RI to open tender for power plant in Banten

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

The government will open bidding for a 500 megawatt coal-fired power plant in Banten valued at US$500 million next month as part of a massive project to secure a continued power supply in the country.

The project is part of the second phase of the government's independent power plant (IPP) program consisting of 10 power plants nationwide.

Ministry of Energy and Mineral Resources director general for electricity and energy utilization Yogo Pratomo said on Monday that the government expected the power plants to operate by 2010 at the latest.

"Beside the first bidding for the Banten coal-fired power plant in March, we will also open a tender for the other nine power plants by 2006," he told reporters.

To ensure flexibility and continuity, only one of the 10 power plants will be gas-fired while the rest will be coal-fired.

"It is more difficult to guarantee a secure supply of natural gas. It is more flexible if we construct coal-fired power plants," Yogo remarked.

After opening the bid, the government will select five companies that pass the pre-qualification process to ensure transparency of the project.

The winning bidder offering the most competitive price will negotiate the price of the electricity with state electricity company PT Perusahaan Listrik Negara (PLN). Only after they reach a deal, the company will be awarded the contract.

Should the company fail to reach a deal with PLN, the government will call on the second best of the five that has passed the pre-qualification phase.

Among the 10 power plants are the North Sumatra power plant with a capacity of 300 megawatts, the Tanjung Jati A and Tanjung Jati C power plant in Central Java, each with a capacity of 1,200 megawatts.

The only gas-fired power plant is the Pasuruan power plant with the capacity of 300 megawatts.

Yogo said that during a meeting with the Japanese economic delegation, Chubu Electric Power Co. Ltd. managing director Shiro Mizutani raised questions about the power plants.

"These projects were discussed with the Japanese delegation," he said.

During the meeting, Japanese power companies also expressed the intention to increase their coal imports from Indonesia, as China's coal exports are declining.

Mizutani said coal imports from Indonesia will be increased gradually within five to six years.

"I can't tell the total consumption, but my company imports nine million tons of coal annually," he said.