Jakarta water rates to increase next month
Jakarta water rates to increase next month
Bambang Nurbianto, The Jakarta Post, Jakarta
Despite criticism of the quality of the tap water supplied by the
city's two water utilities, Jakarta Governor Sutiyoso said water
charges needed to be increased next month in order to cover the
companies' operating costs.
"We have not increased the charges for almost three years.
They must be increased starting early in April ... otherwise we
will go bankrupt," he said on Thursday.
Sutiyoso explained the increases were unavoidable as the
companies' operating costs were higher than their revenues. He
said that without the hikes, the foreign partners would be forced
to pull out.
Sutiyoso, however, refused to reveal the amount of the
increases, saying that the new prices were still being calculated
by the Jakarta Water Regulatory Board.
He also failed to state the amount of the losses being
suffered by the utility companies.
The current price of water in Jakarta averages Rp 2,700 per
cubic meter while the cost of production, according to an
official from city-owned water company PAM Jaya, is Rp 3,100.
If the plan is implemented next month, it will be the third
increase since PAM Jaya signed contracts with its two foreign
partners in 1998.
Despite what the governor said, in 1998 charges were increased
by 20 percent, while in 2001 they were increased by 35 percent.
Unconfirmed source said that the next hike would be around 40
percent.
Sutiyoso, however, promised that the increase would not
adversely affect low-income families as the main target of the
increases was the well-off.
"A cross-subsidy system will continue to be applied," he
stressed.
PT Thames Pam Jaya, which is a subsidiary of Britain's Thames
Water International, supplies customers in the east of Jakarta
while PT Pan Lyonaisse Jaya (Palyja), a subsidiary of France's
ONDEO (formerly Lyonaisse des Eaux), serves customers in the west
of the city. Both companies supply water to about 650,000
customers in Jakarta.
Earlier reports said that since the collaboration agreements
had been signed, the city-owned company has suffered some Rp 700
billion in losses due to -- it claims -- increasing production
costs.
The agreements between PT PAM Jaya and the foreign companies
are to last for 25 years.
When the agreements were signed, the water companies promised
to improve water quality. But many customers are still not only
complaining about quality, but also interruptions in supply.
Husna G. Zahir of the Indonesian Consumers Association (YLKI)
criticized the plan to raise charges, saying they should not be
increased until service was improved.
"Increasing the charges now is unfair as they have not
responded to the public's complaints about bad quality and supply
interruptions," Husna told The Jakarta Post on Thursday.
Husna also questioned the government policy on water which
treated it as a commodity to be "bought and sold by the private
sector."
She said that under the Constitution, all citizens should have
access to clean water.
"If the government only takes into account the wishes of
private investors and treats water as a commodity, then it will
be violating the Constitution," Husna said.
As any water charge increase needs to be approved by the City
Council, Husna called on councillors to reject the city
administration's plan.
According to the regulatory board's chairman Achmad Lanti, the
two Jakarta water utilities produce about 500 million cubic
meters of water a year, but 49 percent of this is lost due to
illegal connections and leakages.