PLN suspends tender of PLTU Java 5 project

State-owned electricity company PT PLN has suspended tender process for the 2x1,000 MW PLTU Java 5 coal-fired power plant project in Banten as the existing transmission facility in the region is already overcrowded, Kontan reported on Thursday.

The paper quoted PLN Procurement Director Supangkat Iwan Santoso as saying that the tender will be resumed once the company has resolved the transmission capacity issue.

He said that the existing transmission in the Banten-West Java region is already ?overcrowded,? thus its capacity could no longer absorb additional output from the planned power plant project. ?The electricity can?t be distributed if the transmission capacity is not sufficient,? he said, adding that according to the tender document, PLN holds the right to suspend the tender process as long as no winning bidder has been announced.

There are two remaining bidders competing for the project, once of which is a consortium of China Oceanwide and Shanghai Electricity, and PT Pembangkitan Jawa Bali (PJB), a subsidiary of PLN, which is said to have made the lowest price bid of 4.5 US cents per kWh, or 1 cent lower than its closes competitor, which means the Chinese consortium should have won the project. A source told Petromindo.com in March that the consortium had been named as the winning bidder.

Eddy Herwani, Executive Director of Indonesia China Cooperative Investment (ICCI), said in a statement to Kontan that there?s no valid reason to suspend the tender. ?The suspension of the tender will create uncertainty for the investors,? he said. (*)