PLN to get higher margin next year

State-owned power company PT Perusahaan Listrik Negara (PLN) may report a positive balance sheet next year after the House of Representatives agreed on Monday to increase the margin PLN charges the government on sales, Jakarta Globe reported

By approving an 8 percent margin for 2010, up from the 2 percent planned earlier this month, the House effectively gave the ailing firm?s budget for next year a Rp 7 trillion ($700 million) boost.

?We will receive an additional Rp 7 trillion because of the increase in the margin,? Fahmi Mochtar, PLN?s president director, said on Monday.

The margin is in addition to the subsidy that comes directly from the government and is not charged to consumers.

The House approved the 8 percent margin for PLN in 2010 and 5 percent for 2009 after Minister of Energy and Mineral Resources Purnomo Yusgiantoro told the House that the company would become technically bankrupt if the a margin rise was not approved.

?If PLN will still get a 2 percent margin [from the government] next year, then it will go into technical default this year and next,? Purnomo said.

The government plans to pay PLN Rp 48.31 trillion (US$= Rp 10,000) in subsidies in 2010 and Rp 52.50 trillion in 2009.

Purnomo said PLN still needed to find Rp 5 trillion in financing for the construction of power plants outside Java. (*)