PLN confident of inking Paiton deal<\/p>\n
Mochammad N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
State-owned electricity company PLN said on Monday it expected
\nto reach a final long-term agreement with independent power
\nproducer (IPP) PT Paiton Energy by the year's end.<\/p>\n
\"We expect to reach an agreement at the end of this year,\" PLN
\npresident Eddie Widiono told reporters prior to a working session
\nwith House of Representatives Commission VIII on science,
\ntechnology and environment.<\/p>\n
He said that both sides were likely to agree on a long-term
\nrate for power, which Paiton sells to PLN at below 5 U.S. cents
\nper kilowatt hour (kWh).<\/p>\n
Paiton is one of the 27 IPPs whose power-selling contract to
\nPLN was terminated by the government in the wake of the 1997
\nfinancial crisis. The government has demanded PLN renegotiate
\nthe contract, particularly on the power selling price, which has
\nbeen deemed too expensive due to a drop in the value of the
\nrupiah against the U.S. dollar.<\/p>\n
PLN has so far been able to close deals with only three IPPs.<\/p>\n
Aside from the rates, PLN and Paiton were also still
\nnegotiating on the total amount of \"arrears\" to be paid by PLN to
\nPaiton, Eddie said.<\/p>\n
Paiton Energy, a joint venture between Mitsui & Co., General
\nElectric, Edison Mission Energy and PT Batu Hitam Perkasa,
\noperates the coal-fired Paiton I power plant in East Java, which
\nhas a power capacity of 1,230 megawatts.<\/p>\n
Late last year, PLN and Paiton agreed to a long-term agreement
\nscheme for PLN's payment to Paiton.<\/p>\n
Both companies agreed to a three-phase scheme under which
\nPaiton would gradually hike its power charges beginning this year
\nat 2.6 cents per kWh.<\/p>\n
This rate allows Paiton to cover the costs of operating the
\nplant and pay interest on its $1.82 billion debt.<\/p>\n
In phase two, between 2002 and 2003, Paiton will further raise
\nits rates, thus permitting some repayment of debt principals.<\/p>\n
By then, both companies also expect the completion of the
\nmuch-needed Java-Bali transmission grid to help meet power demand
\nin that region.<\/p>\n
Finally, PLN and Paiton hope to agree on a long-term rate,
\ncommencing in the third phase, in 2004.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pln-confident-of-inking-paiton-deal-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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