Governor okays PAM Jaya privatization
JAKARTA (JP): Governor Surjadi Soedirdja has given a green light to the privatization of the city-owned water company, PAM Jaya, but has insisted that the administration set a reasonable price for the tap water.
The company's director, Syamsu Romli, said yesterday that the governor didn't want the privatization to hurt any party.
"The governor stressed that the cooperation with a private company must not harm public interest, yet it should improve the water company's services to public," Syamsu said.
He said that a Memorandum of Understanding between PAM Jaya, the Salim Group and PT Kekar Plastindo will be signed next month.
The Salim Group is owned by business tycoon Liem Sioe Liong, also known as Sudono Salim, while PT Kekar Plastindo belongs to Sigit Hardjojudanto, President Soeharto's eldest son.
Syamsu said that a rise in water rates should be in line with the guideline, as stipulated in the agreement. PAM Jaya has projected that, until the year 2000, there will be a one-time rise only.
"We expect the price will go up in 1997," he added, declining to go into details.
Next year
According to Syamsu, the agreements between PAM Jaya and the private companies will be signed this year, and the cooperation will be realized next year.
"We are still negotiating the total fee percentage for the private partners, as well as the total capital the companies will invest in the project," he said.
"The private companies will operate and manage all production and distribution facilities owned by PAM Jaya. They will also collect the rates from consumers," he said, adding that the companies will be granted a 25-year concession period.
PAM Jaya, he added, will be in charge of the planning, programming and supervising of the mechanism for the cooperation.
Syamsu also assured that PAM Jaya will neither lay off, nor fire any of its employees after the agreement is signed.
Syamsu said that the joint cooperation is aimed at increasing tap water distribution services. The level of water leakages is also expected to decrease after the involvement of private companies in the business.
In 1994, leakage levels reached 44.84 percent of the total production of 344,222 cubic meters. Only 189,879 cubic meters of the water reached consumers.
The city administration has vowed to reduce leakages to 30 percent.
At present, PAM Jaya is only able to serve 41 percent of Jakarta's 340,949 families.
"By expanding tap water distribution, we will be able to reduce the excessive use of artesian wells, which is dangerous to the environment," he said.(yns)