PLN firm on Cikarang Listrindo decision

PLN firm on Cikarang Listrindo decision

JAKARTA (JP): State electricity company PLN president Djiteng
Marsudi said yesterday he would not review his recent decision to
annul the company's power purchase contract with PT Cikarang
Listrindo, an independent power producer.

Djiteng told The Jakarta Post that this was despite a request
from Cikarang Listrindo.

"I shall not review the decision," he said.

PLN stopped buying power from the Cikarang, which is partly
owned by former president Soeharto's cousin Sudwikatmono,
starting Monday although the contract, signed in 1993, was
supposed to be effective for 20 years.

Cikarang Listrindo, which runs a 150 Megawatt (MW) gas-fired
power plant in Bekasi, West Java, started operation in 1993 with
the exclusive right to supply power for industrial plants in
Bekasi.

PLN signed a contract to buy the excess power generated by
Cikarang in the same year, but Djiteng claimed PLN had signed the
contract under duress.

"I am ready to face a lawsuit as a result of this move,"
Djiteng said earlier this month.

His move has reportedly made foreign investors, who control
most of the country's independent power producers, worried over
the future of their projects.

Two ministers, including State Minister of the Empowerment of
State Enterprises Tanri Abeng and Minister of Mines and Energy
Kuntoro Mangkusubroto, who both supervise PLN, have publicly
opposed Djiteng's decision.

"A contract is a contract," Kuntoro said recently. "I don't
want to hear any official in my ministry annul a contract with an
excuse that he was under duress to sign the contract in the
past."

Tanri said Djiteng's decision was not correct and the
arbitrary act could give a negative image of Indonesia.

He warned state firms should not arbitrarily annul contracts
with third parties without consulting the government.

"All contracts which need to be reviewed must be identified
and submitted to the government," Tanri said.

Tanri has set up a task force, consisting of PLN's directors
and officials from the General Directorate of Electricity and
Development and the State Ministry of the Empowerment of State
Enterprises, to work out a comprehensive solution to PLN's
problem. (jsk)