PLN to buy power from new private firm
JAKARTA (JP): State-owned electricity company PLN will buy power from a new private power generator, PT Power Jawa Barat, at 6.04 U.S cents per kilowatt hour (KWh) starting in the year 2000.
"I don't want to comment on the price. Just write the price as it is," said PLN president Djiteng Marsudi after he signed a purchase agreement with Power Jawa yesterday.
Djiteng was asked by reporters as to whether the price was not too high. But Minister of Mines and Energy I.B Sudjana also refused to comment on the price, referring instead reporters to Djiteng.
Power Jawa's president commissioner Sudwikatmono denied that the sales price his consortium got was high, saying it had been negotiated with PLN 16 times and was the lowest of the prices offered at an open tender by ten local and foreign bidders.
His company could not lower its price since its capacity was too small, he said.
"If we were allowed (by PLN) to double the power capacity to match that of PT Tanjung Jati A (in Central Java), we would be willing to offer power at 5 cents per KWh," he said.
The 1.320 MW coal-fired Tanjung Jati A power plant in Jepara, Central Java, which is now under construction, agreed last year to sell power to PLN at 5.74 cents per KWh.
Power Jawa is 40 percent owned by coal mining company PT Bukit Sunur Jaya, controlled by tycoon Sudwikatmono; 40 percent by Britain's PowerGen Plc; 5 percent by the United States engineering firm Morrison Knudsen Corp and 15 percent by Japanese trading house Sumitomo Corp.
The consortium will build and operate a 450 Megawatt (MW) coal-fired power plant worth $670 million in Bojonegera, Serang regency.
Under the agreement, Power Java will manage the plant under a build-operate-own scheme and PLN will buy power from the company for 30 years starting from 2000, the start-up production date of the power station.
PLN will pay between 6 cents to 8.56 cents per KWh for private electricity under 24 previous purchase agreements, depending on the type of the and capacity of power generation.
The coal-fired Paiton I power plant in East Java, for example, will be paid 8.56 cents per KWh.
Sudjana said PLN has signed purchasing power agreements with 24 other private power generators. They will generate 9,505 MW, 8,430 MW in Java and 1,075 in Sumatra.
Sudwikatmono said the consortium would raise $470 million in syndicated loans from foreign banks to finance the power project with NM Rothschilds acting as the financial advisor.
The plant will consume 1.6 million tons of coal a year, 50 percent will be supplied by PT Bukit Sunur.
The plant will be fitted out by Japan's Toshiba Corp and the U.S. unit of European Engineering giant Asia Brown Bovery Ltd.
Sudwikatmono said PT Power Jawa Barat would be his second power generation plant after the gas-fired power station, PT Cikarang Listrindo, in Cikarang, West Java.
For Sumitomo, the venture will be its first involvement in the power business in Asia following the participation in similar projects in the region by rivals such as Marubeni Corp and Tome Corp.
"We will continue to be actively involved in power plant businesses in not only Indonesia but also in other Asian countries, as demand for electricity in the region is expected to further expand," a Sumitomo executive was quoted by AFP as saying in Tokyo yesterday. (jsk)