PLN refuses to sell Paiton power plant
PLN refuses to sell Paiton power plant
JAKARTA (JP): President of the State Electricity Company (PLN)
Djiteng Marsudi said yesterday the firm would not sell its coal-
fired power station at Paiton, East Java, because it generated
great revenue.
"The 800-megawatt Paiton station is one of our most profitable
assets. No way shall we sell it," he was quoted by Antara as
saying in Ujungpandang, South Sulawesi.
Djiteng apparently made the statement in response to a
suggestion that PLN sell some of its assets, notably its power
station at Paiton, to improve its liquidity.
Director General for Electricity Zuhal, who is PLN's chief
supervisor, said over the weekend that the best way for the
company to solve its liquidity problem was to sell its Paiton
power plant.
He proposed two other choices: selling shares to the public,
or getting additional equity funds from the government and
raising electricity tariffs.
But Zuhal conceded these two choices were unfeasible because
PLN's poor financial performance disqualified it from going
public, while the government could not give extra funds because
of budget constraints.
"Therefore, selling the Paiton asset is the best choice,"
Zuhal said last week.
Djiteng said if PLN should sell its assets to solve its
liquidity problem, it would prefer selling non-profitable assets,
instead of the profitable Paiton power plant.
But he did not specify which of PLN's assets were
unprofitable.
He said the cost of power generation at the Paiton power plant
was only Rp 71.24 (US$0.03) a KWh, while it sold it for Rp 160.
Zuhal blamed PLN's liquidity problem on its low rate of return
on investments, and on its aggressive capacity expansion program
over the last two years.
He said PLN's yearly profit was around Rp 1 trillion ($427
million), while it had invested more than Rp 8 trillion yearly.
But Djiteng contended that PLN's liquidity had been improving
since early this year.
He said the government had let PLN convert its short-term
liability into a long-term one.
PLN has two power units, each with installed capacity of 400
MW, at Paiton which is being developed into a huge electricity
center. (jsk)