Power projects still in limbo
Power projects still in limbo
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
yesterday declined to explain the fate of the State Electricity
Company's (PLN) three major power projects in Java, which have
been in limbo for almost a year.
"We are still negotiating with all the contractors involved,"
Sudjana told newsmen after meeting President Soeharto at the Bina
Graha office here yesterday.
"The negotiations are being handled by PLN's special team,"
the minister said.
Zuhal, PLN's president, who accompanied Sudjana on the
occasion, declined to comment.
The controversy over the projects started last year when PLN,
without a competitive bidding process, appointed a consortium of
multi-national contractors on a repeat-order basis.
The three projects in Java are: The 982-MW Muara Tawar
combined-cycle (steam and gas) plant project in West Java which
was awarded to Asea Brown Bovery of Switzerland and Marubeni
Corporation of Japan, the 505-MW open-cycle Tambak Lorok plant
project in Central Java to Sumitomo Corporation of Japan and
General Electric of the United States and the 855-MW Grati
combined-cycle plant project in East Java to Siemens from Germany
and Mitsubishi from Japan.
Slash
After direct presidential intervention, PLN managed to force
those contractors to slash their bid prices by a total of US$378
million to $1.76 billion in February.
At that time, PLN announced that the $1.76 billion price was
based on the prices of the Tanjung Priok power units in Jakarta,
which amounted to $623.6/kW for open cycle and $752.2/kW for
combined-cycle operations.
The controversy, however, lingers to this day, especially
after GEC Alsthom International of France's recent claim
that the three projects could be done for a total of $1.4 billion
or $600/kW.
The Ministry of Mines and Energy decided to review the
deal for the three power projects earlier this month.
Meanwhile, Coordinating Minister for Economy and Finance Saleh
Afiff announced early this month that he will also review the
export credit allocations for the three projects in view of the
renegotiations of their prices. (04)