Tap water tariffs to increase 25% for major users
Tap water tariffs to increase 25% for major users
JAKARTA (JP): Tap water tariffs for the city's large-scale
users will be increased an average 25 percent as of April 1,
Governor Sutiyoso announced yesterday.
But the tariffs for small-scale users are to be lowered, the
governor said, without disclosing the percentage discount to be
granted.
"I assure you that the hike will not burden the low-income
people. On the contrary the price for them will be lower,"
Sutiyoso said after the pact-signing ceremony for the
privatization of drinking water company PDAM Jaya at City Hall.
PDAM Jaya categorizes its large-scale consumers as those
living in luxury homes, and businesses using water for commercial
and industrial purposes.
Currently, water tariffs per cubic meter for those living in
affluent houses are set at up to Rp 1,845, commercial users
between Rp 1,350 and Rp 3,100, and industrial users between Rp
1,175 and Rp 5,050, depending on consumption.
In comparison, the tariff for small-scale users living in
cheap houses are set at Rp 390, while social service buildings,
including orphanages, places of worship, and hospitals, must pay
between Rp 390 and Rp 930.
According to Sutiyoso, the plan to raise the tariffs should
have been implemented this month.
"Due to several unfinished preparations, it is likely that the
hike will become effective in April, as approval from the
Ministry of Home Affairs is still needed."
The new tariffs are based on the inflation rate and water
index, Sutiyoso said.
The city's assistant for administrative and development
affairs, Prawoto Danoemihardjo, said Thursday that the increase
was "fair enough" because tap water rates have not been raised
for four years.
From Jan. 1, 1994 to April 1998 the water rates should have
increased by an estimated 25 percent, he said.
The tariffs will be further "adjusted" every six months
following the official privatization of PDAM Jaya yesterday,
Prawoto said.
Privatization
The privatization of the firm is meant to bail out PDAM Jaya
which has a huge debt and poor management system.
In the first five years, the privatized PDAM Jaya could supply
75 percent of the city's users.
With its new status, PDAM Jaya -- which will only control and
supervise water productivity, production processes and financial
affairs -- is to cooperate with two local companies.
The 25-year cooperation agreement was also signed yesterday by
executives of PDAM Jaya and the two firms: PT Garuda Dipta
Semesta of the giant Salim Group, owned by tycoon Soedono Salim,
and PT Kekar-Thames Airindo, which is partly owned by Sigit
Hardjojudanto, President Soeharto's eldest son.
Under the deal, PT Garuda will be in charge of water treatment
and distribution in the western parts 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.
Under the accord, the private investors have the authority to
operate, maintain and expand the water distribution system in the
city, including the management of PDAM Jaya's customers.
"The first thing we will do is to repair water pipelines and
leakage. That's our priority. And I can tell you for sure that no
employees from PDAM Jaya will be fired," Fachry Thaib from Kekar-
Thames Airindo said.
Ten percent of PDAM Jaya employees will remain at its
headquarters while another 1,300 will work for Kekar-Thames. The
remaining employees will be absorbed by Garuda Dipta.
The two Indonesian companies are to invest Rp 3 trillion
during the first five years of the 25-year profit sharing scheme.
After five years, the cooperation is expected to reduce water
leakage from its current rate of 54 percent to 35 percent.
Director of PDAM Jaya Rama Boedi said the private companies
would be taking responsibility of collecting Rp 24 billion in
unpaid customers' bills.
"The payment was delayed due to the changing system of
payment. It is not a leak, so please don't make such a big fuss
out of it," he said, refusing to elaborate. (edt)