RIAU PROJECT HITS SNAG

Con­struc­tion of power plant may be de­layed by 3 years, say sources

New Straits Times - - Business - ZARINA ZAKARIAH KUALA LUMPUR zari­naz@me­di­aprima.com.my

TE­NAGA Na­sional Bhd’s (TNB) joint-ven­ture power project with In­done­sia’s PT Perusa­haan Listrik Ne­gara (PLN) has hit a snag.

Con­struc­tion of the multi-bil­lion ring­git 2x600 megawatt power plant in Riau, Su­ma­tra, which was ex­pected to kick off early this year, could be de­layed by three years, said sources.

A source close to TNB said the es­ti­mated US$1.6 bil­lion (RM7.08 bil­lion) project was ex­pected to be re­vis­ited in three years to see whether it was still vi­able.

“It is said that the gov­ern­ment of In­done­sia has de­cided to fo­cus on the na­tion’s sup­ply first be­fore ex­plor­ing the im­port and ex­port of power with other coun­tries.

“For Malaysia, we are open to it but it is up to the In­done­sian gov­ern­ment. There is no firm date on the mat­ter,” said the source, adding that TNB had bought a land in Malacca for the project.

TNB has not re­sponded to an in­quiry by NST Busi­ness at press time.

It had been re­ported that TNB would par­tic­i­pate in a Su­ma­traPenin­su­lar Malaysia high-volt­age di­rect cur­rent in­ter­con­nec­tion project with PLN and an­other In­done­sian firm.

The project would al­low for the im­port and ex­port of elec­tric­ity be­tween Malaysia and In­done­sia.

The se­nior TNB man­age­ment team was ru­moured to have fi­nalised the deal in In­done­sia re­cently.

Elec­tric­ity de­mand has risen in Asean-5 mem­ber coun­tries (Malaysia, Sin­ga­pore, Thai­land, In­done­sia and the Philip­pines).

Fu­elled by ro­bust economies, rapid in­dus­tral­i­sa­tion and ex­pand­ing pop­u­la­tions, elec­tric­ity de­mand has hit a five-year com­pound an­nual growth rate of 4.8 per cent in the re­gion.

This grow­ing de­mand ne­ces­si­tates a steady source of power sup­ply. Nonethe­less, ef­forts to close the sup­ply-de­mand gap have of­ten posed chal­lenges to cer­tain coun­tries.

While Malaysia, Sin­ga­pore and Thai­land have ex­cel­lent ac­cess to elec­tric­ity sup­ply, In­done­sia and the Philip­pines have ex­pe­ri­enced huge power deficits as un­der­lined by their elec­tri­fi­ca­tion rate of less than 90 per cent, ac­cord­ing to a RAM Rat­ings re­port.

In­done­sia’s elec­tri­fi­ca­tion ra­tio was a low 88.3 per cent as at the end of 2015.

Most of its Asean neigh­bours boast of elec­tri­fi­ca­tion rates ex­ceed­ing 99 per cent.

BLOOMBERG PIC

PT Perusa­haan Listrik Ne­gara’s joint-ven­ture project with Te­naga Na­sional Bhd to build a power plant in Riau, Su­ma­tra, was sup­posed to start early this year.

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