PLN forms new company to develop Tanjung Jati B power plant
Tuesday, July 30 2002 - 03:17 AM WIB
Sentral Jawa Power and Sumitomo would start developing the 1,320 megawatt-power project immediately after the Indonesian government receives US$800 million in loans from Japan Bank for International Cooperation (JBIC), PLN president director Eddie Widiono said. The project is located in Jepara in northern Central Java.
?The Tanjung Jati B project is 60 percent completed, and could be fully finished immediately after the government has finished negotiating with the creditor,? Eddie said.
PLN expects the power project to be finished before 2005 when Indonesia is estimated to face severe power crisis if new power plants are not built, Eddie noted. He said the country?s electricity demand had increased by 8.9 percent annually over the past several years.
Meanwhile, another senior official of PLN, Ratna Djuwita Wahab, said negotiations with JBIC could not be concluded soon because the Japanese creditor insists that the government issue to it a compensation guarantee in anticipation of possible project failures. Ratna said the government had rejected JBIC?s demand and asked it to negotiate about that matter with PLN and Sumitomo.
The Tanjung Jati B project will be carried out under the so-called financial lease scheme so that the Indonesian government does not have to provide any participation funds.
Initially, Hopewell Holding and Impa Energy jointly carried out in 1994 the power project with Sumitomo as its main contractor. The government suspended the project in 1998, along with other 26 power projects, after Indonesia was hit by severe economic crisis.
In 1999, Hopewell and Impa handed over the project to PLN, which later asked Sumotomo to continue it with financial support from JBIC.
Early this month, President Megawati Sukarnoputri relaunched Tanjung Jati B and other seven power projects suspended in 1998. (*)