Thu, 03 Apr 2003

Fakta to file class action against water charge hikes

Bambang Nurbianto, The Jakarta Post, Jakarta

The Jakarta Residents Forum (Fakta) will establish a team to accommodate people who want to join a class action lawsuit against the city administration and water operators over the 40 percent increase in water rates on Tuesday.

"We are inviting the people to lodge their complaints on the increase," Fakta Chairman Azas Tigor Nainggolan told The Jakarta Post Tuesday.

The Jakarta City Council voted Monday night to increase water charges by an average of 40 percent. It was lower than Governor Sutiyoso's proposal, which was 45 percent. The proposal was a response to the requests of water operators.

Before it was increased, water, on average, Rp 3,100 (about 35 US cents) per cubic meter. Now it is Rp 4,340.

The increase was the third since the city administration signed an agreement with two foreign investors in 1998. The first was in 1998 (20 percent) and the second was in 2001 (35 percent).

A number of non-governmental organizations say the tariff should not have been increased before the water operators managed to significantly reduce water leakage, which is 45 percent of their total production.

Among them were the Indonesian Consumers Organization (YLKI), the Jakarta Drinking Water Consumers Community (Komparta), the Water for All Group and Community Association for Humanity and Justice (Humanika).

Komparta has also threatened to file a class action lawsuit.

Tigor said those who wanted to lodge complaints could call (021) 371-5730 or send an e-mail to

Assistant to the city secretary for development affairs Irzal Djamal said earlier that the proceeds of the water charge increase would be used to cover inflation and to pay debts owed by city-owned water company Pam Jaya. The debts have reached Rp 1.7 trillion to the central government and Rp 630 billion to the investors.

Since 1998, Pam Jaya has been working with PT Thames Pam Jaya (TPJ), which is a subsidiary of Britain's Thames Water International, and PT Pam Lyonnaise Jaya (Palyja), a subsidiary of France's ONDEO (formerly Lyonnaise des Eaux).

The companies, in 1998, set a target to reduce leakage from 60 percent to 30 percent within five years.

The agreement was restated in October 2001 but did not clearly stipulate targets to reduce leakage. It also still places Pam Jaya and the City Administration in a very weak position.

The weak position of Pam Jaya, for example, was seen from its loan to the investors. The loan was a cumulative figure of shortfalls between the water charges from the operators and water prices sold to the consumers.

So far the water charges from the operators were higher than the water prices sold to the public.