Fri, 11 Apr 2003

Hike in water rates evinces corrupt administration

The Jakarta City Council has agreed to a 40 percent increase in tap water rates effective as of April. Criticism has emerged for the policy as tap water producer PT PAM Jaya, with its private partners PT Thames PAM Jaya (TPJ) and PT PAM Lyonnaise, has not improved its services. Azas Tigor Nainggolan, coordinator of Jakarta Residents Forum (FAKTA) discusses the issue with The Jakarta Post's Soeryo Winoto.

Question: How do you see the increase in the tap water rates, while many consumers are still voicing complaints about poor service?

Answer: The decision to increase the tap water rates is madness. Services have to be improved with or without an increase. My friend said that the water pressure was very weak in his neighborhood. In my residence in Matraman, Central Jakarta, there is no tap water in the day. Pressure is normal at night. It has been like that for years.

Q: Do you think the cross-subsidy scheme applied in the new rates is popular and useful?

A: No! That's a lie. Customers classified as Group IVA and IVB (luxury houses, government offices, foreign representative office, hotels, motels, saunas, nightclubs, bars) are mostly groundwater users. The target of the new rate is in fact the Group III (A and B); houses in the simple to medium range.

That's a big lie. The city administration and its private partners in businesses are familiar with such a public lie.

The process of the joint venture (between the city administration and its private partners) in the tap water business was spiced with collusion. No wonder the business is now not running well.

Q: Could you give a concrete example of collusion?

A: How could water management be privatized? Article 33 of the 1945 Constitution says that earth and water is controlled by the state for the sake of people's prosperity. Water is a vital human need.

The collusion was clear when the city administration and the City Council could do nothing but agree when the companies proposed the increase in water rates. Their reasons for approving the new water rates are unclear. Some officials said that with new rates PAM Jaya would be able to extend its distribution network. Others said that the new rates would be very important for the company's development, and some others said the new rates would make it possible for PAM Jaya to help its partners to return their debts.

The private partners should have covered all their future expenditure with their capital invested in the joint cooperation with PT PAM Jaya. Consumers should not be burdened with all the expenses through the water charges. What did they (the private investors) bring into the deal? It's an unprofessional practice.

Q: Then you don't think that the cooperation between PAM Jaya and its two private partners reflects professionalism in tap water management?

A: No! They (the two private investors) whose head offices are based in Europe provide no guarantee that the (clean) tap water they produce is potable water. While the European standard is that clean (tap) water is potable water.

The tender for foreign private investors to manage the tap water with PAM Jaya was opened when Soeharto was still in power. I am suspicious something happened during the bidding.

Q: An institution called Tap Water Regulating Agency justified the increase in tap water price. What is the real status of the agency in the PAM Jaya management?

A: The agency is useless. It's just a part of the extortion and exploitation of Jakartans' assets. The existence of the agency has made things worse. We have the City Council. The establishment of such an a agency is just a maneuver or trick to benefit certain parties.

Q: In the early 1980s all officials involved in the Jakarta tap water business said that PT PAM Jaya had suffered big losses due to leakage: Technical leakage, old broken pipes, and administrative leakages which included inefficiency and water theft. Now, after 20 years, leakage is still cited as one of the major causes of the losses. Your comments?

A: That's that. Obviously professionalism has been absent for a long time.

Since governor Ali Sadikin was replaced (in the 1970s) Jakarta's assets have gradually vanished. Since then the governors have been competing to "sell" or at least to privatize the assets ... including PAM Jaya.

This all proves that corrupt system within the city administration started a long time ago. Therefore, the system must be overhauled.

Q: In the 1980s several people were jailed for stealing PAM Jaya water through illegal means. But nothing else happened. Has PAM Jaya made a serious effort to deal with water theft and to clean up corruption?

A: The situation is not that simple. The police were part of the conspiracy (water theft). So water theft and bringing people to court was part of PAM Jaya's ploy at that time.

The problem in the past was water theft, now the problem is the sale of PAM Jaya. This is the peak of the issue.

Q: You are very critical of the city administration. Is that right? Why?

A: I've been living in the capital city since the 1960s. I see and hear of the same unresolved problems from year to year. How could the city administration make the same mistakes all the time? Yet if we give a positive input, the response is negative.

I just say there is no professionalism. We cannot hope for much from the city administration, including the governor, in the development of Jakarta and the prosperity of the residents. They are engaged with the same classic problems. The city administration must clean itself up totally (from corrupt officials). This is a must!

None of the officials have a clear vision to serve the public. They just think about how they could benefit from their position.

As citizens we pay taxes, thus we deserve better services from the administration. But what do we get in return?

Q: FAKTA is submitting a class action suit against the Jakarta administration over the increase in tap water and electricity charges. What do you really expect from the move?

A: The point is not win or lose. It's a question of a lesson in law and politics for the citizens. When we a submitted class action suit against the administration over the flooding, we were aware that we would lose.

We just want to stimulate people's awareness of the importance of being aware of what is going on. The residents must not be ignorant, apathetic or indifferent toward their own city. If the residents are ignorant, apathetic or indifferent this means that the administration is not legitimate. This is very dangerous.