Council vows to reject water charge hike

Council vows to reject water charge hike

Ahmad Junaidi, The Jakarta Post, Jakarta

The City Council promised on Thursday that it would reject a
proposal by city-owned water utility PAM Jaya and its foreign
partners to increase water charges, citing the bad service and
poor water quality provided to consumers.

"We will reject the proposal. They should first improve their
service and the quality of their water," Councillor Syamsidar
Siregar of the National Mandate Party (PAN) told reporters after
a meeting between the City Council and the companies.

Syamsidar, who is a member of the council's Commission C for
financial and budgetary affairs, viewed the service provided by
the foreign partners as being no better than that provided before
PAM Jaya entered into collaborative ventures with them in 1997.

"I was once asked to pay the same bill three times although I
had already paid it," she said to back up her allegations of poor
service.

During the meeting, PAM Jaya and its partners, PT Thames Pam
Jaya (TPJ) and Pam Lyonaisse Jaya (Palyja), revealed their plan
to propose an increase of 35 percent in water charges.

"I hope the new charges will be decided on in December this
year," TPJ's director for communications and external relations
Rhamses Simanjuntak told reporters after the meeting.

He said charges had only been raised once -- last October --
since the foreign companies started their collaboration with PAM
Jaya five years ago.

He claimed the increase was needed to cover an increase in
operating costs and inflation since 1997.

"Actually, the charge increase is not related to service. But
we will continue improving our service," Rhamses said.

Last October, charges were raised by 35 percent to between Rp
2,000 and Rp 3,000 per cubic meter.

During the meeting, PAM Jaya revealed that it still owed some
Rp 1.7 trillion to the World Bank, which extended a loan before
the water service was partially privatized five years ago.

Before the privatization, the company had run up big losses
over several years.

Since the cooperation agreements were signed, the city-owned
company has reportedly suffered some Rp 700 billion in losses due
to -- it claims -- increasing production costs.

The firm said that its cost of production was Rp 3,400 per
cubic meter but it sold the water to consumers at an average cost
of Rp 3,000.

Rhamses said the firm's Rp 1.7 trillion debt had been
rescheduled and was expected to be fully paid off in 2013 when
the collaboration between PAM Jaya and its private sector
partners would end.

He said the deficit problem could be solved if the city
administration and the council approved the proposed increase in
water charges.

"I think that in the next five years, the company will become
profitable if the charges are increased every six months or once
every year," he said.

TPJ, which is a subsidiary of Britain's Thames Water
International, supplies customers in the eastern part of Jakarta
while Palyja, which is a subsidiary of France's ONDEO (formerly
Lyonaisse des Eaux), serves customers in the western part of
Jakarta.

The collaborative ventures between PAM Jaya and the foreign
firms were earlier aimed at improving public service as well as
the management of PAM Jaya, which was widely seen as inefficient
and corrupt.

However, the public are still complaining about bad service
and poor water quality.

Many residents in various part of the city who were
interviewed by The Jakarta Post complained about the dirty water
flowing from their taps. As a consequence, they continued to
purchase bottled mineral water for their drinking requirements.

Mochamad Ali, a hydrology expert from the Ministry of
Resettlement and Regional Infrastructure warned earlier that tap
water might not be safe to drink, even after it had been boiled.

The Indonesian Consumers Foundation (YLKI) and an urban policy
watchdog also blasted the city administration for its failure to
provide clean water and adequate service.