PLN stops negotiations with 12 IPPs

State electricity company PT Perusahaan Listrik Negara (PLN) has stopped negotiations for the construction of 12 power plants because the investors have failed to secure funding and sites for the projects, Bisnis Indonesia reported on Wednesday.

PLN?s President Director Dahlan Iskan said in Jakarta on Tuesday that PLN had not choices but to cancel the construction of the 12 power plants.

But he did not mention the name of 12 power projects.

The 12 projects are part of the 40 power projects to be developed by independent power producers (IPPs) whose constructions have been delayed due to a number of problems, said PLN?s Director for Risk Management Murtaqi Syamsuddin.

The construction of the 28 other projects have been started but the construction works have been suspended due to the delay in loan disbursement or an increase in the construction costs.

?The negotiations for such projects are continuing,? he said.

PLN expects the negotiation to be completed in the next two months. PLN will hire the Institute for the Government's Policy on Goods/Service (LKPP) and the State's Comptroller (BPKP) as assessors to find suitable pricing figures.

The 40 private power plants, which are designed with a total capacity of 2,200 megawatt, will sell its power production to PLN to cope with the power shortage in the country. (*)