Govt sets deadline for Sarulla geothermal project

The government has given Sarulla Operation Ltd a month to decide whether or not it will go ahead with its plan to develop geothermal project in Sarulla, Tarutung, North Sumatra, which has been delayed since 2004.

The deadline was made during a coordinating meeting on the escalation of geothermal projects led by Vice President Boediono in Jakarta on Thursday. The meeting was also attended by Finance Minister, President?s special assistant Kuntoro Mangkusubroto, the Attorney General, and President Director of the state electricity company PLN, Dahlan Iskan.

Investors of the Sarulla Operation Ltd which comprise PT Medco Geothermal Indonesia, Technologies AS, Kyushu Electric, and Itochu Corporation of Japan should decide whether or not they would continue undertaking the project, Dahlan said after the meeting.

?The Vice President gave them until the third week of September to make a decision,? he said. If they finally withdrew, PLN would take over the project, he added.

PLN had earlier said that it would take over the project to build a geothermal power plant with a capacity of 3 x 110 megawatt in Tarutung. But Vice President said that the government would give Sarulla Operation consortium until the third week of September to decide whether to stay or get out.

The consortium led by PT Medco Energi Internasional Tbk has said that the project was delayed because the price of the power agreed with PLN was still too low, making the project not economically feasible. (*)