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View all search resultsCoal price cap, weak oversight fuel blackout-linked probe
Experts doubt that supplies from the two companies under investigation could have caused such widespread blackouts, noting that PLN sources coal from hundreds of suppliers.
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A coal barge sails the western Java Sea on Oct. 31, 2023, as it heads to a coal terminal near the Suralaya coal-fired power plant in Cilegon, Banten. (AFP/Ronald Siagian)
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corruption investigation into two coal suppliers for power plants, which authorities suspect contributed to blackouts across Sumatra, Java and Kalimantan, has raised concerns about transparency in the energy sector and the government's repeated criminal probes into private companies following major disasters.
Experts said the wide gap between the domestic market obligation (DMO) coal price cap for power generation and higher global prices, combined with weak oversight, has created a moral hazard for unscrupulous suppliers. However, they doubted that supplies from the two companies under investigation could have caused such widespread blackouts, noting that state-owned electricity company PLN sources coal from hundreds of suppliers.
The National Police have launched an investigation into alleged corruption involving local coal miners that may has led to rolling blackouts in several regions across Indonesia, causing an estimated Rp 5 trillion (US$277.5 million) in economic losses.
In a press conference on Monday, the National Police’s Criminal Investigation Department (Bareskrim) and the Corruption Eradication Corps (Kortas Tipidkor) escalated the case status from a preliminary inquiry to a formal criminal investigation, targeting alleged corruption and money laundering in coal procurement for coal-fired power plants from 2018 to 2026.
Investigators suspect irregularities in coal procurement involving two companies identified only by their initials, UBP and BRA, but have not yet named any suspects in the case.
The Indonesian Coal Mining Association (APBI) has urged authorities to handle the case with firmness, objectivity and transparency, while cautioning against sweeping judgments that could harm the broader industry.
APBI Executive Director Gita Mahyarani said the association could not yet comment on the substance of the case or potential state losses, as the matter had entered the investigation stage and final official results were still pending.
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