About 2,000 industries ready to shift Saturday, Sunday days-off

About 2,000 of the country’s 6,800 industries have declared their readiness to shift their weekend days off (Saturday and Sunday) to other days, says a spokesman of state electricity company PLN.

“About 2,000 industries are ready to shift their days off from Saturday and Sunday to weekdays. Of the total, about 50 percent are ready to start the program at the end of this month,” PLN’s director for Java-Bali distribution, Murtaqi Syamsuddin, said here on Tuesday.

He said his office had made an inventory of 6,000 industries out of the existing 6,800 companies.

“We actually hope that all industries will make the shift before August 2008,” Syamsuddin said.

According to the PLN official, the shift was to have been carried out by July 31 depending on the readiness of the companies concerned.

He said the companies were in different states of readiness.

“The shifting of the days off needs a common understanding. So I do not want to talk about sanctions, but of coordination and understanding,” he said.

“We hope the program will run well because industries have also responded to it positively as they understand the problem,” he said.

He said there were 1,000 industries which would begin to carry out the program on July 31, 2008.

The government has called on industries to shift their Saturday and Sunday days off to week days so that power supply surpluses on Saturdays and Sundays can be put to productive use
and their need for power on weekdays can be reduced. (Antara/The Jakarta Post)

Decree makes Saturday, Sunday factory working days

By Adianto P. Simamora

In efforts to cut power consumption and prevent blackouts, the government has announced a decree on energy saving that obliges manufacturers to shift working hours two days per month to the weekend.

The decree, signed by five ministers, will take force for companies in Java and Bali starting July 21.

“With the decree, moving the businesses’ operating hours to Saturday or Sunday is a must for the manufacturers,” Industrial Minister Fahmi Idris told reporters Monday.

The decree formed over the last two weeks was signed by Fahmi, Energy and Mineral Resources Minister Purnomo Yusgiantoro, Manpower and Transmigration Minister Erman Soeparno, Home Minister Mardiyanto and State Minister for State Enterprises Sofyan Djalil at the vice presidential office.

Vice President Jusuf Kalla said the decree would initially apply to companies consuming high amounts of electricity but employing few workers.

“It must be focused first on the companies using lots of electricity but employing fewer workers such as steel factories or foundries,” he said.

He said that with the decree, there would no longer be blackouts for companies operating mainly in Java and Bali.

“If the implementation of the decree could save about 500-600 megawatts (MW) of power, I believe there will no longer be blackouts here,” he said.

Kalla told the business community attending the signing ceremony that the government would soon increase the power supply in the country.

He said that from March to December next year, there would be an additional supply of up to 2,000 MW of electricity.

“Thus, if the implementation of the decree could save about 600 MW, we will have an additional power supply of 2,600 MW,” he said.

The government earlier said shifting working days to the weekend was necessary since there were about 1,000 megawatts of idle power capacity of Saturday and Sunday.

Fahmi said the state electricity company PLN together with the Home Ministry would soon distribute schedules for companies to determine when firms should shift operating hours.

“PLN, however, is still drafting sanctions for the companies violating the decree,” he said.

Chairman of the Indonesian Employers Association (Apindo) Sofyan Wanandi said the business community needed certainty in the implementation of the decree.

“We want regents or mayors and PLN who would implement the decree to ensure the electricity supply to companies,” he told reporters at the vice presidential office.

Kalla said the government would also launch a second phase of energy saving aimed at offices, shopping malls and households.

“All the offices must have special energy inspectors to monitor the use of electricity. If this happens, no more lights would be on at 10 p.m. in offices,” he said. (The Jakarta Post)

Power rationing until 2009

The electricity sector today faces at least one certainty. Acute power shortages that require power rationing through rotating electricity blackouts or changes in industrial operating shifts will continue until late 2009.

Businesses are now calculating the losses they will suffer during the rotating blackouts. But most industrial companies seemed resigned to the tragic fact that the Indonesian government is virtually powerless to cope with the power supply crisis until some of the new power plants currently under construction, with combined capacity of 10,000 megawatts (MW), come on line in early 2010.

Hence, instead of asking for an assured power supply, let alone for additional electricity, they simply beg the state electricity monopoly PLN to give them a guaranteed schedule for the impending power blackouts.

Businesses have suffered big losses due to the increased frequency of sudden, unannounced power blackouts over the past two months. Unexpected power outages cause losses not only due to the stoppage of operations or production but also the severe damages inflicted on production processes and equipment. For example, in many industrial plants, the raw materials might be wasted if the production process abruptly stops due to power outages.

The Jakarta Japan Club complained early this week that 42 of its members had suffered total losses of Rp 42 billion (US$4.5 million) in May and June alone due to production interruptions caused by power blackouts. The Indonesian Chamber of Commerce and Industry (Kadin) and the Japan Club therefore asked PLN to provide a definite schedule for the planned blackout periods.

Such advance notifications as those PLN has issued in Jakarta and its surrounding towns for rolling power blackouts during the next two weeks will enable industrial firms to at least adjust their operations schedules to minimize losses.

Industries have asked that advance notification be clearly stipulated in the joint ministerial decree on power rationing which will take effect in October.

The power supply crisis is the culmination of ignorance, misguided energy policy and extreme lack of political leadership in pushing forward the development of badly needed basic infrastructure.

Analysts and industrialists had warned as early as 2002 of a looming power supply disruption in Java and Bali in view of the anticipated steep increase in demand when the economy began a robust recovery, while the prospects of new investment in power generation seemed quite bleak, due to financing and regulatory problems.

Legal foundations for private participation in the electricity sector were severely weakened in 2004 when the Constitutional Court annulled the new electricity law.

So until some of the power plants currently under construction start operations, forget all the big talk about bold reform measures to improve the investment climate. Without a reliable, adequate supply of power, not a single investor will come to this country.

Forget all the optimistic projections of more than 6.5 percent economic growth this year and next year. Lack of power or frequent blackouts could kill all the bullish sentiment.

The power supply crisis should therefore serve as a strong warning to the government that the current crash program to add 10,000 MW to the PLN grid only offers a medium-term solution.

This power crisis will continue to loom over the country as long as the government fails to improve the electricity rate structure. The current universal rate structure imposed on PLN cannot provide it with adequate revenues for achieving long-term financial sustainability.

Just look at how the government was forced to put up financial guarantees for investors and contractors, without which they would have been unwilling to take part in the implementation of the crash program.

The universal rate structure the government imposed on PLN, irrespective of the varying costs associated with providing electricity in different regions, places the company in a financial quandary as it cannot cover its supply costs.

The distorted rate structure also sends the wrong signal to private investors and creditors whose participation is badly needed in power supply. Still more damaging, other provinces outside Java are at a great disadvantage for attracting new investment in power generation because the costs of electricity supply in the outer islands are much higher than in Java. [The Jakarta Post]

Power cuts hit public services in NTT, West Java

By Yemris Fointuna and Yuli Tri Suwarni

Public services and government offices have been paralyzed for the last two weeks by power blackouts in East Nusa Tenggara due to delays in diesel supply and skyrocketing fuel prices.

State-owned PT PLN imposed a daily 12-hour blackout from 6 a.m. local time until 6 p.m. in the regencies of Ruteng, Ngada, Ende, East Flores and Rote Ndao.

East Flores vice regent Yusni Herin confirmed most government offices and civil servants could not work during outages because of dependence on computers, data storage and telephones as well as air conditioning.

“We can’t understand because all provincial power plants are driven by diesel engines but normal deliveries by Pertamina have not yet reached us,” he said.

“Civil servants in East Flores have remained present at their office but cannot work normally,” he added.

Robertus Kaban, resident of Kupang, Manggarai, said the power company should pay consumers compensation for losses due to the blackouts.

“If consumers pay the power bill late, they usually are punished with fines or having their power cut. PLN should get similar treatment for failing to maintain power supply to customers,” he said.

PLN general manager in East Nusa Tenggara, Amir Rosidin, said the blackouts were imposed because of late delivery of diesel fuel to power plants.

“A Pertamina tanker is nearing Flores to supply fuel to deal with the power cuts,” he said, adding his company had no choice but to cut power while waiting for the fuel to arrive.

He acknowledged the blackouts also had something to do with the fuel price increase because his company ordered non-subsidized diesel fuel at Rp 11,000 per liter.

In Bandung, West Java, residents also complained about blackouts imposed without prior notice to customers.

Erna Dini, a 27-year-old employee of a major company in the city, said his company could not do work because they needed computers and internet networks.

“The blackouts since Wednesday have caused losses to the company since we have no our reserve power engine,” Erna said.

Sabar, a 54-year-old professional tailor at Muararajeun in the city confirmed that many customers were upset because work could not be completed on schedule.

The blackouts in the city have been imposed between 8 a.m. local time until 4 p.m. at random.

Many chemical and textile factories have suspended operations which need continual power supply.

The power company said the blackouts were announced only 15 minutes before it was imposed.

PLN deputy manager Bambang Dwiyanto said the blackout was caused by the increasing demand for power and late delivery of fuel to power plants in West Java, Banten and Jakarta.

He said power supply to consumers depended much on the condition of power plants in Suryalaya, North Jakarta and East and Central Java.

“Wednesday night, PLN was short of 300 megawatts for the Java-Bali supply, prompting blackouts in certain areas,” he said.

He called on consumers to use power efficiently to minimize the need for blackouts because it is impossible for PLN to build new power plants immediately. (The Jakarta Post)