Power plant projects to resume: Official
Power plant projects to resume: Official
Moch N. Kurniawan, The Jakarta Post, Jakarta
The government is considering allowing up to seven independent
power producers (IPPs) to resume the development of power plants
which were halted in the wake of the country's 1997 financial
crisis.
Director general for electricity and energy utilization Luluk
Sumiarso said it was considering the move to help meet the
growing power demand both now and in the future.
He declined to name the IPPs or specify where the power plants
would be located.
"We can't disclose it until the presidential decree which
suspended and reviewed the development of many (infrastructure)
projects has been revoked," he told reporters on the sidelines of
a hearing session with the House of Representatives commission
VIII on science, technology and the environment.
The government allowed 27 IPPs to enter the country's power
generation sector under a power purchase agreement (PPA) contract
with state-owned electricity company PLN in the early 1990s
because PLN was unable to build sufficient generating units to
meet the increasing power demand in the country.
But the government suspended and reviewed most of the power
projects during the financial crisis in an effort to help ease
pressure on the local currency and state finances.
The government had also asked PLN to renegotiate the
contracts, seen as unfavorable because of the relatively high
price PLN must pay for the power produced by the IPPs.
The suspension of the power projects were made based on the
presidential decree No. 39/1997.
The government said last week it planned to revoke the decree
to provide legal certainty for investors to continue the power
projects.
The plan to continue the projects was also part of government
efforts to cope with an imminent power crisis.
The government has repeatedly said Java and Bali islands are
predicted to undergo a black out in 2004 and that 28 other areas
outside the two islands could run out of power if there are no
new power plant developments.
Separately, PLN president Eddie Widiono said that one the IPPs
to be allowed to resume the power development project was the
Karaha Bodas Co., which owns the Karaha geothermal power project
in West Java.