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)