Construction of a $2 billion coal-fired power plant in Banten faces uncertainty, with an inquiry into the tender process now underway, as well as a reclamation project near the site that threatens to undermine the effectiveness of the plant's cooling system. (Antara Photo/Zabur Karuru)

Uncertainty Surrounds Jawa 7 Power Project

BY :RETNO AYUNINGTYAS

APRIL 27, 2016

Jakarta. Construction of a $2 billion coal-fired power plant in Banten faces uncertainty, with an inquiry into the tender process now underway, as well as a reclamation project near the site that threatens to undermine the effectiveness of the plant's cooling system.

The 2,000 megawatt power plant, Jawa 7, is to be developed by China Shenhua Energy Company and Pembangkitan Jawa-Bali, a subsidiary of state utility firm Perusahaan Listrik Negara (PLN).

However, the House of Representatives created a special committee to investigate the tender process in February, after finding that the winning consortium had been eliminated in the early stages of the process for not submitting estimates for engineering, procurement and construction costs.

Property developers have also launched reclamation projects in the area, which would ultimately undermine the effectiveness of the cooling process.

"We will continue to look into this and will announce the result [of the investigation] to the public. If there are any violations, the project should be halted," House Commission VI deputy chairman Azam Azman Natawijana said on Tuesday (26/04).

Indonesia's anti-monopoly agency, the Business Competition Supervisory Commission (KPPU), is also investigating the tender, Azam said.

Meanwhile, PLN president director Sofyan Basyir said the company would cooperate fully with the investigation.

He said he remained confident that the construction of the project would begin next month, in order to meet the 2019 operational target.

The consortium beat several competitors for the project last year, including state construction firm Wijaya Karya and Indo Tambangray Megah.

The site faces the Java Sea, which would provide an adequate source of water to cool the power plant.

However, two property companies have since altered the shoreline near the plant's proposed location, which would undermine the effectiveness of the cooling process.

Agung Wicaksono, deputy chairman of the electricity development unit at the Ministry of Energy and Mineral Resources, said the central government never issued permits for reclamation projects in the area, so the property developers should halt any further activities to allow the power plant to proceed.

The Jawa 7 project is expected to occupy 172 hectares in the Kramatwatu sub-district in Serang, Banten province.

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