Mitsubishi, Mitsui and Kepco drop bids for Indonesia power project

Mitsubishi Corporation , Mitsui & Co and Korean Electric Power Corporation (KEPCO) have dropped bids to develop a 2,000 megawatt coal-fired power plant in Central Java, Indonesia's state utility firm Perusahaan Listrik Negara (PLN) said Monday.

In January, PLN shortlisted seven foreign investors for a $3 billion coal-fired power plant in Central Java, an official said.

"Mitsui, Mitsubishi, and KEPCO did not submit their proposals on (the deadline) April 29," said Murtaqi Syamsuddin, PLN's business director. "Mitsui and Mitsubishi submitted letters saying they withdrew from the project."

Syamsuddin added that Mitsui had said that the March earthquake and tsunami in Japan was behind their decision to pull out of the running.

Other investors that submitted bids included a Marubeni Corp consortium, a China Shenhua consortium, a Guangdong Yudean Group and Cahaya Mulia Energi Konstruksi consortium, and a consortium comprising of Electric Power Development Co (J-Power) , Adaro Energy and Itochu Corporation .

PLN said it expected to announce the project winner in June, with commercial operations expected to start by 2017.

Indonesia wants to boost its electricity capacity under a government programme to add a total of 20,000 megawatts generating capacity. The government is seeking private investors to fund two-thirds of its infrastructure needs.

Power shortages are common in Indonesia, where poor infrastructure is one of the factors restricting growth in Southeast Asia's largest economy. Source: Reuters