State firms to build geothermal power plant

JAKARTA (JP): The state-owned general mining firm PT Aneka Tambang and the state-owned tin company PT Tambang Timah are to set up a joint venture to build and operate a geothermal power station.

"The Ministry of Mines and Energy has agreed the two companies' plan and they have already signed a memorandum of understanding on the geothermal project," the ministry's secretary-general, Umar Said, said last night after the closing ceremony of the ministry's three-day working conference.

He said the two companies will have an equal stake in the planned joint venture, which will be called PT Geothermal Indonesia.

Details were not released on the proposed capacity of the power project or the required investment. "Aneka Tambang and Tambang Timah have still to discuss the details of the project," Umar noted.

According to official data, Indonesia's potential geothermal energy reserves will be able to support the operation of power plants with a total capacity of 19,658 megawatts (MW). The geothermal power plants already in existence have a combined capacity of only about 1,000 MW.

Umar said the joint venture is the first to be established under a so-called "cross fertilization" scheme, which calls for cooperation between state-owned enterprises or between the enterprises and private companies.

"In the near future, we'll see more of such business cooperation established to improve efficiency," he said.

Minister of Mines and Energy I.B. Sudjana said at the working conference's opening ceremony that: "to improve the competitive edges of state firms, we need to streamline their bureaucracy and modernize their management."

Sudjana believed going public and cross fertilization were the best ways to modernize state-owned companies.

He said that two subsidiaries of the state-owned electricity company PLN, PT Pembangkit Jawa Bali I and Pembangkit Jawa Bali II, will float their shares internationally early next year.

At last night's closing ceremony, the minister instructed the Directorate General of Electricity and Energy Development to formulate a regulation aimed at attracting private investors to take part in the establishment of electricity transmission networks.

"The directorate general should prepare a regulation which will help improve the business climate in the electricity sector," Sudjana said. "The preparation of such a regulation should be completed before next year's working conference."

He said all the staff of the ministry and state firms under its supervision must be more responsive in serving the public.(13)