Governor raises water rates by 63% for poor

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.