Index

 19 November 2006

 
Winner of New Suralaya power plant to be announced next week
Jakarta

State electricity firm PT Perusahaan Listrik Negara (PLN) said it would announce the winners of the tenders for two coal-fired power plants next week, having secured price-offering bids from nine consortia Wednesday.

The bids should have been submitted earlier but the submission period was extended for a week at the tender participants' request.

"We are receiving their final price-offerings today (Wednesday) and will announce the winners for the two power plants next week," said PLN bidding committee chairman Choiruddin Martondang.

The two power plants are the New Suralaya plant, which is located in Banten, and the New Paiton plant, located in East Java alongside the existing Paiton power plants. Each of the new plants will have a capacity of between 600 and 700 megawatts.

On Wednesday, four consortia submitted their price offers for constructing the Suralaya power plant: the CNTIC consortium with an offer of US$377.9 million, the Marubeni-Doosan-PT Tripatra-PT MCC consortium with an offer $623 million, the Dongfang-Dalle-HEPEC consortium with an offer of $364 million and the Shanghai Maxima consortium with an offer of 493.9 million.

Meanwhile, five consortia submitted price offers for the Paiton power plant: the Chengda Engineering Corporation-Wijaya Karya consortium with an offer of $273 million, the HPE-MSHE consortium with an offer of $423 million, the Marubeni-Doosan-PT Tripatra-PT MCC consortium with an offer of $728 million, the China Huadian-PT DGI consortium with an offer of $363.5 million and the Shanghai Maxima consortium with an offer of $543.7 million.

Although many of the Indonesian-Chinese consortia proposed much lower prices than the Indonesian-Japanese consortia, Choiruddin said the construction price represented only one of the variables PLN would take into account in determining the winners.

"The winner for each project will not necessarily be the one with the lowest construction price. We've other criteria to consider. Two of the most important are the plant's performance guarantee and the end-price for the customer, which is measured in rupiah per kilowatt per hour," he said.

The end-price, Choiruddin said, would be influenced by other calculations, including the costs of generation, operation and maintenance, and the duration of the return on investment period.

"We will need some time to evaluate their proposals," he said.

The two power plants are part of the government's 10,000 MW "crash program" aimed at helping prevent power shortages and cutting the nation's dependence on oil-based fuels for generating electricity.

Due to financial constraints and its commitment to adhering to free-market best practice, the government is procuring the power plants on a public-private partnership basis.

To attract investors, Vice President Jusuf Kalla has said the government would ensure that PLN would buy the power produced by the plants at agreed prices. If PLN was experiencing financial difficulties and could not pay the agreed prices, the government would then step in to make up the difference.

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