Governor raises water rates by 63% for poor
Damar Harsanto, The Jakarta Post, Jakarta
The city administration raised on Friday water rates for low- income home owners Jakarta by as high as 63 percent, while middle and upper-income citizens and commercial enterprises will only pay between 6 percent and 17 percent more.
Jakarta Governor Sutiyoso said water rates for orphanages, social and religious buildings, very small homes and hospitals would increase from Rp 550 to Rp 900 a cubic meter, an increase of 63 percent, beginning July 1.
The rates for middle-upper income people and commercial centers, meanwhile, rose by between 6 percent and 17 percent, depending on the customer group.
While the rates system is progressive, with poorer water users charged less than wealthier ones, the increase means lower income groups are shouldering more of the rise.
On average, water tariffs increased by 9.49 percent.
Sutiyoso said the increase was much lower than proposed by PT Thames Pam Jaya and PT Pam Lyonaisse Jaya, which had sought an average across-the-board increase of 18 percent.
"I deem the increase proposed by tap water operators as too high. That's why I did not accede to their demands. What I had in mind was poor residents," Sutiyoso said at City Hall.
However, lower-income customers living in modest houses and those who run social and religious foundations, like orphanages, mosques and churches, will now have to dig deeper into their pockets with the 63 percent increase.
Residents with larger homes would enjoy a slighter increase from between 8 percent to 11 percent, while industrial and business institutions, including hotels and restaurants, would pay 6 percent more.
The lowest hike went to the "special zone" customer group, which includes Tanjung Priok Port, with a 5 percent increase.
The hike was the second six-month automatic rise as part of the plan to pay off city-owned tap water operator PAM Jaya's debts.
PAM Jaya owes around Rp 600 billion to two foreign partners, British PT Thames PAM Jaya (TPJ) and French PT PAM Lyonaisse Jaya (Palyja), and Rp 1.6 trillion to the Ministry of Finance.
On Jan. 10, the city administration increased tap water rates by between 4 percent and 16 percent. The increase was announced only on February, almost two months after the increase took into effect.
Palyja, a subsidiary of France's ONDEO (formerly Lyonaisse des Eaux) serves customers in western Jakarta, while TPJ, a subsidiary of Britain's Thames Water International, supplies tap water to the city's east.
City Water Regulatory Board head Ahmad Lanti lamented the low rate increase and warned of more delays in the payment of PAM Jaya's debts, which would mean consumers were burdened with regular rates rises for longer.
"According to our calculations, the debts could be paid off in 10 semesters, or in five years until 2009, on one condition; that the administration goes with the request (proposed by the operators). With the approved 9.49 percent rise, we will certainly see another delay in the repayment of the city's debts," Lanti told The Jakarta Post.
Lanti said Jakartans would bear the brunt of the debt repayments in increased rates. Slowing down the repayment would only mean citizens had to endure regular six-month rate increases for longer -- until 2015, he said.
The six-month rate increase plan was approved by the City Council on July 23 last year.