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)