Philippine aborts Indonesian coal supply deal: Report

The government of Philippine has backed down from a plan to import coal from Indonesia under a bilateral contract that was opposed by local coal producers, The Daily Tribune reported Wednesday.

The Department of Energy (DoE), which was supposed to firm up the contract during the Asean Leaders? Summit in Cebu City this week, gave the reason that it is still consulting Indonesia on the deal.

?We?re going to ask the Indonesians to tell us what to do forward,? Energy Undersecretary Guillermo Balce said.

The long-term coal supply agreement with Indonesia was meant to supply the coal requirements of power plants being operated by state firm National Power Corp. (Napocor).

The Philippine Chamber of Coal Mines Inc. (Philcoal) opposed the planned coal supply agreement saying that the government will unduly interfere in the coal-mining industry.

Balce said the proposed coal contract between Napocor and Indonesia?s state-owned PT Tambang Batubara Bukit Asam (PTBA) would not materialize since the company lacks political identity for the contract.

?PTBA, which was to sign the contract, turned out to be not a political company.?

?It has to be government to government,? he added on the proposed agreement.

He said PTBA cannot be a designated signatory to the bilateral coal contract between the two countries.

The rationale behind the agreement was to provide a stable supply and prices for coal used as fuel by local power plants.

Philcoal said, however, there is an abundant supply of coal in the world market and its prices have been going down and is further expected to go down in the foreseeable future.

?The timing to get into such an agreement or understanding by the government puts the private sector apprehensive, as this will create an undue and unfair competition,? according to Philcoal.(*)