Consortiums lower prices for power projects

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)