Robert Go, Jakarta – A lack of investment in Indonesia's power sector has forced the government to schedule regular blackouts in more than 30 regions across the country.

Officials from the state electric company Perusahaan Listrik Negara (PLN) told The Straits Times yesterday that Indonesia has insufficient power-generating and transmission capacities, and could see a nationwide crisis within three years. The 30 regions include all areas of Indonesia outside of Java, Bali and Batam islands.

In some cases, natural disasters have exacerbated the problem. For example, West Sumatra and Riau rely on hydroelectricity, but a drought in recent months has forced PLN to impose blackouts.

In Lampung and South Sumatra, earthquakes and other natural disasters have also brought down power lines and disrupted the power supply to hundreds of villages and towns.

Mr Bambang Hermiyanto, director of operations at PLN, said: "Outside of Java, Bali and Batam, our power infrastructure is inadequate. PLN itself cannot make new investments. Independent power producers have not been building new plants."

In the early 90s, Indonesia signed numerous deals with independent power producers, and officials estimated that as much as US$5 billion was invested each year.

But at the height of the economic crisis in 1998, the government suspended many projects, due to fears that heavily indebted PLN would not be able to pay its partners. Experts said yearly investments had since dropped to around US$400 million.

Indonesia renegotiated 10 of those suspended deals recently – covering geothermal and coal- or gas-fired power plants.

But the PLN official warned that many more generating plants needed to be built and thousands of kilometres of transmission lines placed, if the government wanted to avoid a nationwide crisis, which some analysts have said could happen by 2006.

"Without new plants, we will not be able to supply the power that our industries and homes will need. This is a basic infrastructure problem, and we need to solve it quickly," he said.

Constructing and preparing a plant for full operation could take up to four years, PLN officials explained.

Another problem is the heavily subsidised electricity rate, currently US$0.04 per kilowatt-hour (kwh). "The price has to go up to around seven or eight cents per kwh before both PLN and investors can operate profitably," Mr Bambang said.

He added that Indonesia had hiked rates several times during the last two years, and would continue to increase tariffs over the next five years to entice more investment.