Construction cost for Renun power plant swells by 30%

The construction of the 82-MW Renun hydropower plant in Dairi, North Sumatra has swollen by 30 percent to about US$230 million due the long delay of the project, an official said on Thursday.

State owned electricity company PLN?s president director Eddie Widiono told reporters that a problem in the construction of the 25-kilometer underground water canal had caused a delay in the project for about five years.

Eddie said that the increase in the cost of the project would be covered by soft loans from the Japanese government as the main sponsor of the project. ?The government did not really question the delay because they knew that the delay was caused by non-technical factor,? he added.

The Japanese government, through Japan Bank for International Cooperation (JBIC) agreed to provide soft loan of abut 26.6 billion for the construction of the Renun power plant.

However, Eddie said that the larger than expected cost of the project would cause an increase in the operating cost of the plant. And as the consequence, the price of the power from this power plant will reach 9 U.S. cent per KwH as compared to the average 6 U.S. cent from other hydro power plant.

According to Eddie, the Renum power plant was not only designed to cope with the shortage of electricity supply in North Sumatra but also to help increase the water level of the Toba lake which has showed a continued decline during the past several years. (godang)