PAM Jaya delays imposition of new water price

PAM Jaya delays imposition of new water price

JAKARTA (JP): In response to the public outcry, the City Water
Company (PAM Jaya) has postponed the price increase for public
water-taps until September of this year.

The announcement was made by the company's director of
administration and finance, Mahmud Ranusemitro, following an
inspection by City Council's commission C on economy and
commission D on development to North Jakarta on Tuesday
afternoon.

Nevertheless Mahmud said the postponement was not a result of
pressure from either the public or city councilors.

"The reason for the delay is to allow traders and consumers to
adjust themselves to the new tariff," he said. He added that the
company has ordered traders not to raise water prices during the
transition period .

To the dismay of many, at the beginning of this month PAM Jaya
raised its water prices by an average of 40 percent for
households and over 300 percent for water-taps.

The increase from Rp 250 to Rp 780 per cubic meter at public
water-taps has driven retail prices up by 100 percent for people
who purchase their water from water vendors.

The substantial raise initially met with staunch protests from
the City Council. It was only after a long and heated debate with
PAM Jaya last week did the council acquiesce.

When the increase was first announced, PAM Jaya had prohibited
the merchants managing public taps from increasing their prices.

This proved to be futile, however, as prices at some water-
taps in North Jakarta rose from Rp 350 to Rp 650 per jug. Each
jug contains 20 liters.

Based on PAM Jaya's postponement, the new prices will not be
applied until the August water bill which is paid in September.

According to Mahmud, the reason for the huge increase at
water-taps is the large subsidies PAM Jaya had to bear.

He revealed that at the old price of Rp 250 per cubic meter,
the company has to subsidize Rp 730. With the new price of Rp 780
the company bears just Rp 320 per cubic meter.

There are 2,242 public water-taps in Jakarta, with each tap
serving about 100 households. Many of the water taps are located
in North Jakarta, where it is difficult to obtain clean water.

"We are adding more so it will reach 4,000 units by 1997," he
said.

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Despite the postponement, the chairmen of the City Council's
Commission C and D, Helmy A.R. Syihab and Mansyur Achmad, still
received complaints from five owners of public water taps who
visited the council yesterday.

They expressed dismay at PAM Jaya's price increase while at
the same time prohibiting tap owners to raise their price.

"We would have understood if it had been an increase of ten to
thirty percent but a 312 percent increase in water prices...it's
too much!" Nurdin, one of the delegation members, said.

"The increase will force unskilled laborers with daily wages
of Rp 3,900 to spend half of their income on water alone," he
added.

In response to pleas form tap owners, Mahmud had previously
said a retail price ceiling (HET) will be set very soon.

Tamaria M., another tap owner, said yesterday she could not
understand why the company is burdening the common customer with
their debt obligations. Tamaria is apparently referring to PAM
Jaya's huge debt to foreign creditors.

"If PAM Jaya cannot pay its debts, why doesn't it open an aid-
relief section in the newspapers like the one for quake victims,"
she said.

It must be noted, however, that in the last two years PAM Jaya
has earned a before tax revenue of Rp 14.9 billion in 1992 and Rp
13.4 billion in 1993. (arf/mds)