GOVT'S POWER RATE INCREASE PLAN FACING OPPOSITION

By Andi Abdussalam

Jakarta, June 15 (ANTARA) - Amid a discourse to provide the poor with free electricity, the government's plan to increase the basic electricity tariff (TDL) by an average of 10 percent beginning next month has been opposed by some quarters, including political parties, legislators and students.          A national student movement on Monday called on all students and non-governmental organizations (NGOs) in the country to reject the government's plan to increase power rates.          Besides students, at least two political parties also voiced their disagreement to the plan.  The two are the Indonesian Democratic Party of Struggle (PDIP) and the Prosperous Justice Party (PKS).          The two parties are of the view that the government had better optimize the efficiency of its production cost and raw material expenditure. "The PDIP faction in the House disagrees with the government's plan to raise the TDL rates. We think that the government should first optimize the efficiency of its production cost and raw material expenditure," associate chairman of PDIP Effendi Simbolon said at the Parliament building on Monday.          Effendi explained that PDIP understood the government calculations to raise the TDL rates for power customers of over 1,200 kilowatts categories in the 2010 revised state budget but  for the 6,300 kilowatts the price already exceeded the economic viability.          "So, we want that the government to maximize its efficiency in the first place because we can see a strong cartel in the supply of fuel oils who controls raw materials," Effendi, who is also deputy chairman of Commission VII of the House of Representatives (DPR) on energy affairs, said.          He said the production cost for one kilowatt was six cents if gas was used and 25 cents if other kinds of fuels were used. "The government should use gas for the production of electricity. But this is a cartel (so that it does not use gas), or should we disclose the cartel?" said Effendi.           So far the use of fuel oils in the power production has caused the government to provide a subsidy of Rp56.1 trillion, while actually the subsidy could be reduced to Rp15 trillion if the government used gas.          "This is squandering. We can actually save on Rp35 trillion, but as if the government has turned a blind eye," he said.          PKS legislator at the House Commission VII Achmad Rilvadi shared the PDIP lawmaker's view. "PKS has officially rejected the government's plan to increase the TDL. It has submitted its notes of objection," Achmad said.          Achmad said his party had suggested that the government should maximize its efficiency first. "The government should carry out efficiency before hand," he added.          In the meantime, a national student movement has called for the rejection of the government plan to increase power rates.          "We, on behalf of the Indonesian Nationalist Students Movement (GMNI), together with other Indonesian student groups, hereby declare that we reject the government's plan to increase electricity tariffs and the prices of gas and other fuels. The plan disregards the economic plight of the majority of the Indonesian people," Cokro Wibowo, the GMNI secretary general, said on Monday.           He said the plan to raise the power rates and fuel oil prices would disadvantage the majority of the Indonesian people who were still living under the poverty line. The government should not equalize or compare the present prices of these three commodities with their market prices.           "The lifting of subsidies for electricity, fuel oils and gas will put a heavy financial burden on the people. We should be pro-people, not pro-neocolonialism and liberalism," he said.          Cokro Wibowo called on the government to learn a lesson from India and China. "India and China are an empirical example of countries which have become more developed than us. Their economies are growing rapidly due to the prices of fuels, electricity and gas which are set at a lower level," he said. When Indonesia introduced large-scale subsidies in 2008, Indonesia's economy grew very rapidly.          "This means that if they are empowered, protected and given attention, including providing them with subsidies, the Indonesian people will be able to improve their welfare, increase their productivity and in the end help boost the country's economic growth," he said.          While the opposition is being voiced, the government is still undecided on the new electricity rates it will apply to certain categories of consumers though it is certain  the average tariff is to be raised by 10 percent starting July 1, 2010.          "Based on the law on the state budget, the basic power rates will be raised by an average of 10 percent  effective July 1, 2010. But the options for tariff increases for certain customer categories still have to be discussed with the House of Representatives (DPR)," Energy and Mineral Resources (ESDM) Minister Darwin Zahedy Saleh said Monday.           The government has already prepared a number of options for the basic power rate increases. According to one of these options, the government will raise the electricity rate for customers in the 450 - 900 VA category to Rp2,000 -Rp3,000 and those in the 900-1300 VA category to Rp5,000-Rp6,000.          "Our aim is to have all electricity customers share and care, particularly those who enjoy the biggest portion of the electricity subsidy, namely customers in the 450-900 VA category," the minister said.          He said the tariff increase  was important to enable  electricity firm PLN to increase its capacity so that the  area covered by  electricity in Indonesia can be widened. "At present, only about 70 percent of the area is covered. It means there is still 30 percent of the population or about 53 million people who still do not have access to electricity," the minister said.          In the meantime, data of the Ministry of Energy and Mineral resources  obtained by the press showed that government has one option where it would not increase the tariff for 450-900 VA customer categories while in the other one it would increase the basic tariff for these categories by 5 percent.          It also has two options, raise or not to raise the tariffs  for the 6,600 VA and above category consumers. For household consumers, there are two alternatives: an increase by 18 percent and or 15 percent.          For business customers the options is whether an increase of 12-16 percent or of 12-15 percent, while for industry a increase of 6-15 percent or of 6.13 percent become an alternative.          The average increase by 10 percent is intended to cover the subsidy shortage of Rp4.8 trillion in the 2010 revised state budget which has set a total subsidy of Rp55.1 trillion. ***2*** (T.A014/A/H-NG/A/O001) 15-06-2010 12:23:2