City authorities want 6% to 49% hike in tap water fees

JAKARTA (JP): The city is proposing a hike in tap water fees, ranging from 6 percent to 43.09 percent.

Governor Sutiyoso said Tuesday the increase was needed to cover the rising operating costs of the city water companies.

"We are forced to do this. The hike has been delayed for three years, causing a major deficit for the company," said Sutiyoso, after a meeting with directors of the city tap water company PAM Jaya and its two foreign partners.

"We aim to receive some Rp 1 billion from the city tap water company next year, and a total of Rp 15 billion in 2005 with the new tariff," the governor said.

The proposal divides water consumers into seven groups. The first, comprising charity and worship facilities, apart from public water sources, will be charged an average increase of 6.67 percent.

The second group -- government hospitals, "very simple" households, apartments, and gas stations, -- are charged a 6.04 percent in average increase.

The third group, comprising "simple" households and apartments, will increase 14.83 percent.

"Medium" households and apartments in the fourth group are proposed to pay an average increase of 30.32 percent.

The fourth group is to pay an average increase of 43.09 percent -- these include mansions, embassies, government offices, private institutions, colleges and universities, the military, small businesses, luxury apartments, restaurants and private hospitals.

A hike of 42.47 percent is proposed for star hotels, night clubs, banks, service stations, high rise buildings, factories and the vast Ancol recreational parks and real estate in North Jakarta.

The Tanjung Priok seaport operator will be charged an increase of 34.62 percent, according to the proposal.

PAM Jaya Director Mujahim Muchtar, said the company had suffered a deficit of Rp 300 billion since 1998.

"The hike will hopefully improve the quality of tap water and the service provided by the company," he said.

Sutiyoso said cross-subsidies would be applied in the new fee.

"The fee will lift the cost per cubic meter of water consumed each month. For example, a middle income family who consumes an average of 20 cubic meters of water per month will pay Rp 28,000 from Rp 19,900," Sutiyoso said.

"The tariff has been evaluated by an independent team to establish an effective system for PAM Jaya and its foreign partners," he added.

PAM Jaya established a partnership in 1997 with British-based Thames Pam Jaya (TPJ) and French-based PAM Lyonnaise Jaya (Palyja) for a 25 year contract.

Customers now pay Rp 2,600 (25 U.S. cents) per cubic meter to PAM Jaya, which pays Rp 3,000 per cubic meter to the foreign firm.

It was reported earlier that Palyja had planned to invest more than Rp 100 billion this year for the improvement of water quality, to renovate and to extend the water distribution system.

Under the contract starting in 1997, Palyja supplies tap water to the western part of Jakarta, serving some 210,000 customers, while Thames Pam Jaya serves some 300,000 PAM Jaya customers in the eastern part of the city.

The last hike of 25 percent on tap water was applied in 1998, also due to PAM Jaya's operational costs.

The decision was strongly criticized by customers complaining that it was an improper move during the crisis.

There have also been many customer complaints about poor water quality. (07)