Deal on water agreement expected next month

JAKARTA (JP): City water company PDAM Jaya and its two foreign partners -- PT Pam Lyonnaise Jaya (Palyja) and PT Thames Pam Jaya (TPJ) -- have resolved their differences and are expected to sign a final agreement on the city's water management next month, an executive said on Thursday.

"We have agreed on some important issues on the water management deal, including on water charges. We hope we can reach an agreement in one month," said Palyja commissioner Bernard Lafrogne.

Lafrogne said Palyja and TPJ had agreed to lower their water charges to rates close to the water tariff which is paid by the public.

Water tariffs per cubic meter for those living in affluent areas are currently set at up to Rp 1,845, commercial users pay between Rp 1,350 and Rp 3,100, and industrial users are charged between Rp 1,175 and Rp 5,050, depending on consumption.

The tariff for small-scale users living in cheap accommodation is set at Rp 390, while social service buildings, including orphanages, places of worship and hospitals, must pay between Rp 390 and Rp 930.

Lafrogne said that because of the varying charges, Palyja and TPJ, subsidiaries of respectively French Suez Lyonnaise des Eaux and British Thames Water International, would only be able to reach a break-event point after 10 years, starting from the signing of the agreement last year.

"But our shareholders would understand. It's a long term investment," he said.

The two foreign water firms earlier estimated that they could distribute dividends seven years after the signing of the agreement.

Lafrogne said that once the renegotiation agreement was reached he did not expect PDAM Jaya workers to continue with their protests.

According to Lafrogne, his firm invested Rp 135 billion (US$18.4 million) last year for infrastructure projects, including the installation of pipelines and maintenance projects.

He said Palyja had invested this year an estimated Rp 350 billion and would invest another Rp 200 billion in 2000 for water projects.

Palyja's president Pierre Alla inaugurated on Thursday the completion of the Rempoa-Kebon Jeruk pipeline project worth Rp 80 billion.

"The 12-kilometer pipeline will serve 1.3 million people in the western part of Jakarta," Alla said in a ceremony in Kebon Jeruk, West Jakarta.

He said the pipeline project, which started in July last year, involved eight local contractors and suppliers.

The firm is now developing a distribution and reservoir center in Kebon Jeruk which will be completed in November, Palyja's construction manager Mark Hunting said.

Mark said the new distribution and reservoir center would improve the city's water distribution capacity. (jun)