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.