New water rates effective from March 1: Sutiyoso

JAKARTA (JP): Governor Sutiyoso said on Friday the new tap water rates could be put into effect on March 1, following an initial approval from the City Council.

The city administration, he added, is now waiting for an official letter from the council endorsing the tap water price hike.

"As long as the council sends the letter within a week, the new rates could take effect soon," Sutiyoso told reporters after a Friday prayer at the City Hall.

Sutiyoso was responding to a call from the city water company PAM Jaya's foreign partner PAM Lyonnaise Jaya (Palyja), which asked the city administration earlier in the day to bring the new tap water rates into effect on March 1.

Palyja president director Pierre Alla said the increase was badly needed to make up the deficit the water companies were running as a result of rising operating costs since 1998. He added the discussion on the new tap water rates with the City Council had ran untroubled.

"There is no other way than to increase the water rates to cover the rising operating costs," he told a media briefing after inaugurating the use of the company's new 10.6 km pipeline connecting Pondok Indah and Pasar Minggu areas.

When asked to comment on a proposal raised by some councillors to increase only the water rate for the Tanjung Priok port operator, Pierre said it could not entirely resolve the company's deficit problem.

"It is not enough to cover the company's losses, because the port accounts for only a small part of the total consuming rates," he said.

Governor Sutiyoso suggested the increase three years ago, after receiving a report saying that the city water company PT PAM Jaya had suffered losses totaling Rp 300 billion since 1997.

A leadership meeting of the City Council approved an increase in tap water rates proposed by the commission C for economic affairs. Each of the council's 11 factions will have to endorse the proposal before the council announces its official approval of the new tariffs.

The council leaders also suggested that the water tariff imposed on Tanjung Priok port operator be charged in U.S. dollars.

Commission C proposed that tap water prices be increased between 14 percent and 43 percent for all categories of consumer, except social institutions and poor customers.

A cross-subsidy scheme will be applied as a result of the exemption of social institutions and poor customers from the hike.

The city administration had originally demanded an increase between 6 percent and 43.09 percent be imposed on all consumer categories.

Palyja, a joint venture with Suez Lyonnaise des Eaux of France, services the western areas of the capital, while TPJ, a joint venture with Thames Water Overseas Ltd of Britain, operates the services in eastern Jakarta. (04)