Govt to liberalize electricity in Java, Bali
Tuesday, December 12 2000 - 04:30 AM WIB
The government would liberalize the electricity sector in Java and Bali through the implementation of the multi-buyer and multi-seller (MBMS) system, starting year 2007, according to Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
Purnomo said on Monday (Dec. 11) that the Java-Bali electricity system was the most ready in the country to compete in the MBMS system.
"The Java-Bali system is the most ready for competition. Thus, this area could be set free for liberalization in the electricity sector," Purnomo said on a sideline of electricity seminar in Jakarta.
Purnomo noted that the government's plans to liberalize electricity sector in Java and Bali had been incorporated in the electricity bill that was currently in the hand of President Abdurrahman Wahid for approval before being sent to the House of Representatives for deliberation.
The bill, that would replace Law No. 15/1985 on electricity, is expected to be deliberated by the House in its working session starting Jan. 15, 2001.
Purnomo explained that the government would continue to provide protection in the electricity sector for other areas outside Java and Bali, especially areas that were not ready for private competition.
Meanwhile, the director general of electricity and energy development, Endro Utomo Notodisastro, revealed that Indonesia would be ready to open its electricity market for private competition starting 2007, much later than the initial target date of 2003.
"In the bill, Indonesia is projected to be ready to open its electricity market for competition in year 2007. If it is pursued earlier, it could create a chaotic situation. The people are not ready. Even the Netherlands will liberalize its electricity sector also by that year," Endro said.
He explained that by imposing competition, the government expected that the electricity sector would become healthier and could be self-financing.
"So, the delay in the liberalization from the initial target date of 2003 is not solely because of the incomplete negotiation with private electricity providers," he said.
Endro noted that the government may not use MBMS system to liberalize its electricity sector if the system was not ready to be implemented.
"So, it depends on the system. If we are ready for competition, then we will open it (the electricity sector), but if the system is not ready, maybe we will pursue it gradually or not at all," Endro said. (*)