Index

 02 March 2006

 
Electricity company comes under a harsh spotlight
Jakarta Post

The young man rubbed his forehead in frustration at hearing of the proposal to increase power rates.

"After the fuel price increase, followed by the hike in costs of almost everything else, spending more to pay for power is the last thing I need," said the self-described "middle-income worker".

It's a sentiment shared by most of his fellow citizens, regardless of their economic background.

"Is it really necessary? Power rates here are already higher than in neighboring countries," was the question from a businessman in the Indonesian Chamber of Commerce and Industry (Kadin).

Under a glaring spotlight is state electricity company PLN, which claims it needs Rp 38 trillion (US$4.1 billion) this year to offset rising costs. If the government fails to come up with an increased subsidy, it warns it will have no choice but to raise power rates.

While PLN justifies the proposed rate increase due to oil-based fuel and production costs, critics attribute the company's problems to poor planning and inefficient operations.