Siemens, Bimantara win huge power contract
Siemens, Bimantara win huge power contract
JAKARTA (JP): The state electricity company PLN is scheduled next week to award a contract to a consortium of Siemens AG of Germany and the Bimantara Group of Indonesia to establish two coal-fired power units worth US$2.1 billion in East Java.
"The contract for the establishment of the Paiton II power project will be signed in Hannover, Germany, in the presence of President Soeharto," Minister of Mines and Energy I.B. Sudjana said after meeting with Soeharto at the Bina Graha presidential office yesterday.
The President, accompanied by First Lady Mrs. Tien Soeharto and a number of ministers, will leave for Germany Friday evening for a six-day visit before finishing his two-week trip in Kazakhstan, Uzbekistan and Turkmenistan. In Germany, Soeharto will also open the Hannover Fair '95 with German President Roman Herzog.
Sudjana refused to name the other members of the consortium but said that a Japanese company would likely be involved.
The chief representative of Siemens for Indonesia, Kurt W. Pfeiffer, told The Jakarta Post recently that Siemens and Power Gen. of Britain would likely join the Bimantara Group in constructing two coal-fired power generating units in Paiton, East Java, with a combined capacity of 1,200 megawatts (MW) at a cost of US$2.1 billion.
Paiton currently has two coal-fired power units, each with a generation capacity of 400 MW, which were established by PLN. PT Paiton Energy Company, a consortium of Indonesian, American and Japanese companies, is now constructing two other units with a combined capacity of 1,230 MW at estimated total costs of US$2.5 billion.
Sudjana said the Siemens-Bimantara consortium will establish its power units under a build-own-and-operate arrangement.
Pricing
"The consortium will sell its electricity to PLN, which will then distribute it through its networks, at 6.09 U.S. cents per kilowatt hour (kWh)," the minister said.
In comparison, the Paiton Energy Company, which is comprised of the Dutch subsidiary of Mission Energy of the United States, Mitsui Co. Ltd. of Japan, General Electric Co. of the United States and PT Batu Hitam Perkasa of Indonesia, will sell its electricity to PLN at 8.56 U.S. cents per kWH for the first six years, at 8.41 cents for the next six-year period and 5.54 cents for the remaining 18 years.
The power units to be constructed by the two consortiums are expected to start operating in 1998.
Sudjana said that he also reported to President Soeharto about a plan of Freeport McMoRant Copper & Gold of the United States to join in the exploration and production of gold and copper in its concession in Irian Jaya.
"Freeport wants RTZ to provide an investment of about $450 million for the gold and copper exploration and production in Irian Jaya," the minister said.
Freeport is the majority shareholder of PT Freeport Indonesia, the company operating the Irian Jaya concession which is also owned by the Indonesian government and PT Indocopper Investama. (riz)