HK firm starts Jepara power plant project

HK firm starts Jepara power plant project

JEPARA, Central Java (JP): PT Consolidated Electric Power Asia (CEPA) Indonesia, a subsidiary of CEPA Ltd. of Hong Kong, has begun construction of a US$2 billion coal-fired power plant in Tanjung Jati amidst a controversy on land appropriation.

Hendro Martoyo, an assistant to the provincial secretary, said recently the company, which will construct the plant, consisting of two generator units with a combined capacity of 1,320 megawatts, has begun its preliminary civil works and has so far cleared 171 hectares of land for the plant's site.

The company plans to use 375 hectares of land for the site.

"But the company is now facing a problem on land appropriation because local villagers are demanding a higher compensation for their land being appropriated for the plant," he said.

An informed source told The Jakarta Post recently that CEPA Indonesia's executives have agreed to pay a compensation of Rp 9,000 (US$4.08) per square meter, as compared to Rp 6,300 recently paid by the company to the villagers.

And according to local villagers, the new compensation will be paid directly by Tommy Hutomo Mandala Putra, one of the company's executives.

CEPA Indonesia, which is still wholly owned by CEPA Ltd. of Hong Kong, is reportedly negotiating with local companies, including PT Pembangunan Perumahan, to take part in the ownership of the project.

The state-owned electricity company, PT Perusahaan Listrik Negara (PLN), which awarded the Tanjung Jati contract to CEPA Indonesia last year, expects that the Tanjung Jati power station will ultimately have a total capacity of 4,000 Megawatts.

Upon completion, CEPA Indonesia will sell its electricity to PLN for 30 years, PLN reported.

During the first six years of its operation, CEPA Indonesia will sell its electricity at 7.665 U.S. cents per kilowatt hour, during the next six years at 7.388 cents and during the remaining 18 years at 5.988 cents. (har/fhp)