At least 13 of 26-licensed power projects have yet to operate

At least 13 of the 26 power projects licensed by the government before the crisis hit the country in late 1997 have yet to operate as their investors have difficulties to raise funds for the construction of the power projects, Media Indonesia reported on Thursday.

"It is true that half of the 26 power projects offered to independent power producers (IPPs) have not yet begun operation," said the president director of state owned electricity company PLN, Eddie Widiono. He added the delayed projects include the Amurung hydropower plant and the Sibolga steam power plant.

The power purchase contracts of the 26 independent power producers were restructured in 2000 following the sharp increase in the value of the U.S. dollar against the rupiah as the result of the financial crisis. The restructuring of the contracts, which are based on the U.S. dollar was also made due to alleged mark-up practices.

Seven of the 26 power projects had been suspended due to the lack of progress, including Tanjung Jati A and Tanjung Jati C steam power plants, the Cilacap combined cycle power plant, the Serang steam power plant, the Cilegon combined cycle power plant, the Pasuruan steam power plant, the Kamojang geothermal power plant. However, the Cilacap , Cilegon and Pasuruan power projects have recently been resumed after new investors joined the projects.

Other five projects were acquired by PLN, Pertamina and the government and the others including the Tanjung Jati B, the Paiton I and Paiton II continue to operate under new contracts.

Eddie hoped that the Tanjung Jati B and Cilacap power plants, which are now under construction, could begin operation in 2006. (*)