JAKARTA. Ministry of Energy and Mineral Resources (ESDM) finally approved PT Indonesia Power, which is the subsidiary of PT PLN (State Owned Electricity Company), to work on Steam Electricity Power Plant (PLTU) Jawa 5 in Banten. The worth of IDR30 trillion of power plant will have 2 x 1,000 megawatt (MW) of power capacity.

The decision has solved polemic about the direct appoinment of PLN to its subsidiary PT Indonesia Power to work on the project.  Initially, Ministry of Energy and Mineral Resources forbidded PLN to make direct appoinment on PLTU Jawa 5 project. According to the ministry, the appointment has to go through bidding process.

In June 2016, PLN aborted ongoing bidding process when there were only two companies left. PLN was not convinced with  one of them, a Chinese company, on the grounds that it is a non-electric company.

Unlike his previous attitude that opposed the direct appoinment, this time Care Taker of Minister of Energy and Mineral Resources Luhut Binsar Panjaitan expressed his support towards the process. According to Luhut, direct appointment is valid, as long as PLN appointed its subsidiary company.

In this case, Luhut referred to President Instruction No. 4/2016 on Acceleration of Infrastructure Construction. The presidential instruction provides legal basis for PLN to make direct appoinment with a condition that the company has at least 51% of arcshares in the project.

However, the presidential instruction contradicts with 2016-2025 Electricity Supply Business Plan (RUPTL). According to the plan, PLTU Jawa 5 will be managed under the bidding scheme that involved independent power producer.

Meanwhile, President Director of Indonesia Power (IP) Sripeni Inten Cahyani has not confirmed yet the company’s readiness to work on the project.

Procurement Director at PLN Supangkat Iwan Santoso said that the project is scheduled to commence in January 2017 and complete at the end of 2019.  Recently, Indonesia Power is conducting selection process to find a partner to work on PLTU Jawa 5 project. One of the strong candidates is Japanese Mitsubishi.

According to electrification observer at Institute for Essential Service Reform (IESR) Fabby Tumiwa, article 2 of Presidential Regulation No 4/2016 stipulates that the acceleration of electricity infrastructure is conducted in accordance with  2016-2025 Electricity Supply Business Plan (RUPTL).

Executive Director of China Cooperative Investment Eddy Herwani said that he has delivered a letter to President Joko Widodo to propose for audience. Eddy is disappointed with PLN decision that aborted bidding process, which involved his company’s partner China Oceanwide Holding Group-China Shanghai Electrical Power Construction Company-PT Pembangkit Jawa Bali (PJB).

According to Eddy,  his company’s partner was ready to sell electricity at a price of US$4.5 cent per kwh, or US$1 cent cheaper than another participant. (Translator: Muhammad Farid)

Editor: Sanny Cicilia