Power producer to get govt assurance

The government may provide a letter to investor involved in the construction of coal-fired power plants to be built under a fast track program to provide an additional power supply of 10,000 megawatts in the country by 2009, to show its commitment to see the projects through.

Speaking to reporters in Jakarta on Friday, Vice President Jusuf Kalla said that the government should issue a letter stating that it is committed to supporting state-owned electricity company PLN so as to enable it to pay the Independent Power Producers (IPPs), The Jakarta Post reported Saturday.

?However this is not guarantee letter that will require the state to cover the utility?s unpaid debts,? Kalla said.

The government has asked PLN to build several coal-fired power plants within the next four years to provide an additional power supply of 10,000 MW. Some of the projects will be excluded from a lengthy tender process so that the new plants will be able to commence operation according to schedule.

Earlier several of the investors requested the government provide letters of guarantee the government would take over the project in case a disturbance halted the construction.

?The government is still considering requests from investors for a guarantee. Several lenders for the projects are also requesting this. It is just to make them feel more secure in doing their business here,? Djuanda Nugraha Ibrahim, acting president director for state electricity company PT PLN said on July 21. (*)