Japan pressurizes RI to resume and complete Paiton, Tanjung Jati and TPPI projects

Minister of Energy and Mineral Resources Purnomo Yusgiantoro acknowledged that there were increased international pressure for the Indonesian government to resume and complete the construction of Japan-financed projects, such as Tanjung Jati and Paiton power plants and Tuban petrochemical project, Kompas daily reported on Friday.

Purnomo said that the pressure not only came from Japan, but also from other parties, but the government insisted that the resolution for those Japan-funded projects must be pursued without sacrificing the Indonesian government.

Therefore, the settlement of those projects must be pursued through a business-to-business scheme.

He said the government would first of all try to resolve the Tuban petrochemical project, belonging to Trans Pacific Petrochemical Indotama (TPPI), with the main contractor of JGC of Japan.

He said the government had agreed to involve Pertamina in the restructuring of the petrochemical project, although some critics said that the proposed mechanism, if implemented, would victimize Pertamina and benefit the owners.

Meanwhile, Problems with the Tanjung Jati B power plant had actually been settled, by setting up the selling price of the electricity at between 4.00 U.S. cents and 4.30 U.S. cents per kilowatt-hour, through a leasing system. But the implementation is stalled as the decision was taken by caretaker ministers after former President Abdurrahman Wahid was impeached.

And the Paiton project is currently under negotiation because the government could not yet accept the electricity price offered by Paiton. The government wants to get the price below 5 U.S. cents per kilowatt-hour. (*)