Class action sought over water rate hike
Bambang Nurbianto, The Jakarta Post, Jakarta
Some water consumers are threatening to file a class action against the city administration and the City Council if Governor Sutiyoso's proposal for a 45 percent rise in water charges is approved by councillors.
Jakarta Tap Water Consumers' Community (Komparta) chairman Achmad Djiddan Safwan said on Friday that an increase would only be acceptable if the city water company and its private sector partners improved their services.
"Without better services, we will never agree to any proposal to increase water charges," he told a press conference while simultaneously launching the organization here.
Djiddan claimed that his organization had the support of approximately 200,000 water consumers out of a total of about 650,000 in the city.
Responding to a demand from the private water utilities, PT Thames Pam Jaya (TPJ) and PT Pam Lyonaisse Jaya (Palyja), Sutiyoso on Thursday proposed the 45 percent increase in water charges to the City Council.
The new water charges are expected to come into effect early next month.
Low-income families in the city will find their difficulties compounded in April as Sutiyoso has also submitted a proposal for a rise in economy class city bus fares by up to 27 percent to the City Council, which increase is also expected to come into effect next month.
Djiddan criticized the city administration for bowing to the wishes of its private sector partners. TPJ is a subsidiary of Britain's Thames Water International, and Palyja a subsidiary of France's ONDEO (formerly Lyonaisse des Eaux).
"Before the two foreign partners became involved in water management in 1998, Pam Jaya was able to contribute between Rp 3 billion and Rp 10 billion to the city budget. But now, the water companies cannot even properly serve their customers," he asserted.
The agreement between the city and the private sector water utilities is due to last for 25 years.
According to Djiddan, the collaborative venture between Pam Jaya and its partners was unhealthy as Pam Jaya found itself in a very weak position.
He cited as an example the fact that the foreign partners received 50 percent of the income from fines imposed on customers, but Pam Jaya and the city administration had to bear all the risks arising from the sluggish bureaucratic process.
Water Regulatory Board chairman Achmad Lanti had earlier said that the two companies produced about 500 million cubic meters of water per year, but 49 percent of this water was lost due to illegal connections and leakage.
The chairwoman of the City Council financial affairs commission, Anna Rudhiantiana Legawati, said she could understand the need for the increase, but the figure proposed was too high.
"I think 45 percent is excessive. Therefore, we will discuss the proposal carefully and hopefully the result of this will be announced next week," Anna told the press on Friday.
The current price of water in Jakarta averages Rp 2,700 per cubic meter while the cost of production, according to an official from city-owned water company PAM Jaya, is Rp 3,100.
Since PAM Jaya signed contracts with its two private sector partners, water charges have been increased twice, by 20 percent in 1998 and by 35 percent in 2001.
Yet, the city-owned company has suffered some Rp 700 billion in losses due to -- it claims -- increasing production costs.