Negotiation with Paiton continues despite Chinese offer: PLN

State owned electricity company PT Perusahaan Listrik Negara (PLN) said that the negotiations with PT Paiton Energy was still continuing despite the offer from a Chinese investor to give a better price, Investor Daily reported on Thursday.

"The negotiations with Paiton are continuing. We have not yet received the offer from China," PLN's president director Eddie Widiono said on Wednesday when he was asked to comment on a report that China National Machinery and Equipment Import and Export (CEMC) had offered PLN to build the third and fourth power units of the Paiton power complex in East Java.

The Chinese company has offered to sell the electricity company to PLN at US$0.028 per KwH if it is allowed to build the power plants. The price offered by the Chinese company is much lower than the US$0.0317 per KwH proposed by PT Paiton Energy.

Three operators are now involved in the development of the Paiton power complex, which will have eight power plants. PLN's subsidiary PT Pembangkit Jawa and Bali (PJB) operates the first and second plants, with total capacity of 800 MW, PT Java Power operates the fifth and sixth power plants with total capacity of 1,230 MW and Paiton Energy operates the seventh and eight units with capacity of 1,230 MW. The third and fourth power units have not been built.

Paiton Energy has proposed to build a new power plant with a capacity of 800 MW. The company offers PLN to buy the power from the new plant at $0.0317 per KwH but the latter says that the price is still too high. (*)