PLN pooh-poohs Pertamina debt threat

PLN pooh-poohs Pertamina debt threat

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

State-owned power firm Perusahaan Listrik Negara (PLN) played
down a threat by state-owned oil and gas company PT Pertamina to
cut off its fuel supplies until it paid its debts, saying PLN had
never been behind with payments due and owing to Pertamina.

The power firm's president director, Eddie Widiono, said on
Tuesday that it was nothing unusual for a company to have debts
as long as it paid the installments on time.

"In our business it is normal to have debts, but we always
make the due payments on time," Eddie told reporters after a
closed-door hearing with the House of Representatives' mining and
environment commission.

Eddie gave assurances that the PLN was not facing any
shortages in fuel supplies for its power plants, saying the two
companies would soon work things out.

"I assure you, we will settle things," he said, adding that
the power company had received a number of invoices from
Pertamina over the past months and would pay the installments
that had become due and owing as soon as possible.

While admitting that he had received a letter from Pertamina
regarding the sums owed, Eddie insisted that the outstanding
amounts were less than the Rp 2 trillion (US$215.8 million)
claimed by Pertamina.

"According to the Development Finance Comptroller (BPKP), our
debts are not that great," Eddie said, although he refused to say
exactly how much they were according to PLN's reckoning.

During a hearing with the House on Monday, Pertamina
threatened to cut off fuel supplies to PLN, saying the firm was
late in making payments on Rp 2 trillion-worth of outstanding
debt to Pertamina.

Pertamina supplies some 9 million kiloliters of oil annually
to PLN to fuel more than 25 percent of its power plants.

PLN plans to issue some Rp 2.5 trillion in bonds and sell two
of its subsidiaries -- PT Indonesia Power and PT Pembangkitan
Jawa-Bali -- this year to generate fresh cash.

Besides PLN, Pertamina has also demanded that other state
institutions, such as the Indonesian Military (TNI), pay their
debts as the oil company struggles to get back into the black.