Aussie firm to manage city's domestic sewerage

Ahmad Junaidi, The Jakarta Post, Jakarta

The city administration announced on Thursday it would privatize its sewage management and cooperate with waste management firm Global Grid of New South Wales, Australia, which would invest Rp 50 trillion (about US$5.3 billion) in the project.

Assistant for development affairs for the city secretary, Irzal Jamal, revealed that the foreign firm would implement its investment over a 25-year period.

"We will sign a Memorandum of Implementation Agreement in June this year. We hope the project can start next year," Irzal said.

He said the firm would first invest US$5 million for a feasibility study this year, including making a map of the areas in Jakarta.

The company, which will start the construction of pipes next year, will hand over the facility in 25 years under a Build Operate and Transfer (BOT) scheme, he said.

"After 25 years, all of the facilities will belong to us," Irzal said.

He said the company would cooperate with the city's sewage firm PD PAL Jaya, which currently serves the Setiabudi area in South Jakarta, since the latter could not manage all Jakartans' waste.

He said the cooperation was sought to prevent more environmental damage, especially, due to high contamination of the E coli bacteria in the city's ground water.

"The Australian firm uses high technology which will not harm the environment," Irzal claimed.

Separately, councillor Tjuk Sudono welcomed the plan to cooperate with the Australian firm to handle sewage management, but suggested that the domestic partner should be a private firm, instead of PD PAL Jaya.

"If we want full privatization, we should have a private firm as the domestic partner. We, the council, just have to make a regulation on the charges to households for the sewage management," Tjuk of the National Mandate Party (PAN) said.

He rejected a possibility that the foreign firm would only use facilities that belonged to PD PAL Jaya without implementing their investment plan.

He said the cooperation with Global Grid would be different from the administration's earlier cooperation with two foreign firms, PT Thames Pam Jaya (TPJ), a subsidiary of British firm Thames Water International and PT Pam Lyonaisse Jaya (Palyja), a subsidiary of French Lyonaisse des Aux, in managing city's tap water management.

"The cooperation with Global Grid uses the BOT scheme. We just make the regulations without any financial investment," he said.

He said the regulations would stipulate the percentage of the charges that would be received by the administration and the firm.

Many councillors have repeatedly criticized the agreement with PT TPJ and PT Palyja which they perceive only brought profit to the companies at the expense of the city.

"The agreement with TPJ and Palyja was a mistake since the beginning. But we have made an improvement," Tjuk of the City Council's Commission D for development affairs said without giving further explanation.