City to increase groundwater tax

The Jakarta Post, Jakarta

Trying to curb the use of groundwater by commercial industries, the city administration plans to increase the tax on groundwater water, by up to five times of that on tap water.

Head of the City Mining Agency Setiawan Kanani told the press at City Hall on Wednesday, that the regulation would be stipulated in a bylaw which was being drafted by agency officials.

"The policy is expected to discourage the use of groundwater by industries," said Kanani.

However, he stressed, the high tax of groundwater would only apply to areas where tap water was accessible.

While the tax on groundwater, for those without access to tap- water, would be the same as the tap water tariff at the most, he added.

He also said, the tax would only be imposed on those using groundwater for commercial purposes. The use of groundwater by residents would be tax-free.

The tariff on tap water for industrial purposes -- supplied by the city-owned PT Pam Jaya -- is Rp 7,000 per cubic meter, while the current groundwater tax is only Rp 2,500 per cubic meter.

Kanani said the low tax on groundwater water had encouraged industries to exploit the resource, which had badly impacted the environment.

Commercial industries argue that the tap water company can not adequately supply them.

Environmentalists say, the three main areas of damage, due to the exploitation of groundwater, are: groundwater scarcity during the dry season, the increased seeping of sea water into groundwater, and land subsidence.

Kanani, however, admitted that much depended on the capability of the tap water company to supply enough water to subscribers.

But, PT PAM Jaya and its two foreign partners, PT Pam Lyonaisse Jaya (Palyja) and PT Thames Pam Jaya (TPJ) can only provide less than 50 percent of the water demands of subscribers.

During the current dry season, the companies struggle to meet demands, as they have less water available to them, mainly from Jatiluhur dam in West Java.

Kanani said the administration had encouraged PT PAM Jaya to improve their service to existing networks, as well as expanding their networks.

"With such a condition, the people need to be able to chose whether they use groundwater or tap water," he said.

"We could not force hotels, for example, not to use groundwater if the water supply from PT Pam Jaya is not enough... there is no alternative for them," he explained.

Kanani, however, could not say when the draft bylaw on groundwater conservation will be submitted to the city council as his agency is still concentrating on the draft bylaw on general mining in the city.