Seven projects shelved again

Seven projects shelved again

JAKARTA (JP): The government announced last night that it was
shelving seven megaprojects and put another eight under review,
for the second time in five months.

The decision was contained in a decree signed by President
Soeharto yesterday, Minister/State Secretary Moerdiono was quoted
by Antara as saying.

The news agency said Moerdiono phoned it with the story.

The 15 projects -- eight power projects, four toll road
projects, one airport project, one building project and one
equipment-provision project -- were among dozens originally
shelved or reviewed in September in a bid to save billions of
dollars of badly needed foreign currency.

They were revived Nov. 1, but the presidential decree only
became known to the public a week after it was signed.

When news of their resurrection came, there were allegations
of nepotism because they were projects tied to politically well-
connected business groups.

The sudden about face also raised doubts about the
government's commitment and ability to see through tough economic
reforms.

The latest decision was taken by the government to reaffirm
its commitment to handle the monetary crisis, Antara said.

The government had intended to continue with the projects, but
after another review, it was learned they required huge financing
that could undermine the government's effort to deal with the
monetary crisis, Moerdiono said.

"That's why the President decided to shelve them," he said.

One of the projects affected is the controversial Tanjung Jati
C power project in Jepara, Central Java. The 1,320-megawatt (MW)
coal-fired power project worth $1.77 billion was awarded to
Consolidated Electric Power Asia (CEPA) Indonesia in reward for
its willingness to reduce the price of another power project,
Tanjung Jati B, also in Jepara.

Other power projects include the 1,320-MW coal-fired Tanjung
Jati A power plant, also in Central Java, being developed by a
consortium made up of President Soeharto's daughter Siti Hediati
Prabowo and the Bakrie Group; the 330-MW Sarulla geothermal power
project in North Sumatra owned by a consortium of the U.S. Unocal
Corp and the Nusamba Group of Muhammad "Bob" Hasan; and the 55-MW
Patuha geothermal power plant in West Java by a consortium
controlled by California Energy.

The other power projects are the Karaha geothermal power
plant, unit one and two of the Drajat geothermal power plant, the
Asahan I hydropower plant and the Palembang Timur combined-cycle
power plant in South Sumatra, which is sponsored by PT Astra
International. (emb/prb)

Table A: Projects put under review

No. Project Value (US$m) Location

1. Semarang Section C toll road na C. Java

2. Ujungpandang toll road 51 S. Sulawesi

3. Pondok Aren-Serpong toll road na W. Java

4. Jamsostek tower project na Jakarta

5. Patuha 1 geothermal power plant 95 W. Java

6. Asahan 1 hydropower plant 180 N. Sumatra

7. Tanjung Jati A steam power plant 1,660 C. Java

8. Tanjung Jati C steam power plant 1,770 C. Java

Table B: Projects postponed

No. Project Value (US$m) Location

1. Aloha Waru-Tg. Perak toll road 247 E. Java

2. Karaha 1 geothermal power plant 380 W. Java

3. Sarulla geothermal power plant 330 N. Sumatra

4. Darajat 1, 2 geothermal power plant 475 W. Java

5. Palembang Timur combined

cycle power plant 168.5 S. Sumatra

6. Construction and management of

new airport in Medan na N. Sumatra

7. Improvement of meteorological and

geophysical equipment project na