S

tate electricity company PT PLN will set aside Rp 66 trillion (US$7.34 billion) of this year’s budget to build new electricity infrastructure across the country, a senior executive says.

“We’re prepared to allocate Rp 66 trillion in investments this year. We hope this year the budget disbursement will reach 100 percent,” PLN finance director Setio Anggoro Dewo said Wednesday.

Setio said PLN’s board of directors had also promised to speed up the construction of the projects by removing bureaucratic constraints.

He said due to many bureaucratic and administrative constraints, the disbursement of the company’s budget was only 60 percent last year

The late distribution of investment authorization letters (SKI) for the company’s regional managers was one of the major reasons infrastructure projects often lagged far behind schedule, he said.

The investment authorization letters are permissions issued by the company’s board of directors to allow regional managers to begin development projects in their areas.

PLN president director Dahlan Iskan said PLN usually distributed the letters in March every year, which consequently forced managers to delay projects until the second half of the year as they had to follow required preparatory procedures.

“The development of electricity infrastructure across the country is often behind schedule because of the late distribution of investment authorization letters. They usually arrive in managers’ hands in March. Project preparations generally begin in April, while the execution begins in August,” Dahlan said.

This year, regional managers can start procurement, tenders and other preparation processes earlier, he said.

Dahlan did say land acquisition would remain the ultimate constraint in accelerating the development of electricity infrastructure in the country.

He said he had ordered all his senior officers to allow younger officers to deal with land acquisition issues, as they had more stamina and spirit to complete the necessary work.

Dewo said from PLN’s Rp 66 trillion budget, the company would allocate Rp 13.42 trillion to develop new transmissions, power houses and distribution networks in Java and Bali, Rp 6.25 trillion in western Indonesia and Rp 3.66 trillion in the eastern part of the country.

In 2011, seven new power plants will begin operating in Java and Bali. The power plants are part of the first phase of the 10,000-megawatt fast-track program.

The seven plants are located in Suralaya and Lontar in Banten, Pelabuhan Ratu and Indramayu in West Java, Rembang in Central Java and Pacitan and Paiton in East Java.

Dahlan said the new power plants needed strong transmission and power house network support to channel electricity to customers, and he expected there would be no delays in completing development projects this year.

PLN aims to boost revenues by 10.7 percent in 2011.