Councilors want PDAM deals renewed

Councilors want PDAM deals renewed

JAKARTA (JP): The City Council strongly supports the
cooperative agreements on water management between city-owned
water company PDAM Jaya and its two foreign partners, but urges
the administration to review the deals, its speaker said.

Speaking in a monthly meeting with the media on Tuesday, City
Council Speaker Edy Waluyo said the city authority should arrange
"renegotiation talks" for the new agreements immediately.

The new deals should then assure that none of the parties
involved, including the general public, city administration, PDAM
Jaya and its foreign partners, would suffer any financial losses.

"We (members of the City Council) have agreed that the
authority should continue the cooperation deals.

"But we also appeal for immediate renegotiation talks that
would change the substance of the (existing) agreements to assure
that all parties involved would lose nothing," he said.

Edy suggested that a meeting for the review of the existing
cooperation deals should be held shortly after the Nov. 10
through Nov. 13 special session of the People's Consultative
Assembly (MPR) here.

"We have to hold new negotiations as soon as possible.
Otherwise, the city administration would suffer great losses," he
said, adding that the council would help supervise the meeting.

It appears that the council's proposal was in response to a
request made by lawyers of the Jakarta chapter of the Indonesian
Water Contractors Association (Akaindo), who visited the council
on Monday and asked the councilors to open a special meeting
between executives of the two joint ventures and the city
authority to review the cooperation deals.

The lawyers claim the deals between PDAM Jaya and its foreign
partners are illegal agreements because they were made in an
unfair bidding process.

The 40 lawyers also claimed the two foreign parties, French
company Suez Lyonnaise des Eaux and British company Thames Water
Overseas Ltd., had invested no money in the cooperation.

The foreign firms instead shared the money collected from the
customers' water bills, thereby inflicting the public with a
total financial loss of Rp 341.42 billion, they said.

The lawyers threatened to sue the foreign companies under
Indonesia's Criminal Code for corruption if their proposed
renegotiation talks failed.

The lawyers belong to the same team of lawyers that filed a
lawsuit in September at the Central Jakarta district court
against Governor Sutiyoso, PDAM Jaya and nine other parties,
including the two joint ventures, over the cooperative agreements
on water management in the capital.

The cooperative agreement between PDAM Jaya and Suez Lyonnaise
to form Pam Lyonnaise Jaya (Palyja) and PDAM Jaya and Thames
Water to set up Thames Pam Jaya (TPJ) was the result of
one-and-a-half years of negotiation under the coordination of
officials from the Indonesian ministries of home affairs, public
works, finance and the National Development Planning Board.

Both companies are responsible for managing, operating,
maintaining and improving the water supply system in the capital,
with Palyja controlling the western part of the city and TPJ the
north.

When contacted last night, executives of both Palyja and TPJ
warmly welcomed the council's idea for the talks.

"Actually, we're still negotiating with the city
administration to get an independent group of advisors sponsored
by the World Bank in a bid to get a very fair and transparent
contract," Bernard Lafrogne of Palyja said.

Nani Sariati, sales and marketing manager of TPJ, commented:
"We're very grateful for the idea to arrange a meeting,
especially if Akaindo members and their lawyers also attend it."

Both executives, however, strongly denied the claims by the
Akaindo lawyers.

"It's absolutely incorrect and groundless information. They
are irresponsible people," Nani replied, adding that TPJ had
spent Rp 163.6 billion over the last seven months, with the
revenue for the same period being Rp 44.4 billion.

According to Bernard, Palyja has invested, for example, some
Rp 175 billion for its project in Kebon Jeruk. "It's really our
money."

He said that Akaindo's accusation was therefore "a lie".

During the media briefing, councilor Eddy also pointed out
that the council had held a series of working session with PDAM
Jaya and its foreign partners and made an on-site inspection
last month to learn details of the water management cooperation.

Based on their findings, the council then issued a
recommendation to Governor Sutiyoso about the importance of
arranging renegotiation talks.

In the letter dated Sept. 16, the council also suggested the
governor disallow the two joint ventures of PDAM Jaya and its
foreign partners to collect money unless they could show tangible
accomplishments that benefited the public.

The foreign companies, the council said, should not use the
money they collect from the scheme as capital in the projects.
(ivy/bsr)