PLN expects Rp 3t in profit

State owned electricity firm PT Perusahaan Listrik Negara expects to post a net income of Rp 3 trillion ($332 million) this year, its first profit since the economic crisis hit the nation 1998.

Company president commissioner Al Hilal Hamdi said the firm?s efficiency programs had brought fruits and the company expected to cut costs as a result of the decreased use of fossil fuel.

?There are a lot of efficiencies. Many new power plants which do not use oil will come on stream. Thus there will savings of oil costs,? Hilal said.

The Rp 3 trillion profit target assumes that PLN will book Rp 108 trillion in revenue this year, including the government?s subsidy, he said without specifying the subsidy?s amount.

He noted however the government is not giving subsidy to PLN as a company but to poor households that buy power from PLN at a price lower than PLN?s production cost.

He also said the Rp 3 trillion profit target assumes that the firm will get fee from the government for distributing subsidized power.

?Like state oil and gas firm PT Pertamina which gets fee for distributing subsidized fuel, PLN also deserves fee from the government for distributing subsidized power,? Hilal said.

He said now Pertamina gets a margin of 15 percent from the government in its service to distribute subsidized fuel, while PLN gets no fee at all.

?According to the State Owned Enterprises Law, (PLN) should have got a margin of about five percent. Thus, (PLN get disbursement from the government amounting to) production cost plus margin,? Hilal said.

PLN earlier announced that it had cut its loss to Rp 1.03 trillion last year from Rp 4.92 trillion in 2005.

Hilal also said PLN plans to issue Rp 3 trillion bond to boost its working capital.

?PLN must be healthy financially, must have a margin so that financial investors are willing to take a look at it,? Hilal said. (Godang)