The Jakarta Post, Jakarta | Tue, 01/07/2003 7:29 AM | Business
A’an Suryana, The Jakarta Post, Jakarta
A coalition of non-governmental organizations (NGOs) has strongly rejected the government’s electricity pricing policy, saying it as unfair.
Under the policy, state-owned electricity company PLN has been allowed to increase its charges by an average of 6 percent per quarter since 2001 with the aim of bringing the price to 7 U.S. cents per kilowatt hour by 2005 so that the company can enjoy profits and make new investments.
But the NGO grouping, called the Working Group on Power Sector Restructuring (WG-PSR), said on Monday that the target was unacceptable because neighboring countries in the region only charged between 5 cents and 6 cents per kWh for electricity.
“”The increase in charges will only burden the people,”” said Fabby Tumiwa, an official at WG-PSR.
The WG-PSR is a coalition of NGOs which includes high profile NGOs such as the Indonesia Corruption Watch (ICW), the Indonesian Consumers Foundation (YLKI) and the International NGO Forum for Indonesian Development (Infid).
The coalition has consistently waged a public campaign to reject the power pricing policy.
The government increased electricity charges earlier this month as the first quarterly increase for the year. The increase in electricity charges coincides with the rise in fuel prices and telephone charges, prompting protests in several cities in the country.
Currently, the Indonesian people must pay between 5 cents and 6 cents per kWh.
Fabby challenged PLN to provide a rationale for the policy.
“”The 7 U.S. cents benchmark has raised some eyebrows. Where does this price come from? PLN has always failed to provide a credible explanation for the public,”” said Fabby.
Fabby demanded the government and PLN establish an independent team to find a more fair electricity rate.
PLN president Eddie Widiono could not be reached for comment.
On previous occasions, the PLN management has said that the company could not make a profit with the current price level.
The company said that since the economic crisis hit the country in late 1997, PLN had been selling its power at a loss as the value of the rupiah had fallen against the U.S. dollar. PLN sells the power at a rupiah price, while its expenses are mostly in dollars. If the current price level is maintained, PLN would fall into bankruptcy in no time, it claimed.
The profit will also be used by PLN to cover its financial obligations to independent power producers (IPPs).
But critics have said that PLN’s financial mess is a result of massive corruption in the past including the power purchase deals with a number of IPPs, and this burden should not be passed on to the public.