Zelan-Priamanaya reaches COD extension deal with PLN

By Romel S. Gurky

Malaysian-exchange listed firm Zelan Berhad announced Thursday that state electricity firm PT PLN (Persero) and Zelan-Priamanaya-Tronoh, a consortium led by Zelan Holdings (M) Sdn. Bhd. have concluded a global settlement and entered into the negotiation agreement dated 21 February 2012 in relation to the contract dated 21 March 2007 for the design, engineering, procurement, commissioning and construction (EPCC) of the 2 x 300 - 400MW coal fired power plant in Rembang, Central Java.

Based on the new deal of the EPCC, the parties have agreed the extension of time, the contractual commercial operation date for Unit 1 is 26 October 2011 and for Unit 2 is 25 January 2012.

As both units 1 and 2 achieved COD on 10 December 2011, there is a delay of 45 days for Unit 1 and no delay for unit 2. The parties have agreed that the amount of the liquidated damages due to PLN for the said delay is US$9.2 million.

The parties have also agreed that the amount of deviations due to PLN is $4.74 million.

ZB and ZHSB collectively hold 70% participating interests in the consortium while PT Priamanaya Djan International holds the remaining 30%.

Editing by Denny H. Tarigan