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)