Sucofindo chosen to reevaluate PLN's assets

Sucofindo chosen to reevaluate PLN's assets

JAKARTA (JP): The government has appointed state surveyor
company PT Sucofindo to reevaluate the assets of state
electricity company PT PLN.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said the ministerial team supervising PLN's restructuring
recently approved the appointment of Sucofindo.

"The plan is that Sucofindo will complete the reevaluation of
PLN's assets in January next year," he was quoted as saying by
Antara on Friday.

The reevaluation of PLN's assets will allow the company to
raise the book value of its assets to current market price
levels, thus leveraging its assets against its liabilities.

The state company is on the verge of bankruptcy with short-
term debts of over US$2.36 billion and projected net losses of
more than Rp 11 trillion ($1.15 billion) this year.

An earlier request to have the government bailout its short-
term debts received a mixed response from the ministerial team,
which instead ordered PLN to reevaluate its assets.

While Purnomo supported the request, Coordinating Minister for
the Economy Rizal Ramli was against it. Both are members of the
ministerial team.

However, Purnomo said the government might still consider
taking over PLN's debts, adding the team had not made any final
decisions.

He also voiced support for freeing PLN from requirement of
paying income taxes based on the results of the company's asset
reevaluation.

He said that "personally" he would grant PLN the tax
exemption.

"Isn't the goal of the reevaluation to return PLN to health?"
he asked.

Under the current tax law, PLN would be required to pay 10
percent income tax on any profits from the asset reevaluation
process.

PLN president Kuntoro Mangkusubroto has said PLN's assets
stand at Rp 68 trillion, but will swell to Rp 193 trillion after
the reevaluation.

The resulting difference in the value, subtracting PLN's
current losses, will result in the company earning a net profit
of some Rp 100 trillion, he explained.

That profit, he said, was subject to a 10 percent income tax
payment.

"So if we pay an income tax of 10 percent, then we will have
to pay Rp 10 trillion in taxes," Bisnis Indonesia daily quoted
him as saying.

PLN finance director Parno Isworo said the process of
reevaluating PLN's assets might take up to three months.

According to him, the final results of the reevaluation may
have to wait until PLN issues its annual financial report in
April. (bkm)