Sutiyoso defends water handling deal

JAKARTA (JP): Governor Sutiyoso insisted on Tuesday that he would not revoke the existing water supply agreement between city water company PDAM Jaya and its two foreign partners, as was demanded by PDAM Jaya workers.

According to the governor, the city administration would face lawsuits from the foreign firms -- PT Thames Pam Jaya (TPJ) and PT Pam Lyonnaise Jaya (Palyja) -- if it canceled the deal without clear legal reasons.

"The firms would ask for compensation since they have invested money here... and it's not small money," he said.

"Revoking the deal will not be a best choice."

The cancellation of the agreement would put PDAM Jaya in a difficult position since it still has foreign debt worth Rp 800 billion (US$100 million), Sutiyoso said.

The governor would not name the creditors.

He said that the two firms, which are subsidiaries of Britain's Thames Water International and France's Lyonnaise des Eaux, stated in the water deal that they would help settle the foreign debt.

Sutiyoso again refused to give further details.

He claimed that the revocation of the agreement would also affect the country's economy, as foreign companies would be made reluctant to invest here.

At least 500 people in the Pam Jaya workers union demonstrated at the City Council on Monday, demanding that Sutiyoso cancel the 19-month-old water agreement by the end of September at the latest. They said that otherwise they would disrupt the city's water supply.

Carrying banners, posters, a coffin and effigies of Sutiyoso and the council's former speaker, Edy Waluyo, the workers asked the council to press the governor to revoke the deal.

The council's provisional leaders, Supangat from the Indonesian Democratic Party of Struggle (PDI Perjuangan) and Abdul Aziz Matnur from the Justice Party, said the council would do everything within its power to return the management of the city's water supply to PDAM Jaya.

"We will try to return water management to PDAM Jaya by the end of this month at the latest," Supangat who seemed influenced by the workers' emotion, told the demonstrators.

Sutiyoso promised on Tuesday that the city administration would improve the conditions of the water agreement, signed in February last year, in order to satisfy all related parties.

"The renegotiation is still underway. We are making several corrections to avoid losses to the city administration," he said, without giving details.

Asked to comment on PDAM Jaya workers' threat to cut the water supply, Sutiyoso said that this would only make the people suffer.

"The workers' threat is an old song. The public would be angry if the workers tried to disrupt the water supply," he said. (jun)