Power firm PLN owes Pertamina Rp 35 trillion

State oil company PT Pertamina reported Thursday that power firm PT Perusahaan Listrik Negara, also owned by the state, had failed to pay a total debt of Rp 35 trillion from purchases of fuels for power generation since 2006.

"Yes, PLN’s debt is a lot, Rp 40 trillion … So far, it has only paid Rp 5 trillion through bonds,” Pertamina financial director Frederick Siahaan said on Thursday in a hearing with members of House of Representatives Commission VII, which oversees energy affairs.

Frederick suggested PLN to issue a letter of credit or L/C as a payment guarantee if the government refused to pay for the debt. A letter of credit is a legal document issued by mostly banks to provide an irrevocable payment to a beneficiary stated in the letter.

“We have demanded them to pay. All I want is for a fair treatment. If they pay for their coal consumption, why not pay us?” he said. (and)