Lyonnaise to embark on two water projects worth Rp 87 billion

JAKARTA (JP): City-owned tap water company PDAM Jaya and French firm Lyonnaise des Eaux have reached an agreement to embark on the construction of two water projects worth Rp 87 billion (US$5.8 million) in West Jakarta.

The two firms said in a statement yesterday that the first project, involving an investment commitment of Rp 60 billion, would be the construction of an 11-kilometer main water pipeline linking the Cisadane river in Tangerang to the new distribution center in the western part of Jakarta.

The second project will be the Rp 27 billion construction of a new reservoir with a designed capacity of 22,300 cubic meters, the statement said.

According to the statement, PDAM Jaya, which manages the capital's water production and distribution, has awarded contracts for the two projects to all national contractors with the expenses financed by Lyonnaise des Eaux.

"The projects are slated for completion at the end of 1999," the statement said, adding the project is expected to supply tap water to about 500,000 new customers.

The two projects are part of investment commitments amounting to Rp 350 billion made by Lyonnaise des Eaux and Britain's Thames Water Overseas Ltd. in their cooperation agreement with PDAM Jaya to improve water infrastructure in the capital.

Based on the cooperation scheme, besides the two projects, the two foreign firms will also fund the repair and replacement of approximately 120 kilometers of pipes and the refurbishment of water treatment plants.

The two foreign firms resumed their contracts with PDAM Jaya recently after the Jakarta administration canceled tap water concessions with PT Garuda Dipta Semesta (GDS), which involved Suez Lyonnaise, and PT Kekar-Thames Airindo (Kati) -- the Thames Water joint venture -- shortly after Soeharto resigned as president on May 21.

The cancellation of the deals to supply water to Jakarta customers was taken on the grounds that the awarding of the projects was not done fairly.

GDS is a subsidiary of the widely diversified Salim group owned by tycoon Soedono Salim, which has close ties to the Soeharto family.

Kati is owned by former president Soeharto's eldest son Sigit Hardjojudanto in cooperation with a subsidiary of Thames Water. (hhr)