PLN sub-holding Holding is unnecessary. The holding formation would only place management , including board of directors, in a difficult situation. Professor Mukhtasor’s statement in Seminar to celebrat the 23rd SP-PJB anniversary under the theme of “PLN Group Subholding – Holding, is it necessary?” held on Thursday, September 29, 2022.
In relation to that, PT PLN and PT PJB are not the prolem as they only execute the order. Therefore, Mukhtasor reminded all not to miss-address the criticism regarding the sub-holding – holding. It is the government who created the policy, not PLN.
“Regarding energy, the ministry that is acting inconstitutionally is the minstry of SOE (BUMN). The Law of Oil and Gas was enacted in 2001 and then the Constitutional Court decided that that law was inconstitutional that the law was annulled in 2012. Now, ten years later, the Law is produced to replace the annulled law on gas an oil. Then there was the electricity Law. Many parties filed for judicial review against this law many times, especially on the clause of unbundling and bundling. The Constitutional Curt had decided that that law is inconstitutional. If we follow the Constitutional Court decision, the IPP system is inconstitutional. Besides, Law of Minerba (Mineral, energy, and coal) was also reviewed by the Constitutional Court. Some articles in the law were annulled.
When we are talking about SOE (BUMN) management, there needs to note that what and what is behind that? If we looked closely, before the creation of sub-holding holding of PLN, the minister said that the holding formation would encourage transparency and accountability.
If it is really for transparency and accountability, the solution is not doing IPO. For example, Garuda has done an IPO. Then was Garuda getting better. There were even more cases happen after Garuda did its IPO,” he further explain.
IPO opens a space of private to enter the scene. When IPP becomes dominant, then electricity is no longer in the government’s control and hands. In turn, this will be danger for the development of energy sovereignty. Mukhtasor then remided the participants about an event in Sumatera where IPP dictated PLN. If PLN does not operate in accordance to its business scheme, they would refuse to operate the generator.
“PLN’s market is shrinking. On the upstream, PLN must buy electricity from the private. Distribution is also divided. PLN will turn into Garuda, sooner or later. I am concern that PLN would be like Garuda. Back in the days, airports were filled with Garuda’s airplane. Now, it is difficult to find Garuda, he asserted.
Mukhtasor said that we must fight to realize the true freedom of Indonesia by choosing the system that constitutionally correct. According to Bung Hatta, the Sectors of production which are important for the country and affect the life of the people shall be under the powers of the State. The culprit is BUMN. While small businesses through community participation, then in the middle there are many businesses that can be built by the private sector.
Similar thing was delivered by the a constitutional expert, Feri Amsari. According to him, the concept in article 33 that is most used is that the economy shall be organized as a common endeavour based upon the principles of the family system. The explanation of this article, citing Bung Hatta, said that it was cooperative. The core of cooperative is the develop the economy collectively.
If we look into the decision of Constitutional Court No.01-021-022-PPU-2003, Decision No. 58-PUU-2008, to decision No. 111 and also Decision No. 61, the most important is the principle of controlled by the state. It means, that the sectors of production which are important for the country and affect the life of the people shall be under the powers of the State.
However, Feri thought that the Constitutional Court was not so assertive. The decisions, the articles were to assert, said that there must not be any privatization. Therefore, the principle of under the power of the state does not allow any private interest, hence, the articles are cancelled. Due to the cancellation of main articles, the law is annulled as self. Unfortunately, the government and parliament created a new law that the content mostly against the Constitutional Court.
The Law was reviewed again by the Constitutional Court. The Constitutional Court tried to defend itself and explain that what was meant by sectors that are important for the country and affect the life of the people. There are three models. First, sectors of producition important for the sate and affects the lives of many people. Second, it is not important for the state but affect the life of different people. Third, not important for people but imporant for the state.
“If we refer to the three criteria above mentioned, then Pertamina and PLN must not be distrubed. They have to be under the power of the state,” explained Feri. In its next decision, ther are few important things related to the sector of production that are important for the stae but bear the potential to be take in by a group of people, not the state. Therefore it must be cancelled. Second, once an asset is under the private power but bear the potential to be the state’s competitors then will affect the lives of the people, then it must not.
“But business is business. Even though it is cancelled multiple times, it will ressurrect itself. We can see that there are other interest. We see on Indonesian Constitution article 33, the constitution includes everyone by forming a common the endeavours based upon the principles of the family system, not individual,” he added.
The problem is that there are gaps in the Constitutional Court decision. There is a sentence that said if PLN is no longer able, it is ok to only manage a small part. This is multi-interpreation. Although the law is not even enacted.
“This is problematic. Basically, there is not any wish in the Constutional to open a space for privatization,” said Feri. Therefore, holding sub-holding is unnecessary.
Prof. Mukhtasor and Feri Amsari’s thoughts was supported by the Economist Salamuddin Daeng. He thought that the government must postpone and reevaluate their plan to form holding and subholding. Given that PLN’s duty and responsibility is providing electricity. That is mandated by the Constitution of 1945 article 33, implementing the Law NO. 30 of 2009 on Electricity and implementing the Constitutional Court decision (MK) 111/PUU-XIII/2015 that is to provid electricity in an integrated way.
The plan of Ministry of SOE to form PLN subhold holding as stated in teh State Budget Plan (APBN) of the upcominng year is a policy for portfolio improvement and strengthening the financial structure of SOEs through the formation of strategic holdings, restructuring of SOEs, as well as reducing the proportion of debt to the funding structure (deleveraging).
However, PLN’s concern is not only whether or not the company’s financial situation is sound, but also related to the life of many people which is the responsibility of the State that is carried out by PLN. Therefore, the policy of forming PLN sub holding holding must be discussed cross-sectorally by involving all stakeholders and public. There are so many problems related to electricity faced by Indonesian people that must be handled by the government and PLN as the electricity operator.
“This sub holding formation is a hasty policy, running on somekind or deadline, forced, and even without any regulation basis will endanger the future of electricity in Indonesia,” he asserted.