Rumania concerned about slow progress of Asam-Asam power project

Rumania?s extraordinary plenipotentiary in Indonesia George Savuica has voiced concerns about the slow progress in the negotiations on the development of the Asam-Asam coal-fired power plant project in South Kalimantan.

Rumanian electricity company Romelectro SA signed the memorandum of understanding (MOU) with Indonesian state electricity company PT PLN on the development of the power plant in 2003 in the presence of the president of both countries.

Three years after, the Rumanian company is still unable to start the development of the project because the negotiations on the financing scheme for the project had yet to be completed.

?The negotiations are not facing a stalemate. Yet, if the contract on the project can?t be signed this year, I can?t say anything, because negotiations on the project have been progressing slowly. Yet, I think we are ready to sign the contract on the project in one or two months,? Savuica was quoted by Bisnis Indonesia as saying.

Rumanian once proposed a financing scheme under which Rumanian and Indonesia will cover 70 percent and 30 percent of the project costs respectively. Now, Rumania is proposing to finance all the project costs through a combination of export credits and concessional loans. Negotiation is still progress on the amount of interest to be paid by Indonesia, he said.

PLN?s deputy director of primary energy Tonny Agus Mulyantono said that PLN was still waiting for the Ministry of Finance and the National Planning Board (Bappenas) to approve of the financing scheme.

?As far as PLN is concerned, we have prepared lands for the location and implementation technicalities for the development of the power plant that will have two units each the capacity of 65 MW. PLN will build and operate it,? he said. (*)