PT PLN 2000 net loss surges to Rp 24 trillion<\/p>\n
JAKARTA (JP): State-owned electricity company PT PLN said on
\nMonday its net loss last year surged to Rp 24.61 trillion (about
\nUS$2.16 billion), or more than double the Rp 11.36 trillion loss
\nrecorded in the previous year, due mainly to the higher cost of
\npurchasing electricity from independent power producers (IPPs).<\/p>\n
PLN said that payments to IPPs had soared to Rp 9.39 trillion
\nfrom Rp 5.06 trillion the year before.<\/p>\n
\"It's partly because some IPPs began to produce power last
\nyear which we purchased to meet demand,\" said PLN finance
\ndirector Parno Isworo during a public presentation by the
\ncompany.<\/p>\n
PLN purchases the IPPs' power at U.S dollar rates, but sells
\nits power to the public in rupiah. The more power PLN buys from
\nthe IPPs, the greater the price gap that it must cover.<\/p>\n
Among the IPPs that came on stream last year were the coal-
\nfired Paiton I power plant. Now, PLN and Paiton operator PT
\nPaiton Energy Company are in negotiations over lowering the power
\nrates the latter charges to PLN.<\/p>\n
PLN suffered a net loss despite a marked increase in its
\nrevenue, up to Rp 22.13 trillion from Rp 15.67 trillion the year
\nbefore, as PLN connected some 241,000 new customers.<\/p>\n
But debt repayments of Rp 13.65 trillion, compared to Rp 9.42
\ntrillion a year earlier, worsened PLN's net loss.<\/p>\n
Last year, the company also recorded a hefty foreign exchange
\nloss of Rp 5.49 trillion, as against a foreign exchange gain of
\nRp 3.45 trillion during the previous year.<\/p>\n
PLN's poor performance further affects the prospects of luring
\nforeign investors into the power sector to help meet rising
\ndemand.<\/p>\n
Indonesia is in dire need of more generating capacity to stave
\noff a possible shortage of power by late 2002 or 2003, according
\nto experts.<\/p>\n
Given the sluggish local banking sector and the government's
\nfinancial woes, the country will have to rely on foreign
\ninvestors to build the new power plants.<\/p>\n
During the early 1990s, Indonesia invited foreign investors to
\nhelp build power plants across the country in anticipation of an
\nexpected power deficit.<\/p>\n
Responding to the call, some 27 IPPs signed contracts with PLN
\nto build power plants and to sell their power at dollar-
\ndenominated rates.<\/p>\n
However, the 1997 economic crisis led to a sudden drop in
\npower demand and a sharp depreciation of the rupiah. This
\ncombination crippled PLN's ability to pay for the power it buys
\nas it sells on the power to the public in rupiah.<\/p>\n
To prevent PLN from going bankrupt, the government allowed the
\nstate company to renegotiate all of its 27 contracts with the
\nIPPs.<\/p>\n
This move, however, wrecked legal havoc with the IPPs'
\ncontracts, thereby hurting Indonesia's relations with the
\ninternational creditors who financed the projects.<\/p>\n
Foreign investors have demanded that Indonesia restructure its
\npower sector, including improving PLN's financial health to
\nenable it buy their power in dollars.<\/p>\n
According to PLN's work plan, the company expects to cut its
\nnet loss to Rp 4.4 trillion from last year's Rp 24.61 trillion.<\/p>\n
\"I'm sure we'll be able to cut our net loss, as we've been
\nquite successful in renegotiating the power rates with the IPPs,\"
\nParno explained.<\/p>\n
Under the work plan, the cost of purchasing the IPPs' power is
\nseen lower at Rp 6.24 trillion as against last year's Rp 9.39
\ntrillion.<\/p>\n
His optimism comes despite a first quarter net loss of Rp 3.4
\ntrillion this year already.<\/p>\n
Recently, PLN also secured a debt restructuring deal worth Rp
\n21 trillion in respect of the debts it owes to the government.
\nUnder the deal, the state company will only repay loan principle
\nof Rp 5.2 trillion over 20 years.<\/p>\n
The remainder of the debt will be converted into government
\nequity in PLN. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pt-pln-2000-net-loss-surges-to-rp-24-trillion-1447893297",
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