PLN's high rates

PLN's high rates
due to corruption

On Feb. 7, 2003 the State-owned electricity company (PLN) and
the Indonesian Police signed an agreement on the theft of
electricity. In his statement, PLN director Eddie Widiono said
that PLN sustained an annual loss of between Rp 500 billion to Rp
1 trillion from this theft.

As a citizen, I warmly welcome PLN's efforts to stop the
corruption because the company's inefficiency has the resulting
effect on the end user's rates of electricity which keep on
rising each year. But it is deplorable that PLN only has the will
to deal with the usually poor, petty thieves who connect their
wires to neighbors' lines. In my opinion, one of PLN's biggest
losses is due to the trillions of rupiah worth of Paiton's (one
of many Independent Power Producers) electricity sale-purchase
contract doled out by the New Order regime.

Despite the State Audit Agency's (BPK) alleged report on
corruption in the project, it is lamentable that neither the
government nor PLN has taken any action to investigate the case
thoroughly or put these multi-trillion rupiah corruptors on
trial.

If PLN were fair and truly interested in eliminating
corruption-related inefficiency, it would give the case top
priority rather than to look for petty thieves that represent
only one percent to two percent of the total losses.

PLN has said that it has negotiated with Paiton to decrease
the price of electricity, however, it must not be inferred that
the corruptors are free from legal charges, moreover PLN has paid
some money to Paiton based on the old contract.

If PLN really intends to improve its performance, it should
settle the case thoroughly, not only the Paiton case but also
other contracts that involve private electricity companies so it
will not shift the burdens to the public.

FABBY VICTOR C.M
Coordinator of
NGO Working Group on
Power Sector
Restructuring
Jakarta