PLN defends decision to appoint Siemens

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.