Privatization needed to boost water distribution, says WB
Privatization needed to boost water distribution, says WB
Moch. N. Kurniawan, The Jakarta Post, Jakarta
The World Bank is calling on the government to proceed with
its higly criticized plan to actively involve the private sector
in managing clean water services to help improve people's access
to water.
Richard M. Hopkins, Regional Water and Sanitation Specialist
of East Asia and the Pacific World Bank Office, said on Tuesday
that the involvement of the private sector in managing clean
water services was necessary as the government would never have
enough funds to meet the demand for water.
"Private firms will help expand clean water distribution to
people at affordable prices, but at the same time enable the
firms to make profit," Hopkins said at a press briefing jointly
held by AusAid and the World Bank on water supply and sanitation
policy.
Therefore, a law to regulate the involvement of the private
sector in the clean water business must be pursued, he added.
He was commenting on the current controversy over the water
resources bill that would allow for widespread participation from
private firms in managing clean water services.
Hopkins said without clear regulations, private firms would
become like a mafia, citing the ugly practices by clean water
providers in dry areas, where they set the rate of their product
10 times higher than the price set by the tap water company.
The tap water business in Jakarta has sparked controversy due
to the absence of a clear contract agreement between private tap
water firms and city water company PDAM Jaya, for example on the
pricing structure.
At present, private firms have been allowed to provide tap
water, serve areas that lack clean water and produce bottled
drinking water.
Under the draft law on water resources, an independent body
must be set up to oversee the performance of private firms, which
would include ensuring that water rates would not overburden the
public.
"I think the present opposition against the broad involvement
of the private sector in managing water services is an emotional
response," Hopkins said.
He cited Macau and Chile as success stories of private firms
managing clean water services.
But he admitted that in Argentina, there was difficulty with
private firms in the water business due to a weak contract
agreement.
The government submitted the bill on water resources to the
House of Representatives last year, and private sector
involvement has drawn criticism from various parties.
Opposition to the bill has come from, among others, the Kehati
Biodiversity Foundation and the Indonesian Forum for the
Environment (Walhi).
Kehati executive director Ismid Hadad decided that the bill
would bring more hardship to the people, including millions of
farmers, which he claimed would have to pay for irrigation water.
They said they feared that if the bill were passed into law in
its current state, it would endorse privatization without much
governmental control, and this would lead to excessive water
exploitation by private entities, higher water rates and also
limit the urban poor's access to water.
The government has assured the people however, that they would
not have to pay for river water used for daily needs such as
bathing, washing clothes, cleaning and cooking, and that water
used for farming and fish ponds owned by small-scale farmers
would also remain free of charge.