Government retenders four major power projects worth $1.2 billion

Ika Krismantari, The Jakarta Post

The government is reopening the tender for the construction of four power plants worth US$1.2 billion to be built as part of the fast-track program to provide additional electricity supplies of about 10,000 MW by 2009.

President director of state electricity utility PT Perusahaan Listrik Negara (PLN) Eddie Widiono said in Jakarta that the four projects were being retendered because only one of the bidders had satisfied the tender requirements.

The four coal-fired power plants consist of the Banten power plant with a capacity of 300 MW in Teluk Naga, Banten, the 300-MW Pelabuhan Ratu power plant in West Java, the 300-MW Pacitan power plant in East Java and the 600-MW Tanjung Jati power plant in Tanjung Jati, Central Java.

"Those interested in bidding must submit their bids by Dec. 27 at the latest," Eddie said.

He said that the three 300-MW power plants had attracted 24 bidders, while the 600 MW power plant had attracted bids from 19 local and overseas companies.

However, as only one of them was qualified to enter the final round of bidding, the tender, which was launched in July, had been canceled.

A government regulation states that a tender will only be valid if at least three bidders progress to the final round of bidding.

"We hope that the four power plants will be able to commence commercial operations in October 2009," said J. Purwono, the director general for electricity and energy use at the Energy and Mineral Resources Ministry, adding that the winners of the second tender would be announced in April 2007.

The power plants are being put out to tender as part of the government's 10,000 MW "crash program" launched in March, which is aimed at preventing power shortages and cutting the nation's dependence on oil-based fuels for electricity generation.

In October, PLN opened the tenders for the construction of 30 power plants outside of Java and Bali islands, including nine power plants in Sumatra and surrounding islands with a total capacity of 1,428 MW, as well as plants with a capacity of 220 MW in Sulawesi and 400 MW in Kalimantan.

The government has estimated the cost of infrastructure development in the power sector will reach $41.3 billion between 2006 and 2016, including $8 billion under the crash program.

"Considering the limited funding resources for power-sector development, private sector participation in power generation will be encouraged, while transmission and distribution will continue to be handled by PLN," Purwono said.