Luhut says PLTU Jawa-5 project must be offered to IPP
Friday, September 9 2016 - 02:39 AM WIB
Luhut said on Thursday that according to the 2016-2025 Electricity Procurement Business Plan (RUPTL) of PLN, the power plant project must be offered to independent power producer (IPP) via tender process. ?I will reprimand PLN. If the project is designated for IPP it must implemented accordingly,? he said, adding that his office has yet to formally receive the PLN decision on the direct appointment of IPP to develop the project.
According to the RUPTL document, the PLTU Jawa-5 coal-fired power plant project should be developed by IPP. The plant can be either located in West Java or Banten.
PLN President Director Sofyan Basir said early this month the company has appointed Indonesia Power to develop the project to help ensure it could be completed in 2019 as targeted by the government.
PLN Director Supangkat Iwan Santoso, however, quickly said on Thursday that his company has yet to officially appoint Indonesia Power for the project.
He acknowledged that Indonesia Power has a number of advantages in developing the project as the company already have the required land in Serang, Banten Province, and better access to get permit quickly. As such construction of the project can be completed in three years, so that it could be ready for operation in 2019. On the other hand, if the project is given to IPP via tender process, the winning bidder may require more time to among others complete land acquisition process, which would make completion of the project to be delayed, possibly in 2020 or beyond.
Iwan said that according to Presidential Regulation No 4/2016 on the acceleration of infrastructure projects, PLN can directly appoint its subsidiary for the project as long it holds a 51 percent interest. Therefore, he said, Indonesia Power will team up with IPP in the PLTU Jawa-5 project.
Arthur Simatupang, Executive Chairman of Indonesia Electricity Producers (APLSI) said that as the PLTU Jawa -5 project has been allocated for IPP, the move by PLN to appoint its own subsidiary will create bad precedent and undermine investment climate in the country?s power sector. He fears that PLN will make similar move regarding other coal-fired power plant projects designated by the RUPTL for IPPs.
Tender process for the PLTU Jawa-5 project was entering the final stage when PLN halted the process and appointed Indonesia Power instead. A strong candidate to win the project was a consortium led by China Oceanwide with members including PJB and Shanghai Electric Power. PJB is a subsidiary of PLN. (*)