PLN seeing red as losses increase

JAKARTA (JP): State electricity company PT Perusahaan Listrik Negara (PLN) plunged deeper into the red in 1998 with a net loss of Rp 9.156 trillion (US$1.1 billion) from Rp 579.01 billion in the previous year.

The company announced on Friday that total sales increased by 26 percent to Rp 13.7 trillion last year from Rp 10.8 trillion in 1997.

However, the company's debt payment sharply increased to Rp 6.01 trillion last year from Rp 1.12 trillion in 1997.

The company's foreign exchange loss also rose to Rp 3.5 trillion from 1.2 trillion in 1997, due to the sharp depreciation of the rupiah against the U.S. dollar.

PLN has been severely battered by the economic crisis, as most of its costs, including fuel and power supplies from independent power producers (IPPs), are in dollars, while electricity sales are in rupiah.

The company said the cost to buy fuel and natural gas amounted to Rp 9.40 trillion last year, a 117 percent increase from Rp 4.33 trillion a year earlier. The cost of buying electricity from IPPs rose to Rp 1.88 trillion from Rp 325.16 billion in the previous year

The company said it received a government subsidy of Rp 1.9 trillion last year.

The company has refused to buy power supplies from IPPs in the dollar as stipulated in the contract.

PLN is trying to negotiate power purchase agreements (PPA) with 10 IPPs. The company has requested power prices be lowered to about 4 U.S. cents, from between 6 cents and 8 cents under the contracts.

Earlier, PLN president Adhi Satriya said the renegotiation may take between one year to two years to complete. (jsk)