Plan on water tariff hike suspended

JAKARTA (JP): The city administration, councilors, city-owned tap water company PDAM Jaya and its two foreign partners have agreed to suspend the plan to hike water rates every six months.

The plan, stated in the cooperation agreement of the two joint venture water management firms, "will resume in 2000 with an increase of once a year under a new formula," according to a statement released by the city council on Monday.

Under the agreement signed last February between PDAM Jaya and its business partners in the joint venture companies of Pam Lyonnaise Jaya (Palyja) and Thames Pam Jaya (TPJ), the rates could be increased every six months in line with inflation.

The statement, however, did not reveal when and where the changes were made but said that it was made at a renegotiation meeting. Executives of Palyja and TPJ could not be reached for comment on Tuesday.

In early September the council demanded that PDAM Jaya revise its cooperation agreement in the joint venture, particularly the contract term allowing an automatic increase in the water rates every six months which it saw as burdensome on Jakartans.

Palyja and TPJ also agreed to provide fair revenue-sharing and transparent accounts, the statement said.

"The period of the program's investment plan has been extended from five years to seven years. Palyja and TPJ should discuss all the details of the plan with PDAM Jaya," the statement said, as quoted by Antara.

During the renegotiations, the parties agreed to require the foreign business partners to develop an on-line system giving PDAM Jaya instant access to information on tap water management services in the capital.

Palyja is a joint venture between PDAM Jaya and Suez Lyonnaise des Eaux of France, while TPJ is a union of PDAM Jaya and British water company Thames Water.

The foreign parties, under the new scheme, are required to pay compensation to customers should the latter suffer losses due to neglect on the part of the foreign companies.

"The customers' bad debts will become the responsibility of the (foreign) private partners, not PDAM Jaya," the statement said. (bsr)