Water deals 'could be canceled'<\/p>\n
JAKARTA (JP): Governor Sutiyoso said on Tuesday cooperation
\nagreements between the city water management company PDAM Jaya
\nand two foreign partners could be canceled if they were found to
\ncause losses to the city administration.<\/p>\n
It was his first explicit statement on the controversial
\npartnerships, which have led hundreds of PDAM employees to hold
\nalmost daily protests in recent weeks demanding their
\ncancellation.<\/p>\n
\"If our (local) interests are not accommodated, then why
\nshould we continue the cooperation?\" Sutiyoso told reporters
\nafter attending a ceremony for the handover of a donation of 500
\ntons of rice from Singapore.<\/p>\n
He warned, however, that canceling the deals could be legally
\nproblematic.<\/p>\n
\"We should be ready for possible risks to be sued if we take
\nsuch step. Remember, it's not a local affair but it relates to
\nforeign companies.\"<\/p>\n
According to the governor, PDAM Jaya has adequate time to
\ndiscuss its status in the deals because the period of
\nrenegotiation with Lyonnaise des Eaux of France and Thames Water
\nInternational of Britain would last until August.<\/p>\n
The protests were triggered by the salary disparity between
\nPDAM Jaya employees and those seconded to the two foreign
\ncompanies, who are on a lower pay scale.<\/p>\n
Of the 3,000-personnel PDAM Jaya workforce, 200 are assigned
\nto PDAM Jaya headquarters, 1,500 at Palyja, which is the joint
\nventure with Lyonnaise, and 1,300 at TPJ, the cooperation with
\nThames.<\/p>\n
PDAM Jaya president Rama Boedi recently granted a 45 percent
\nincrease in wages and allowances for employees working at
\nheadquarters, causing resentment among his employees working
\nunder the foreign firms.<\/p>\n
They quickly launched protests demanding equal wages with
\ntheir colleagues.<\/p>\n
Protest coordinator Idris Mansuri said on Monday that the
\nprotesters' main demand now was the cancellation of the
\npartnerships, which he said were illegal and caused losses to the
\ncity administration.<\/p>\n
\"The demand about raising wages and allowances was only a
\n'warm-up',\" he said.<\/p>\n
Rama Boedi told reporters at City Hall on Monday the wage
\nincrease was not a calculated ploy to foment trouble among
\nemployees at Palyja and TPJ, with the intent to stymie the
\npartnerships.<\/p>\n
\"Don't ever think that I'm behind all these things,\" Boedi
\nsaid.<\/p>\n
During a news conference on Monday, Palyja's commissioner
\nBernard Lafrogne challenged the protesters to show financial
\nlosses allegedly suffered by the administration.<\/p>\n
Lafrogne insisted that under the deals, the company targeted
\nto cut water leakages from 55 percent to 30 percent and produce
\npotable tap water within the next seven years.<\/p>\n
\"It's not true that the administration has suffered losses in
\nthe partnership. Instead, it's the two partners that have faced
\nlosses because we should pay the deficit resulting from
\nescalating operational costs when the water tariff remained the
\nsame,\" he said.<\/p>\n
TPJ's sales and marketing manager Nani Sariati said funds used
\nto cover the deficit were counted as investment.<\/p>\n
Nani and Lafrogne also questioned the PDAM employees'
\nmotivation in demanding a halt to the water business cooperation.<\/p>\n
The companies said they invested Rp 265.6 billion in 1998 and
\nRp 450 billion in 1999.<\/p>\n
Separately on Tuesday, the Jakarta chapter of the tap water
\ncontractors' association (Akaindo) announced it sent letters to
\nPresident B.J. Habibie and Minister of Defense and Security\/Armed
\nForces Commander Gen. Wiranto to express concern over the
\nprotests by PDAM Jaya employees.<\/p>\n
An Akaindo executive, speaking on the condition of anonymity,
\nsaid the letter to Wiranto explicitly requested security to
\nsafeguard the water supply in the capital, and also stressed the
\nlegality of the agreement between PDAM Jaya and the partners.
\n(ind\/ylt)<\/p>",
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