PDAM hikes water rate by 46%

BOGOR (JP): The Bogor tap water company (PDAM) confirmed on Tuesday a plan to hike water rates by 46 percent to cover its monthly losses.

"The planned hike, 46 percent up on the current rate of Rp 770 (10 US cents), is needed to cover our monthly losses of Rp 240 million (US$ 32,000) since 1998," head of PDAM's general affairs department Saifuddin told The Jakarta Post..

"The losses are mainly caused by the procurement of chemical substances whose prices have risen three times following the weakening of the rupiah against the US dollar," he said, adding that the company had reduced most of its operational costs, such as telephone bills, for efficiency purposes.

Saifuddin said the company also had to delay its expansion plan to reach the national target of 80 percent coverage of service.

"Currently, the coverage is only 49 percent and it will be difficult to increase the service without the rate hike," he said, adding that there was a possibility that the company would reduce its water production.

He also said that the water rate had not been hiked since 1995 and hinted that the new rate would still be cheaper than the tariff set in the neighboring greater Jakarta area.

"With the rate hike, we will not only be able to cover our production costs, but also expand our network," he said.

Local councillor Benny Mahyudin said he understood the hike plan, saying the council would first study the proposal.

"We may impose a hike classification to differentiate the users. The rate for industry will not be the same as for households," Benny said. (05/24)