GOVT MIGHT REMOVE PLN CHIEF TO SOLVE POWER PROBLEM

By Andi Abdussalam

Jakarta, Nov 18 (ANTARA) - After President Susilo Bambang Yudhoyono summoned ministers and other related officials on Tuesday, rumors now have it that the chief of state-owned the state power company PLN would be replaced.

        The president has summoned the relevant ministers and officials to discuss solutions to the problem of power deficits that forced PLN to impose rotating power cuts in a number of cities, triggering protests from industrial and household customers.

        In order to increase its capacity, the president asked PLN to improve its management both financial and distribution terms so that its consumers would no longer have to suffer power outages as a result of PLN's mismanagement.

        "I want PLN which runs a big business of trillions of rupiah to exercise good governance. It should not show peculiarity as it would sacrifice the people," the president said on Tuesday.

        The head of state even stressed that the state power company faced coordination problems as reflected in its slow response to proposals from the regions while a number of areas were also not smart in taking serious steps to solve electricity problems.

        A day after the president's meeting with the relevant officials, rumors surfaced that the current PLN president director would likely be replaced. However, a legislator warned the government to be careful in deciding to replace the PLN chief. The problem with PLN cannot be solved only with replacing its director.

        "If the government decides to replace the PLN director, it should appoint a competent and experienced person in electricity affairs," Airlangga Hartarto, chairman of the House of Representatives (DPR)'s Commission VII on state-owned enterprises (BUMN) affairs, said on Wednesday.

        He said that a decision to replace the director of a company which had a multi-complex problems could not be made instantly. "A person would need time before he or she could understand electricity industry as a whole," he said.

        Hartarto said that it was not enough for a PLN director to have a managerial skill only. He or she should also be able to solve various problems facing PLN, including matters relating to state budget such as funding and public obligation services (PSO).

        Rumors have it that the government would replace the PLN director, now being held by Fahmi Mochtar.

        Two names based on rumors have been tipped to occupy the top position of the state power firm. Rumors also have it that the two names have been submitted to President Susilo Bambang Yudhoyono.

        One of them, who has also been summoned by the president is Dahlan Iskan, owner and chief executive officer of media publication group, The Jawa Pos Group. The other name is proposed by the DPR.

        Dahlan Iskan is known as a figure not only as owner of a media business group but also as an independent power producer (IPP) in Kalimantan. It seems however that he might face opposition from PLN workers, who want the state firm to be led by a person from within the company.

        Chairman of PLN's Workers Association, Achmad Daryoko said he hoped the government would no longer turn PLN as a mere political commodity. "Should there be replacement in the top leadership, the would-be director should be selected from PLN's internal officials who are qualified and understand electricity problems so that the replacement would not create a conflict of interest," he said.

        With regard to Dahlan, Daryoko said his association would reject him because Dahlan had no capacity to lead a big company as caliber as PLN. "If the government forces its own will to place him (Dahlan), there would be internal turmoil in the company," he said.

        On the other hand all BUMNs are willing to be free from political intervention. "If the government eventually place an incapable person, it would mean that the government is still turning BUMN as a political commodity," Daryoko said.

        He said that his side had sent a letter to the president last week which in principle contained a rejection of replacing the PLN president director with an outsider.

        "A copy of the letter to the head of state was also sent to the ESDM minister, BUMN minister and the police chief," he said.

        In the meantime, in response to the rumors, legislator Hartarto said that the government in its capacity as authorized share owner of PLN through the State Enterprise (BUMN) Ministry, had the full right to place a man as the president director of PLN.

        "Share-holders have the right to replace it (PLN director). But the government has to learn a lesson from its experience in placing a number of people as directors of BUMNs.

        In other words, the government should learn that although the president director of a BUMN is replaced for several times, yet one cannot expect an improvement in the company's performance if the basic problems are not solved," he said.

        PLN, due to its limited capacity, is no longer able to meet the people's need for power which continues to increase at a rate of between six and eight percent or between 2,000 and 3,000 megawatts per annum.

        The increase in demand for electricity supply has caused a power deficit which leads to power outages and rotating blackouts in various regions. In October 2009, for example, PLN suffered a power deficit of 460.2 MW.***2*** (T.A014/A/H-NG/B003). (T.A014/A/A014/B003) 18-11-2009 23:30:53