Tap water tariffs raised by an average of 25%

JAKARTA (JP): City water company PDAM Jaya director Rama Boedi announced an average increase of 25 percent in tap water tariffs yesterday, the largest portion of which will be borne by affluent customers.

Rama said the new tariffs were effective from April 1, even though they had not yet been approved by Governor Sutiyoso.

The highest increase of 65.71 percent, imposed on affluent families, will lift the cost per cubic meter of water from Rp 1,175 to Rp 2,545. Tariffs for middle income families were raised by 38.36 percent, an increase from Rp 930 to Rp 1.935 per cubic meter.

"Tariffs for poorer families who consume less than 20 cubic meters of water per month were raised by 38 percent, to Rp 1.600 up from Rp 775," he said.

Rama said that cross-subsidies had been used in the tariff increases so that affluent customers who used large volumes of water helped smaller, less well off consumers.

When asked to comment on the increases, however, Sutiyoso said he had not issued any decree to approve the tariff adjustments.

"Really? I haven't signed any decree. You must be joking. We're still discussing it," the governor told reporters during a visit to the Thousand Islands in North Jakarta yesterday.

Rama admitted the new tariffs had not been officially approved by the governor and that no decree had been issued.

"The legal foundation for the increases is the Ministry of Home Affairs' decree on tariffs issued on Feb. 23, 1998, and the 1993 City Ordinance on water tap services," he said in a media conference yesterday.

He explained that the new increases had been skewed to help buildings which provide social services. Tariffs for places of worship, orphanages and other charitable causes had received tariff cuts of 3.85 percent, bringing the price per cubic metre of water down to Rp 375, provided they do not use more than more than 20 cubic meters per month.

Tariffs for state hospitals, low-income households and cheap apartments were raised by between 10.58 percent and 11.42 percent per cubic meter, he said.

"That is cheaper than the old tariff of between Rp 390 and Rp 930 for consumption of up to 30 cubic meters per month," Rama said.

An average rise of 11.25 percent has been imposed on embassies and consulates, 31 percent on government and military institutions, 16.2 percent on private clinics and hospitals, 25.86 percent on cafes, 17.74 percent on four and five-star hotels and 11.45 percent on medium to large-scale industries.

City councillors said yesterday they were shocked upon hearing the abrupt announcement on the new water tariffs.

Rusjdi Hamka, a council deputy speaker, said that PDAM had not involved the council in setting the new tariffs.

Saud Rahman, secretary of Commission D for development affairs, also complained that PDAM had not discussed the decision with the council beforehand.

"As far as I know, PDAM only discussed cooperation with two private partners with the council," he said.

PDAM Jaya signed a 25-year cooperation agreement with PT Kekar-Thames Airindo (Kati), a company partly owned by President Soeharto's eldest son Sigit Hardjojudanto, and PT Garuda Dipta Semesta (GDS), a subsidiary of the giant Salim business group.

Saud, however, said that he was not against PDAM's decision to increase tariffs because it would mainly affect wealthy households and hotels, and have a low impact on the poor.

Sutiyoso said earlier the increase could not be delayed any longer because PDAM was bound by agreements and contracts with private parties.

"Please understand that we have really tried not to let the increase affect low-income users," Sutiyoso said.

The last adjustment to tariffs was made by PDAM in 1994.

Rama said his company had no choice but to increase the tariffs if the company wanted to remain profitable.

"We'll keep on losing around Rp 294.56 per cubic meter if we don't increase the tariffs," he complained.

Rama promised that GDS and Kati, which now handle operational activities, including bill collecting, would not fine or cancel the services to any of its customers for nonpayment of bills. (ind/cst)