TEMPO.CO, Jakarta-The Indonesian Forum for Budget Transparency (Fitra) questioned the proposal to add state equity participation (PMN) to state owned power company PLN, which listed in the 2016 State Budget Amendment Draft.
The proposal is based on the 35,000-MW power project, which according to Fitra is unrealistic.
"Even the Coordinating Minister for Maritime Affairs Rizal Ramli said that this is unrealistic," Fitra advocacy manager Apung Widadi said in Jakarta yesterday, June 5, 2016.
On Thursday last week, Finance Minister Bambang Brodjonegoro submitted the 2016 Budget Amendment Draft to the House of Representatives (DPR). In it, the government proposed for PLN to be given an additional PMN received funds amounting to Rp13.56 trillion.
The additional capital would turn PLN into a state-owned firm with the biggest equity participation. I Made Suprateka, PLN's director for corporate communications, said the additional capital will be used to support the 35,000-MW megaproject.
"We will take a look at the details of the fund later," Made said when Tempo contacted him Saturday.
Made vouched that PLN will use and manage the 2016 PMN fund transparently. PLN, he said, is cooperating with the Attorney General's Office to oversee the 35,000-MW project.
PLN needs the additional capital because the mega project has high costs. "For instance the hydroelectric plants where we need to invest for the reservoir," he said.
In May, PLN president director Sofyan Basir asked for an additional PMN. AT that time, however, he only asked for Rp10 trillion, not Rp13.56 trillion. This year, Sofyan said, PLN needs Rp20 trillion to work on their share of the project, which amounts to 10,000 MW, or less than a third of the 35,000-MW project's total capacity.
The initial PMN allotted in the 2016 State Budget for PLN has not actually been disbursed yet. All disbursements are postponed until the government and the House hold further discussions for this year's Amended State Budget.
Minister Rizal had requested to re-review the 35,000-MW plan, saying that it is an unrealistic project. He said PLN would have to pay US$10.7 billion for electricity to the independent power producers (IPP) every year, which is a heavy burden to take. Rizal also said that the power plant constructions are given to inexperienced contractors.
On the contrary, Institute for Essential Services Reform's executive director Fabby Tumiwa said that giving additional capital for PLN is the right thing to do. The fund will support PLN in completing its share in the 35,000 MW project.
"However, the funds must be spent on projects that are ready to be executed," he said.
With an additional PMN of Rp13.56 trillion, the amount of equity participation given by the state will increase from Rp40.42 trillion to Rp53.98 trillion. However, as reported earlier, Finance Minister Bambang Brodjonegoro said that the additional Rp13.56 trillion for PLN will not be disbursed in cash. The added capital will be sourced from the tax on assets re-evaluation.
FAIZ NASHRILLAH | DIKO OKTARA
