PLN settles Tanjung Jati A electricity price

State electricity firm PLN said on Wednesday it had settled negotiation with a Bakrie-led consortium to set electricity price generated from the proposed 2x660 MW Tanjung Jati A coal-fired power plant at US 4. 5 cents per KWH.

PLN Director Ali Herman Ibrahim said the price was lower than initial price of 4.8 cents proposed by the consortium. The settled price, he said, was inline with government?s instruction, which sets maximum electricity price generated by coal-fired power plant in Java at 4.5 cents per KWH.

Tanjung Jati A project would be built by Tanjung Jati Corp., which shareholders include Bakrie Power, Tomen Corp, International Power and Maharani Group.

PLN Deputy Director Nasri Sebayang said that in order to be able to economically achieve the 4.5 cents per KWH price, the consortium would have to relocate the project from Central Java to West Java. Sebayang said that construction would costs significantly higher in Central Java due to complicated structure and swampy areas.?They are now looking for the most suitable location in the northern coast of West Java,? he said.

The consortium would spend $1.4 billion to build the project. Tanjung Jati Corp. will act as independent power producer with PLN as single offtaker.

Tanjung Jati Corp. is given time until May 2007 deadline to settle the project.

Earlier, Tanjung Jati Corp. Ambono Janurianto said that the consortium would receive financial back-up from JBIC.

The power plant is slated to commence operations in 2012, he said. (godang)