Tuesday, July 20, 2010

Govt will Review Electricity Hike

Last month, the government announced that there will be an electricity hike of 10% to 18% starting 1 July 2010.

Although the electricity hike excludes households using less than 90 Watts of electricity, but this decision has been widely protested especially by  the industries that stated that the increase is actually many times higher than the average 15% declared by the government.

For example, the association of textile industries and association of furniture industries alleged that the increase would be more than 40%. They said that if the electricity hike is not delayed or revised they would not be able to make and sell products that would compete with cheap products freely imported from China. Which means that they would have to stop business operation and more than 10 million their workers would be out of job.

In response to the above protests, the Coordinating Minister of Economy Hatta Rajasa (a technical engineer) announced that the government will review the electricity hike and limit it to18% max. for industries.

Although I am glad that the government decided to reconsider the electricity hike rate, however I am very sad that the hike has not been made based on careful and accurate calculations that it has to be reconsidered only 2 weeks after its implementation.

Here are some related articles that I quoted from The Jakarta Globe :

Industries Shocked By Steep Electricity Hikes
Govt Will Rethink Electricity Hike Rate
Indonesian Government Puts Cap On Electricity Rate Hike

13 comments:

fairuz said...

i think...

2 weeks of national bill payments sum up as a big finance injection..a lot of money.

hundreds of engineers worked and calculated the electricity demand and tariff. dont know why the tariff hikes just a moment and then to be reviewed.

maybe that hundreds of engineers had miscalculated.

H. Nizam said...

@Fairuz,
As a country that has 238 mio population, a very important matter i.e electricity should be planned based on accurate calculations.
I can't understand why should there be a miscalculation. Is it because the Coordinating Minister of Economy is not and economist as it used to be in the past?

李琪 said...

IS VERY GOOD..............................

umihoney said...

We always provide some percentage of errors in any estimates but too big an error is definitely not acceptable. Was this done in haste to fill up the coffer, consequently putting millions at risk of loosing their livelihood.Admittedly the review affected the credibility of the govt. agency.

colson said...

I guess the demand of electricity surpasses the supply by far ( due to lack of investments in the past) and that's why a negotiated hike is the result. Negotiations are different from accurate calculations.

I don't think the minister can't add one and one. Engineers usually are at least as good at calculating as economists are. Most of them are better actually.

H. Nizam said...

@李琪,
Thank you for the kind words.

@Umihoney,
It is impossible to imagine that there would be a big miscalculation in a matter as important as electricity.

@Colson,
On thing for sure is that the Coordinating Minister is a politician (PAN). I hope that the miscalculation is not caused by the growing competition among politicians for the 2013 election.

Edwin's Personal Blog said...

somehow we hope the would be a little ease for people appeasing burdens of life...

BALI DEALS said...

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H. Nizam said...

@Edwin,
Yes let us hope so.

@Bali Deals,
I thought that if people can follow my blog on GFC and Mbl it means that my blog is already "do follow".
I am "gaptek" on this matter.
Thank you for your information.

boyin said...

The reality is everything will going high no matter what is the defect,people grow,and many aspect involve. just make sure that we also have to try increasing our income

H. Nizam said...

@Boyin,
It's good to see you again.
On the topic, electricity will surely have impact on living costs especially that on the second week of August we will start Ramadhan followed by Eidul fitri one month later, usually prices would go sky high. Let us hope that development would run smoothly, so that national income will increase to.

fairuz said...

hi.. me again:)

actually, what i am really thinking is the reality is too far for miscalculation and errors to be happened after all the studies, double checks, procedures, reviews, approvals and so on by many parties...

dont know what is going on actually:)

H. Nizam said...

Hi Fairuz,
I also believe that there should not be a miscalculation. Difficult to say what's the real reason. I hope that there is no bad reason.