Kadin officially opposes power hike plan

The Indonesian Chamber of Commerce and Industry (Kadin) issued an official statement on Wednesday to oppose the government's plan to increase the power tariff, which it said would further hurt the ailing business sector, Kompas reported on Thursday.

The statement on the rejection on the power hike plan was unveiled by the chairman of the association of the Indonesian businessmen Sofjan Wanandi at a press conference in Jakarta on Wednesday, which was also joined by the chairman of Kadin, M.S. Hidayat.

Sofjan said that the rejection of the power hike plan was made after receiving complaints from 100 business organizations under Kadin. "Most of companies are still struggling to cope with the impact of the increase in fuel price last year. If the power tariff is increased it will further hurt their business activities," he said.

The government plans to increase the power tariff by up to 100 percent to cope with state owned electricity company's rising operating costs. According to the government, the increase could not be avoided because it would only be able to provide subsidy of only about Rp 17 trillion to PLN. Without power tariff increase, the subsidy for PLN should be increased to Rp 34.7 trillion.

Sofjan said that most of the industries in Indonesia were now at critical situation due to the sharp increase in their operating costs as the result of the sharp increase in the fuel prices last year.

According to him, many industrial companies have cut working shifts to only two from three in normal times due to the lack of orders. "Many companies have suffered a sharp decline in the orders due to the decline in the buying power of consumers. This condition has forced them to reduce their operational activities," he added. (*)