Experts doubt ability to meet water targets<\/p>\n
JAKARTA (JP): A group of experts expressed doubt yesterday
\nover the government's ability to provide clean water for the
\ncountry's ever-increasing urban population, unless it changes the
\nway the state-run water companies are managed.<\/p>\n
The Association of Health and Environment Technology Experts
\ndescribed as \"ambitious\" the government's target of piping clean
\nwater to 62 percent of Indonesia's urban population by 2008.<\/p>\n
The target means the government must provide clean water to 66
\nmillion people, association chairman Rama Boedi said in a
\nworkshop on urban water policy.<\/p>\n
Rama presented the Urban Water Sector Policy Framework, a
\nreport commissioned by the World Bank, to representatives of
\nwater companies run by the 27 provincial administrations, and
\nexecutives from the National Development Planning Board and the
\nMinistry of Public Works Directorate General of Human
\nSettlements.<\/p>\n
Rama said that at the end of the Fifth Five Year Program in
\n1994, 24 million people, or 36 percent of Indonesia's urban
\npopulation, received water from state-run water companies.<\/p>\n
In order to achieve the targets, he said, Indonesia would need
\nto invest Rp 7 billion and Rp 10.8 billion in the seventh and
\neighth Five-Year Plans respectively between 1999 and 2008.<\/p>\n
The government has earmarked Rp 3 billion in the current Sixth
\nFive Year Plan.<\/p>\n
Rama said water companies run by regional administrations
\n(PDAMs) must be revamped to become autonomous service companies
\nthat are creditworthy and customer-driven.<\/p>\n
Unless the clean water industry, regarded as a high-risk
\ninvestment sector, could attract commercial loans, the burden of
\nachieving the Five-Year Plan targets would fall solely on the
\ngovernment, he said.<\/p>\n
He noted that the government's spending on clean water
\nprojects is to shrink in the Seventh Five-Year Plan, and that the
\nPDAMs will be expected to finance their own investments, either
\nthrough their own sources, or through the stock market.<\/p>\n
This, he said, could be achieved by raising water rates, from
\nan average of Rp 650 per cubic meter in 1985 to Rp 950 (at
\ncurrent prices) by 2008.<\/p>\n
Rama said: \"Theoretically, average water rates in Jakarta
\ncould be reduced if the company could achieve greater
\nefficiency.\"<\/p>\n
The study proposes a number of changes to the government's
\nurban water policy.<\/p>\n
First and foremost is the separation of ownership and
\nmanagement of the 300-odd water companies currently managed by
\nregional administrations. This would lead to greater efficiency
\nand accountability by the managements and minimize the political
\naspects of the day-to-day operations.<\/p>\n
The study also proposes a regulation on private sector
\nparticipation in the water industry. The absence of such a
\nregulation has deterred many potential investors, particularly
\ngiven the high risk.<\/p>\n
A third proposal is better financial management of PDAMs,
\nwhich have relied on government aid and concessional loans
\nbecause very few are considered creditworthy.<\/p>\n
It fourthly urges simpler tariff structures, recalling that
\nthe present system encourages major users to tap artesian wells,
\ncausing huge losses in potential revenue.<\/p>\n
The workshop highlighted the success of the cooperation
\nbetween PDAM Bali and a group of private investors in managing
\nwater resources in the province since 1991<\/p>\n
Uki Ahardijatno, head of PDAM Bali, said the company enlisted
\nmajor hotel owners in Bali to participate in the project<\/p>\n
\"Our investors are also our customers,\" Uki said.<\/p>\n
PDAM Jaya, which supplies clean water in Jakarta, signed a
\ncooperation agreement in June with three private companies to
\njointly manage water treatment and distribution in the capital.
\n(04)<\/p>",
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