Water operator defends hike plan<\/p>\n
P.C. Naommy and M. Taufiqurrahman, The Jakarta Post, Jakarta<\/p>\n
A top executive at city tap water operator PT PAM Lyonnaise Jaya
\n(Palyja), claimed on Tuesday that the company would not be able
\nto provide better services unless the Jakarta administration
\nincreased the water rate by 30 percent early next year.<\/p>\n
Palyja commissioner Bernard Lafrogne said inflation in the
\npast five years had increased over 150 percent, but water rate
\nhikes during that time only covered 127 percent of the inflation.<\/p>\n
"We were told by the government not to increase the water rate
\nduring the height of the economic crisis in 1998, while the
\ncompany's operational costs increased due to the soaring
\ninflation rate. That has been a great burden to us," he said.<\/p>\n
The company had called a media gathering to defend the city's
\nplan to increase the tap water rate by 30 percent. In the hike
\nproposal, the administration said it would use 17 percent of the
\nincrease to pay off its debts to its two foreign partners, Palyja
\nand PT Thames PAM Jaya (TPJ).<\/p>\n
The foreign partners have reported a Rp 990 billion (US$116.47
\nmillion) shortfall in the debt payments from city-owned water
\ncompany PD PAM Jaya.<\/p>\n
The remaining 13 percent of the water rate increase would be
\nused to cover inflation and the foreign partners' operational
\ncosts.<\/p>\n
In the ongoing debate on the plan at City Council, many
\ncouncillors urged the administration to wait for the result of
\nthe audit being carried out by Stone Webster's Independent
\nCombined Experts (ICE) team in collaboration with experts from
\nthe Development Finance Comptroller (BPKP) on the real extent of
\nthe shortfall.<\/p>\n
Bernard said the simultaneous increase in electricity rates
\nand the price of raw water supplied by a Tangerang water operator
\nwould make impossible for Palyja to maintain operations at the
\ncurrent rate.<\/p>\n
He said despite regular complaints from around 3,000 consumers
\non the quality of its services and product, he stressed that
\nPalyja did not sell water, but services, to the customers.<\/p>\n
From the total Rp 670 million investment made by Palyja by
\nSeptember 2003, he said the firm had repaired 1,300 kilometers of
\n4,000 km of old pipeline and had installed 700 km of new
\npipeline.<\/p>\n
Palyja also said it had surpassed its 47 percent target of
\nreducing water leakage and had achieved 45 percent as of October.
\nThe previous rate of water leakage stood at 61 percent.<\/p>\n
However, consumers' criticisms on the latest 40 percent rate
\nhike has yet to subside, as the Central Jakarta District Court
\nruled on Tuesday that it would proceed with a class action filed
\nby the Jakarta Tap Water Consumers' Community (Komparta) against
\nthe administration and City Council.<\/p>\n
Presiding judge Andi Samsan Nganro said the decision to
\nincrease the water rate "did not merely affect an individual or
\nprivate entity, but concerned the general public".<\/p>\n
Komparta claims to represent about 200,000 out of 650,000 tap
\nwater consumers in the capital.<\/p>",
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