PLN: We Are Capable of Completing 35 GW Project Tender

Perusahaan Listrik Negara (PLN) has responded to theMinistry of Energy and Mineral Resources (ESDM)intended takeover of the state electricity firm’s tendering of the 35 gigawatts (GW) megaproject. PLN President Director Sofyan Basir said he has no problem handing over the tendering of projects under the 35 GW megaproject to the Energy Ministry.

“It’s fine if it wants to shut down PLN. The minister has the authority,” he said at PLN headquarters in Jakarta, Monday (30/5). However, he also warned the ministry that although it has authority over the power sector, it cannot arbitrarily take over control of corporate policies.

Sofyan said PLN is under the auspices of the Ministry of State-owned Enterprises (SOE). So, if the Energy Ministry’s plan has the potential to disrupt PLN’s corporate activities, Minister of Energy must discuss its plans with the Minister of State-owned Enterprises.

(Read:  Four Factors Hampering 35 GW Electricity Megaproject)

Sofyan claimed that PLN is actually capable of completing the tender process for projects under the 35 GW mega project by the December 2016 deadline, even though the firm still needs to seal deals for the development of power plants of a total 17 GW capacity. “We can do it. In December last year alone, we managed (to sign contracts for) 8,000 MW,” he said.

The Energy Ministry wants to take over the tender of projects under the 35 GW mega project because it believes PLN is dragging its feet. The ministry wants all tender processes for this mega project to be completed by the end of this year. (Read:  35 GWProject Slow, Energy Ministry Plans to Taking Over Bidding Process )

As of the end of last year, PLN had developed power plants with a total capacity of just 2,015 MW. By April this year, power plants with a total capacity of 397 MW had been added to the fold. PLN has also built supporting infrastructures, such as transmissions and substations, to distribute power produced by power plants under the 35 GW megaproject.

Last year, PLN completed the construction of 58 transmission lines, with a total length of 1,883 ckm (circuit kilometres). By April 2016, PLN had successfully added 23 transmission lines stretching 486 ckm and completed the construction of 35 substations with a capacity of 1,680 MVA (megavolt ampere). This adds to the 77 substations with a capacity of 5,615 MVA that were built last year.

Head of the Communications Centre at the Energy Ministry Sujatmiko said the sluggish execution of the 35 MW mega project had prompted many investors to question the government’s target for completing this project. To accelerate the process, the ministry then decided to propose changing the tender process.(Read: 35,000 MW Power Megaproject Lacks Appeal)

If the ministry took over the tendering of projects under the 35 GW megaproject, PLN would be able to focus on building their portion of power plants. To stay on track, the Energy Ministry would issue the regulations needed to speed up the tender process.