Ministry to issue decree to restart power projects<\/p>\n
Moch. N. Kurniawan
\nThe Jakarta Post
\nJakarta<\/p>\n
The Ministry of Energy and Mineral Resources said on Friday it
\nwould issue a decree this month to allow independent power
\nproducers (IPPs) restart their stalled power projects.<\/p>\n
\"We hope the decree will be issued this month,\" ministry
\nspokesman Nurwinakun told The Jakarta Post.<\/p>\n
The government suspended some 21 power projects worth around
\nUS$10 billion belonging to the IPPs in the late 1990s as part of
\nefforts to cope with the country's economic crisis.<\/p>\n
But the government now wants to see these projects running
\nagain, particularly to help avoid a power crisis in the future.
\nThe IPPs will sell their power to state-owned electricity company
\nPLN.<\/p>\n
The move to allow the resumption of the projects comes as PLN
\nhas managed to obtain lower power purchase prices from several
\nIPPs.<\/p>\n
The Sarulla geothermal power plant in North Sumatra and the
\nBedugul geothermal power plant in Bali are among the power
\nprojects whose contractors are ready to resume development.<\/p>\n
The country still needs additional electricity to cope with
\nthe imminent danger of power black outs.<\/p>\n
PLN has said that Java and Bali will begin to experience a
\npower crisis in 2006.<\/p>\n
However, some 28 areas in other islands are already
\nexperiencing the inconvenience of rotating blackouts.<\/p>\n
Separately, a senior official of the Indonesian Geothermal
\nAssociation (API), Riki F.Ibrahim, welcomed the planned ministry
\ndecree, saying that investors, particularly in the geothermal
\npower plants, were ready to restart their projects.<\/p>\n
But he said that the investors wanted the government to drop a
\nvalue added tax (VAT) policy imposed on geothermal projects at
\nexploratory stage, saying that the new policy was in
\ncontradiction to the initial contracts signed by the IPPs and the
\ngovernment.<\/p>\n
Under the original contracts, geothermal projects would only
\nbe subject to VAT once it they entered into commercial
\nproduction.<\/p>\n
Riki said that unless the new tax policy was revoked,
\ngeothermal-based IPPs would not recommence their projects.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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