Hike in tariff will help rural people: Minister<\/p>\n
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
\nyesterday defended the government's decision to hike electricity
\ntariffs beginning next month, saying that it will help accelerate
\nelectrification for the majority of the country's population.<\/p>\n
\"Many people may have forgotten that around 60 percent of our
\npopulation, who live in rural areas, have not been reached by
\nelectricity,\" Sudjana said during a three-day workshop on energy
\nat the Agency for the Technology Assessment and Application
\n(BPPT).<\/p>\n
He contended that the planned increase in electricity billing
\nrates will enable the state electricity company PT PLN to collect
\nfunds to finance its electrification program.<\/p>\n
\"I am deeply concerned over recent comments raised by economic
\nanalysts who criticized the government on its new policy of the
\ntariff hikes, which they labeled as unfavorable to small-scale
\nsubscribers,\" he said.<\/p>\n
The government last week announced an average increase of 7.8
\npercent in electricity billing rates effective next month.<\/p>\n
The government has also allowed PLN to make tariff adjustments
\nevery three months on the basis of the impacts of inflation,
\ndepreciation of the rupiah, increases in fuel prices and
\nelectricity charges determined by privately-run power generators.<\/p>\n
Under the new policy, small households with a capacity of
\nbetween 60 volt amperes (VA) and 200 VA will pay Rp 71.70 per
\nkilowatt hour (kWh), reflecting an increase of 7.52 percent from
\nRp 66.50 per kWh currently.<\/p>\n
Sudjana argued yesterday that under the new tariff
\narrangement, small-scale subscribers will pay a lower rate for
\nelectricity.<\/p>\n
He added that large-scale subscribers will be burdened with
\nthe cross-subsidy program for helping small subscribers tackle
\nthe remaining part of the unabsorbed tariffs.<\/p>\n
\"It is not true that the government has given special
\ntreatment to large-scale subscribers, which are usually from the
\nindustry sector,\" he said.<\/p>\n
Demand<\/p>\n
He contended that the increase in the electricity billing
\nrates was also urgent, considering that the demand for the
\nelectricity in the country is sharply growing. \"The growth rate
\nof our electricity demand is the highest in the world,\" he said.<\/p>\n
He said the country's demand increases by over 15 percent per
\nyear.<\/p>\n
Indonesia, therefore, plans to establish new generation plants
\nwith a total capacity of 13,000 megawatts (MW), of which plants
\nwith a combined capacity of 9,500 MW will be constructed by PLN
\nalone and the remaining 3,500 MW by the private sector, he said.<\/p>\n
PLN needs around Rp 12 trillion per annum for its own power
\nprojects, he added.<\/p>\n
Sudjana called it groundless to say that the planned
\nelectricity hikes will hinder our industry's competitiveness on
\nthe international market.<\/p>\n
\"If there is a problem in the industry, I would say that the
\nproblem is caused by its own inefficiency, not by the electricity
\ntariff hikes,\" he said.<\/p>\n
Sudjana acknowledged that PLN should improve its efficiency.
\n\"But, I have seen that PLN made its best efforts to reduce its
\nlosses from 20 percent in 1985 to 12 percent in 1993,\" he added.<\/p>\n
PLN's president, Zuhal, said that the proceedings of the
\ntariff increase will not be used to strengthen PLN's financial
\nstructure but to finance electrification projects throughout the
\ncountry.(fhp)<\/p>",
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