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)