PLN introduces new tender system for Sumsel 9, 10

State-owned electricity company PT. Perusahaan Listrik Negara (PLN) has set up a new tender mechanism to seek contractors for the development of the South Sumatra (Sumsel) 9 and 10 coal-fired power plants, Kontan reported on Tuesday.

The paper quoted Bambang Triharyono, General Manager for Business Development of coal mining firm PT Pendopo Energi Batubara as saying that PLN has sent amended tender documents to participating bidders, in which the tender system has now been divided into two clusters.

One cluster is for bidders comprising of coal miners producing low rank coal with calorific value of 3,000 kcal/kg or lower, and the second cluster is for coal producers having coal with higher CV of more than 4,000 kcal/kg.

Under the new system, the winning bidder for reach cluster will be competed against each other in determining the winning bidder for the 2x600 MW Sumsel 9 power plant project. The runner up will be the winning bidder for the Sumsel 10 project, Kontan said.

Low rank coal producers protested the new tender system as producers of higher CV coal would win the tender because they would be able to offer lower cost as the particular type of coal is more efficient.

Producers of low CV coal have urged PLN to use 3,000 k/cal per kg coal in the two projects, arguing that the country has abundant supply of low rank coal which have less value in the export market, while the higher CV coal can be exported.

Then minister of energy and mineral resources Jero Wacik in August issued a controversial letter, asking PLN to abandon its policy to use low rank coal in the Sumsel 9 and 10 projects, triggering protest from low rank coal producers. (*)