Governor okays PAM Jaya privatization
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)