Stalled electricity projects disadvantage people

Indonesias state-owned electricity company PLNs Regional Director for Kalimantan, Djoko Rahardjo Abumanan, said the fact that 34 power projects have remained stalled will prove to be disadvantageous for the companys customers.

“The local people will have to bear the opportunity loss because it will delay their chance to enjoy electricity supply,” the PLN director for Kalimantan said here on Wednesday.

Regions that are expected to enjoy electricity supply from the 34 projects will not be able to access power till the construction is resumed and projects are ready.

“Take, for instance, the case of a 2×7 megawatt project that was taken up for development in 2011 and should have been completed by 2014, but because its construction was stalled, the local people have no access to electricity supply till date,” Djoko explained.

The losses suffered by PLN depend on how much progress has happened in the work on any of these projects.

The PLN was assisted by the governments Development Finance Comptroller (BPKP) in computing the loss.

The BPKP had earlier audited the 34 power projects whose construction was started seven to eight years earlier.

The PLN said these were not large scale projects and had a total capacity of 627.8 megawatts.

In the meantime, the construction of 11 power projects with a capacity of 147 megawatts has been terminated. These projects are not part of the government 35,000 megawatt electricity development program.

The PLN had recently said it would resume work at 17 of the 34 power plant development projects. The decision to resume the work was taken after the company evaluated all the projects in terms of location, audit and recalculation by experts.

“We will terminate some projects for which no possible solution can be found, and resume 17 projects. Some projects involve legal and financial issues and we have to study these locations one by one,” PLN president director Sofyan Basir, noted.

The power plants construction was undertaken based on the Presidential Decree 4/2016 to expedite power infrastructure development by taking into account cost and benefit.

While budget for the projects was to come from state-run companies and private firms that had won the bids, some of it was to be covered by PLN.

“There are some state-owned companies. We will work in cooperation with them as also with PLNs subsidiaries to find a solution (to the issue of funding). The aim is not to earn profit but to bring down potential losses to a minimum,” he pointed out.

He expected that the PLN would need some Rp1 trillion (US$76 million) for the 17 power plant projects.

Previously, Sofyan had said the company could not resume development work on 12 of its 34 stalled power plant projects.

Work on project development was halted due to factors such as inaccurate planning or land. In some cases, land was unsuitable as it was either peat land or sites were too remote.

President Joko Widodo (Jokowi) disclosed that he would lodge a complaint with the Commission for Corruption Eradication (KPK) against those tasked with executing the projects, especially those which could not be resumed.

“Trillions of rupiah worth of funds were involved, and it should not be allowed to happen anymore. I can see that one or two projects could not be continued because everything was already rusted. There has to be certainty about these projects,” the president stressed.

Source: Antara News