Govt stops subsidy disbursement to PLN
Wednesday, January 31 2001 - 04:00 AM WIB
The government would not disburse subsidy to cash-strapped state owned utility PT PLN this year to cover its losses in the fiscal year 1999/2000 following "positive cash flow" recorded by the state company that year, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Tuesday.
"Under the existing regulation made by the ministry of finance, if (state companies) record positive cash flow, the government will not provide subsidies to them," Purnomo said after a post-Idul Fitri get-together with the Indonesian Geothermal Association (INAGA)
Purnomo did not provide details on the positive cash flow.
But Purnomo noted that the government was thinking alternative strategies to help ease PLN's financial burdens.
Director general of electricity and energy development at the ministry Endro Utomo Notodisuryo confirmed that the Supreme Audit Agency (BPK) had reported that PLN, which continued suffering losses since the economic crisis hit the country in 1997, showed a positive cash flow in 1999/2000.
He also did not provide details.
Endro was speaking during a seminar on electricity.
During the seminar, PLN's finance director F. Parno Isworo said PLN was projected to suffer Rp 4.4 trillion in losses this year, as against Rp 22.5 trillion in losses last year.
During the seminar, Parno said PLN projected losses at Rp 8.5 trillion in 2001, as against Rp 22.5 trillion in 2000.
"The company will continue to record a decline in financial performance this year and we expect to hit Rp 8.5 trillion in losses compared with last year's Rp 22.5 trillion," Parno said.
The Rp 8.5 trillion loss projection is based on the assumption that the government will approve the company's asset revaluation and corporate and debt restructuring program, raise power price by 8 percent to an average Rp 305 per kilowatt hour from Rp 280 today, and stop subsidy disbursement to the company and the rupiah value reach Rp 7,000 per dollar this year.
Parno said PLN actually expected the government to provide it with Rp 4.1 trillion in subsidy.
"If the government provides the subsidy, our losses are projected at Rp 4.4 trillion this year," Parno said (Godang/Epin)