The government will most likely go ahead with plans for a US$2 billion Sumatra and Java power project, which will involve the development of cables under the sea, says an official.

According to a study, the construction of the cables would be more economically feasible than other means to deliver the electricity from coal-rich South Sumatra to Java, J. Purwono, a director general at the ministry of energy and mineral resources, said Monday.

"PLN (state electricity company) will need to pay between 1 to 1.2 U.S. cents per KwH in transmission fee for using the cables," Purwono said.

Purwono said the project would help PLN deal with the looming electricity supply shortage on the Java-Bali grid, the country's largest power consumer.

The project, which is scheduled to be completed by 2010, will be built based on an Independent Power Producer (IPP) scheme, under which PLN will buy the electricity from power plant developers.

PLN plans to invite bids later this year for the development of the transmission network, including the submarine cables.

As for the construction of the power plants, a number of firms, both local and foreign, have expressed interest in constructing coal-fired power plants in Sumatra, where coal deposits are abundant.

PLN estimates the planned power plants will produce enough electricity for Java and Bali, where blackouts are frequent.

Among the power plants to be built are the 2,400-megawatt plant in Bangko, South Sumatra, and the 1,600-megawatt plant in Muara Enim, South Sumatra.

Those plants will be operated by a Chinese firm, China Huadian, and local coal miner, PT Bumi Resources, respectively.

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