Novia D. Rulistia ,  The Jakarta Post ,
Jakarta   |  Sat, 04/12/2008 11:17 AM  |  Business

South Korean-based trading company Daewoo International wants to be involved in Indonesia’s first nuclear power plant project, offering its services and experience in building such plants.

Speaking at the Indonesia-Korea business forum here on Friday, CEO Kang Young-won urged Indonesian officials to consider the project.

“As we have a lot of experience in engineering and constructing nuclear power plants, we will be pleased to take part and contribute to the development of the Indonesian electricity system,” Kang said at the forum.

In 2006, Indonesia’s President Susilo Bambang Yudhoyono and South Korea’s President Roh Moo-hyun signed a cooperation agreement on a nuclear energy project and planned construction for as early as 2010.

Muria Peninsula in Central Java is one location being considered for the plant. It was also former president Soeharto’s first choice of location.

The total capital investment needed for the project, the government said, could be up to US$4.8 billion.

As early as 1989, Soeharto instructed then research and technology minister, B.J. Habibie, to begin a feasibility study for the plant. It reported Muria and several other places as potential plant locations.

Despite Soeharto’s authoritarian regime, the plan immediately faced strong criticism from civil society groups and religious leaders, who feared the plant would have a similar fate to Chernobyl, in the then Soviet Union (now Ukraine), just three years earlier in 1986.

After being dropped, the plan resurfaced during Megawati Soekarnoputri’s presidency in 2003 only to face the same resistance.

People still oppose the plan, particularly Muria citizens, but the government now faces greater pressure to reduce dependency on fuel to generate power as oil prices chart new heights, currently hovering around $110 a barrel.

The government said it expected the plant to start supplying electricity in 2016, with a total capacity of 4,000 megawatts to 6,000 megawatts for Java and Bali exclusively.

Also speaking on behalf of Korean business players, Kang said many of his colleagues were interested in investing in the mining sector, but were awaiting implementation of the upcoming mining law.

He said the law should be able to minimize some obstacles in foreign investment, including those in mining licensing and taxation, and enhance legal protection by eliminating the contradictions of overlapping laws and regulations imposed by the central and local governments.

The Indonesia-Korea business forum aims to explore new opportunities for economic partnerships, as Indonesia has been able to turn its potential into achievements, said chairman of the Korea Chamber of Commerce and Industry Sohn Kyung-Shik.

According to the South Korean Embassy, total investment by South Korean firms in Indonesia last year reached $895 million, up from $320 million in 2002.

In 2007, Indonesia enjoyed a trade surplus of $3.3 billion with South Korea, with $9.1 billion in exports and $5.7 billion in imports.