PLN wants to partner with Japan for Jawa 5 project

JAKARTA. President Director of State Electricity Company (PLN) Sofyan Basir said that PLN has prerogative right to appoint its subsidiary Indonesia Power to work on the project of PLTU (Steam Electric Power Plant) Jawa 5 with the capacity of 2x1,000 megawatt (MW).

According to Sofyan, PLN prefers to invite investor from Japan to work with this project. However, the Japanese investor will only have 49% of ownership in the project. PLN itself will let Indonesia Power to select the investor.

Sofyan said that PLN makes the preference to balance the number of partnership with Chinese investors.

Recently, many of power plant projects in Java involve Chinese companies as partners. Sofyan continued that this kind of direct appointment is in accordance with Presidential Regulation No 4/2016 on Acceleration of Electricity Infrastructure Development.

“The tender process will take at least 6 months to settle, and after that we have to conduct procurement process. The direct appointment is not breaking the law. So it is legal”, Sofyan said.

However, Director General of Electricity Power of Ministry of Energy and Mineral Resources Jarman said that according to the Provision of Electriciy Power Business Plan (RUTPL) 2015-2016, the project of Jawa 5 is a quota for Independent Power Producer (IPP).

According to Jarman, PLN can make direct appointment only for PLN project, while Jawa 5 project is regulated under RUTPL so that the project has to involve IPP.

“The appointment has to go through tender proccedure,” Jarman said. Eventhough Jarman said that the direct appointment has to be aborted, he did not specify whether or not his office will send a reprimand to PLN.

Complained to Minister
The controversy on PLTU Jawa 5 project has drawn investors attention.

Executive Director of Indonesia China Cooperative Investment (ICCI) Eddy Herwani said, PLN measures to abort the ongoing tender process, which was nearing final process, and make direct appointment are unacceptable.

Eddy plans to complain about this matter to Caretaker of Minister of Energy and Mineral Resources Luhut Binsar Panjaitan. “The Minister also does not agree with the direct appointment so that we are looking forward to having his decision”, Eddy told Kontan on Friday (9/9). (Translator: Muhammad Farid)