Govt launches mega project in N. Sumatra

President Susilo Bambang Yudhoyono launched Thursday the construction of two power plants, an electricity interconnection facility, and a fisheries and agribusiness project in North Sumatra, which are expected to help turn the province? into a center of manufacturing, services and agribusiness activities. The Jakarta Post reported on Friday.

?The central government is supporting the construction of economic infrastructure facilities in North Sumatra, with the hope that the province can become the main driver of economic activities in Sumatra,? said Yudhoyono in a speech during a ceremony here

The first power project is the 2x115 MW Labuhan Angin coal-fired power plant, located in Central Tapanuli regency. The construction cost is estimated at more than US$ 201 million.

Several export financing institutions from China will finance the project. PT Cimex, a joint venture between local firms and Chinese companies, has been selected as the contractor of the project, which is expected to be completed in 2008.

The second project is the 2x90 MW Asahan I hydro power plant in Toba Samosir regency. Financing for the project will come from the state budget and a Chinese investor.

China-based Huan Gian Engineering Corporation and PT Basra Daya Sentranusa of Medan will act as the developer of the $250 million project, which is slated for completion in 2009.

North Sumatra Governor Rudolf M. Pardede said that the projects would help prevent the province from plunging into a power shortage crisis in the future as demand for electricity has been rising.

Rudolf also said that the government would construct a 103-kilometer power interconnection facility that would link supply from the northern and southern parts of Sumatra. Total investment for the project is estimated at $100 million.

Aside from the power sector projects, Yudhoyono also inaugurated the setting up of an agribusiness center in the highlands of Bukit Barisan area, which is expected to help boost the export of fruit and vegetables from the province.

Rudolf said that the center was expected to a raise foreign exchange revenue of more than Rp 1.5 trillion over the next five years.

The province?s economy, which has long been driven partly by illicit businesses such as illegal logging, smuggling and gambling by local organized crime groups, is forecast to grow by more than 6 percent this year.

With abundant marine resources, the province will also set up a fisheries business center, covering an area of 734,000 hectares along the province?s coastline and small scattered islands.

The fisheries business is expected to generate some Rp 1.01 trillion in foreign exchange revenue for the province over the next five years. (*)