geothermal vs coal in indonesia, page-16

So the contentious question now is what tariff will apply to the Bakrie/Panax projects? We've had this one before.

I recall Bakrie won the Flores and East Java projects by the tender process after 2003. In the Baker and McKenzie document those projects fall in para (e) of the section "Who does the new tariff regime apply to?".

As B&M state this is the most "controversial" group - mainly because the tenders were won on the basis of lowest price offered. Hence unsuccessful tenderers would be entitled to be very upset if the winning "lowest price" was later able to increase the price.

However the new tariff regime appears to ignore this issue and allows the parties (ie PLN and para (e) developers) to agree to use the new tariff regime. PAX has repeatedly asserted that PLN has agreed to apply the new tariffs to their projects. Do we believe them?

The problem is, as Daz pointed out, the latest PPA agreement for Rantau Dedap also involved a para (e) developer but the agreed tariff of 8.86 c/kWh is significantly less than the 10 c/kWh allowed by the new regime.

This raises the question of whether PAX will actually receive less than what they've been telling the market?