Govt to reevaluate PDAM Jaya's accord with private firms

JAKARTA (JP): The city administration will reevaluate its cooperative agreement with private companies in the management of city-owned water company PDAM Jaya and possibly cut tap water tariffs, Governor Sutiyoso said yesterday.

Sutiyoso said that representatives of the two private companies -- PT Garuda Dipta Semesta (GDS) and PT Kekar-Thames Airindo (Kati) -- had vanished without prior notification following the eruption of rioting last week.

"Our business partners have abandoned their responsibilities. That's why I should take over the management, because I cannot neglect the people's need for water," he said.

The 25-year cooperative agreement between PDAM Jaya and the two firms was signed on Feb. 5. Kati is owned by former president Soeharto's eldest son Sigit Hardjojudanto, while GDS is a subsidiary of a business group owned by tycoon Soedono Salim.

After the signing of the agreement, PDAM Jaya announced water tariff increases of an average of 25 percent, effective from April 1. The decision was strongly criticized by customers, who complained the new tariffs, levied at a time of crisis, were an unnecessary additional burden on them.

Most heavily affected by the tariff increases were affluent customers, who faced an increase of up to 65.71 percent. The company, however, cut prices by 3.85 percent for special customers like orphanages, dormitories run by noncommercial institutes and places of worship in an effort to maintain its cross-subsidy policy.

Sutiyoso said he did not see any improvement in PDAM Jaya's service, even after the tariff increases.

"The quality of the service instead decreased, and the people blamed the city administration for the higher tariffs," he said.

The governor said that due to the current conditions, he would reduce water tariffs to bring them into line with the people's purchasing power.

"Purchasing power has dropped day by day, how can I maintain and justify the tariff increases?" he asked.

Head of City Council Commission C for financial affairs Amarullah Asbah warmly welcomed the governor's initiative, saying it was a wise step.

"I support the governor's plan because the cooperative agreement with the two private companies only burdened the people. Furthermore, it is not of any benefit to the city administration, as the governor has said," he said.

According to PDAM Jaya data, the company had 475,103 customers in April with combined incomes of Rp 28.12 billion. In January, before the cooperation agreement was signed, the company had 460,841 customers with incomes reaching Rp 30.32 billion.

Reform

Meanwhile, non-governmental organizations have urged the administration to follow the wave of reform sweeping through the country.

Chairperson of the Jakarta Legal Aid Institute Apong Herlina and vice chairman of the Indonesian Consumers Foundation Agus Pambagio said that it was time for the administration to reevaluate cooperation with the private sector.

Agus said that people had not believed that cooperative agreements with the private sector were free from collusion, corruption and nepotism for a long time.

"It has become a 'public secret' that development projects in the city are not awarded through an open bidding process," he said, citing the privatization of PDAM as an example.

Apong said that now was the right time for the administration to become more people oriented.

"Policies should become more transparent and more people oriented," she reiterated.

Answering the NGOs' appeal, Sutiyoso said, "I will start by reevaluating PDAM Jaya's cooperation with the private sector." (ind)