Jakarta quietly hikes water rates

Jakarta quietly hikes water rates

The Jakarta Post, Jakarta

The city administration has secretly increased tapwater rates by
between 4 and 16 percent, depending on the level of water
consumption and customer classification.

Jakarta water regulatory board chairman Achmad Lanti said at
City Hall on Tuesday that the increase took effect on Jan. 20 and
was one of the automatic water rate hikes that would take place
every six months for the next five years.

"We have decided to raise water rates this year and we will
continue increasing them every six months for the next five
years," Lanti said.

He did not explain why the water hike was only announced on
Tuesday, more than 10 days after it took effect.

Up until Jan. 20, poor consumers paid Rp 500 per cubic meter,
while well-off consumers paid Rp 9,100 per cubic meter. Under the
new regime, however, the poor will pay Rp 550, an increase of 10
percent, while the rich will pay Rp 9,750, or an increase of 7
percent.

Lanti, accompanied by an assistant to the City Secretary for
Development Affairs, Hari Sandjojo, and the technical director of
PAM Jaya, Kris Tutuko, said the money earned from the hike would
be used mostly to pay PT PAM Jaya's outstanding debts of Rp 938
billion to its foreign partners -- PT PAM Lyonaisse Jaya and PT
Thames PAM Jaya.

Palyja, a subsidiary of France's ONDEO (formerly Lyonaisse des
Eaux) serves customers in western part Jakarta, while TPJ, a
subsidiary of Britain's Thames Water International, supplies
tapwater to customers in eastern part Jakarta.

"Hopefully, with a slight increase every six months, we will
be able to repay all our debts to the two foreign partners within
five years in 10 installments," he said.

In addition to its debts to the foreign partners, PAM Jaya
also owes about Rp 1.7 trillion to the central government.

The automatic tariff increase scheme was approved by the City
Council on July 23, 2004.

According to Lanti, the regulatory board, whose duties include
proposing tariff increases, mediating in any disputes that might
arise between PAM Jaya and its foreign partners, was also playing
a role in the negotiations for a new water charge.

The water charge is the sum of money PAM Jaya must pay to the
tapwater operators for treating and supplying water.

"Both PAM Jaya and Palyja have reached a consensus to accept a
new charge of Rp 4,450 per cubic meter. Unfortunately, TPJ has
refused to accept the proposed new charge of Rp 3,671 per cubic
meter and has appealed to an international expert to help mediate
the dispute," he said.

Palyja and TPJ plan to connect 5,500 and 4,251 new customers
respectively this year.

A senior executive with Palyja, Bernard Lafronge, said that
his company planned to invest Rp 551 billion this year, including
investment in a 148-kilometer long pipeline in North and West
Jakarta.