PLN lit up by loss of US$756 million

JAKARTA (JP): State electricity company PT Perusahaan Listrik Negara (PLN) on Wednesday announced an unaudited loss of at least Rp 5.9 trillion (US$756 million) for 1998, up from Rp 579 billion in 1997.

"The figures have yet to be audited and do not take foreign exchange losses into account," PLN president Adhi Satriya was quoted by Antara as saying at a breaking of the fast meal at the company's headquarters.

He said PLN earned Rp 13.33 trillion in power sales last year against operating costs of Rp 17.86 trillion for the same period, leading to an operational loss of Rp 4.54 trillion.

In addition, Adhi said, the company spent Rp 1.4 trillion last year to cover a variety of other costs, including repayment of loan principal and interest.

He said the losses were covered by government subsidies.

Company finance director Parno Isworo said the company spent Rp 2.1 trillion buying power from independent power producers (IPPs) and Rp 9.4 trillion buying fuel for its power plants, including Rp 5.6 trillion worth of natural gas.

Parno noted that despite the monetary crisis, PLN booked a 1.6 percent increase in power volume sale, which rose to 65,370 giga watt hours (gwh) in 1998 from 64,312 gwh in 1997.

The company also recorded an increase in the number of customers, which rose by 1.6 million to 26.24 million last year.

PLN has projected that power sales will increase to 64,000 gwh worth Rp 16.4 trillion in 1999.

The company, which earns revenues in rupiah but faces most of its costs in dollars, has been severely affected by the economic crisis which has now been battering the country for more than 17 months.

The company has stated its intention of renegotiating the terms of power purchase agreements which it signed with 26 IPPs prior to the crisis to ease its financial burden.

The company has insisted that it will only buy power from IPPs at the pre-crisis exchange rate of Rp 2,450 per dollar, as compared to the current rate of nearly Rp 8,000.

Two American IPPs -- CalEnergy and Florida Power & Lights -- took PLN to an arbitration court last year for breach of contract.

The government set up an inter-ministerial task force last year to restructure and rehabilitate the company and to help it renegotiate contracts with IPPs.

Adhi also said the company launched an efficiency program last year and would further intensify the program later this year. (jsk)