PT PLN first half losses surge 12-fold

JAKARTA (JP): Cash-strapped state electricity company PT Perusahaan Listrik Negara (PLN) announced on Thursday a twelvefold increase in losses of up to Rp 11.58 trillion (US$1.4 billion) in the first half of the year, as compared to Rp 974 billion for the same period last year.

The January-June 2000 loss exceeds the annual net loss of Rp 11.3 trillion recorded last year.

A company balance sheet published in the local papers revealed the first half loss occurred despite a rise in net revenue of 30 percent to Rp 10.11 trillion over the period, from Rp 7.75 trillion over the corresponding period of last year.

The company's operating costs surged to Rp 12.3 trillion in the first six months of the year, from Rp 8.76 trillion for the same period of last year.

The cost for the purchase of power surged four-fold to Rp 4.13 trillion in the first half of the year from Rp 1.07 trillion in the same period of last year.

PLN buys power from independent power producers (IPP) at average price of 5.5 U.S. cents or about Rp 453 per kilowatt hour (KwH) but resells it to the public at an average of Rp 250.

Debt payment reached Rp 5.9 trillion in the first six months of the year as against Rp 2.9 trillion in the same period of last year.

The company suffered Rp 3.5 trillion in foreign exchange losses during the first half of the year, as against a foreign exchange gain of Rp 2.7 trillion for the corresponding period of last year.

PLN has been hard hit by the three-year economic crisis as it sells its power in rupiah but pays most of its costs, including for power from IPPs and spare parts, in dollars.

The state company has signed power purchase agreements with 27 IPPs, which are all consortiums comprising of international energy companies and businesses owned by former president Soeharto's family members and friends.

Some of the private power projects have been on stream and some others were suspended by the government in 1997 and 1998 as part of the retrenchment measures to cope with the monetary crisis.

Some IPPs, including MidAmerican Energy Holdings, formerly known as CalEnergy, have sued PLN for its refusal to fulfill its contractual obligations.

MidAmerican won a US$573 million-worth arbitration lawsuit against PLN but the state company and the government as the major shareholder have yet to pay the damages.

PLN is now seeking to re-negotiate its power purchase contracts with the IPPs that have come on stream in a bid to lower the price of their power.

The government allowed PLN to raise its power tariff by 34 percent in April this year to ease its financial burden. (jsk)