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.