PDAM hikes water rate by 46%

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)