PLN Next in Line for Management Shake-Up After Pertamina, Minister Says

Jakarta Globe, Dec 08, 2014

Two workers fix an electricity network operated by state-owned electricity firm
Perusahaan Listrik Negara (PLN) in Semarang. (JG Photo/Dhana Kencana)

Jakarta. State Enterprises Minister Rini Soemarno confirmed on Monday that the government was planning a management shake-up at the state power utility.

The move is part of a series of reforms initiated by the administration of President Joko Widodo aimed at boosting confidence in Indonesia’s economy.

The minister said the management of Perusahaan Listrik Negara (PLN) would be restructured similar to that of state energy firm Pertamina, which last month saw its entire board of directors dismissed and a new chief appointed. Six new directors were added this week.

“We first performed an analysis in terms of restructuring Pertamina’s management and we’ll try to do the same for other SOEs in the future,” Rini told reporters, declining to elaborate on the time frame of the planned changes.

“The extent of the changes will depend on the activities of the SOEs themselves,” she said, adding that PLN, which has a monopoly on electricity distribution across the archipelago, would be next.

The management changes could come this month and would include a partial or total replacement of PLN’s board, the Wall Street Journal reported, quoted by Reuters.

Joko’s administration seeks to accelerate electricity connectivity in the country to support his 7 percent annual growth target.

The government plans to build new power plants to add an additional 35,000 megawatts to the national grid between 2015-2019, boosting Indonesia’s electricity generating capacity to 85,7000 MW.

The plan will reportedly cost around Rp 980 trillion ($80 billion), with Rp 545 trillion expected from PLN. The remainder is expected to come from the private sector.

PLN plays a key role in Indonesia’s economy as it is not only a power producer, but also the biggest electricity distributor.

Rini, former head of Indonesia’s biggest auto distributor Astra International, also called for an end to SOE dividend payments to the government, saying profits will be used for capital expenditure.

Reuters & JG

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