PLN’s units outside Java suffer financial losses due to poor efficiency
Thursday, May 27 2004 - 02:57 AM WIB
The state owned electricity company PLN’s branches outside Java, each, suffer financial loss of at least Rp300 billion a year due to the lack of efficiency and low tariffs, Neraca reported on Thursday.
Ahmad Daryoko, the chairman of the central executive board of PLN’s workers association, said on Wednesday that about Rp200 billion of the financial deficit suffered by each of the company’s branches were covered by the earnings of the company’s operations in Java, while the other Rp100 billion was paid by the government.
He said that the cross-subsidy to cover the financial deficits of PLN offices outside Java could be stopped in the future if the government continued with its program to privatize the state owned electricity company.
“If the cross-subsidy is stopped, the electricity tariff outside Java will certainly increase from the current levels. This is the real impact of the issuance of the new electricity law No. 20, 2002,” he said. (*)