Consortiums lower prices for power projects

JAKARTA (JP): The three consortiums who have bid to set up power plants in West, Central and East Java are willing to reduce their prices only very slightly to a total of US$1.75 billion from $1.76 billion, the State Electricity Company (PLN) says.

PLN's spokesman David Tombeg told The Jakarta Post here yesterday that the company is still studying the new proposals of the consortiums.

Yesterday, PLN's director for development, Roeswito, declined to give any comment on the newly proposed prices. "Please, wait until we finish the study," he said.

Under the new proposals dated April 26, which are a revision of the Feb. 26 proposals, the consortium of Asea Brown Bovery (ABB) of Switzerland and Marubeni of Japan is ready to reduce the price for the construction of a 982-megawatt (MW) combined-cycle power plant at Muara Tawar in West Java from $743,973,314 to $743,973,000.

The consortium of Japan's Sumitomo and General Electric of the United States offered to lower the price for establishment of a 505-MW one-cycle power plant at Tambak Lorok in Central Java to $394 million from $395 million. The consortium of the Japanese Mitsubishi and the German Siemens offered to cut the cost for the construction of a 855-MW combined-cycle power generation plant at Grati in East Java to $617.4 million from $630 million.

The three consortiums had reduced their prices from a total of $2.14 billion last year to $1.76 in February.

GEC Alsthom International of France has reportedly offered a price of $1.35 billion for construction of the three projects.

Tombeg said PLN is not in a position to confront Alsthom with the three consortiums.

Tombeg said if PLN's team and the government find out that the prices offered by the three consortiums are still too high, PLN will ask the consortiums to cut the prices further.

"If they are reluctant to do so, you will see that the projects will be offered in open biddings," he pointed out. (fhp)