PLN, PTBA power plant negotiation deadlocked over price
Wednesday, January 14 2009 - 10:00 AM WIB
State owned electricity firm PT Perusahaan Listrik Negara's (PLN) President Director Fahmi Mochtar said on Wednesday that negotiations between the firm and PTBA had been deadlocked over the price payable by PLN for the power to be generated by the power plant
"They insist on the selling price of 5 U.S. cents (per kilowatt hour or kWh). We already have a (price) benchmark. If they accept, we'll make a deal. If not, we'll think about other option," Fahmi told reporters at the Office of State Minister of State Enterprises.
PLN uses the selling price of the Simpang Belimbing power plant in Muara Enim, South Sumatra. Under the deal recently signed by PLN with PT GH EMM Indonesia which plans to develop the power plant, PLN will pay the subsidiary of a Chinese firm 4.28 cents per kWh of power produced from the 227-Megawatt (MW) power plant.
Fahmi warned that if PTBA insists on its price proposal, PLN would offer the project to other party.
PTBA earlier said it was negotiating Power Purchase Agreements (PPA) with PLN for its proposed Banjarsari 2x100-MW mine-mouth power plant and 4x600 MW Bangko Tengah power plant due to soaring investment costs.
PTBA Corporate Secretary Eko Budhiwijayanto said in August 2008 that investment for the Banjarsari power plant was estimated to soar to $310 million from $241 million estimated earlier.
The company said that the plant is expected to come onstream in 2011 with annual coal consumption of 1.1 million tones.
PTBA has 41 percent stake in the Banjarsari power plant. It owns 28 percent of the Bangko Tengah project, with China Huadian owning 55 percent, PT Indika Energy about eight percent, PLN eight percent and the local administration-owned company BUMD Sumsel owns the remaining one percent. (Bodega)