Govt to ask contractors to continue coal supplies to PLN's power plant
Friday, June 1 2001 - 07:00 AM WIB
The ministry of energy and mineral resources is planning to ask four contractors to continue coal supplies to the Suralaya power plant in West Java to ensure power production at the plant until the end of the year, according to a report.
Director general of geology and mineral resources Wimpy S. Tjetjep said on Thursday the four contractors, that is PT Adaro Indonesia, PT Kideco Jaya Agung, PT Berau Coal and PT Jorong Barutama Greston, would be asked to supply the power plant with the government's share in their coal output.
"We are waiting for the minister to approve the plan," Wimpy was quoted by MinergyNews as saying.
Under their contracts, all coal contractors are obliged to deliver 13,5 percent of their coal output in royalties and taxes to the government.
Normally, the contractors sell the coal and deliver the proceeds to the government. But, the government recently asked the four companies to send the government's coal share to Suralaya following a coal crisis at the plant.
The power plant, which is owned by PT Indonesia Power, a subsidiary of state electricity company PT PLN, was recently forced to cut its production due to the decrease in coal supplies from state coal company PT Bukit Asam. Bukit Asam, which is based in South Sumatra, claimed it could not meet the coal needs of the power plant due to transportation problems.
Suralaya accounts for 30 percent of power supplies to Java and Bali. Thus, any production disruptions at the power plant could cause power crisis in both islands.
Wimpy said Suralaya would have enough coal supplies until end of July, but it has yet to secure coal supplies amounting to 1.2 million tons for the period of August to December.
Wimpy said the government would face no legal obstacles in asking the four contractors to send their coal output to Suralaya because under their contracts, the companies were obliged to deliver the government's share in their coal output in kind, rather than in cash.
Adaro, Kideco Jaya Agung, and Berau held the first generation coal contract of work, while Jorong the second generation coal contract of work.
"Under the first and second generation contracts of work, the government's share in the contractors' coal output should be delivered in kind," Wimpy said. (*)