Govt discusses local revenues from geothermal power projects

The government is studying the possibility of sharing part of the state revenues from geothermal power plants in a bid to cope with the growing resentment from the local administrations over the geothermal projects in their areas, Koran Tempo reported on Monday.

The Secretary of the Directorate General of Geology and Natural Resources at the Ministry of Energy and Mineral Resources, Suhkyar, said in Jakarta over the weekend that his office and operators of existing geothermal power plants were discussing the revenue sharing scheme for the local authorities.

"The local administration can for example receive certain amount of cash from an operator of an existing geothermal power plant as royalty," he said.

According to the regulation, the government receives 34 percent of profits obtained by geothermal power plants. But the revenue sharing between the central and local governments have not been regulated until the issuance of the Geothermal Law 2003 which states that 20 percent of the state revenues from the geothermal power plants should go to the central government, and the other 80 percent to the local government.

The lack of the revenue sharing mechanism for geothermal power plants established before the issuance of the law has caused a problem to existing geothermal plants. The Garut regency administration in West Java, for example, refuses to issue permits for the expansion of the Darajat geothermal power plant on grounds that project doesn't give much benefits to the local people. (*)