PLN extends talks on power rate dispute

JAKARTA (JP): State electricity company PT PLN agreed on Thursday to extend power rate negotiations with industrial users until December, when a decision would be made by the government either to accept or dismiss their requests for downward revisions of new power rates.

"We will maintain the status quo of the current situation; but, if by the end of this year the government turns down their suggestions, we will stick to the new power rates," PLN president Kuntoro Mangkusubroto told reporters after a hearing with the House of Representatives' Commission V, which oversees industrial affairs.

The hearing was also attended by leaders of the Association of Indonesian Textile Industries (API), the Association of Indonesian Synthetic Fiber Producers (APSyFI), the Association of Indonesian Apparel Manufacturers (AMI) and the Association of Billets, Iron and Concrete Factories (ABBESI).

They have been protesting against a government decision in April to increase power rates by 53 percent to 76 percent for industrial users.

The associations have suggested a gradual increase of 20 percent this year up to 101 percent by September, 2002.

Kuntoro has advised them to forward their complaints and suggestions to the government, as PLN has no authority to reverse a government decision.

"If the government doesn't respond to the suggestions, we will apply the 2000 power rates," he said.

He added that should the government approve a gradual increase, PLN would reimburse the companies that have paid their power bills under the current schedule.

During the hearing, it was agreed that PLN would not disconnect the power for industrial users that were still in negotiations.

However, Kuntoro warned that firms refusing to negotiate or pay their bills, risked disconnection.

"We will disconnect them, and we can do it next week," he said.

He further dismissed the associations' claims that they represented the nation's industries.

According to him, since April, overdue payments owed by PLN's customers nationwide have cumulatively reached Rp 600 billion (US$68 million), of which Rp 400 billion is owed by only 29 firms.

"While 1.1 million people still can't enjoy electricity, they (the 29 firms) don't pay their bills. How are we supposed to fund our expansion?" Kuntoro said

Data from PLN showed that the 29 firms were largely members of associations attending the House hearing. They included, among others, PT Texmaco Jaya, PT Texmaco Taman, PT GT Petrochem, PT Indorama Technology, PT Master Steel and PT Konikotex.

"It's up to you (House members) to judge whether those complaining over the tariffs can be considered representatives of industrial associations or whether they are just fighting for individual company interests," Kuntoro said.

But API vice chairman Lili Asdjudiredja denied Kuntoro's observation, claiming that almost all members of his association refused to pay their electricity bills according to the new tariffs.

"We still pay our bills, but under the old power rates," he explained.

He said the government should adopt a gradual price increase, since many companies were facing simultaneous increases in other cost components.

Lili cited the 20 percent increase in the regional minimum wage in April and another 24 percent in September, and the average 12 percent increase in fuel prices from early this month.

Lili predicted that the sudden jump in production costs would force the textile industry to scale back its export target this year by around 10 percent from an initial target of US$7.8 billion.

Separately, news agency Antara quoted Minister of Energy and Mineral Resources Purnomo Yusgiantoro as saying on Thursday that PLN had requested the government to bail out its $1.33 billion debt.

He said the government had received PLN's application for the bailout on its debts to independent power producers (IPPs).

"The government will discuss PLN's request with the team assigned through Presidential Decree No 133 to restructure PLN's financial structure," he said, before attending a limited Cabinet meeting chaired by Vice President Megawati Soekarnoputri.

Over the years, PLN has failed to pay for the electricity it has purchased from the IPPs.

In the first half of this year, PLN recorded net revenues of Rp 10.11 trillion, up 30 percent from the same period last year, mainly due to the new power rates.

However, during the same period, the state company recorded a twelve-fold increase in losses to Rp 11.58 trillion, as against last year's first semester loss of Rp 974 billion. (bkm)