Businesses to request lower electricity charges from PLN

A'an Suryana, The Jakarta Post, Jakarta

A number of business associations plan to hold talks with the state-owned electricity company PLN to ask for lower electricity charges to help ease the burden of domestic companies who say they have been hard by the negative impact of the recent war in Iraq and the outbreak of SARS.

Chairman of the National Economic Recovery Committee (KPEN) Sofyan Wanandi confirmed the plan, saying that the committee would facilitate the planned meeting.

"The move should help businesses survive the current difficult situation," he told The Jakarta Post on Sunday.

PLN has been increasing its electricity prices by an average of six percent each quarter since 2000 as it tries to free itself from subsidies. The hikes are set to continue until 2005.

The hotel sector is one of the worst-affected as a result of the current international problems as travelers worldwide have preferred to stay home.

Haryadi Sukamdani, another executive at KPEN, said that even before the war and the outbreak of SARS, hotel occupancy rates here had declined to around 40 percent due to a combination of a general downward economic trend and terrorism, particularly since the Bali terror bombs last October.

He said that the occupancy rate in many hotels had now fallen to around 30 percent.

He explained that reducing the electricity charges for hotels would greatly help ease the burden of the industry, pointing out that electricity costs represented some 12 percent of total costs on average.

He feared that without help, many people would have to be laid off by hotel operators, thus creating more unemployment in the country.

Under PLN's electricity pricing structure, the hotel industry is included in the business category with average electricity charge of Rp 635.3 per kilowatt hour.

Haryadi said that PLN could help the hotel sector by putting it in the industry category with a lower average electricity charge of Rp 511.4 per kilowatt hour.

Meanwhile, PLN president Eddie Widiono said that the company was ready for the planned talks, but quickly added that any decision to lower electricity rates would be in the hands of the government.