New water rates effective from March 1: Sutiyoso

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)