PLN to suffer losses until 2005 due to lack of gas supply

State-owned power company PLN is projected to suffer financial losses until 2005 as most of its gas-fired power plants are forced to use fuel due to the lack of gas supply, a daily reported on Friday.

The use of fuel in gas-fired power plants is pushing cost of operating the plants much higher, creating pressure to PLN's finances.

PLN president Eddie Widiono was quoted by Kompas as saying that declining gas supply to PLN's gas fired power plants has also partly contributed to the much-criticized high power prices here.

Meanwhile, other reports said that PLN was planning to sign gas purchase contracts with several suppliers on Saturday. This is in line with the company's plan to build more gas-fired power plants to help reduce the company's overall operation cost and boost efficiency in producing electricity.

PLN projected to return to profit by 2006.

Meanwhile, PLN finance director Parno Isworo said the use of fuel will increase from 6.5 million kilo litter in 2002 to 8.1 million kilo litter this year.

PLN's spending on fuel will jump from Rp 10.3 trillion in 2002 to Rp 13.7 trillion this year.

On the other hand, gas usage to decline from 225 million metric standard cubic feet (MMSCFD) in 2002 to 175 MMSCFD due to declining supply.

Commenting on the planned bond issuance, Eddie stressed that PLN is to go ahead with the plan sometime in the second semester of this year. However, he did not provide details on the value of bonds issued. Proceeds from the bonds will be used to finance several projects.(*)