Medco Snatches Umbulan PPP Project from Japan, China Rivals
Jakarta. A consortium led by Medco, one of Indonesia's largest energy groups, has won the tender for Umbulan water treatment plant project in East Java, beating out local and Japanese rivals, a senior official at the Housing and Public Works Ministry said on Monday.
The announcement marks the end of a six year campaign from the government to market the Rp 2.1 trillion ($151 million) project as a leading example of public-private partnerships (PPP) in the country — ironically long delayed by red tape and pricing scheme debacles.
"With the tender concluded, the plant construction will begin immediately," said Andreas Suhono, a director at the Housing and Public Works Ministry.
The ministry expects Umbulan water plant to be operational within two years, he said.
Andreas said investors have secured funding for the project, with the government chipping in a total Rp 300 billion from the 2016 and 2017 state budgets.
The Finance Ministry will also provide a viability gap for the project, with a Rp 835 billion one-time grant to help lessen financial losses the project will make over its lifetime, he said.
Medco will be joined by Jakarta-based construction firm Bangun Cipta Kontraktor, founded by former Suharto-era minister Siswono Yudho Husodo.
The company submitted the lowest offer compared to rivals, including a Japanese consortium between Maurbeni, Nippon Koei and Perkom Indah Murni; Bakrieland Development's consortium with Amerta Bumi Capital and Beijing Enterprise Water; and China's Beijing Enterprise Water and Kukdong Engineering 7 Construction.
Initiated by the East Java provincial government in 2010, the water plant will provide drinking water to 350,000 households in Pasuruan, Sidoardjo and Gresik districts as well as Surabaya municipality.
Tags: Keywords: