Power projects may continue this year, Dorodjatun says
Power projects may continue this year, Dorodjatun says
The Jakarta Post, Jakarta
The government would allow the independent power producers
(IPP) to resume, their projects this year, ones which were put on
hold in the wake of the economic crisis in 1997, a senior
minister said Wednesday.
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti said the resumption of the electricity projects was aimed
at preventing a power crisis which was looming over Java island,
the center of politics and the economy of the country.
"A power crisis in Java would materialize should the projects
be discontinued," Dorodjatun said in a hearing with the House of
Representatives's Commission VIII for energy and mineral
resources, environment, science and technology as quoted by
Antara as saying.
According to Dorodjatun, there are 28 regions outside of Java
which have been experiencing rotating power blackouts. Java might
go through a similar experience unless the government allows the
resumption of the power projects.
In addition, Dorodjatun said that the resumption of
electricity projects was urgent to prepare for the coming general
election in 2004.
Prior to the crisis, the state electricity company signed
power purchase agreements (PPA) with 27 IPPs, which paved the way
for the latter to develop power projects in the country.
The government put on hold many of the projects in late 1997
as part of the retrenchment program to cope with the economic
crisis.
The postponement was first lauded by many people who
considered it a good response to the reform movement, given the
fact that all the projects involved former President Soeharto's
families and friends who partnered with international firms.
But, the postponement later triggered a string of disputes
with the IPPs and arbitration proceedings, resulting in financial
losses for the government.
Dorodjatun said the government might give a greater role to
private sector firms in delivering electricity.
"In many countries, electricity is managed by state-owned
companies or the government. But now, electricity should be in
the hands of the private sector," he said.
PLN did not have any money to build its power plants, so, it
was better to allow private firms to build the plants, he
asserted.
Meanwhile, PLN's president Eddie Wibowo urged on Wednesday the
government to approve the company's plan to get an US$800 million
loan from European countries for its projects to cope with the
power crisis in the 28 regions.
"We expect the Ministry of Finance could immediately approve
our proposal," Eddie said after a Cabinet meeting on electricity
led by Vice President Hamzah Haz.
He said that PLN has been offered loans by creditors from
countries like Denmark and Belgium, but the prospective creditors
asked for the government's approval for the loans.