Construction of Tanjung Jati B power plant continues as planned

The construction of the Tanjung Jati B steam power plant in Jepara, Central Java will go as planned although the counter trade deal imposed by the Minister of Industry and Trade on the giant electricity projects has not been concluded, Koran Tempo reported on Wednesday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Tuesday that the project would continue as planned while the problem related to the barter trade deal would be settled by the office of the coordinating minister for economy.

Sumitomo Corporation of Japan has delayed the construction of the Tanjung Jati B due to certainties resulting from the counter trade deal attached in the importation of the equipment for the massive power project.

The counter trade deal has caused a problem to Sumitomo because the company faced difficulties to find out what kinds of commodities that would be imported from Indonesia as part of the deal.

Purnomo said that his office opposed the barter trade deal because for strategic project such as Tanjung Jati B such kind of counter trade deal should be avoided to ensure that the project would go as planned.

The construction of the Tajung Jati B power plant with a capacity of 1,320 MW began in 1994. However, its investor Hopewell Holding which developed the project in cooperation with Impa Energy and Sumitomo as the main contractor failed to complete it due to financial difficulties.

The state-owned electricity company PLN then assigned Sumitomo to take over the project which has been 30 percent completed. However, the resumption of the project has been hurdled by the barter deal required by minister of industry and trade

PLN has said that the delay in the US$1.4 billion power project would result in the shortage of the power supply for Java and Bali up to 600 MW in 2004 and 900 MW in 2005. (*)