Govt to propose new power law
Govt to propose new power law
Dadan Wijaksana, The Jakarta Post, Jakarta
The government, in response to the Constitutional Court's
annulling Electricity Law No. 20/2002, said it would draft a new
law that would take a "softer" approach to liberalizing the power
sector.
The new draft law is expected to be completed for submission
to the House of Representatives in early January, Director
General of Electricity and Energy Utilization Yogo Pratomo at the
energy ministry said on Thursday.
"The reasons for annulling the law concern only a few
articles, so I do not think it would take long to revise or
modify (the law). We hope to submit it (to the House) by the
middle of next month," Yogo told a press conference. "...The
spirit (of liberalization) of those articles may have to be toned
down a bit, to accommodate as many interests as possible."
He did not elaborate, and said only that the matter would be
discussed further in the drafting process.
The Electricity Law, endorsed by the House in 2002, aims at a
gradual liberalization of the power sector, which has been
monopolized for decades by state electricity firm PT PLN.
The law states that, starting in 2007, private companies may
produce and sell power to the public in Java, Bali and Madura.
Only three articles -- Articles 16, 17 and 68 -- contain
stipulations on liberalizing the power sector.
The Constitutional Court ruled on Wednesday that the law be
annulled, arguing that electricity was a commodity vital to the
lives of many citizens and should therefore remain under
government control. In addition, the court reinstated the defunct
Electricity Law No. 15/1985.
The court reviewed the case upon complaints filed on behalf of
PLN workers by non-governmental organizations (NGOs) and labor
unions, which claimed the law would lead to layoffs and higher
electricity rates for consumers.
Meanwhile, Minister of Energy and Mineral Resources Purnomo
Yusgiantoro said the government needed to focus on revising the
three articles as soon as possible, so as not to cause any
confusion among existing and potential investors.
"(A prompt revision) is important in sending a sign to
investors that the government is committed to inviting them to
develop our power sector," Purnomo said.
"As we said earlier, of the US$30 billion or so needed to
develop the sector, $20 billion is expected to come from the
private sector," he added.
Meanwhile, Yogo said several investors had already voiced
their concerns over the court's decision.
"We have received questions from certain investors, including
those from Germany and Japan, on the issue. To be honest, this
(annulment) has the potential to derail investor confidence about
legal certainty here," Yogo said.
Separately, PLN president Eddie Widiono said the annulment
would not affect its current contracts.
"PLN is still studying its impact, but our tentative
conclusion is that it will not have a negative effect on our
existing power purchase contracts and will not lead to their
renegotiation," he said.