PLN may lose Rp 13.7 trillion this year; PLN barred from seeking overseas loans

Minister of Mines and Energy Susilo Bambang Yudhoyono said on Tuesday state electricity company PT PLN may lose Rp 13.7 trillion during the 2000 fiscal year beginning in April, The Jakarta Post reported.

But, the loss could be cut to Rp 4.06 trillion if PLN could cut obligations to the independent power producers (IPP), raise electricity tariff and improve efficiency, Bambang said during a hearing with the House of Representatives' Commission VIII for mines and energy.

He said PLN expected to save Rp 5.1 trillion in payments to IPPs, and another Rp 759 billion through efficiency program.

The state company expected an additional income of Rp 3.9 trillion by raising the electricity rates by 29.3 percent, he added.

Meanwhile, Suara Merdeka quoted PLN's president Kuntoro Mangkusubroto as saying that the government had barred PLN from seeking overseas loans due to its mounting debt.

The lack of finance had forced to the state company to cancel several projects, including the Musi hydropower project in Bengkulu.

Kuntoro said PLN's financial obligation to IPPs would reach Rp 9 trillion in the 2000 fiscal year, but the state company hoped to cut them to Rp 3.9 trillion through negotiations.

Besides, he said, the Indonesian government had US$290 million in financial obligation to the United States government following PLN's defeat in arbitration suit against American IPP MidAmerican Energy Holding. The US government, through its insurance firm Overseas Private Investment Corporation (OPIC), which insured MidAmerican's geothermal projects in Indonesia, had paid $290 million in claim to MidAmerican. (*)