PLANNED POWER RATE INCREASE ILLOGICAL : OBSERVER

Medan, N Sumatra, March 10 (ANTARA) - State-owned power utility PLN's plan to raise its basic electricity rate (TDL) by 15 percent is illogical, an observer said.

"How could PLN raise its power rate tariff while its services are still quite disappointing," Ansari Yamamah, executive director of Slokantara Institute, a research institute on social, political and economic affairs, said here on Wednesday.

He said that the ideal thing PLN should do first was to improve its services in supplying electricity for the people. Only if PLN's services are already good could its proposal to raise the tariff be accepted by the people.

Ansari said that no matter from what aspect, including the aspect of market law, of the proposal was seen, it would never be logical because it was against the logic.

"How could the price of a product be raised if its quality is not good," he said.

He said that customers so far were still disappointed by PLN's services as a result of frequent power outages. PLN needed to overcome all this first before it could raise its power rate tariffs.

PLN should replace its old equipment and find a new substitute technology for electricity supplies.

"If need be, PLN should cooperate with foreign investors if it has no enough funds," he said.