Tap water tariffs raised by an average of 25%

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)