IPPs asks for tax facility, budget support

Independent power producers (IPPs) have asked the government to provide them with tax facility and budget supports to encourage the restructuring of electricity tariffs, and the government is still considering the request, according to Finance Minister Bambang Sudibyo on Friday.

Speaking to reporters after attending a meeting on the restructuring of state-owned electricity firm PT PLN, Bambang said IPPs asked the government to use "cash base," not "actual base," in calculating the amount of taxes that IPPs had to pay.

But Bambang said the government was still discussing the matter with PLN.

Bambang said the government was currently restructuring the energy sector, including private electricity. But he acknowledged that there were many things needed to be negotiated with IPPs.

"We, the government, are happy with the results of negotiations conducted by PLN and IPPs, and encourage PLN president Kuntoro Mangkusubroto to continue with the next negotiations," Bambang said.

Bambang said that the government had given Kuntoro an authority to find a win-win solution for the dispute between the government, or PLN, and IPPs.

Bambang also revealed IPPs, through their creditors grouped in the Export Credit Agency, had also asked the government to continue to give budget supports for PLN in the government budget for year 2001 to support the restructuring of PLN, including budget supports for electricity tariffs.

Bambang said that the government had planned to allocate certain amount of subsidy fund in the year 2001 budget for electricity development, as requested, but he asked PLN to discuss it with the director general of budget to find the proper amount of subsidy.

Speaking to journalists after the meeting, Kuntoro, however, said that ECA's requests were actually not discussed in the meeting. "I don't know if it is discussed outside the meeting, though." (*)