New agency formed to fast-track power projects

Indonesia, Southeast Asia?s biggest oil producer, has set up an agency to speed up the construction of 10,000 megawatts of coal-fired power plants to help ease domestic power shortages.

The government appointed Yogo Pratomo, formerly director general of electricity, to lead the team that will supervise the tendering and construction of power plants worth US$9 billion, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

President Susilo Bambang Yudhoyono has signed the regulation to set up the team, which will make sure that the plants start operating by 2009, Purnomo said.

Indonesia, which has frequent blackouts, needs to spend about $27 billion on new plants and power lines by 2012 to avoid electricity shortages, according to the World Bank. The government is encouraging the use of fuel generated from coal- fired plants as oil trades at near record prices.

PLN plans to award the contracts to build the coal-fired power stations as early as September, pending a state?s decision to waive a rule requiring open bidding on the projects. Yudhoyono has signed the decree on the rule, which has yet to be made official, Purnomo said.

The contractors building the plants will need to complete the projects in 33 months, Djuanda Nugraha Ibrahim, acting president director of PLN said on June 21. The plants would be able to produce a minimum of 8,000 megawatts of power by June 2009, he said.

Bank of China, Export-Import Bank of China and China Development Bank have agreed to lend as much as $4 billion to PLN for the power plants, Ibrahim said on June 8. (*)