Astra to build 130 MW power plant

Astra to build 130 MW power plant

JAKARTA (JP): PT Astra International, Indonesia's largest
automobile producer, will become the 18th private power generator
in the country under a build-operate-transfer scheme for the
state-owned electricity company PT PLN.

An Astra International subsidiary, PT Asrigita Prasarana, will
invest US$150 million to build a 130 megawatt (MW) power plant in
Palembang, South Sumatra.

"We'll start construction soon. The combined-cycle power plant
will begin operating in November 1998," PT Asrigita's managing
director Arief Istanto said after a power-purchase agreement with
PLN was signed yesterday.

Under the agreement, PLN will buy electricity from Asrigita
for US$0.064 per kilowatt-hour.

Arief said that 20 percent of the combined-cycle power plant
would be constructed with local materials, and that the plant
would burn gas from the Asamera field in South Sumatra.

He said 75 percent of the $150 million investment would be
funded by loans and 25 percent by the company's capital.

He said PT Asrigita, which is 87 percent owned by Astra and 13
percent by Martini Sulaeman, would build the power project under
a 20-year build, operate and transfer scheme.

PLN president Djiteng Marsoedi said his company had signed 18
power-purchase agreements with private power generating
companies, including Asrigita.

He said five of the 18 power projects used coal, two used gas
and 11 used geothermal power. The projects include the Paiton
plants, Tanjung Jati B and Darajat in Java, Sibolga in North
Sumatra and Amurang in Sulawesi.

The Ministry of Mines and Energy's director general of
electricity and new energy development, Zuhal, said: "We have
been urging PLN to buy the electricity by considering market
risks."

He said the government was working on a new legal framework to
buy electricity from the private sector.

"We'll regulate that PLN and the private sector must share
market risks in selling electricity. It's not fair just to leave
the market risk with the state-owned company," he said.

He said the government would expose the electricity business
to more competition by reducing the so-called unsolicited
projects and awarding more contracts under solicited project
schemes.

For unsolicited projects, private companies can propose to
build a power plant and get a contract without going through a
PLN tendering process. Whereas, solicited projects require
private companies to compete in a tender organized by PLN. (bnt)

Partners -- Page 12