Talks with developers of all suspended power projects expected to be concluded in June

The government and state electricity company PLN may conclude in June their negotiations with developers of three geothermal power projects, which are among the 27 power projects suspended in 1998 due to the Asian financial crisis, a senior official said Tuesday.

They are Bedugul power project in Bali, Karaha Bodas project in West Java, and Sarulla project in North Sumatra, electricity and energy development director general Luluk Sumiarso said.

?We expect negotiations on the projects to be concluded in June,? Luluk told reporters.

The official said that negotiations with developers of the other 24 projects had been concluded.

Reports said that price was a sticky matter in negotiations with investors of the three projects.

Sarulla and Bedugul project developers reportedly offered their electricity at 6.1 US cent dollar and 6.35 cent dollar per kilowatt hour, respectively, which were too high for the government. The projects were planned to have capacity of 3x110 megawatts (MW) and 2x110 MW, respectively.

U.S. oil and gas firm Unocal owns 90 percent of the Sarulla project, while a consortium of PT Pandanwangi Sekartaji, California Energy and PT Wawatindo owns the Bedugul project.

Meanwhile, the government has yet to decide whether to allow state oil and gas firm Pertamina to follow an out-of-court settlement over its long running dispute with Karaha Bodas Co., a power company mainly owned by U.S. investors.

The government wants Karaha Bodas Co. to resume its project in Karaha Bodas, West Java while still refusing to pay the Cayman Islands-registered firm US$261 million as compensation for costs incurred and loss of earning due to the cancellation of the project. A Switzerland-based arbitration court in 2000 ordered the amount.

The Karaha Bodas project had been planned to have capacity of 220 MW. (godang)