Govt eases barter deal requirement in Tanjung Jati power project
Wednesday, February 19 2003 - 03:51 AM WIB
Speaking to reporters in Jakarta on Tuesday, Minister of Industry and Trade Rini MS Soewandi said that Sumitomo would be allowed to settle the barter deal after the construction of the power plant was completed.
"In addition, we will also issue all the licenses needed by Sumitomo in importing from Indonesia. The requirement will be made much more flexible to ensure that the large-scale power project will not be delayed," the minister was quoted as saying.
Rini said that she also discussed the barter deal arrangement with Sumitomo?s president during her recent visit to Japan. "Sumitomo?s chairman understood why we imposed the barter deal. More over the value of the barter deal which is about US$500 million is relatively not too big," she added.
According to Rini, if Sumitomo would settle the barter deal in three years, the company would only need to import about US$150 million from Indonesia a year. "For Sumitomo, the amount is not too big but for Indonesia it will be quite important," she added.
President director of the state owned electricity company PLN, Eddie Widiono said earlier that the counter trade deal imposed by the Ministry of Industry and Trade on the importation of the equipment for the power plant 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.
"As the result, the project has been delayed, and Sumitomo reschedule the commercial operation of the power plant to 2006 instead of 2004 as earlier planned," he added.
Sumitomo has been named to resume the construction of the Tanjung Jati B power plant which has been delayed for several years due to financial problem. Sumitomo will build the power plant under a leasing contract with the state owned electricity company PLN.
PLN will then buy the electricity from the plant, which will be operated by Central Java Project (CJV). The plant will be transferred to PLN after 20 years of commercial operation. (*)