I say, the worst has yet to come! Still, the like of this disaster hasn’t been around for a long, long time. If such blatant mismanagement isn’t reason enough for those in power to think that something seriously wrong has been going on, I surmise we’ll never know what wrong means. Really, what would you do if you were Minister of Energy?
Power Outage, Industry Outrage
Association of Japanese Companies Lodged Protest Letters to PLN and Energy Minister
Koran Tempo Daily, 9 July 2008
Jakarta – Industry players are still complaining on the power blackout still ongoing periodically to date. They keep pressing the government to be serious in maintaining uninterrupted electricity distribution for industrial needs.
Head of Investment Division at the Indonesian Chamber and Industry, Bambang Susetyo, revealed that national industry is having a huge loss due to the ongoing power outage. “Most associations of producers have filed their complaints through Kadin, “ said Bambang in Jakarta yesterday.
The most shocking ones came in last July 3, from Association of Japanese Companies under the Jakarta Japan Club Foundation (JJC). JJC Chairman Seiji Komuro sent a letter to the President Director of PLN Fahmi Mochtar, carbon copied to Minister of Energy and Mineral Resources, Coordinating Minister for Economic Affairs, and Kadin Chairman.
According to the copy that Tempo received, JJC members have complained that when the outage took place on 25 May-13 June, it was done with no prior notice. JJC then followed it up by undertaking a rapid survey to 414 companies, regarding the power cut during the fateful three-week period.
The survey found out that the power cut had impacted negatively to the operationalization of Japanese companies in Indonesia. According to JJC, some 42 companies suffered Rp 41 billion losses (not Rp. 48 billion as previously reported by this paper on July 5).
“Blackouts continue to be a major threat to Japanese companies here,” as Komuro wrote in his letter.
Losses due to the electricity outage were also reported by Secretary General of the Association of Indonesia’s Plastic and Olefin Industries (Inaplas), Budi Susanto Sadiman. He said one particular petrochemical company had suffered a potential loss up to US$ 10 million due to a 4-day power blackout. This excluded all the trouble in rebooting machines, which generally takes 4 days. “If the machines get damaged, we'll need Rp 2 billion to clean them up,” he said.
Textile producers from various regions also screamed out loud due to the big losses incurred by the outage. “We will go bankrupt if this continues,” said Head of Indonesia’s Textile Industry Association for Semarang region, Agung Wahono, yesterday.
Agung is currently taking a survey on victimized companies among more than 200 textile companies in Central Java. According to him, the losses must vary with companies. Yet, lower middle companies would suffer a loss of about Rp 100 million on average per one hour blackout.
He warned us that power blackout not only would delay textile production schedules and increase costs, but would also hurt exports and reduce revenues. The economy would be disturbed with the collapse of the textile industry.
Take PT. Dan Liris for example. Its PR Director Djoko Santosa said that due to the power cut, his company had had to stop production entirely. They sent workers home, although still on payment. To meet targets, some workers had had to work extra hours. Otherwise, if delayed, air transportation would be more costly. “The solution was better than losing customers or being penalized.”
Big losses have triggered companies in their warning to the government about the threat of investment. According to Bambang Susetyo, if this power problem cannot be solved, investors may flee from the country. “As regards further impacts, industries will collapse with most workers laid off,” he said.
Member of the Parliamentary Commission on Industries, Lily Asdjudiredja, was especially worried if neighboring countries might take advantage of the power crisis. “Besides, competition is fierce in the region.”
To safeguard power supplies, Kadin has recommended several measures. First, the government has to impose domestic market obligation, by altering the 13.5 percent royalty from the monetary form into an in-kind form, namely in coal. Second, the government must improve the price structure of industrial fuels to levels bearable to industries.
Meanwhile, Budi Susanto suggested that PLN increase tariffs to industries. This is because the main problem faced by PLN is that it has no adequate financial capacity to purchase coal. Electricity subsidy given by the government amounts to only Rp 60 trillion, instead of the Rp 100 trillion necessary.
According to him, petrochemical industries in Cilegon, Banten, would be willing to accept the new tariffs, through business to business negotiation. “As long as it is reasonable, made through same price levels or lower than that in neighboring countries,” he said. However, PLN itself must guarantee smooth electricity provision without blackouts. “This move needs no prior political approval from the government of Parliament.”
* Yuliawati, Eko Nopiansyah, Rofiuddin, Ahmad Rafiq from Koran Tempo; English translation drafted by Nad Labels: crisis, electricity, power |
