Indonesia to review ambitious power plant programme

Jakarta: Indonesian President Joko Widodo has called for a review of a programme to develop 35 gigawatts of power-generating capacity by 2019 as the ambitious electrification scheme succumbed to doubts from within the government and private sector.
Under the programme, the government aims to build nearly 300 power plants, most of them coal-fired, to increase Indonesia's power capacity by two-thirds and help overcome endemic shortages especially in Java.
Lagging progress on the programme could hurt economic growth and erode Widodo's approval ratings. It may also be a setback to coal producers from the world's top exporter of the power station fuel who have pinned hopes on domestic power projects absorbing excess supply at a time of low prices and ebbing demand from top customer China.
"(Widodo) emphasised that there should be a thorough review while the deadline is still a long way off, so that we don't encounter obstacles when we're already halfway," Energy Minister Sudirman Said told reporters on Friday.
Said was referring to reviews of aspects of the programme ranging from the tender process to financing and management by state electricity utility Perusahaan Listrik Negara (PLN).
"Investors and business people have started to question if we can finish this or not," the minister said.
While power purchase deals have been signed for around 30 per cent of the projects, only 10 per cent of the programme was currently under construction, he said.
Construction of the government's flagship 2,000-megawatt (MW) Batang power station in Central Java has been held up since Japan's Electric Power Development Co won the contract in 2011. If built, the project would be the biggest coal-fired power station of its kind in Southeast Asia.
The Japan Bank for International Cooperation (JBIC) said last month that it was undecided whether it will provide funding for the $4 billion Batang project that has faced protests from green groups and landowners.
Widodo wants authority over power stations to be shifted to regional administrations to speed up decision making and procurement, according to Said, and for management to be closer to communities they supply power to.