Discrepancy found in water firm debt
Damar Harsanto, The Jakarta Post, Jakarta
The City Water Regulatory Agency has revealed a discrepancy in the amount of debt owed by city-run tap water operator PD PAM Jaya to its two foreign partners, British firm Thames PAM Jaya (TPJ) and French firm PT PAM Lyonnaise Jaya (Palyja).
"An audit report by the Development Finance Comptroller (BPKP) stated that the operator's debt was smaller than what has been claimed by the two foreign partners," agency head Achmad Lanti told The Jakarta Post on Thursday.
Lanti, however, declined to divulge the figure, saying that the amount was currently being discussed by the related parties including those representing PD PAM Jaya, TPJ and Palyja.
Both TPJ and Palyja earlier claimed that PD PAM Jaya's debt stood at Rp 990 billion (US$116.5 million), but the figure from the comptroller's audit report was not available.
The debt was the main reason behind the decision of the Jakarta administration to raise the tap water rate early this year by 30 percent on average to enable PAM Jaya to repay its debts to its foreign partners.
The rate hike was first proposed in late November although city councillors had earlier demanded the increase to be delayed, pending an audit by an independent consultant.
On the first day of 2004, the administration increased the rate amid public outcry. Jakartans have been complaining about the operator's poor service and constant disruption in water supply.
PAM Jaya plans to pay 24 percent of its debt in installments to TPJ and Palyja this year.
Councillor Agus Darmawan of Commission B overseeing economic affairs called on the administration to submit the audit report to the City Council.
He promised that the council would support any moves by the administration to repay its debt to private companies as long as the debt was audited by an independent audit body first.
Aside from the audit report from the comptroller, an International Combined Experts (ICE) team of London-based independent auditor Stone Webster and its local experts already finished its report in mid March.
The audit was a part of a grant from the Asian Development Bank (ADB) given to the Ministry of Resettlement and Regional Infrastructure.
A reliable source with the administration said that the audit report was currently being discussed by a joint team from the ministry and the administration.
"Besides the report, the ICE team also came up with several recommendations on calculation, for instance in water charges and capital expenditure, in order to prevent a further deficit in the tap water operation," the source said.
The joint team is scheduled to submit the audit report and recommendations from the ICE team to Minister Soenarno and Governor Sutiyoso by the end of this month.
Sutiyoso assured the public that his administration would not raise the tap water rate again.
"There is no plan to increase the rate as everything is in accordance with the existing contract (with TPJ and Palyja)...," he said. "We only need to complete the basis of the calculation in the tap water business by next month."