Investment Policy Scheme by Private Partnership In Supply Infrastructure of Power

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CHAPTER IV MECHANISM PROCEDURE IN INVESTMENT

4.1. Investment Policy

It is found some points related the investment policy on electricity sub- sector, they are:  To encourage and improve investment climate be better and organize private participation in business of electricity  To increase ability of PT PLN Persero to invest on superstructure of supply power.  To push private investment and to many other business operation specifically on the generating power under mechanism Independent Power Producer IPP also by a Government partnership with Business operating KPBU or Public Private Partnership PPP.  To improve efficiency and transparency investment in electricity  To offer fiscal and non-fiscal incentive in investment of electricity sector for public interest and development of new energy and renewable.

4.2. Scheme by Private Partnership In Supply Infrastructure of Power

a. Scheme of business and Private participation in development of the generating power consisting of 3 type, they are :  Engineering Procurement and Construction EPC Contract The employer is PLN, The Engineering Procurement and Construction EPC project is offered to private through tender. In this model, PLN is responsible for the activities and cost of plans, provide the land, funding and generating operation. For instance: Development of the generating program FTP I and program 35 GW. 32  Independence Power Producer IPP – Regular Program Accelerating The employer of project at once executor EPC is private, where 100 of funding is original from private and transform it by price sale of power. The funding is comprising the fund for development, land clearance, asset operation, where the asset after completing the contract period shall be transferred to PT PLN Persero. For instance: IPP projects in a 35 GW program.  Independence Power Producer – in cooperation Government with Corporations KPBU or Public Private Partnership PPP Project The government project is offered to private under a tender mechanism. The government may provide support or a government guarantee. If the private as initiator of project in case, the government shall provide compensation. For instance: PLTU Jawa Tengah Project 2 x 1,000 MW. b. Scheme of business and private participation in development of transmission and sub-station  Supply and Erect PLN shall buy equipments from supplier of transmission and sub-station through process of procurement refers to the rules in PLN, and PLN shall procure a contractor that responsible for conducting the works of construction and installing transmission and sub-station.  Engineering Procurement and Construction EPC Contract PLN shall appoint contractor EPC responsible for procurement of transmission equipments and sub-station and carry out construction and installation and PLN shall pay contractor EPC 33 refers to the terms of payment and works progress by agreement.  Deferred Payment PLN shall appoint contractor responsible for funding, procurement of transmission equipment and sub-station as well as carrying out construction and installation, and PLN shall pay contractor in staged after transmission and sub-station finished all refers to the agreement.

4.3. Mechanism in Participation of Private in Procurement of