Megawati urges all people not to waste electricity

Fitri Wulandari, The Jakarta Post, Jepara, Central Java

President Megawati Soekarnoputri called on people from all walks of life on Thursday to limit their electricity usage.

Speaking after dedicating a number of development projects at the Tanjung Jati B coal-fired power plant in Tuban, Jepara, Central Java, Megawati also promised that the government would do its best to continue augmenting the nation's power capacity, despite limited funds for the development of power plants.

"The public should develop the habit of saving (electricity)," she said.

The 1,329-Megawatt Tanjung Jati B power plant is one of the projects that was launched by the President.

Analysts say that the country could face a power crisis in the future, because of the rising demand for energy and the slow development of new power plants.

During the ceremony, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti commended state electricity company PT PLN for its success in renegotiating power purchase agreements with the 26 independent power producers (IPP) who had projects in the country. The projects have a total value of US$15.1 billion.

PLN's success, he said, was expected to boost the country's economy amid improving macroeconomic indicators.

"The inflation rate is under control, the interest rate is down and the exchange rate is strengthening, as well as the foreign exchange reserves. These have improved our economy," Dorodjatun said in his speech.

"With an additional power supply, it is hoped that demand for power in Indonesia can be met," he added.

The 26 IPPs, including the Tanjung Jati B plant, were part of the 27 IPPs who had originally signed power purchase agreements with PLN prior to the economic crisis in 1997.

In the wake of the crisis, most of the projects were suspended by the government, resulting in lengthy disputes between PLN and the IPPs. In 2000, the government formed a special team to renegotiate the contracts with the IPPs.

Of the 27 IPPs, 14 agreed to cut the prices of their power supplies, five decided to sell their projects to state oil and gas company Pertamina, the government and PLN, and seven agreed to discontinue their projects.

One IPP, Karaha Bodas Company, is pursuing a legal suit at U.S. courts for compensation from Pertamina.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the completion of the contractual renegotiations with the IPPs was expected to herald a positive climate for investment in the power sector.

"It shows that the Indonesian government has abided by the agreed terms and conditions," he said.

Purnomo added that partnerships between private power producers and PLN would increase in the future, as the state power company had a limited financial capacity to provide power.

"In the future, the private sector should have an increasing role in providing electricity, as PLN faces financial constraints," he said.

PLN president Eddie Widiono said the company had received several proposals for the development of power plants in the country. The new projects include the Tanjung Batu project in East Kalimantan, one project proposed by the East Kalimantan regional government and one from U.S. energy company Unocal.

Apart from the power projects, Megawati also inaugurated the development of three toll roads in East Java, valued at Rp 5.4 trillion, and the East Flood Canal in Jakarta, valued at Rp 4 trillion.

Dorodjatun said the government was preparing a number of infrastructure projects in the power and transportation sectors to boost the country's economy in anticipation of the end of the International Monetary Fund (IMF) program this year.

Among the projects are the development of Suramadu bridge, which will connect the eastern part of Java with Madura Island, and the improvement of the road network along the northern coast of Java. The Suramadu bridge project is scheduled to commence in August.

He also said the government planned to build a number of new airports to support the bustling air transportation industry and improve Djuanda airport in East Java.