Reaction mixed to water tariff hike plan

JAKARTA (JP): City-owned drinking water company PDAM Jaya's proposal to raise water tariffs by up to 12 percent got a mixed response yesterday.

The City Council's deputy speaker Ade Surapriatna fully supported the proposal, but Indonesian Consumers Foundation chairwoman Tini Hadad strongly opposed it.

Water prices are very cheap here, Ade said. "So the plan to raise the water tariffs is acceptable as long as it is calculated based on rising production costs and not on the basis of inflation. And the tariffs should be stabilized because water is an essential need for people."

However, Ade reminded PDAM about its duty to give social services to the public.

"Despite the privatization of PDAM, the company still has an important social function in that the prices of water must be affordable for everyone. So the public interest must come first," he said.

"It's okay for PDAM to ask for the rise in the tariffs, but the hike must be calculated properly. For instance, the hike of water tariffs for commercial needs must be higher than those for households," Ade said.

It would be better if the hike was focused on business and commercial sites rather than on domestic houses and social service buildings, he said.

The Director of PDAM Jaya, Rama Boedi said Tuesday that the proposal to raise tap water tariffs was made because charges had to be adjusted to take into account rising inflation and production costs over the past two years.

"The hike proposal also covers subsidies for social service buildings," Rama said, adding that the distribution of revenue would be arranged to reduce the burden on low-income people.

Tini, however, said that PDAM should not propose any water tariff increases due to the abundant complaints sent to her office about the company's poor service.

"Many people are questioning the lack of service and the limited availability of PDAM water supply," she told The Jakarta Post yesterday.

"I object to the hike proposal. PDAM has to reorganize its management and services first before thinking about raising the tariffs," she said.

Tini underlined the importance for the city administration to maintain existing tariffs and give subsidies, especially to poor people.

"Don't just think about raising the tariffs, but think more of the people," she said.

According to Tini, there are several problems that must be resolved by PDAM.

"One of the most talked about is water leakages. These may well continue because the leaks are caused partly by collusion between consumers and the firm's officials. This kind of practice must be stopped," she said.

Tini's remarks were echoed by Ade, who said: "Many small houses are developed into big and luxurious ones, but the owners still pay for water under the small-household classification," he said.

Ade urged PDAM to re-evaluate tariff classifications in many residential areas to base them on proper user qualifications. "It will increase the city's revenue from tap water charges as well," he added.

Both Tini and Ade agreed that the privatization of PDAM would encourage the firm to improve its performance, management and service.

"But don't just believe the private investors' promises. The city must not lose its control of determining the tariffs so as not to affect the public interest," she said.

Last June, PDAM Jaya signed a 25-year cooperation agreement, which will be effective from next January, with private investors to manage water treatment and distribution.

They include PT Garuda Dipta Semesta of the Salim Group, owned by tycoon Sudono Salim, and PT Kekarpola Airindo, owned by Sigit Hardjojudanto, President Soeharto's eldest son. (07)