PDAM Jaya told to rework its agreements with foreign firms
JAKARTA (JP): City Council on Monday demanded the city-owned water company PDAM Jaya revise its cooperation agreement with joint venture partners Pam Lyonnaise Jaya (Palyja) and Thames Pam Jaya (TPJ).
During a meeting with the three parties, councilors of commission D for development affairs queried a contract term allowing for an automatic increase in the water rate every six months, charging it would be burdensome to the people.
"The policy would only make things difficult for most Jakartans, who at this time of hardship are already facing serious financial problems," said commission head Ali Wongso Sinaga.
Under the agreement signed in February, the rate can be increased every six months in line with inflation.
According to Ali, the deal should also regulate that the salary standard for expatriates and Indonesians should be commensurate with their skills.
"Equal salaries for local and foreign staff members is badly needed to avoid discrimination."
Palyja is a joint venture between PDAM Jaya and Suez Lyonnaise des Eaux of France, while TPJ joins PDAM Jaya and British water company Thames Water.
Both companies are responsible for managing, operating, maintaining and improving the water supply system in the capital, with Palyja in the western part and TPJ in the north.
Palyja and TPJ resumed their 25-year contracts with PDAM Jaya in May after the administration canceled previous tap water concessions with two joint venture firms, which also involved Lyonnaise and Thames.
Although no PDAM Jaya official was available on Monday to comment on the councilors' demand, Palyja's local representative Bernard Lafrogne said the revision was already in process.
The reworking also involves representatives of PDAM, the World Bank, the Ministry of Finance, the Ministry of Home Affairs and the National Development Planning Board, he said.
"There are points which should be changed or only revised due to lack of communication." He declined to elaborate.
Lafrogne insisted that three firms would suffer financial losses if the water rate could not be increased at the six-month intervals.
"However, we have decided to resume the cooperation due to the 25-year-agreement and for our reputation. Our projects in Manila, Casablanca and France will be affected if we terminate our contract (here)."
He said Palyja's income from consumer payments would be Rp 35 billion per year.
"But for the operation management cost only we need about Rp 75 billion. It's the risks of the agreement and we should take it." (ind)