Businesses to request lower electricity charges from PLN

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.