Napocor gives coal supply contracts to Indon firms

The National Power Corp. (Napocor) will officially award long-term coal supply contracts to some members of the Indonesia Coal Mining Association (ICMA).

Napocor president Rogelio Murga, told The STAR the state-owned power firm has given ICMA members provisional contracts six months ago. "We will just make official the provisional contracts that we gave them in July," he said.

The contract, will involve some nine panamax and/or 650,000 metric tons (MT) per year.

Murga said the contract with ICMA members will ensure the sufficient supply of coal for Napocor in the next few years.

"We need to ensure we have adequate supply of coal, especially amid the tension in the Middle East. An inadequate supply for coal should not add to the burden of a possible lack of fuel supply. We have to ensure that our power plants, both coal-fired and oil-fired will continue to operate if war breaks out in Iraq," he said.

The members of the consortium include: PT Tambang Batubara Bukit Asam, PT Intitirta Primasakti, PT Bukit Baiduri Enterprise, PT Berau Coal, PT Arutmin Indonesia, PT Kaltim Prima Coal and PT Sari Andara Persada, PT Tanito Harum, PT Gunung Bayan and PT Indominco.

The bidding last April was done through Napocor’s internally developed electronic bidding system.

Napocor has pursued bilateral agreements to guarantee a long-term supply of coal under a system of discounted prices.

The coal supply agreement was an offshoot of a memorandum of understanding (MOU) signed by the Philippines and Indonesia during President Arroyo’s state visit to Indonesia in November 2001. Among areas of cooperation established were possible long-term supply deals for coal.