Murky waters
Murky waters
Although people are aware the government will increase various
tariffs, further burdens for them to bear in this devastating
crisis, some circles still registered strong reactions with the
Jakarta city administration before it decided on the 25 percent
increase in tap water tariffs early this week.
The protests emphasized the absence of transparency by the
administration in running the business, charging that there were
thus no grounds whatsoever for increasing the rates.
The Indonesian Consumers Foundation came out strongly in
criticizing the proposed increase, stating that "such a method is
a typical solution made by ailing or mismanaged state-run
companies to rid themselves of their problems without really
solving them".
The foundation questioned why city water company PDAM always
claims financial losses because of extensive leakage problems
with its pipes. "Why don't they fix that problem first rather
than charging customers higher prices?" it asked.
The Jakarta branch of the government's Golkar grouping also
voiced objections to the policy because the city administration
has yet to make clear the details of newly forged cooperation
agreements with two private companies in the water business,
especially how the projects will be financed.
Although Golkar's statement does not mention the names of the
companies, reports say the city administration granted PT Garuda
Cipta Perkasa and PT Kekarpola Airindo -- both well-connected
with the ruling elite -- the right to join the tap water business
outside of a tender bid.
Reports say PT Garuda, which will work together with Lyonnaise
des Eaux of France, will operate in the western region of the
city, and PT Kekarpola, to work with Thames Water International
from Britain, will get the eastern region.
While the city administration still has to answer the
complaints, Jakarta Governor Sutiyoso has said that the most
important aspect of the new tariffs is that they will not in any
way inflict suffering on poor people because the increase for
them is only between 10.58 percent and 11.42 percent.
He even said that PDAM had cut rates by 3.85 percent for
"special" customers like orphanages, dormitories run by
noncommercial institutes and places of worship in an effort to
maintain its cross-subsidy policy.
He also said PDAM's operational expenses were much bigger than
its earnings, and that it would ultimately collapse if this
continued. "That's why the new tariffs were established," he
said.
The explanation is logical enough and could be expected to
avoid disquiet among water subscribers.
What the administration needs to take care of today is the
problem that PDAM only reaches 23 percent of Jakartans, and the
company still has a lot of work to do in improving the water
quality. This failure to serve more of the city's residents is
caused by its incapability of installing more pipes to reach all
corners of this sprawling metropolis.
Through it all, tap water leakage is still rampant. Up to last
year, it reached 53 percent. Some water losses are said to be
unavoidable for most water companies worldwide because the
product evaporates on its way to consumers. But the tolerable
proportion is 20 percent.
Here, the losses are caused by peculiar reasons. Criminals
have their role, as do the age of the pipes, some of which were
installed before World War II. Some have also been damaged by
construction activities; PDAM's capability to replace the old
pipes is limited to 1 percent annually.
We understand that reducing water losses requires major
institutional improvements in the operational efficiency of the
water company. To overcome the problem, the city administration
needs to cooperate with the private sector, but it should do it
openly. The administration should understand that lack of
transparency played a major part in causing the crisis we are in
today.