Four islands to become the "competition areas" for electricity supply

Four islands including Batam, Java, Bali and Madura will be prepared as "the competition areas" for the supply and distribution of electricity to industrial users following the introduction of the new electricity law last year, Kompas daily reported on Thursday.

J. Purwono, the director for electricity development at the Ministry of Energy and Mineral Resources, told journalists on Thursday that the electricity generation and distribution would be opened for competition beginning 2007.

The areas which would be opened for competition would, for the first stage include, Batam, Java, Bali and Madura. "We hope in Batam, the free competition in the electricity generation and distribution can be carried before 2004, while Bali, Java and Madura could be carried before 2007," he said.

According to him the price of electricity sold by power plant operators and the price at retail levels would be determined by the market. "The transmission of the electricity will be still monopolized by state electricity company PLN and the price at transmission level will be decided by the government?s supervision board," he said.

PLN president director Eddy Widiono said that the electricity company which at present hold the exclusive rights in the supply and distribution of electricity to the public and industrial users in the country would be ready to compete with private companies by 2007. (*)