PLN will reduce investment funds
Wednesday, February 1 2006 - 02:20 AM WIB
Speaking to reporters on Tuesday, PLN's president director Eddie Widiono said that PLN initially planned to allocate about Rp 17 trillion this year in new investment for power generation, transmission and distribution.
About Rp 9 trillion of the total investment funds would come from PLN's own financial sources, and the remaining Rp 8 million would come from the state budget. "In order to meet the government's request, we would reduce the Rp 9 billion to be allocated from our own budget," he said. "Such a reduction is necessary in order to cut down the planned increase in the electricity rates," he said.
Eddie, however, said that amount of the reduction had not yet been decided. According to him, the Rp 17 trillion investment funds would be needed only to maintain the current efficiency rate. "We actually needs at least Rp 30 trillion in investment funds if we want to support the economic growth," he added.
He said in 2005 the realization of the investment plans reached only about 40 percent due to the sharp increase in fuel prices.
PLN has proposed the government to increase electricity tariffs by an average of 40 percent to cope with the sharp increase in the operating costs. But the planned tariff increase was opposed by members of the House of Representatives. (*)