Negotiations over electricity will be tough

It was a very uncommon sight when around 100 executives of companies and five business associations staged a protest in the office of Coordinating Minister for Economic Affairs Rizal Ramli.

The five associations are the Association of Indonesian Textile Producers (API), the Association of Indonesian Apparel Manufacturers (AMI), the Association of Indonesian Billet and Steel Roll Producers (AbBesi), the Association of Indonesian Hotels and Restaurants (PHRI) and the Association of Indonesian Synthetic Fiber Producers (APSyFI).

They came to Rizal's office, located in the National Development Planning Board office complex, complete with posters and other attributes normally used by any demonstrator.

They were compelled to stage demonstrations following a drastic measure from state electricity company PT PLN that cut electricity supplies for one of industries in West Java for not paying electricity bills according to the new tariffs.

They feared that PLN today, Sept. 20, would cut electricity supplies to more industries that could not pay electricity bills according to the new tariffs.

And their protests bore fruits. The government on Sept. 18 ordered PLN not to cut electricity supplies to industries willing to negotiate the payment of the electricity bills with PLN.

However, the problems between PLN and businesses would linger on, as negotiations between the two parties would take some time to complete.

According to API chairman Benny Soetrisno, industrial customers actually do not reject the basic tariff increase for 2000.

"We only ask the implementation of Presidential Decree No. 48/2000 (on the electricity tariff increase) be implemented gradually and proportionally so that the industries can prepare themselves and minimize the impacts of electricity tariff increase," Benny said.

Benny said industrial customers would be able to pay electricity increase of only 20 percent because they had to bear a lot of other increases from other production components, including wages, port levies, and also telephone bills.

But he said they would agree to increase the electricity tariffs every six months so that the new electricity tariff increase of 80 percent for industries in the I-3 category and 101 percent for industries in the I-4 categories could eventually be materialized.

Meanwhile, An APSyFI deputy chairman Soroatmodjo said it was not fair to burden PLN's inefficiencies to its customers, especially big customers.

And PT Super Tata Raya Steel Corp. director Jimmie Soelaiman said that PLN's offer for discount for big industrial customers falling in the I-4 category was not fair.

He noted that the discount should also be offered to industries in the I-3 category. He said the number of customers in the I-4 category was no more than 50 companies, while those in the I-3 category number thousands.

Jimmie said that steel producers had anticipated a drastic measure from PLN, including the cutting of electricity supplies, by preparing electricity generator sets.

If that happens, demand for diesel oil will increase drastically. Has state oil and gas firm Pertamina anticipated this? (*)