Synthetic fiber makers protest power rate hikes
Synthetic fiber makers protest power rate hikes
JAKARTA (JP): The Indonesian Synthetic Fiber Makers
Association (APSyFI) has warned that the increase in electricity
rates beginning this month would severely undermine the operation
of its members.
The hike will undermine companies' financial situations, and
with the official minimum wage increasing at the same time, it
will cause higher operational costs, the association's secretary-
general Sutrisno R said in a statement on Saturday.
"The effect of these costs could result in declining
production activities and exports and it could cause the company
to lay off workers," Sutrisno said.
With the new rate, the association will not be able to meet
the $7 billion-$8 billion export target set this year by the
Ministry of Industry and Trade, he said.
The association is the latest industrial organization to warn
of dire consequences to the economy as a result of the increase
in electricity rates.
The 55 to 76 percent increase in the rates for middle and
large industries translate into an actual increase of between 80
and 101 percent once the electricity bills are calculated,
according to various industrial associations.
The Federation of Steel-related Producers (Gapbesi) warned on
Thursday that unless the government lowered the planed increase,
that many of its members would collapse.
The Indonesian Textile Association (API) called for a review
of the increase that it said could undermine the industry.
"If they have to be increased, then it should be gradual," API
deputy chairman Benny Soetrisno was quoted by Kompas Cyber Media
as saying on Saturday.
The Association of Billet and Concrete Bar Producers (Abbesi)
said PT PLN, the state electricity company, had not been
transparent with the rate hikes.
"PLN only made public the average 29.43 percent increase,
while the hikes for industrial consumers were hidden," Abbesi
chairman Zainal Musa said. The association is one of the members
of Gapbesi.
Responding to the protests, PLN said it could do nothing to
change the government's decision.
PLN spokesman Maryono told Kompas Cyber Media that the company
was only following decrees signed by President Abdurrahman Wahid
and Minister of Mines and Energy Susilo Bambang Yudhoyono.
"If industrial associations asks why the increases were so
high, they are asking why the decrees were made. We are only
following those decrees," Maryono said.
The government said the increase was necessary to reduce the
Rp 13.7 trillion ($1.83 billion) losses faced by PLN this fiscal
year. Even after the increase, PLN is estimated to lose about Rp
3.9 trillion ($520 million). (10)