Tap water tariffs to increase 25% for major users<\/p>\n
JAKARTA (JP): Tap water tariffs for the city's large-scale
\nusers will be increased an average 25 percent as of April 1,
\nGovernor Sutiyoso announced yesterday.<\/p>\n
But the tariffs for small-scale users are to be lowered, the
\ngovernor said, without disclosing the percentage discount to be
\ngranted.<\/p>\n
\"I assure you that the hike will not burden the low-income
\npeople. On the contrary the price for them will be lower,\"
\nSutiyoso said after the pact-signing ceremony for the
\nprivatization of drinking water company PDAM Jaya at City Hall.<\/p>\n
PDAM Jaya categorizes its large-scale consumers as those
\nliving in luxury homes, and businesses using water for commercial
\nand industrial purposes.<\/p>\n
Currently, water tariffs per cubic meter for those living in
\naffluent houses are set at up to Rp 1,845, commercial users
\nbetween Rp 1,350 and Rp 3,100, and industrial users between Rp
\n1,175 and Rp 5,050, depending on consumption.<\/p>\n
In comparison, the tariff for small-scale users living in
\ncheap houses are set at Rp 390, while social service buildings,
\nincluding orphanages, places of worship, and hospitals, must pay
\nbetween Rp 390 and Rp 930.<\/p>\n
According to Sutiyoso, the plan to raise the tariffs should
\nhave been implemented this month.<\/p>\n
\"Due to several unfinished preparations, it is likely that the
\nhike will become effective in April, as approval from the
\nMinistry of Home Affairs is still needed.\"<\/p>\n
The new tariffs are based on the inflation rate and water
\nindex, Sutiyoso said.<\/p>\n
The city's assistant for administrative and development
\naffairs, Prawoto Danoemihardjo, said Thursday that the increase
\nwas \"fair enough\" because tap water rates have not been raised
\nfor four years.<\/p>\n
From Jan. 1, 1994 to April 1998 the water rates should have
\nincreased by an estimated 25 percent, he said.<\/p>\n
The tariffs will be further \"adjusted\" every six months
\nfollowing the official privatization of PDAM Jaya yesterday,
\nPrawoto said.<\/p>\n
Privatization<\/p>\n
The privatization of the firm is meant to bail out PDAM Jaya
\nwhich has a huge debt and poor management system.<\/p>\n
In the first five years, the privatized PDAM Jaya could supply
\n75 percent of the city's users.<\/p>\n
With its new status, PDAM Jaya -- which will only control and
\nsupervise water productivity, production processes and financial
\naffairs -- is to cooperate with two local companies.<\/p>\n
The 25-year cooperation agreement was also signed yesterday by
\nexecutives of PDAM Jaya and the two firms: PT Garuda Dipta
\nSemesta of the giant Salim Group, owned by tycoon Soedono Salim,
\nand PT Kekar-Thames Airindo, which is partly owned by Sigit
\nHardjojudanto, President Soeharto's eldest son.<\/p>\n
Under the deal, PT Garuda will be in charge of water treatment
\nand distribution in the western parts of Jakarta, while PT Kekar-
\nThames will operate in the eastern part of the city.<\/p>\n
The two private companies will work in cooperation with French
\nfirm Lyonnaise des Eaux and British firm Thames Water
\nInternational.<\/p>\n
Under the accord, the private investors have the authority to
\noperate, maintain and expand the water distribution system in the
\ncity, including the management of PDAM Jaya's customers.<\/p>\n
\"The first thing we will do is to repair water pipelines and
\nleakage. That's our priority. And I can tell you for sure that no
\nemployees from PDAM Jaya will be fired,\" Fachry Thaib from Kekar-
\nThames Airindo said.<\/p>\n
Ten percent of PDAM Jaya employees will remain at its
\nheadquarters while another 1,300 will work for Kekar-Thames. The
\nremaining employees will be absorbed by Garuda Dipta.<\/p>\n
The two Indonesian companies are to invest Rp 3 trillion
\nduring the first five years of the 25-year profit sharing scheme.<\/p>\n
After five years, the cooperation is expected to reduce water
\nleakage from its current rate of 54 percent to 35 percent.<\/p>\n
Director of PDAM Jaya Rama Boedi said the private companies
\nwould be taking responsibility of collecting Rp 24 billion in
\nunpaid customers' bills.<\/p>\n
\"The payment was delayed due to the changing system of
\npayment. It is not a leak, so please don't make such a big fuss
\nout of it,\" he said, refusing to elaborate. (edt)<\/p>",
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