Govt to offer gas and power projects
Govt to offer gas and power projects
The Jakarta Post, Jakarta
The government will open bidding for a power plant and two gas
pipeline projects in May that could be worth more than US$1.1
billion, top officials say.
State power firm PT Perusahaan Listrik Negara (PLN) will begin
the pre-qualification procedure for a tender to build a 450-
megawatt coal-fired power plant located in Cilegon, Banten, on
May 25, the firm's financial director Parno Isworo said on
Tuesday.
"We expect power generation to start in 2009 or 2010," he said
on the sidelines of a presentation for potential investors.
Bidders interested in the project, estimated to be worth $500
million, will have to prove they have experience in developing
private power projects and sufficient funds to cover construction
costs.
The tender winner will construct the plant as well as sell the
power generated to PLN, which aims to sign the power purchase
agreement by June 21 next year.
The contract will be the first to be conducted with
independent power producers since the monetary crisis seven years
ago.
Power shortages have been increasingly serious over the past
few years with demand continuing to grow but supply remaining
stagnant due to lack of investment.
Bloomberg quoted PLN president director Eddie Widiono as
saying that PLN needs $16 billion over 16 years to help avoid
shortages. More than half of the required investment is expected
to come from foreign investors.
The government will also open bidding for two pipeline
projects, namely a 390-kilometer-long pipeline from Gresik in
East Java to Semarang in Central Java and a 290-kilometer-long
one from Semarang to Cirebon in West Java.
Each of the pipelines will carry between 350 million standard
cubic feet of gas per day. Combined, the projects are estimated
to be worth up to Rp 6 trillion ($625 million).
The pipelines are expected to channel gas to fulfill demand in
Java, where gas is used by industries as well as households, from
newly developed gas fields operated by Santos, offshore Madura
-- an island off East Java -- ExxonMobil on Madura and Amerada
Hess in Ujung Pangkah in the province.