PLN terminates three unfinished power contracts

State utility PT Perusahaan Listrik Negara (PLN) has decided to terminate three contracts of development of steam power plants, and its subsidiaries will take over the construction works.

?The three steam power plants are the 4 x 7 MW PLTU Atambua, 2 x 25 MW PLTU Gorontalo, and 2 x 10 MW PLTU Bima. We considered the contractors as no longer able to continue the constructions,? said PLN Construction Director Nasri Sebayang after a hearing session with the Commission VII of the House of Representatives in Jakarta on Monday.

All of the three contractors are Indonesian companies. ?They cannot complete the constructions according to the agreed contracts. They?ve stopped their construction activities for more than a year,? he said as reported by Kontan daily on Wednesday.

He pointed out that their failure to continue the constructions was the result of their inability to secure funds to finance the projects and conflict among members of their consortium.

According to him, the projects will be taken over by PLN subsidiaries without a process of tender. The subsidiaries include PT Pembangkit Jawa Bali, Indonesia Power, and Rekadaya. (*)