Govt asking coal contractors to sell some output to PLN's power plant
Wednesday, April 11 2001 - 06:30 AM WIB
The government is planning to ask the country's coal contractors to sell some of their output to state electricity company PLN 's subsidiary PT Indonesia Power following the shortages of coal supplies at the company's power plant in Suralaya, West Java.
A source at PLN told Petromindo.Com Wednesday morning that the ministry of finance had sent letters to the leaders of ten coal mining companies to invite them to a meeting Wednesday afternoon on the government's request.
"The invitations came from the ministry's director general for oil and non-tax revenues Sahala Lumban Gaol. According to the information that I received, ten companies were invited to a meeting with Sahala," the source said.
He said the companies include PT Jurong Barutama Greston, PT Kideco Jaya Agung, PT Bukit Baiduri Enterprise, PT Bukit Sunur, PT Kitadin, PT Adaro Indonesia and PT Kaltim Prima Coal.
The source said the ministry would ask the companies to sell the government's share in their output to the Suralaya power plant.
Under the contracts, the government is entitled to receive 13.5 percent of the contractors' coal output in royalties and taxes.
Today, the contractors sell the government's coal share and deliver the proceeds to the ministry of finance. The contractors receive some fee for selling the coal.
The source said the Suralaya power plant, which is the largest power plant in South East Asia with the power generation capacity of more than 3,000 Megawatt, was now in a critical condition following the difficulties faced by state coal mining company PT Bukit Asam to continue coal supplies to the power plant.
The source said bad weather had affected Bukit Asam's production. Besides, the state coal company was basically reluctant to sell its coal to Suralaya due to the low price quotation set by Indonesia Power for its coal.
Other coal companies are also not interested to sell their coal to Indonesia Power due to the low price. Besides, the source said, Indonesia Power had often delayed the payment of its coal supplies.
The source said Indonesia Power sets the price of coal at Rp 150,000 (US$1=Rp 10,780) per ton, which is far lower than the international price.
Analysts say the government's move would impact the contracts between coal companies and their customers, as they would be forced to reduce the amount of their coal shipment to buyers. (Bodega)