Power plant contractors face fines due to delays

JAKARTA. Most construction companies involved in the development of power plants under the first 10,000 megawatt (MW) fast-track program may be fined for construction delays, a senior official at the Energy and Mineral Resources Ministry has said.

The ministry’s director general of electricity, Jarman, said that contractors who failed to complete their projects according to schedule would receive fines of up to 10 percent of the total project value.

“Except PLTU Labuan, all the power plants being built under the first 10,000 MW program are behind schedule,” he added.

Overall, the completion rate of the 10,000 MW power plant project had reached over 40 percent up to July this year, Jarman said, adding that the rate was expected to increase to 60 percent by the end of the year.

“We have received 4,500 MW of power supply from the program, and we expect to get an additional 1,500 megawatts by the end of the year,” he said on Monday.

The program was initially scheduled for completion in 2010. However, the completion date has been extended to 2014 due to problems related to equipment availability, land-acquisition problems or funding.

Projects that are still being hampered by land-acquisition problems include several coal-fired power plants in Bengkayang, West Kalimantan; Teluk Sirih in West Sumatra; and Bau Bau in Southeast Sulawesi, Jarman said.

The program comprises 35 power plants, mostly coal-fired plants, 10 of them in Java and Bali with the remaining 25 off the two islands. Most coal-fired power plants being developed under the program are being built by Chinese companies.

Seven new power plants with a combined capacity of 860 MW should have begun operating in the second semester of this year.

These power plants are PLTU Asam-Asam in South Kalimantan (65 MW), PLTU Lombok in West Nusa Tenggara (30 MW), PLTU Barru in South Sulawesi (50 MW), PLTU Amurang (25 MW), PLTU Kendari in Southeast Sulawesi (20 MW), and PLTU Kupang in East Nusa Tenggara (10 MW) and Paiton in East Java (660 MW).

State power company PT PLN confirmed that difficulties in acquiring land, time-consuming loan disbursement and technical problems with imported machinery had delayed completion of several coal-fired power plants within the first phase of the 10,000 MW fast-track program.

“Land acquisition has long been among the major problems in our projects. For the fast-track program, we even have several projects where the locations have had to be changed due to land problems,” PLN construction director Nasri Sebayang said recently.

He said that many projects were temporarily stalled while waiting for government guarantees of funding to be issued.

PLN was also not fully informed about how Chinese contractors worked and how they maintained quality-control over machinery, he said.

Because of that, Nasri said, many pieces of equipment failed to work properly during the commissioning period and required even more time for repairs. (Rabby Pramudatama/ The Jakarta Post)