Ministry to issue decree to restart power projects
Ministry to issue decree to restart power projects
Moch. N. Kurniawan
The Jakarta Post
Jakarta
The Ministry of Energy and Mineral Resources said on Friday it
would issue a decree this month to allow independent power
producers (IPPs) restart their stalled power projects.
"We hope the decree will be issued this month," ministry
spokesman Nurwinakun told The Jakarta Post.
The government suspended some 21 power projects worth around
US$10 billion belonging to the IPPs in the late 1990s as part of
efforts to cope with the country's economic crisis.
But the government now wants to see these projects running
again, particularly to help avoid a power crisis in the future.
The IPPs will sell their power to state-owned electricity company
PLN.
The move to allow the resumption of the projects comes as PLN
has managed to obtain lower power purchase prices from several
IPPs.
The Sarulla geothermal power plant in North Sumatra and the
Bedugul geothermal power plant in Bali are among the power
projects whose contractors are ready to resume development.
The country still needs additional electricity to cope with
the imminent danger of power black outs.
PLN has said that Java and Bali will begin to experience a
power crisis in 2006.
However, some 28 areas in other islands are already
experiencing the inconvenience of rotating blackouts.
Separately, a senior official of the Indonesian Geothermal
Association (API), Riki F.Ibrahim, welcomed the planned ministry
decree, saying that investors, particularly in the geothermal
power plants, were ready to restart their projects.
But he said that the investors wanted the government to drop a
value added tax (VAT) policy imposed on geothermal projects at
exploratory stage, saying that the new policy was in
contradiction to the initial contracts signed by the IPPs and the
government.
Under the original contracts, geothermal projects would only
be subject to VAT once it they entered into commercial
production.
Riki said that unless the new tax policy was revoked,
geothermal-based IPPs would not recommence their projects.