City Council rejects privatization plans

JAKARTA (JP): The City Council has rejected the municipality's plan for private firms to cooperate with the city-owned water company because the administration did not give enough details on the cooperation.

The council said a lack of detail made it fear private company participation could affect city water prices, it was disclosed at a meeting Wednesday night.

City Council deputy chairman H.M. Djufrie, quoting the city administration's information, said the private firms would have been in charge of distributing water and billing the customers.

"We fear the private firms would have more authority than the city, which means they could raise tariffs unreasonably," Djufrie said.

Muhammad Banang, of the United Development Party faction, said the cooperation plan had to be more transparent before the council could approve it.

"As representatives of the people, the council cannot easily accept plans that could end up in burdening the people," Banang said.

Golkar faction member Ary Amier Armas asked why the plan was not submitted to the House of Representatives.

"If the plan comes straight from the central government, then it should have been submitted to the House of Representatives instead of the City Council," Ary said.

Although cooperation with private firms aimed to increase water quality and distribution services, the companies must guarantee prices would be affordable for everyone, he said.

Meanwhile, the Assistant to the City Secretary, Prawoto Danoemihardjo, said the city would not let private companies take control of water management and would like the council's opinions on the plan.

Earlier, the Ministry of Public Works approved four local and foreign private companies to join the city-owned water company.

Director of the water company, Syamsu Romli, said the project would start in June if an agreement could be reached by next month.

PT Garuda Dipta Semesta, managed by the Salim Group, and PT Kekarpola Airindo, owned by President's Soeharto's eldest son Sigit Harjojudanto, planned to carry out the project.

French firm Lyonnaise des Eaux and British firm Thames Water International would also be involved.

The water company predicted cooperation with the private sector would increase water quality and distribution services by up to 49 percent by next year.

It also predicted the city's running water would be drinkable by 2006. (02)