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tar-rated hotels and malls in Batam have been complaining about electricity rate hikes of between 40 and 52 percent, which state-owned electricity company PT PLN's Batam office has been applying since October 2008, a hotel owner said.

Anas, owner of Novotel Hotel Batam, said that as many as 42 star-rated hotels had complained, accusing the electricity company of being inconsistent with its rates.

"It previously agreed to apply old rates for hotels and malls until a decision by the Energy and Mineral Resources *ESDM* Ministry was made. Yet, it raised the rates by 40 percent for hotels and 52 percent for malls on Oct 1, 2008," Anas said.

With the new rate, he added, his hotel that previously only paid between Rp 300 million and Rp 400 million for electricity, now had to pay around Rp 600 million a month, or 40 percent of the hotel's total monthly operational costs.

"This is completely unreasonable. We don't know for how long we can survive. We are now counting down the days until we close our business in Batam," Anas said, adding that electricity costs should ideally be no higher than 20 percent of a hotel's monthly operational costs.

According to Anas, all hotels and malls in Batam were in arrears last month because of the new rates.

"It really worried us. Even the President said during his visit to Batam that fuel prices were down. The electricity rates must also be reduced," he said.

Anas noted that the electricity supply of at least four star-rated hotels was cut off last month due to payment arrears. The supply was only switched back on after Batam Deputy Mayor Ria Saptarika asked PLN for an exemption for hotels.

"PLN's behavior is really unprofessional. It's a terrible thing to do in this investment climate. But PLN is completely ignoring our pleas," Anas said, adding that hotels and malls could only tolerate electricity rate increases of up to 10 percent of the old rates.

Anas said hotels, through the Association of Indonesian Hotels and Restaurants (PHRI), had tried to meet with PLN and the municipal administration several times, without reaching any satisfactory outcome for the business community.

Head of Batam's Industry, Trade and ESDM Agency, Ahmad Hijazi, said his office was planning to meet ESDM Minister Purnomo Yusgiantoro to discuss the problem.

"The rate hike is linked to the quantity of gas needed to power PLN's electricity generators. So, we need his *Purnomo's* involvement," he said.