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)