Councilor blasts governor over hike in tap water prices

Councilor blasts governor over hike in tap water prices

JAKARTA (JP): A city councilor lambasted Jakarta Governor
Sutiyoso yesterday over a decree he issued in April allowing a
gradual hike in tap water tariffs.

Lukman Mokoginta, head of the Indonesian Democratic Party
faction, said the decree would just eliminate the City Council's
right to be involved in the decision-making process.

"The governor has deviated from City Bylaw No. 11 on tap water
tariffs."

He said the decree, which gave the city-owned water company
PDAM Jaya the right to automatically set new tariffs at the end
of every six-month period, contravened the bylaw.

The bylaw states that the adjustment of tap water tariffs must
have the governor's approval and that PDAM and the city
administration must consult the City Council beforehand, he said.

"But the decree has given PDAM and its two private partners
the right to set and increase the tariffs without necessarily
asking for the council's opinion on it," Lukman said.

PDAM, which is privately run, has been cooperating with
President Soeharto's eldest son Sigit Hardjojudanto's company PT
Kekar-Thames Airindo (Kati) and tycoon Soedono Salim's subsidiary
company PT Garuda Dipta Semesta (GDS) since February. PDAM signed
a 25-year cooperation agreement with the two firms.

Lukman said the decree, which was issued on April 9, allowed
the three companies to independently calculate the tariff
elements and set prices in accordance with a formula which was
validated in the same decree.

The formula states that the tariff increase per cubic meter is
derived from dividing the integrated amount of cost elements,
including profit shares for Kati and GDS and regional revenues,
by the total volume of water sold to customers.

"The formula was developed by the companies and then ratified
by the governor without the council's consent," Lukman said.

"Then who would be responsible for checking on them? How would
we ever know that they are being honest and fair in making their
calculations of tariff adjustments in the future?"

Lukman said the tariff adjustment scheme served only to
benefit the companies, especially Kati and GDS.

"The two have a great interest in it because they invested a
lot of money in the project."

An executive from GDS denied yesterday the company's
involvement in the decree's formula-making process.

"We are not involved in determining the tariffs. That's solely
PDAM's business. Our responsibility is only to handle the
technical matters in the operational activities," she said.

Head of Commission C for Financial Affairs Amarullah Asbah,
from the Golkar faction, did not want to become engaged in an
argument over the validity of the formula.

"I think it's all right. It was just a product that resulted
from the agreement and cooperation between PDAM and the two
private companies," he said. "It could still be assessed by the
council afterward."

Amarullah said that it was more important to focus on the
outcome of the cooperation between PDAM and the two private
companies.

"We will see later. If the cooperation does not benefit PDAM
and the city administration, say if it does not bring more
revenue for the administration, it can be canceled," he said.
(cst)