Govt to hold tender for nuclear plant in 2008

Ika Krismantari, The Jakarta Post - 2006-12-07 15:32

Jakarta, December 7, 2006 (JP) - Pushing ahead with its plans to harness nuclear power, the government will hold a tender in 2008 to select suitable suppliers of nuclear technology and contractors to construct the Rp 15 trillion (US$1.66 billion) plant in Muria, Central Java, a senior official says.

"A special body responsible for conducting the tender will be set up next year, with a presidential decree to serve as the legal basis expected to be issued later this month," Ferhat Aziz, legal and public relations head at the National Nuclear Energy Agency (Batan), said Wednesday.

To be called the Nuclear Power Implementation Agency, Ferhat said the new agency would be responsible for preparing the tender and selecting reliable suppliers of safe technology suppliers for the project, which will be able to generate 1,000 megawatts (MW) of electricity.

It will be made up of officials from Batan, state power firm PT PLN, the Research and Technology Ministry and the Nuclear Energy Regulatory Agency (Bapeten).

"We're eyeing companies from the U.S., South Korea, France and Japan, as their technologies meet the standards set by the International Atomic Energy Agency (IAEA)," he said, although he was quick to add that the tender, by its nature, would be open to all potential suppliers.

The winner, however, would have to team up with a local company for the development of the plant.

"We estimate that the shareout will be 25 percent for the local-based firm and 75 percent for the foreign company," Ferhat said.

The government is hoping to commence construction of the power plant in 2010, with it expected to come onstream in 2017.

In terms of cost, nuclear power is marginally cheaper than oil-based electricity. A nuclear power plant can produce one kilowatt hour (kWh) of electricity at an estimated cost of 4.3 U.S. cents, while oil-based electricity costs 4.5 U.S. cents per kWh.

Hudi Hastowo, the secretary at the Research and Technology Ministry, said that Indonesia needed to develop a nuclear program to reduce its dependence on oil.

"We have high hopes for this kind of energy as it saves money. Oil, when used to generate electricity, contributes to around 60 percent of the electricity's retail price, compared to 20 percent in the case of nuclear power," he said,

He stressed that PLN would benefit from the development of a nuclear power plant given that it would need an additional 1,500 MW to 2,000 MW annually after 2016.

Commenting on resistance by those concerned about safety and the environment, Hudi said the government was fully aware of their concerns, which was why it fully intended to adhere to international standards.

"IAEA Director General Mohammed Elbaradai is scheduled to visit Indonesia on Dec. 7-9 to help us promote the safe use of nuclear power for peaceful purposes. We hope we can improve public awareness about the issues involved," he said.

Indonesia has received a total of $1.34 million in technical assistance from the IAEA to develop eight programs in 2007 and 2008 related to the harnessing of safe nuclear power.