Pasuruan, July 2006
“Life… should be enjoyed. You do your daily job in the right manner and being nice with your comrades. When you come to the age of 56, you will receive your gratuity as the result of 30 years, maybe more…, of your work dedication to our company. You will look after your grandchild or you might still do your own business, when we enter our pension days. I myself plan to expand my current business in fruits plantation and inter-villages transportation.”
“What do you mean by inter-villages transportation? What kind of business is that?”
“Uh-uh, it’s simple. My business is to help people of one village to go to another village by public utility vehicle. I used Carry 1.0 as my armada.”
“Wait a sec… Did you say “Carry 1.0″?”
“Yup… Is there anything wrong with that?”
“No, no… Do not get me wrong. I think you just want to explain to me that you are an “angkot” businessperson. I couldn’t be wrong this time, could I?”
“Haha… You still missed a little this time, boy… Not “angkot”, but “angdes” = angkutan pedesaan = inter-villages public means of transportation. Although the four-wheel vehicles we used in village are the same kind with they used in town, as a businessperson I must say that they are different! If you are interested in my business, you can join me, boy… :)”
This dialogue was the conversation between my senior and me a while ago. He has been working in PLN (now in Indonesia Power) for more than 25 years as an electric power plant operator. He is very rich if we use “an ordinary PLN employee” criteria. Imagine that he has 14 public cars (completed with the operational permits from DLLAJR), several acres of various fruits plantation (banana, mango, durian, avocado, rambutan, jackfruit for examples), and several cows in his ranch and dogs in his house to guard his properties… Ups! Just kidding, he loves animal, which is why he bred animals such as dog, cat, swan, cow, and goat.
His family has a blue-blood background in Javanese culture and has many businesses long before Mr. Andi (the nickname he likes to use) entered the PLN 25 years ago. The conversation gives us a brief illustration about an ordinary PLN employee, which has a dream about his retirement days. Of course, not every employee is as lucky as he is. Many of us (including me) only rely on the company (PLN) as the only source of our living income. When the time or the age of 56 comes to us, we have to accept the reality that we must continue to survive our live with the pension money we get from our company. We should thank to God that our company, until now, still give us allowance for our health cares, including for the retired employees.
Unfortunately, that would not last forever. The allowances for the retired employees depend on the company’s financial ability. Our company financial ability depends on the ability of the company to survive. In this globalization era, the competition between countries forces every country to use their best efforts to survive. In the past days, the government still supports its state-owned companies, since they are the locomotive for the development of the country. Now, BUMN (state-owned company) faces challenges that are more complex. Not only they have less support from the government, they must be more competitive than ever since the government cannot protect the markets. This is the consequence of the free trade market agreement, which is initiated by the WTO (World Trade Organization). Almost all countries in the world has already signed the treaty except a few isolated countries, such as Vietnam, North Korea. I do not say the communist would not join the treaty; People’s Republic of China (China mainland) in fact has joined the treaty since 2001 and has used the advantages to spread the markets of their products. We all know that “made in China” products has overwhelmed everywhere. As we know now, not only motorcycles are made by China, they also can produce electric power plant. Now we can see this China made-steam power plant in Cilacap, Central Java.
This should wake all of us from our daydreaming. The dream about our PT Indonesia Power-full (IP) ability to dominate the Java-Bali electricity market share or that we will never get bankrupt. Statistics showed us that IP market share in Java Bali electric power grid tends to decrease from 57% to 46% in the last decade. The growth of the IPP (Independent Power Producer) pushes IP market share. IP President Director, Mr. Abimanyu Suyoso, has given his vision about IPO (Initial Public Offering) to overcome this challenge recently. Here is the interview between him and the journalist from one foreign media:
The Unitedworld-USA journalist (UW):
“You have indeed been a very stable organization in Indonesia while the market has been continually changing.”
Mr. Abimanyu Suyoso (AS):
“Our Initial Public Offering, planned for next year, will add great value to Indonesia Power, as it will increase the investor’s confidence in our company. I want Indonesia Power to be a top world-class company. Indonesia Power is already better than most of the North American Power companies in terms of operational performance.”
“Do you have a final message to our readers?”
“There are five reasons why investors should be interested in Indonesia Power. Firstly, electricity demand in Indonesia is booming. Secondly, Indonesia Power has outstanding operational performance. Thirdly, Indonesia Power has excellent financial records. Fourthly, we have plans to build an extensive network of new power plants. And finally, nobody knows the market better than we do.”
An optimistic vision about IP future we can conclude from the conversation. IP Board of Director promotes IPO not only to the investors but also to our employees. Even though there are questions from several IP employees, the BOD seems to be very optimistic about IPO. The controversy about “the company sale” (terminology borrowed from some commoner employees) has been answered by the BOD. One crucial issue is about the possibility of company’s human resources restructurisation. In another words, they are afraid to be fired and lost their job. However, the BOD convinced us that the IPO would make the company more sustainable. Here is news from one mass media:
“PT Indonesia Power, a subsidiary of the ailing state-owned electricity monopoly PT Perusahaan Listrik Negara (PLN), will launch its initial public offering (IPO) in the first half 2006. While the amount of shares to be floated yet to be decided, the company needs at least Rp6 trillion (US$600 million) to develop its power generating capacity to cope with increasing domestic demand for electricity which is estimated to grow 7%-9% per year. 
Indonesia Power currently has 9,000 MW capacity and needs additional capacity 630 MW per year. With investment cost of US$100 million per 100 MW and capital expenditure available at US$25 million, the company is powerless. The company serves the lucrative Java and Bali market and has a 50 per cent market share. Fortunately, that most of its power plants are combined cycles, gas-fired, and coal-fired, which normally have lower production costs than diesel-fired power plants. Abimanyu Suyoso, president director of Indonesia Power, said the company has equity of Rp44 trillion. IPO would sell around 10% of the equity, which could reach Rp4.2 trillion. Loans are expected to fill the financing gap, as its debt to ratio is 20%. Roadshow to attract investors has been conducted in various cities such as Singapore, Los Angeles, Boston, and New York.
What is about a possible joint venture with private investors? Nope, Abimanyu said. IP needs IPO as the gate to financial market to change the company’s financial structure to, let say, 80% loans and 20% equity. Unlike its parent company, IP booked net profit in the last four years. In 2003, IP booked net profit of Rp1.21 trillion (around US$130 million). PLN booked net loss of US$450 million in the first half 2005.”
I am glad that Mr. Andi, my colleague I have mention above, and all employees could enjoy his pension days with the sustainable of our company’s life. We just hope that nothing goes wrong in our company’s decision in the future. Even though PT Indonesia Power IPO has been delayed for some reasons (read about 10000 MW PLTU crash program project), the path of our company in the future has been defined. IP will be more efficient and accountable. Not agony but happiness of the brighter future soon will be in reality.
I dedicate this article to our senior employees who teach us, junior employees, with patience, trust and happiness.
 Quoted from William Shakespeare’s play with a little additional word: The Tragedy of Hamlet, Prince of Denmark (Act 3, Scene 1)
 It is according to the 2006 Indonesia Power PKB (Perjanjian Kerja Bersama) as a normal pension.
 Ibid (a statement from Deputy of State Owned Enterprises Ministry Republic of Indonesia)