Group seeks to continue T. Jati A power project
Group seeks to continue T. Jati A power project
JAKARTA (JP): PT Tanjung Jati Power Company has asked the
government to allow it to continue its US$1.66 billion Tanjung
Jati A power project in Jepara, Central Jakarta, the company said
yesterday.
Aburizal Bakrie, chairman of the Bakrie and Brothers Group --
a member of the project's consortium -- suggested in a recent
letter to the government that the project be lifted from "under
review" status and be allowed to continue.
Government approval is needed to allow the consortium to get
foreign loan disbursements for the project.
The coal-fired 1,320 MW power project is among six private
power projects which were put under review by the government as
part of a package of measures launched to cope with the current
monetary crisis.
The measures, which were announced last month, allowed ten
private power projects to continue, but postponed 13 other power
projects.
"We are optimistic that the project will be allowed to
continue because the project is needed by the public and is good
in light of its cheap price," Aburizal said on the sideline of
the Asia Pacific Countertrade Association conference.
Tanjung Jati A is 30 percent owned by Japan's Tomen Power, 30
percent by Britain's National Power, 20 percent by Bakrie Power
and 20 percent by Maharani Paramitra, controlled by President
Soeharto's daughter Siti Hediati Harijadi Prabowo.
The consortium signed a power purchase agreement with state-
owned electricity company PLN last April.
Under the agreement, PLN will buy power from Tanjung Jati A at
5.74 U.S. cents per kilowatt hour (kwh) starting from the
beginning of its operation in 2001. Thus far it is the cheapest
price offered by a private power company.
Aburizal said while waiting for the government's new policy
regarding the project the consortium would continue to work on
the project.
"We decided to continue the project because we have completed
some main stages of preparation, including making financial
arrangements with foreign banks, several months ago," he said.
"The banks are scheduled to close financing for the project by
June next year," Aburizal said, refusing to give further details.
According to the current ruling, a private power company which
has signed a power purchase agreement with PLN has to conclude
energy and construction contracts and financing arrangements in
order to be allowed to obtain foreign loan disbursements to
develop the project.
Among other power companies which have asked for government
approval to continue their projects was Unocal Geothermal
Indonesia Ltd, a subsidiary of American Unocal Corp.
Unocal had been licensed to develop two geothermal power
projects: the $266 million Salak power project in West Java with
a capacity of 165 MW and the $570 million Sarulla power project
in North Sumatra with a capacity of 220 MW.
However, the government only allowed the Salak power project
to continue.
The vice president and general manager of Unocal Geothermal of
Indonesia, Olin D. Whitescarver, recently said the company had
spent some $50 million of its equity capital to develop the
Sarulla project.
Whitescarver said he was optimistic that the government would
give the go-ahead for the project to continue in the near future.
(jsk)