Operators need to reduce water leakage, YLKI says
Bambang Nurbianto, The Jakarta Post, Jakarta
The Indonesian Consumers Foundation (YLKI) has urged the city's water operators to focus on the reduction of water leakage and other losses to curb high operational costs, rather than burdening customers with price increases.
"If the leakage rate is still high, it would swell operational costs of the operators, which use various chemical substances in producing the water," YLKI executive Daryatmo told The Jakarta Post on Tuesday.
Daryatmo said that water leakage contributed significantly to the companies' financial losses, as they had high production costs in processing the water, including buying raw water and various kinds of chemical substances.
However, he said that a review of the leakage rate was part of the agreement signed in 1998 between city water operator Pam Jaya and its foreign partners. The agreement was revised in 2001.
"The operators should also be able to reach the target of reducing the leakage to 35 percent by the end of 2002," Daryatmo added.
Since 1998, the city's clean water consumers have been served by two companies: PT Thames Pam Jaya (TPJ), which is a subsidiary of Britain's Thames Water International, supplies customers in the eastern areas of Jakarta; PT Pam Lyonnaise Jaya (Palyja), a subsidiary of France's ONDEO (formerly Lyonaisse des Eaux), serves customers in the western parts of the city.
Data jointly issued by TPJ and Palyja, however, showed that TPJ could decrease their water loss from 57.6 percent in 1998 to only 43.5 percent in December 2002 and Palyja, from 61 percent to 43.3 percent.
Commenting on investors' threats to withdraw from the agreement if the city administration failed to increase water prices, Daryatmo explained that the water operators relied upon two financial structures: initial cost recovery and loan installments.
"It is unfair, as when they borrow money, they do not discuss it with the public; but when they have financial problems, they burden the consumers through a price adjustment," he added.
Meanwhile, TPJ Communication & External Relations Director Rhamses Simanjuntak denied that the raised price would be used to pay its debts. He said the price adjustment was necessary to make back their initial cost of investment, so that they could make further investments.
"The adjustment to the water price is needed to cover inflation, which has caused increases in electricity, chemicals and manpower, as well as investment costs," he said in his statement.
Rhamses revised his previous statement for possible pulling out from the agreement with the city if there is no price increase, saying his company would maintain its commitment to the project in Jakarta.
"Even during the economic crisis and political instability, TPJ's commitment was tenaciously maintained. As such at present we have no intention to pull out from the project," he added.
He said since the cooperation began in 1998, TPJ had invested over 434 billion rupiah, and was planning to invest a further 208 billion rupiah in 2003.