Sumitomo, Essar, Harbin may bid to build power plants in Java

Japan's Sumitomo Corp., India's Essar Group and China's Harbin Electric Inc. may submit bids to build ten coal-fired power plants on Java island.

Marubeni, Japan's fifth largest trading company by revenue, and Shanghai Electric Power Co. are also among 59 companies that have taken bidding documents for the plants, Djuanda Nugraha Ibrahim, acting president director of state utility PT PerusahaanListrik Negara, said in Jakarta Friday.

The government in March ordered Listrik Negara to build 10,000 megawatts of coal-fired power generation capacity to cut dependence on oil that's at near-record p rices. Rising oil prices increased power generation costs and drained Indonesia's finances as the country subsidizes electricity.

The utility on July 10 invited bids for 10 coal-fired power plants on Java, with units able to generate between 300 and 700 megawatts each. Contractors are expected to finance at least 85percent of the project cost using export credits, it said in an announcement in local newspapers.

The utility plans to name the winners of the contracts to build power plants with a total capacity of about 7,000 megawatts in early October, Ibrahim said Thursday.

"We're focusing on Java first, after that we'll start inviting bids for outside Java," Ibrahim said. The utility plans to start inviting bids to build 30 coal-fired plants outside Java three months from now. The plants will have a total capacity of between2,900 megawatts and 3,200 megawatts, he said.

Listrik Negara may pick Indonesian companies over foreign ones to build the plants outside Java, he said.(*)