Electricity projects

Regarding the article "Influence brokers inflate prices of electricity plants," the latest statement by Indonesia's electric utility, PLN (state electricity company), that it must go ahead with three controversial power projects (Muara Tawar, Tambak Lorok II and Grati) is unfortunate, for these projects do not represent the best way to progress toward greater efficiency and higher quality of service.

First of all, these projects were conceived under pressure of a crisis that no longer exists. PLN has excess capacity in the Java-Bali system since the completion of projects that were accelerated during the 1990 crisis (Gresik, Muara Karang, Paiton, Tambak Lorok I and Tanjung Priok).

Today PLN cannot sell all the electricity it is able to generate because many industrial customers, who were unable to get PLN connections or who were not satisfied with PLN's quality of service, decided to install their own generators. To improve the situation, PLN would do better to invest its scarce resources to strengthen transmission and distribution, rather than build new power plants in Java. (PLN has already agreed to this idea, but only after the three new projects are built).

Second, these projects will impede the process of involving the private sector in power supply, something to which the president has been committed since 1990 but which has moved forward very slowly since then. Private power projects for West and East Java have been proposed and approved by the government, and should be allowed to replace the Muara Tawar and Grati PLN projects. But right now the private projects are on hold because their potential gas supplies have been committed by Pertamina to PLN.

Indonesia is on the verge of making substantial changes it its power sector, changes that can increase efficiency through competition, reduce dependence on government subsidies, make optimal use of all available energy resources, slow down environmental pollution, and stimulate growth of employment and industry. Given the government's expressed commitment to these objectives, one must wonder why PLN insists on building the three projects in question. It is not too late to change course, but perhaps those "lobbyists and brokers with strong political ties" who were mentioned in the DPR hearing are still having their day.

LORENZO KRISTOV

Jakarta