Power Producers Must Hand Over Their Plants to PLN at the Contract's End

Starting this year, the government will require independent power producers to transfer new power plants to state power company Perusahaan Listrik Negara when their contracts expire, in a move to ensure state control over the critical sector. (ID Photo/Mohammad Defrizal)

By : Rangga Prakoso | on 2:59 PM February 03, 2017
Category : Business, Economy

Jakarta. Starting this year, the government will require independent power producers to transfer new power plants to state power company Perusahaan Listrik Negara when their contracts expire, in a move to ensure state control over the critical sector.

The Constitutional Court ruled in December that upon a ministerial regulation based on "build-own-and-operate" scheme, there is risk of electricity being controlled by private companies. Sectors important for the country's security and affecting the lives of many should be controlled by the state, the court decided.

The Ministry of Energy and Mineral Resources issued a new regulation earlier this week, stating that independent power producers from now on will have to transfer their facilities to PLN.

"Now all must transfer [their power plants] at the end of the contract period," director general of electricity at the ministry Jarman said on Thursday (02/02).

"This is in line with the Constitutional Court's ruling," he added.

He said that contracts that had been signed prior to the new regulation will leave their holders an option to keep their power plants.

 

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