Paiton offers write-off of some PLN debt

PT Paiton Energy has offered PLN a write-off for some of debt arrears of state electricity company PT Perusahaan Listrik Negara (PLN) for year 2001 if both parties could agree on a long-term agreement (LTA), Kompas reported on Thursday.

Such an offer was made to expedite the signing of the LTA that governs electricity purchase tariffs by PLN from Paiton and to help PLN improve its financial standing, according to Paiton president Ronald P. Landry.

Landry said that the arrears would be charged only for electricity produced since commissioning in 1999, and that matter would be governed by a separate agreement.

When everything had been settled, Landry said the content of the agreement would be announced to the public by the end of this year.

Landry said that his company was of the opinion that the electricity price of over 5 U.S. cents per kilowatt-hour was still normal, and this attractive tariff was needed to attract new investors.

He noted that negotiations over the long-term agreement had made significant progresses during the past three years, and he hoped that the new agreement would give more certainty, and create a beneficial long-term relations between the two parties.

Meanwhile, PLN president Eddie Widiono said earlier that re-negotiations with Paiton Energy, that had been dragged on over electricity pricing, would likely be completed by the end of this year. (*)