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SOE Synergy: Secure Coal Supply, PLN Signs HoA with PTBA and KAI

February 17, 2022

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SOE Synergy: Secure Coal Supply, PLN Signs HoA with PTBA and KAI

PT PLN (Persero), PT Bukit Asam Tbk (PTBA), and PT Kereta Api Indonesia (KAI) are committed to strengthening the synergy between SOEs as part of the synergy of the coal supply chain pattern to support national energy security. This synergy is a tangible manifestation of the role of SOEs to improve people's welfare through the reliability and continuity of providing electrical energy. 

Along with economic development, the need for reliable electrical energy requires a long-term and dependable oriented primary energy source chain. As a follow-up to the Memorandum of Understanding(MoU) agreed on August 19, 2021, in maintaining coal supply and electricity reliability, PLN, PTBA, and KAI signed a Head of Agreement (HoA) as the basis for preparing a joint study in connection with the cooperation plan.

The HoA was signed by PLN Primary Energy Director Hartanto Wibowo, PTBA Business Development Director Rafli Yandra, and KAI Commerce Director Dadan Rudiansyah at PLN Headquarters, Jakarta, Wednesday (16/2).

PLN Primary Energy Director Hartanto Wibowo explained that this collaboration is proof that PLN is committed to improving the security of coal supply sustainably.

"We hope that with the signing of this HoA, the implementation of the synergy of SOEs in the coal supply chain can be carried out properly to support national energy security," he said.

With this HoA, Hartanto added, a comprehensive study related to the cooperation plan, ranging from possible cooperation schemes and business models, technical and operational, price and economics, work environment and safety, regulation, and stakeholder management, to risk analysis begin.  

This study will later serve as guidance for PTBA, KAI, and PLN to carry out their respective roles in this cooperation.

"So the synergy implemented will provide great added value and benefit all stakeholders, the three companies, and the wider community," he said.

Hartanto emphasized that this cooperation is long-term. Currently, the three SOEs will speed up the study of cooperation so that it is hoped that in 2025, from the MoU agreed today, the first shipment of coal using the train can occur.

"This is an extraordinary collaboration, and we will work together to prepare a work plan so that 2025 can be operated immediately," Hartanto added.

On the same occasion, the Director of Business Development of PTBA, Rafli Yandra, also welcomed the signing of this HoA. According to Rafli, the signing of the HoA is a new milestone in SOE synergy cooperation which is expected to provide maximum contribution to national electricity. 

"This is a positive synergy. PTBA as the owner of the largest source of coal reserves, is ready to supply PLN's needs," said Rafli.

PTBA has long cooperated with PLN in supplying coal needs using the rail mode of transportation. Since 1980, PTBA has supplied PLN's coal needs, especially for the Suralaya coal-fired power plant (PLTU).

"Through this agreement, we will increase cooperation and synergy again. Through this synergy, we will increase the supply of coal to 20 million tons for PLN so that PLN can be secure in terms of fuel supply," he continued.

Meanwhile, KAI's Commercial Director Dadan Rudiansyah added that KAI wants to ensure the supply of raw materials for power plants is safe. KAI's involvement is a tangible form of participating in maintaining energy security through reliable rail transportation.

Freight transportation by train has various advantages, such as being safe, timely, and environmentally friendly. Coal itself is the commodity with the largest volume in KAI's transportation, wherein in 2021 the number will reach 76 percent of KAI's total freight transportation.

"This HoA is a breakthrough and a good step and is expected to be implemented as soon as possible by prioritizing Good Corporate Governance (GCG). In the future, KAI will also prepare special investments for this project," said Dadan.

For information, PTBA and KAI are not foreign names in the process of supplying coal for PLN's power plants. Cooperation with these two SOEs has been carried out since the 1980s.

The synergy of PLN, PTBA, and KAI to ensure the supply chain of coal, is a tangible manifestation of the role of SOEs to improve people's welfare through the reliability and continuity of providing electrical energy for the entire community. This synergy is also expected to be a good opportunity for all parties to develop their business, increase their contribution, and strengthen the role of BUMN as an economic driver in Indonesia.