PLN $105m short on gas, power payments<\/p>\n
JAKARTA (JP): State electricity company PLN has failed to make
\npayments on US$105 million owed for gas and power supplies over
\nthe past two months, its president said yesterday.<\/p>\n
Djiteng Marsudi said PLN had requested the Ministry of Finance
\ninject subsidies to help the cash-strapped company meet its
\nfinancial obligations, but the ministry had yet to disburse the
\nmoney.<\/p>\n
\"Anyway, the government has promised to give subsidies to PLN
\nthis year,\" Djiteng told reporters after a hearing with the House
\nof Representatives' Commission VIII for budget, finance and
\nresearch and technology.<\/p>\n
He said the $105 million included for the payment of gas to
\nArco Indonesia Inc., a subsidiary of Atlantic Richfield Co.
\n(ARCO) of the United States; payment for geothermal steam and
\npower to the Indonesian subsidiaries of the U.S. Unocal Corp.;
\nand the payment of combined cycle power to PT Sengkang Energy.<\/p>\n
Arco supplies gas for PLN's power plants in East Java.<\/p>\n
Unocal operates a 165-Megawatt geothermal power plant on the
\nSalak mountain, West Java, and supplies geothermal steam to the
\n165-MW geothermal power plant owned by PLN's subsidiary, PT
\nPembangkitan Listrik Jawa Bali I (PJB), located in the same area.<\/p>\n
Sengkang operates a 135-MW combined cycle power plant in South
\nSulawesi.<\/p>\n
PLN has been severely battered by the monetary crisis which
\nhas gripped the country since the middle of last year because of
\nthe sharp depreciation of the rupiah against the U.S. dollar.<\/p>\n
The company earns in rupiah while spending -- including the
\nforeign debt payment and the power purchases from independent
\npower producers -- are in dollars.<\/p>\n
The company suffered a loss of more than Rp 550 trillion
\n($36.6 million) last year. It asked for a subsidy of Rp 1.25
\ntrillion from the government early this year to help it meet its
\nfinancial obligations to gas contractors and IPPs for the first
\nquarter of the year.<\/p>\n
Djiteng said during the hearing that PLN needed a government
\nsubsidy of Rp 2.3 trillion this fiscal year if the exchange rate
\naveraged Rp 6,000 per dollar and the subsidy would increase to Rp
\n3.4 trillion if the rupiah's value fell to an average Rp 10,000
\nper dollar.<\/p>\n
The government raised power prices by an average 20 percent in
\nMay and planned to further increase the price by 18 percent in
\nAugust and another 20 percent in November to ease PLN's financial
\nburdens.<\/p>\n
But the government backtracked on increasing power prices for
\nhouseholds due to an outcry from the public.<\/p>\n
PLN has also tried to renegotiate with IPPs and gas
\ncontractors on their contracts but to no avail.<\/p>\n
PLN's finance director Muslim Abuhujus said yesterday a
\nnegotiating team comprising officials from PLN, state oil and gas
\ncompany Pertamina and the Ministry of Mines and Energy had
\nreached an \"agreement\" with Arco on gas payment.<\/p>\n
Abuhujus said PLN would pay Arco at the exchange rate of Rp
\n2,450 to the dollar for three months through June and then at the
\ngovernment rate of Rp 6,000 for three years starting July.<\/p>\n
PLN is allowed to pay half of its financial obligations for
\nthree years but it has to repay the arrears with some interest in
\nthe future.<\/p>\n
But Abuhujus said the agreement had yet to be signed because
\nPLN could not secure a standby letter of credit at banks to
\nguarantee its future debt repayment. (jsk)<\/p>",
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