Sumsel 9, 10 power plant projects face delay threat

Construction and commercial operation of key Sumsel 9 and 10 mine-mouth coal-fired power plants with combined capacit of 1,800 MW in South Sumatra may be delayed following recent regulatory change, Bisnis Indonesia reported Friday.

The paper quoted Director of Planning at state-owned electricity firm PLN, Murtaqi Samsuddin, as saying that company will have to reevaluate the tender process following the issuance of Minister of Energy and Mineral Resources No 10/2014 on the mechanism for the supply and price determination of coal for mine-mouth power plants, under which the coal price is determined using the cost plus scheme, which means that the coal price is calculated based on production cost plus a margin of 25 percent of production cost for the coal producers.

He added that the tender process for the project, which started in 2012, has now entered the stage of submitting bidding documents by participants.

The planned Sumsel 9 and 10 power plants were supposed to start operation in 2017.

Murtaqi said that Sumsel 9 and 10 are complex projects as it would be developed under the so-called private-public partnership scheme, thus involving various ministries and government institutions in te decision making process.

Coal giants such as PT Bukit Asam and PT Adaro Energy have expressed interest in the projects. (*)