PLN under fire for cooperation
PLN under fire for cooperation
JAKARTA (JP): The state electricity company PT PLN was under fire yesterday over its dealing with private investors involving power generation, which has caused high prices of electricity for subscribers and PLN.
A member of the Commission VI of the House of Representatives, Iskandar Mandji, said in a hearing with PLN executives that PLN is also not transparent in setting criteria for companies which may be awarded contracts for the establishment of power generating plants.
He said PLN's decision to allow private producers of electricity to set electricity rates at levels higher than those set by PLN will affect electricity subscribers.
PLN has allowed PT Cikarang Listrindo to set billing rates at levels higher than PLN's rates for its customers during peak hours at industrial estates in Bekasi, West Java.
PLN also agreed to buy electricity from PT Paiton Energy Company, a private consortium which is now constructing a 1,230- megawatt (MW) coal-fired power plant in Paiton, East Java, at Rp 183 (8.3 U.S. cents) per kilowatt hour (kWh), much higher than PLN's average generation cost of Rp 114.18 in Java.
Mandji also said the House of Representatives had received complaints from private companies over the absence of clear criteria on which bidders can be awarded contracts with PLN.
In response to the criticisms, PLN's president Djiteng Marsudi said that contract decisions and the pricing of electricity are both under the authority of the government.
He acknowledged, however, that the pricing was set on the basis of brief studies made by PLN and its contractors.
He hopes the government will provide criteria for companies bidding for contracts with PLN in the coming years.
Bonds
Djiteng also said PLN has scaled down its plan of offering bonds to the public from the original value of Rp 1 trillion to only Rp 500 billion due to weak demand from investors.
PLN's director of finance, Muslim Abuhudjus, told reporters during a break at yesterday's hearing that according to the underwriter of the bond issuance, PT Danareksa Sekuritas -- the state-owned investment trust company -- demand for PLN's bonds had reached only around Rp 275 billion.
PLN said last week that the company had for the second time delayed its plan to offer five-year bonds worth Rp 1 trillion on the over-the-counter (parallel) market.
Muslim said PLN will probably offer the bonds on March 26 through April 6 on the parallel bourse.
PLN will use funds from the bond issuance to finance various power projects in the country. (fhp)