Expert call on city to regulate water firms

Urip Hudiono, Jakarta

An expert witness told the Central Jakarta District Court on Thursday that the city administration must regulate private water companies to ensure they provide quality service to the public.

"The administration must ensure that the current water rates indeed match the companies' service," public utilities and water resource expert Sri Bintang Pamungkas said in his testimony. "It must also ensure that every resident has full and equal access to the companies' service."

Sri Bintang, who holds degrees in civil engineering and industrial economics, testified for a civil lawsuit filed by the Jakarta Water Consumers Community (Komparta) against foreign water firms PT Thames PAM Jaya (TPJ) and PT PAM Lyonnaise Jaya (Palyja).

TPJ is a joint venture between city-run water operator PD PAM Jaya and British holding company Thames Water International, while Palyja is a joint venture between PAM Jaya and French firm Suez Lyonnaise des Eaux.

Sri Bintang explained that as water was a public utility, the administration must have full regulatory rights over it although it has already handed over the management of the utility to private companies in an effort to improve the service.

"Since the main purpose of the cooperation is to improve the service, the administration must ensure that the private firms do just that," he said.

He suggested the administration conduct a thorough audit of water operators, taking into consideration the quality of their service and operational costs each time they request a rate hike.

"Through such an independent and transparent audit, the administration can be sure that the companies are not just profiting from a public service," he said.

Sri Bintang also suggested that the administration require companies to implement a cross subsidy scheme for billing customers.

"They could charge higher fees to high-income customers to help subsidize the low-income customers," he said. "With this kind of pricing scheme, the water service will hopefully be more affordable and accessible to all customers."

Komparta has been in a legal row with TPJ and Palyja, following the companies' continuous raising of their rates, despite complaints from customers that they have done nothing to improve their service.

The consumer group is asking that the rate hikes be canceled and that the companies provide better service to their customers.

In a separate class action lawsuit against the administration, Komparta won a ruling from the court that last year's 40 percent rate hike be postponed. The administration has appealed.