International Power, Tomen to cancel building Tanjung Jati A project
Monday, August 23 2010 - 08:38 AM WIB
?Although Bakrie has not received officially the cancellation latter yet, but they already told Bakrie about their plan,? Bakrie Power?s President Director Ali Herman Ibrahim told reporters in Jakarta on Monday.
He refused to mention the reason of the cancellation.
He also said that the project will be continued with or without the two partners. ?So the project?s shareholders will only be Bakrie and Maharani,? he said. He expected that the project will start commercial operation in 2016
When PLN signed the agreement to buy power from Tanjung Jati A in April 1997, the official record issued by PLN stated that the project was owned by Bakrie Power Corporation (20 percent), Tomen Power Corporation (30 percent), UK-based firm International Power (30 percent) and PT Maharani Paramitra (20 percent). Maharani is owned by former President Soeharto?s daughter Titiek Prabowo.
The Tanjung Jati A had been delayed several years because PLN had not yet agreed with the prices of the electricity proposed by Bakrie.
Bakrie proposed a price range of between 6 US cents and 7 US cents per kWh for the electricity to be produced from the Tanjung Jati A plant, but the proposal was rejected by PLN. ?The negotiation is still underway to settle the difference,? he said in April last year.
A difficulty in obtaining the land in Jepara for the power plant had also hampered the power project, Ali said on 29th April last year, adding that the company could relocate the plant site to Pemalang, also in Central Java , if the land appropriation problem could not be settled.
PT Bakrie Power had also raised the cost estimate for the construction of the Tanjung Jati A power plant to about US$2 billion from $1.2 billion due to an increase in the engineering, procurement and construction (EPC) costs. (godang)