City water firm urged to abandon privatization plans

City water firm urged to abandon privatization plans

JAKARTA (JP): A consumer rights advocate said the city-owned
Water Company (PDAM) should stop its privatization plans, fearing
unaffordable water fees.

Indah, an executive secretary at the Indonesian Consumers
Foundation, yesterday said private companies only focus on
gaining back their investments.

"The administration should increase its employees' efficiency
in order to improve public facilities," instead of seeking
solutions through privatization, Indah said.

She was referring to PDAM's plan to cooperate with PT Garuda
Dipta Semesta of the Salim Group, owned by conglomerate Sudono
Salim, and PT Kekarpola Airindo, owned by President Soeharto's
son Sigit Hardjojudanto.

The agreement between the municipality and the companies is
scheduled to take place in December. The deal, with a value of
US$250 million for the first five years, incorporates the French
Lyonnaise des Eaux, and the British Thames Water International.

The 25-year profit sharing scheme involves the construction of
a new pipe network, and a treatment plant in East Jakarta. The
plant will produce 6,000 liters of water per second from the West
Java's Jatiluhur dam.

City administrators have previously reassured consumers the
agreement will not result in high tap-water fees.

Governor Surjadi Soedirdja, and the management of the water
firm, have said the municipality has total authority to set an
affordable price.

PDAM director, Syamsu Romli, said the administration would not
increase the tap water price until 1997.

The privatization plan is expected to improve the company's
services, and reduce water leakage by 10 percent.

Surjadi and city councilors have repeatedly criticized the
management of the city-owned water firm for inefficiency and
water leakages.

For years, the firm hasn't managed to extend services beyond
40 percent of Jakarta's households, which now reach 1,640,380
families.

But Indah said under the 1945 state constitution, public
facilities must be managed by the government.

She cited examples of other countries such as Malaysia and
Singapore, where the government fully manages the drinking water
supply.

"In Malaysia, the water installation is even guarded by
military officers, to guarantee safety," she said. (02)