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