Power project in in Southeast Aceh might be suspended

The government's plan to build a hydro power plant in Peusangan, Southeast Aceh might be suspended after a contractor and financial provider of the project hinted that they would pull out from the project due to continued armed conflicts in the troubled province.

The project, which was scheduled for operation in 2004, had been delayed for several times due to the uncertainty in the security situation. The plant, with a capacity of 86.4 MW, will replace existing oil diesel power plants, which would end their operations in 2004.

Sulaiman Daud, the project officer of the planned hydro power plant, said that Japanese contractor Komaga Engineering Corp, which led a consortium in the construction of the power plant had expressed their intention to withdraw from the US$225 million project.

He said that the Asian Development Bank, the main donor of the power plant, had also threatened to cancel its financing if the armed conflicts in the province continued. (*)