Clean water tariff structure must be negotiable: Radinal
Clean water tariff structure must be negotiable: Radinal
JAKARTA (JP): Minister of Public Works Radinal Moochtar said
here yesterday that the tariff structure for clean water must be
negotiable with private investors in order to ensure cost
recovery.
Addressing a session at the World Infrastructure Forum-Asia
1994, Radinal said the tariff-flexibility policy hopes to attract
more private investment in the area of water supply.
The minister said 73 percent of investments needed for water
supply, which are projected to reach US$7.8 billion during the
next five years, is expected to come from the private sector.
When asked about water as a public commodity, Radinal said the
government will take a better look at the matter and added, "as
long as it is regarded as a public commodity, it is difficult for
the private sector to enter. In this case, the government must do
it alone," he told journalists after addressing the session.
The government, with its limited funds, will concentrate on
the development of water supply only for the urban poor, the
rural sector and for small urban centers.
Facilities for the supply of clean water for medium, large and
metropolitan centers such as Jakarta, Medan, Surabaya and
Bandung, will be offered to project creditors under bilateral and
multilateral arrangements and to the private sector.
Better service
The private sector is better suited to serve urban centers
which have higher service standards, and also higher tariffs.
"Look at the Kemang Pratama water supply in Bekasi of West
Java. The supplier charges higher tariffs than those set by the
city water company PDAM Jaya, but consumers are satisfied with
the service," the minister said.
About 50 percent of the urban population is served through
pipelines but only 20 percent of them is served with proper
direct connections. This indicates potential for rapid expansion
of the service through private investment.
At the moment, the government is examining proposals by
private sector companies for two water treatment projects in
Jakarta with an investment of US$280 million, two transmission
pipeline projects at $45 million, two water treatment projects in
Surabaya at $85 million and one water treatment project in
Semarang with $60 million investment.
The government will offer 20 new water supply projects during
the next six years. They are intake, water treatment, reservoir
and main trunk projects in Tangerang, Bogor, Sidoarjo, Bandung,
Medan, Pekanbaru, Ujungpandang, Bandar Lampung, Lhok Seumawe and
Balikpapan. (rid)