PLN cuts losses in 2006, plans to boost investment for 2007

State electricity utility PT Perusahaan Listrik Negara (PLN) has managed to considerably cut its losses to Rp 1.08 trillion (US$120 million) in 2006 from a whooping Rp 4.93 trillion in 2005, thanks to the coming onstream of new non oil-fired power plants.

While the figures have yet to audited, PLN chief commissioner Alhilal Hamdi said the commencement of operations of the utility?s new 740-megawatt (MW) gas-fired power plant in Cilegon, Banten, 1,320-MW coal-fired power plant in Tanjung Jati, Central Java, and 600-MW coal-fired power plant in Cilacap, Central Java, had helped the company to significantly reduce its losses, which had doubled in 2005 from Rp 2.02 trillion in 2004.

The losses suffered by PLN were mainly to blame on high global crude oil prices during the year, which reached a peak of $74 a barrel in August, Alhilal explained.

The company used oil-based fuels for 24 percent of its total power plants in 2006.

PLN?s interim report also showed that the company?s earnings before interest, tax and depreciation (ebitda) increased to $1.24 billion in 2006, as compared to $1.02 billion in 2005.

During the meeting, according to Alhilal, a plan to privatize Indonesian Power (IP), a PLN subsidiary, this year was also discussed.

The State Ministry for State Enterprises had already said it was considering selling a stake in IP, one of three state firms operating in the energy sector, later this year.

However, Roes Ariwijaya, deputy for strategic industries, mining and telecommunications at the ministry, who was also present at the meeting, refused to reveal the names of the other two companies, saying that the ministry was still discussing the matter.

PLN had earlier said it would continue focusing on the construction of new power plants with a combined capacity of 6,900 MW as part of the government?s crash program to build new non oil-fired power plants with a total capacity of 10,000 MW by 2009.

The government?s program is expected to help the company save up to Rp 45 trillion in annual fuel costs, while also serving to meet rising domestic electricity demand.

For this year, the company is setting aside Rp 10 trillion to develop and enhance power grid all over place in Indonesia. Rp 2 trillion of this will come from the national budget and Rp 5 trillion from PLN, while the remainder is expected to come from loans. (*)