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.