Ruling on power plant leaseback to be issued soon

A ruling that would become a legal umbrella for state-owned electricity company PT PLN?s plan to leaseback dozens of power plants to the Chinese contractors to improve their reliability is expected to be issued soon.

PLN President Director Sofyan Basir was quoted by Kontan as saying Friday that the draft of the ruling is currently being evaluated and finalized, in the hope that it could be completed within the next 1-2 weeks.

The government has instructed PLN to leaseback unreliable power plants developed by Chinese contractors. Minister of Energy and Mineral Resources Sudirman Said stated in April of this year that the power plants built by the Chinese contractors under the first fast track development program (FTP I) only have reliability of 60-65 percent due to poor quality.

The government wants the plants to be improved, and PLN has selected three of the five Chinese contractors to do the job. He did not provide further details.

There are 35 plants with combined capacity of 10,000 MW built by Chinese contractors under the FTP I. (*)