BPK finds high potential losses in PLN's power transmission

The state audit agency BPK has completed an audit on the operating costs of the state owned electricity company PLN. In the audit, the agency found huge potential losses suffered by the firm in power transmission, Investor Daily reported on Wednesday.

BPK senior auditor in charge of the audit, Baharuddin Aritonang, said in Jakarta on Tuesday that the potential losses of electricity supply suffered by PLN was far bigger than four percent recorded by similar utility firm in Singapore.

According to him, the high potential loss in the distribution of the power supply in Indonesia was mainly due to a geographic factor. Unlike in Singapore, the power distribution in Indonesia is quite extensive.

He said that the high potential losses had partly contributed to PLN's high operating costs. He refused to unveil the other findings, but he said that all of the findings had been confirmed with PLN's executives.

Baharuddin said that the findings would be submitted to the House of Representatives on Thursday. "It is up to the House members to decide whether or not it will accept the government's proposal to increase the power tariff," he said.

The government has proposed an increase in the electricity tariff by of up to 100 percent to cope with PLN's rising costs as the result of the surge in fuel prices. But the House demanded an extensive audit of PLN's operating costs before discussing the proposed tariff increase. (*)