PLN not to build new power plants this year
Saturday, May 12 2001 - 05:00 AM WIB
State electricity company PT Perusahaan Listrik Negara (PLN) will not build new power plants this year due to budget constraints, Kompas daily reported on Saturday.
The daily quoted PLN operational director Tunggono as saying that PLN was currently only completing the construction of the existing power plants.
Tunggono added that the company was also facing financial constraints even to build new distribution network and maintain its existing network.
Consequently, PLN's services to its customers were also deteriorating due to the poor maintenance of its facilities.
PLN was also facing difficulties to meet the increasing demands from customers, especially to meet demand for new electricity lines because its existing lines were already over-loaded with electricity currents.
PLN's installed electricity capacity currently reaches 20,000 megawatt, of which 3,350 megawatt coming from private power producers.
A number of power plants are currently under construction, including steam-powered Asam-Asam power plant in Banjarmasin, water-powered Basai power plant in Lampung, water-powered Musi power plant in South Sumatra, as well as water-powered Sipang Siporas power plant and water-powered Renung power plants, both in North Sumatra.
When asked on how to deal with such financial constraints, Tunggono said the only way to deal with the problem was by increasing basic electricity tariffs to a level that would be viable for PLN to maintain its healthy operation.
This means that PLN had to increase its electricity tariffs from Rp 300 per kilowatt per hour (kWh) now to Rp 570 per kWh.
However, to achieve that target, it would need the approval from the government and also from the House of Representatives.
While PLN is facing difficulties in building new power plants, PLN is inviting private investors to participate in the provision of electricity, especially in areas outside Java and Bali, in cooperation with local administrations. In this scheme, they could set their own regional tariffs, with the approval from the central government.
All parties would get the benefits with that kind of cooperation. Local people and industries would get their needed electricity, investors would get a better returns of investment, and local administrations would get additional income. (*)