| PLN asked TDL rose 15% per year |
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| Thursday, 22 April 2010 10:08 | |||||||
Page 1 of 2 Corporate savings target set in 2010 to Rp1, 7 trillion
JAKARTA: State electricity company PT (Persero) request immediate tariff increase of electricity each year an average of 15% to avoid the expected jump in subsidies could reach Rp155 trillion in 2018. Business and Risk Management Director PLN Murtaqi Shamsuddin said if the electricity basic tariff (TDL) was increased this year with an average rate of increase of 15%, electricity subsidies reach Rp54, 5 billion. Subsidies could be shortlisted to around Rp46 trillion in the next year if the same amount of increase applied to TDL. "Even if the TDL in 2012 increased 15% return, then the subsidies will go back down to Rp32, 6 trillion," he said yesterday. According to him, the decision not to raise the TDL since 2003 has provided the risk of swelling power subsidy in the state budget revenue expenditure from year to year. Murtaqi said if the TDL still remain at the same level until 2015, with all the company's efficiency programs carried out, subsidies are expected to crawl up to Rp109, 2 trillion. "Even in the 2018 subsidy could reach Rp155 trillion. The swelling was made by considering the economic growth of 6% and the national electricity demand growth of 9.2% per year." In response, members of the House of Representatives Commission VII of the Golkar Party faction ditto Ganinduto actually demanded PLN TDL delaying a planned increase in July 2010. He said the delays were related to the momentum that is not appropriate because it will be the entry of the Muslim fasting month of August. "If TDL up time, auto prices of basic commodities will go up," he explained. Ditto suggest that PLN is seeking other ways to reduce electricity subsidies that are targeted only to slim down around Rp7 trillion if the increase in TDL done. If saving Rp7 trillion, PLN could find another way. " However, Finance Director PLN Setio Anggoro TDL Dewo said the increase should be done every year at least until 2013. According to him, the policy is needed so that the state electric company could meet the electricity sector needs an investment fund that reaching Rp70 trillion per year. "If PLN wants to be an investment of Rp 70 trillion per year, TDL had to rise every year," he said. Based on the calculation of electricity, if the increases continue to be in constant TDL, is expected to reach the point of equality between the cost of goods manufactured (BPP) electricity and selling rates so that at 2012 PLN had reached break-even point (break event point / BEP). Besides the increase in TDL, said Setio, PLN also require an adequate level of margin to support the power infrastructure development plan for the future. With the assumption of equilibrium BPP and TDL, the amount of margin is expected to continue shrinking from 8% in 2010-2011 to just 3% in 2013. "The need for any margin that we feel quite 4 years, that is last in 2013. Needs a large margin at the beginning, because accumulated after 10 years of PLN did not get the operating margin," he said. On the other hand PLN's operational efficiency targets multiple programs, such as energy losses 9.41% this year from last year which reached 9.93%. The decrease was equivalent to Rp500 billion efficient. PLN is also programmed fuel conversion from oil to gas and coal, and also the efficiency of administrative activities. Saving subsidies For subsidized savings target of Rp1, 7 trillion this year to be gained from the program efficiency of the company, Finance Director said PLN Setio Anggoro Dewo efficiency programs carried out through three activities. First, the decrease in losses, more efficient fuel tenders, and improvement of business processes from procurement activities. Through a decrease in losses, he said, with a decrease from 9.95% to 9.41% PLN hoping to get the savings amounted to Rp500 billion. "We are targeting the reduction of energy losses or losses this year reached 9.41% which could bring a saving of about Rp500 billion," he said. He explained PLN targeted to eliminate rotating blackouts throughout Indonesia at the end of the year. To that end, some areas outside Java PLN was forced to hire a diesel-based power plant that resulted in the addition of up to 600,000 kiloliters of fuel consumption. "Coupled with the use of fuel for the Muara Tawar not get the gas, the total additional needs as many as 2 million kiloliters of fuel." He hoped that from the fuel tender PLN will get a lower margin of 5% to 3% so that it can save fuel cost of Rp200 billion. " PLN will also conduct procurement business process improvement for the necessary electricity infrastructure. He said the business process improvements to procurement activities can save up to 30% from the previous procurement conducted. "It has been proved in a transformer procurement program that could save 20% -30%. We expect the savings can be achieved around Rp1 trillion from the business process improvement," he said..
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