Paiton's investors slams PLN

Shareholders of PT Paiton Energy Company (PEC) slams state-owned electricity firm PT PLN's decision not to buy electricity from Paiton this year.

Kusumo A. Martoredjo, chief commissioner of PT Batu Hitam Persasa - one of Paiton's shareholders, said PLN could not impose its arbitrary decision not to buy Paiton's electricity as it had signed a letter of intent with Paiton's creditors, Export Credit Agency (ECA).

"PLN cannot run away from its responsibility to buy private electricity because there is a routine monthly meeting between PLN and ECA. So, there is a confidence agreement," he told Bisnis on Monday.

PLN's marketing director said earlier that PLN had decided not to buy electricity produced by independent power producers because the House of Representatives cut PLN's budget to buy private electricity.

Kusumo said that according to PLN's letter of intent to ECA, PLN is committed to buying electricity from five independent power producers, including Paiton I, Paiton II, and Sengkang.

Kusumo urged PLN to buy electricity from private producers, not only Paiton I only, but also from other private producers which have been in operation.

"Moreover, electricity consumption from various industries continues to increase. Total use of PLN electricity supply has reached 12,000 megawatts," he said, noting that PLN's maximum capacity stands at only 15,000 megawatts, only short of 3,000 megawatts.

Kusumo also expressed his concerns over the possibility to re-tender the transmission project which would connect Paiton with other cities in Java, which had been won by a consortium led by the Bukaka Group. He noted that such a re-tender policy would only delay PLN from buying private electricity.

Batu Hitam, affiliated to Hashim Djojohadikusumo, controls only 15 percent stake at Paiton I project. The project is 42 percent owned by Edison Mission International, 32 percent by Mitsui and 11 percent by General Electric. (*)