Indonesian Court to decide if state can forcibly buy farmers' land for $4B coal power plant project

The top court of Indonesia is set to decide whether the government can apply compulsory land purchases on farmers who are unwilling to sell their land for the US$4 billion Batang coal-fired station on Java Island.

The construction of the power plant was supposed to start in 2012; however, villagers refuse to sell their lands. This is a typical problem that hinders these kinds of projects in Indonesia. The court's ruling would be a step forward for President Joko Widodo who is trying to uphold a reputation as a "can-do reformer," according to the Business Times.

According to Central Java governor Ganjar Pranowo, the court will settle the case by the end of the year and he expects the court to rule in favor of the government. After that he said they will start work. However, there are residents who said they are not leaving their lands under any circumstances.

That would mean the residents will be taken out of their lands forcefully, which is a big concern for developers like Japan's Electric Power Development Co, Itochu Corp, and Indonesia's PT Adaro Energy.

The decision from the court is very important for President Widodo as he recently launched program to build 300 power plants and put up 35 megawatts of new power facilities by 2019 to curb electric shortages, according to Reuters.

Besides the Batang power plant, Yonhap News Agency reported that South Korea's Hyundai Engineering & Construction Co. recently won a $727 million deal to construct a1,000-MW coal-fired power station in Java, which is an island 200 kilometers east of Jakarta, Indonesia. The construction will be done 54 months after its launch, which is not yet officially scheduled.

The Batang coal-fired station, which is a public-private partnership, was supposed to start construction in 2012. Mr. Joko has officially launched the construction in August but there has been no full-scale construction yet after three months.