Drop Tanjung Jati B buyout plan: Legislators

Drop Tanjung Jati B buyout plan: Legislators

JAKARTA (JP): Legislators called on the government to cancel
plans to buy out the giant Tanjung Jati B power plant in Central
Java using loans under the Miyazawa Plan.

"The (Miyazawa Plan) loan can not be used to finance private
power plant projects. The government must cancel plans to secure
loans to buy out the Tanjung Jati B plant," Lili Asdjudiredja of
the ruling Golkar party said.

Rahadi Sayoga, also a Golkar legislator, said the buyout plans
reflected the confusion experienced by the government in finding
a solution to disputes involving PLN and its independent power
producers.

"I am very concerned about the situation. I don't know which
is the real way out for PLN's problems," Rahadi told The Jakarta
Post.

Both legislators were commenting on the government's plan to
secure loans from Japan under the Miyazawa Plan for cash-strapped
state electricity company PT Perusahaan Listrik Negara (PLN) to
buy out the plant.

The 1330 Megawatt (MW) coal-fired power plant, located in
Central Java, is 80 percent owned by Hopewell Holdings Ltd., of
Hong Kong with the remaining shares held by PT Impa Energy Co.,
owned by Djan Farid.

Farid is known to have links with the daughter of former
president Soeharto, Siti Hardiyanti Rukmana.

Speculation is rife that Siti Hardiyanti's involvement was a
factor in the planned buyout.

Former PLN president Djiteng Marsudi earlier said if the
buyout plan was realized, it would amount to "a betrayal of
Indonesians". He noted the funds from the Miyazawa Plan were
allocated to help Asian countries improve their battered economy.

An informed source denied the government asked loans from
Japan under the Miyazawa Plan but under the Japanese Special
Loan. The soft loan, which has a grace period of 10 years and a
maturity period of 40 years, is aimed at infrastructure projects.

Coordinating Minister of Development Supervision Hartarto
Sastrosoenarto and PLN's president Adhi Satriya said the buyout
was one of several options being considered by PLN in its efforts
to cut prices of power supplies from independent power producers
(IPP).

PLN has signed power purchase agreements with 27 IPPs from
which the state company has to buy power at a price between 5.7
U.S. cents and 8.6 cents per kilowatt hour (kwh). PLN, however,
sells power to the public at about 3 cents per kwh.

In a related development, Kontan daily reported on Friday
that international auditor Arthur Andersen, who was hired by the
Ministry of Finance to audit PLN, estimated that PLN would lose
US$18 billion due to IPP's power plant projects.

The audit report, submitted to the ministry last month, also
said PLN lost Rp 16 trillion due to operation inefficiency. (jsk)