Govt to tender all power projects
Govt to tender all power projects
JAKARTA (JP): The government will tender all electricity
projects to international bidders, including projects to be
financed with export credits, the president of state-owned
electricity company PLN, Djiteng Marsudi said yesterday.
Speaking at a hearing with Commission VI of the House of
Representatives, Djiteng said the new policy would nullify all
contracts related to direct or repeat orders.
He said the new tender policy would also affect electricity
projects financed with foreign funds, including export credits.
The projects are estimated to have a total value of about US$400
million in the 1996/1997 fiscal year.
"All projects to be funded by export credits will be open to
international tenders," he told the commission, which oversees
industry, energy, mining, manpower and investment.
Djiteng acknowledged that PLN's decision to scrap the direct
and repeat order system was opposed by certain parties, including
those who provide the overseas funding.
"But we are committed to abolishing the system to improve
efficiency," he said.
In the past, the government often directly assigned foreign
companies to carry out particular projects. Existing contractors
could also receive "repeat orders" to do similar projects,
without having to undergo the tender process.
Djiteng also told House members about the PLN's plan to float
both its shares and bonds to support its financing requirements,
which could reach Rp 10 trillion.
He said the government allocated about Rp 4.14 trillion ($1.5
billion) in the 1996/1997 budget to finance electricity projects,
most of the amount will be foreign loans.
PLN plans to raise the same amount by issuing bonds, or from
credit exports.
He said privatization is part of PLN's strategy to raise
development funds.
"We hope we will be able to go public next year," he said,
adding that any problems related to the plan should be cleared
before the end of this year.
An important part of its plan is the formation of two
subsidiaries. One is named PT Pembangkit I, and will operate
PLN's power plants in West and Central Java.
The second subsidiary is PT Pembangkit II. It will be
responsible for power plants in East Java and Bali.
Djiteng said that the two subsidiaries, which will be
separately listed on both the domestic and international
exchanges, will manage commercial operations. PLN, as the holding
company, will concentrate on social missions. (hen)