Plan to build Riau's mine-mouth power plant stalled

Riau provincial authorities remain unclear whether the plan of building a mine-mouth coal power plant in the area will be materialized as planned, Bisnis Indonesia daily reported Tuesday.

"We have sent letters coalminer PT Tambang Batubara Bukit Asam (PTBA) to ask it about the realization of the plan, but it has given no response," the paper quoted as saying Herlyan Saleh, head of Riau's development promotion and investment agency.

Herlyan said state-owned PTBA should have completed a feasibility study of the plan in 2002 as stipulated by the memorandum of understanding the company had signed with Riau provincial administration, Indragiri Hulu regency administration and Kuantan Singingi regency administration.

The plant, designed to have capacity of 2x600 megawatts, was expected to start operation by 2006 and its construction would be jointly financed Riau administration, PTBA and state electricity firm PT Indonesia Power. The project will be located in Riau's Peranap district, while coal for it would come from Kuantan Singingi.

Meanwhile, PTBA's corporate secretary Milawarma said the feasibility study of the power project could be completed in the first quarter of this year. Whether or not the project would be carried out would depend on the outcome of the feasibility study, he said.

Earlier reports said the power project would cost US$500 million and that Indonesia Power would hold a 51-percent stake in it.

Herlyan said Riau administration had considered to a 2x150 MW gas power plant in Duri, Bengkalis. (*)