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)