Private companies can build hydropower plants at lower costs

The government has been asked to give a wider opportunity to private companies to take part in the construction of hydropower plants in the country because experiences have indicated that the cost of building hydropower plants by private companies was much lower than those by state owned electricity company PLN, Bisnis Indonesia reported on Friday.

Electricity expert Herald Sihombing said that the construction of a hydropower plant in North Sumatra such as PLTA Sipansihaporas in Tapanuli and PLTA Lau Renun in Dairi were very costly.

At the PLTA Sipansihaporas, the construction cost is about Rp 34.5 billion for 1 MW or about Rp 1.72 trillion for its total capacity of 2 x 25 MW, while at PLTA Lau Renun, the cost for one MW is about Rp 79.9 billion or about Rp 3.99 trillion for its total capacity of 2x 41 MW.

"If the power plants were built by private companies, the costs would have been much lower. A professional private contractor would only spend about Rp 12 billion to produce one MW of electricity," he said.

Nelson Matondang, a Medan based contractor, also shared Sihombing's view. "The cost of the construction of a hydropower plant is much lower than those of PLN. I think it is time for the government to allow private companies to do the construction of PLN's power plants," he said. (*)