Strategic industry companies to help PLN in new projects
JAKARTA (JP): The 10 state-owned strategic industrial companies are committed to helping the State Electricity Company (PLN) improve its power generation technology and design in the near future.
A memorandum of understanding on this cooperation was signed yesterday by PLN's president, Zuhal, and the vice chairman of the Agency for the Management of Strategic Industries (BPIS), Giri Suseno Hadiardjo, who represented the strategic industrial companies.
The agreement, which lasts for five years with an option for expansion by up to 20 years, will allow BPIS to integrate its 10 companies to participate in the construction of power plants, technology procurement and joint research.
"We are optimistic that the state strategic industrial companies can tackle important jobs for PLN's power projects," Giri said. "Dependence on foreign contractors, therefore, will be able to be reduced for the construction of power projects."
He told reporters that only three strategic industrial companies are so far involved in PLN projects.
The three are the engineering firms PT Boma Bisma Indra and PT Bharata and the shipbuilder PT PAL.
"Boma Bisma Indra was responsible for the basic design of two coal-fired power units in Paiton, East Java, with a combined capacity of 800 megawatts (MW)," Giri said.
Bharata and PAL, meanwhile, engineered boilers for the Paiton project, which was dedicated by President Soeharto last month.
"PAL can now produce turbines for power plants," he told The Jakarta Post.
Besides the three companies, BPIS also supervises the management of the aircraft manufacturer PT IPTN, steel producer PT Krakatau Steel, military equipment producer PT Pindad, telecommunication equipment manufacturer PT Inti, explosives maker PT Dahana, railway equipment company PT Inka and electronics company PT LEN.
Massive plans
Zuhal said the new relationship is part of the PLN's plans to set up new power plants with a total capacity of 13,000 MW and 11,000 kilometers (km) of transmission networks throughout the country during the newly begun Sixth Five Year Development Plan (Repelita VI) period.
"If we depend mostly on foreign companies, the costs for the development of our electricity projects may exceed Rp 60 trillion (US$27.9 billion," he said.
For the first stage of cooperation, BPIS companies can tackle transmission work in Java, he said.
PLN plans to establish 5,000 km of transmission wire throughout Java and 6,000 km on other islands, he said.
He estimated the total costs for the transmission project at $5 billion.
"With BPIS' involvement, I believe, the costs can be reduced because more local products will be used," he said.
He said that the recent failures to meet the government's target of 25 percent local content in PLN projects will be made up for.
"PLN and BPIS are committed to increasing local products in electricity projects to over 30 percent this year," he said.
When asked about power supply, Zuhal said PLN's power plants in Java currently have a total capacity of 10,141 MW, far higher than demand, which ranges from 5,000 MW and 6,000 MW.
"PLN plans to increase capacity by 1,000 MW this year to anticipate increased demand from industrial plants," he said.
Hizban Ahmad meanwhile told the Post that electricity demand in Java grew by 11 percent last year, as compared to 15 percent a year earlier. (fhp)