PLN, Paiton sign initial deal

The state-owned electricity company PLN signed an initial deal with independent power producer PT Paiton Energy late on Friday, with the outlook to be able to hammer out a long-term agreement by the end of this year.

PLN president Eddie Widiono told reporters that the preliminary agreement would be effective until the end of this year. He said that in the upcoming two months period, PLN and Paiton would continue to talks to prepare for a final long-term agreement particularly on power price and contract period.

Eddie declined to provide much comment.

Paiton is part of the 27 IPPs which singed agreement with PLN to provide the later with power supply. But the contract was terminated in the wake of 1997 financial crisis. PLN is under pressure to renegotiate the contract particularly the power price as some deemed as too high especially with the sharp decline in the value of the rupiah against the U.S.

PLN has so far only been able to reach agreement with three IPPs.(Amoros)