Water tariffs to be cut by a quarter<\/p>\n
JAKARTA (JP): The city administration, beset by a deluge of
\ncomplaints over new tap water rates, decided yesterday to lower
\nthem by an average of 25 percent starting next month.<\/p>\n
Governor Sutiyoso said the decision was made after the two
\nforeign business partners of city-owned water management company
\nPDAM Jaya agreed to the new tariff proposals.<\/p>\n
Tariffs for affluent customers will not be affected.<\/p>\n
Customers categorized in middle and low economic brackets --
\nsuch as residents of low-cost apartments, buildings for social
\nservices, houses of worship and hospitals -- would have their
\nrates lowered by 17 percent, he said.<\/p>\n
\"The new tariff is still set under the cross-subsidy principle
\nin that the wealthy customers subsidize those of the middle to
\nlower class.\"<\/p>\n
Sutiyoso could not provide further details on new tariffs and
\ntold reporters to check with PDAM.<\/p>\n
The city administration raised tap water tariffs by an average
\nof 25 percent April 1. The highest increase of 65.71 percent was
\nimposed at that time on affluent customers, with the cost per
\ncubic meter of water rising from Rp 1,175 to Rp 2,545.<\/p>\n
Tariffs for middle income families were raised by 38.36
\npercent, from Rp 930 to Rp 1,935 per cubic meter, while those for
\npoorer families went up 38 percent from Rp 775 to Rp 1,600.<\/p>\n
PDAM made the increases after it signed a 25-year cooperation
\nagreement with PT Kekar-Thames Airindo (Kati), a joint venture
\nbetween former president Soeharto's eldest son Sigit
\nHardjojudanto and Thames Water International of Britain, and PT
\nGaruda Dipta Semesta (GDS), a cooperation between the giant Salim
\nbusiness group and Lyonnaise des Eaux of France.<\/p>\n
Customers strongly protested the increase in the midst of the
\neconomic crisis.<\/p>\n
The administration subsequently canceled the cooperation last
\nmonth as the contracts with the two joint venture firms were
\nbelieved to have been won through nepotistic and collusive
\npractices.<\/p>\n
PDAM then established new deals with the foreign partners.<\/p>\n
City Council urged the administration on Monday to lower the
\ntariffs as promised following the revocation of the cooperation
\nagreements.<\/p>\n
Sutiyoso said yesterday the administration had not dragged its
\nfeet on its previous pledge to lower the tariffs. The delay was
\ndue to lengthy negotiations with its partners, he said.<\/p>\n
\"The decision was made through a hard struggle because we had
\nto negotiate with our partners as we have a commitment to them.\"<\/p>\n
The governor mentioned several issues which had to be
\nconsidered before establishing the new tariffs, such as the
\nsmaller revenues to be collected by PDAM even as it had to pay
\noff huge debts.<\/p>\n
\"We also had to consider maintenance costs, salaries for
\nemployees and so on. Following that, we found the 25 percent
\ndecrease to be the most reasonable.\"<\/p>\n
The governor said he would ask members of his staff to soon
\nmake an explanation before the City Council.<\/p>\n
Meanwhile, head of the council's Commission C for financial
\naffairs, Amarullah Asbah, warmly welcomed the tariff decrease and
\nsaid: \"We are waiting for the executive's explanation on it.\"<\/p>\n
He recommended that the move should be followed by efforts to
\nreduce leakages in water production and distribution, estimated
\nto reach up to 40 percent. (ind)<\/p>",
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