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Jakarta Post

Consortium to use new approach in stalled plant

  • Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Mon, November 4, 2013   /  03:44 pm

Following the extension of a deadline for securing financial backing for the development of Southeast Asia'€™s biggest power plant in Batang, Central Java, the consortium that won the project and the government are working on a persuasive approach to win the hearts of local residents.

Garibaldi Thohir, the president of Adaro Energy, part of the consortium, said that he and the Governor of Central Java, Ganjar Pranowo, would be directly involved in a socialization program to convince the locals that the power project would be beneficial to them.

'€œThe important thing now is how to approach the community. I myself, along with Pak Ganjar will take part in the socialization program,'€ Thohir said.

The major power plant project, with a proposed capacity of 2x1,000 MW, located in Batang regency has received approval for the extension of its deadline to secure financial backing for another year, until next October.

The extension of the deadline was possible after President Susilo Bambang Yudhoyono revised a regulation which had given the company only a year after the signing of the contract to secure financing for the project.

The developers of the project, PT Bhimasena Power, a consortium consisting of Jakarta-listed
PT Adaro Energy and Japanese firms J-Power and Itochu, have faced difficulty starting work on the power plant, particularly due to land-acquisition problems.

The project requires about 370 hectares of land. Only 85 percent of the land has been acquired as many local residents have refused to sell up.

The locals and green activists strongly oppose the construction of the plant due to its alleged negative
impact on the environment.

Adaro holds a 34 percent stake in the consortium, which won the tender in 2011. J-Power holds 34 percent and Itochu has the remaining 32 percent stake.

It is estimated the Batang power plant will cost US$4 billion.

The power plant is part of the Master Plan for Acceleration and Expansion of Indonesia'€™s Economic Development (MP3EI) project.

Japanese Prime Minister Shinzo Abe openly criticized the government'€™s handling of the project in a discussion held during the APEC Summit in Bali, recently.

The Japanese leader also raised the issue during a bilateral meeting with President Yudhoyono.

Luky Eko Wuryanto, the deputy for infrastructure and regional planning at the Office of the Coordinating Economic Minister, said that after the revision of the presidential decree that allowed the one-year extension to secure financial backing, further progress now depended on the local administration.

'€œThere are already the results of an environmental study as well as recommended programs that can be carried out. There will be a communication team responsible for determining which residents are affected by the development and who are therefore entitled to assistance programs,'€ Luky said
last week.

Luky said that a coordination meeting involving all parties in the power plant project would be carried out in the middle of this month to track progress, particularly on land acquisition.

'€œWe hope to finish everything, particularly the land acquisition, by next March,'€ Luky said.

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