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)