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.