Tangerang to raise tap water tariffs

TANGERANG (JP): Regency-owned drinking water company PDAM Tangerang will raise its tariffs for tap water supplied to Jakarta 26.6 percent, a company director said over the weekend.

Director of general affairs Dadan Hendra Sambas said the tariff increase, from Rp 450 to Rp 570 per cubic meter, was unavoidable because the company had huge debts to domestic and foreign lenders.

"The increase is aimed at covering domestic and overseas debts worth more than Rp 130 billion (US$15.29 million)," Dadan said.

The company lost Rp 30 billion in the last four months alone, he said.

PDAM Tangerang has been experiencing losses partly because of a lack infrastructure for distributing water from the company's new treatment facility, he said.

Dadan said the facility's sales of only 1,700 cubic meters of water per second were far below its production capacity of 3,000 cubic meters per second.

To construct the Rp 126.28 billion Serpong facility, PDAM Tangerang borrowed Rp 65.28 billion from the French government, Rp 20.03 billion from the World Bank, Rp 34.06 billion from domestic creditors and the remaining Rp 7.5 billion from the regency.

The company sells 1,500 cubic meters of the 1,700 cubic meters treated at the Serpong facility to Jakarta-owned water company PDAM Jaya. The remaining 200 cubic meters are sold to the Bumi Serpong Damai housing complex in Tangerang.

PDAM Tangerang has scheduled a similar tariff hike for its 45,000 customers in both the Tangerang mayoralty and regency, Dadan said.

Tangerang household customers will soon have to pay Rp 500 per cubic meter, a 42.05 percent increase from the current Rp 350 per cubic meter rate, he said.

"But the water tariff increase has yet to be approved by the Tangerang regent," he said.

Jakarta Governor Sutiyoso has already announced the capital city's plan to increase tap water tariffs by an average of 25 percent for major users from April 1.

Sutiyoso promised the increase would not burden low-income people.

Currently, residents living in Jakarta's high-cost housing complexes pay up to Rp 1,845 per cubic meter of tap water, commercial users between Rp 1,350 and Rp 3,100 per cubic meter, and industrial users between Rp 1,175 and Rp 5,050 per cubic meter, depending on consumption.

In comparison, the water tariff for small-scale users living in low-income housing is set at Rp 390 per cubic meter, while social service organizations -- including orphanages, places of worship and hospitals -- must pay between Rp 390 and Rp 930.

The city signed a water management agreement Feb. 6 with PT Garuda Dipta Semesta of the giant Salim Group, owned by tycoon Soedono Salim, and PT Kekar-Thames Airindo, partly owned by Sigit Hardjojudanto, President Soeharto's eldest son.

Under the 25-year deal, PT Garuda will manage water treatment and distribution in the western part of Jakarta, while PT Kekar- Thames will operate in the eastern part of the city.

The two private companies will work in cooperation with French firm Lyonnaise des Eaux and British firm Thames Water International. (41/jun)