Minister proposes land lease option for power projects

Amid difficulties faced by state-owned power firm PT PLN to complete land acquisition for power plant projects, Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan suggested the utility to lease the land from the people.

He was quoted by Kontan as saying Monday that by introducing the lease mechanism, the people would have alternative other than selling their land to PLN. He said that PLN could, for example, lease the land for up to 50 years.

Ferry said that this requires a legal umbrella that must be discussed with the Ministry of Finance.

Minister of Energy and Mineral Resources Sudirman Said has stated earlier that land acquisition has been the toughest obstacle in the development of the planned 35,000 MW power plant projects. So far, only 10 percent of the target has been completed.

President Joko Widodo also last week warned of the slow progress in the 35,000 MW power plant projects that are supposed to be completed by 2019 to help accelerate economic growth. He said that PLN must carry out a thorough evaluation on how to speed up the projects. (*)