PAM privatization plan queried

PAM privatization plan queried

JAKARTA (JP): A city councilor yesterday urged the Jakarta
administration to inform the council of its plan to invite
private firms to manage the city water company, PAM Jaya.

The chairman of the council's commission B for economic
affairs, Sahala P. Sinaga, said the city administration had not
yet submitted a formal notification about the plan to the
council.

"I think it is important for the administration to inform us
about the plan, because we need to know who is the investor and
what type of cooperation is involved," Sahala said after visiting
a water distribution center in Cilincing, North Jakarta.

Sahala said the city council could form a special committee to
study the plan if the administration gave it adequate
information.

According to PAM Jaya, the cooperation's memorandum of
understanding would be signed in November and production would be
expected to start in May next year, he said.

"We don't oppose the cooperation, but it would be better if we
knew the cooperation's details," he said.

Sahala said cooperation with private investors could help
increase tap water production to 40,000 liter per second. This
rate would be reached by 1998, he said.

Currently, PAM Jaya produces 18,000 liters per second and the
company can serve only 430,949 families out of the 1,640,380 in
Jakarta.

The plan to invite local investors is aimed at improving the
company's performance: increasing tap water production, reducing
tap water leakages and expanding the distribution of tap water in
Jakarta.

Earlier this month PAM Jaya said it planned to cooperate with
the Salim Group, owned by conglomerate Sudono Salim, and PT Kekar
Plastindo, owned by President Soeharto's eldest son Sigit
Harjojudanto.

Governor Surjadi Soedirdja said the cooperation will not cause
the price of tap water to rise because the city administration
still had the right to set the price and would set an affordable
price.

According PAM Jaya's projections, the price of tap water will
increase only once and not for another four years. However, one
company's officials predicted "tap water prices would probably be
raised in 1997." (yns)