Indonesia: North Kalimantan Villagers Forced Out By China Hydroplant

Tunggadewa Mattangkilang, Jakarta Globe, 7 Oct 13;

Bulungan. North Kalimantan’s Bulungan district plans to relocate two villages to make room for a $17 billion hydropower project with a capacity to generate up to seven gigawatts of electricity.

The two villages, Long Peleban and Long Leju, are home to approximately 700 residents who will be displaced.

But so far no alternative arrangements have been offered to the villagers, and the construction plans are fast approaching.

The project, which is a joint investment by two Chinese companies, China Power Investment Corporation and Anhui Conch Cement, will be the archipelago’s largest-ever power plant, the government has announced recently.

Bulungan district chief Budiman Arifin said the Peso subdistrict project would begin early next year after the environmental impact analysis, known as Amdal, was conducted and approved by the government.

“Residents are aware of our plans. However, we are still trying to find a location for the families,” Budiman said.

He added that local residents should support the project as it would create jobs and provide better electricity.

“The electricity produced from the plant will be enough for several subdistricts and even other provinces,” he said.

However East Kalimantan’s Environmental Forum (Walhi) criticized the project for its expected environmental impact and displacement .

“They need to rethink the project. Over the past two decades, big projects like this have always destroyed the surrounding environment,” a Walhi spokesperson said.

In May, China Power and Anhui announced more than $17 billion of investments in the hydropower plan project, quickly drawing praise proving the attractiveness and allure of the Southeast Asian nation to foreign investors, and an investment that will help the country’s power scarcity.

China Power, a Chinese state-owned enterprise, has been granted permission by the Indonesian government to build the plant, the government announced after a meeting between Xia Zhong, a vice president of China Power and Energy and Mineral Resources Minister Jero Wacik.

The project will be dependent on the Tayan River in the newly created North Kalimantan province, with the construction, divided into five phases, is projected to take seven years to be completed.

China Power has concluded the preliminary study of the project and will proceed with its feasibility and environmental assessment impact study, Jero said.

“We expect to see the ground breaking next year,” the minister added.

“Construction for the first phase will be completed in about a year and a half. By 2015, the power plant will generate 700 megawatts of electricity,” Jero said.

The minister said the government would not provide additional incentives.

The government has set the price level for renewable energy, such as hydropower, considerably higher to entice more investors. In comparison, the price for coal-fired power plants is around 4 to 9 cents per kilowatt-hour.

“They did not request incentives. They think the 24 cents per kilowatt-hour power purchase price for hydropower plant is good.”

In Indonesia, independent power producers must sell their electricity to state utility firm Perusahaan Listrik Negara (PLN), based on the government’s approved pricing schedule.