Ministry: Court ruling won?t hamper 35,000 MW program

Petromindo|Lucky

The Ministry of Energy and Mineral Resources said that the Constitutional Court ruling, which annulled two chapters in Law No 30/2009 on electricity, will not hamper the government?s 35,000 MW power plant development program.

Ministry Spokesman Sujatmiko said in a statement on Thursday that court?s ruling does not ban the involvement of the private sector in power plant development in the country as long as state control in the provision of electricity to the general public remains in place.

He said that the state remains in control over the provision of electricity to the general public as the government via state-owned electricity firm PT PLN sells the power output including those produced by private power producers to the public, and that the electricity tariff is determined by the government. He added that electricity operation area is also determined by the government.

The court, following judicial review of the electricity law filed by labor union of state-owned electricity firm PT PLN, annulled chapter two verse one and chapter 11 verse 1 of the Law No 30/2009. The chapters allow the role of private investors in power plant development, and a single entity to operate an integrated operation from power generation to transmission and to distribution.

While some say that this ruling would prevent private investors from participating in electricity development projects, the court said that the role of the private investors is still allowed but that the state must have control over the supply of electricity for the general public.

Sujatmiko said that the ministry is moving to revise a number of regulations to ensure the principle of ?state control? in the provision of electricity for the general public.

PLN said that the development of power plants in the country must involve the role of private investors as the company does not have funding capacity to develop the entire 35,000 MW power plants.

Editing by Reiner Simanjuntak