PLN defends decision to appoint Siemens
The Jakarta Post, Jakarta
State-owned electricity company PLN defended its decision last week to appoint a Siemens-led consortium to undertake the expansion of the Muara Tawar power plant, following strong criticism from a non-governmental organization.
PLN finance director Parno Isworo said at the weekend that the Siemens consortium had offered the lowest price -- US$288.95 per kilowatt of power capacity.
He added that Siemens also provided a guarantee that the crucial project could be completed within a year.
The two other bidders including Alstom and IMECO GE, which respectively offered prices of $373 and $377 per kilowatt.
Having won the tender for the project, the Siemens consortium will be obliged to build six power units, each with a generating capacity of between 100 Megawatts (MW) and 150 MW. The Muara Tawar power plant is located in Bekasi, West Java.
The project is crucial for helping avoid a power crisis in the Java-Bali network amid growing power demand.
But an NGO -- the Working Group on Power Sector Restructuring (WGPSR) -- has criticized the appointment of Siemens, saying that the price offered by the winning consortium was still too expensive. Siemens is expected to use a V 94.2 turbine for the project.
WGPSR coordinator Fabby Tumiwa was quoted by the press as saying that according to the 2000 Gas Turbine Work Handbook, the price for the V 94.2 turbine with a 159 kilowatt capacity should have been around $188 per kilowatt.
The NGO also suspected that PLN had leaked information on its budget for the project (around $300 million) to Siemens as the winning consortium managed to offer a price close to PLN's figure.
Parno dismisses the criticism.
He said that according to the latest 2001-2002 Gas Turbine Work Handbook, the cost of the above type of turbine had already increased to $194 per kilowatt capacity. It this figure was added to the cost of installation, including insurance and the cost of civil works plus value added tax, the Siemens' offer was in fact cheap.
He stressed that PLN had never leaked any confidential information to Siemens.
The Muara Tawar expansion project should start at the end of this month, and is scheduled to continue until the middle of July 2004.