Tap water tariffs to increase by 25%

JAKARTA (JP): Deputy Governor for Development Affairs Budihardjo Sukmadi said on Friday that the city administration would increase tap water tariffs by an average of 25 percent as of July next year.

"Water tariffs will increase by 25 percent in July next year. They will then increase by 10 percent every year following," Budihardjo said after accompanying Governor Sutiyoso to a meeting with executives of city-owned water firm PDAM Jaya at the city hall.

He said the planned increase was aimed at reducing losses due to the skyrocketing prices of some chemical materials needed in water production.

"PDAM Jaya should not suffer losses because it sells water at low prices to the public," he said without mentioning the amount of losses.

He said the plan to increase tap water tariffs was following the example of other cities, such as Surabaya and Tangerang.

The planned increase was also aimed at facilitating an investment plan by PDAM Jaya's foreign partners, PT Pam Lyonnaise Jaya (Palyja) and PT Thames Pam Jaya (TPJ).

The investment plan was extended from five years to seven years because water tariffs have not increased since February last year when the agreement between PDAM Jaya, Palyja and TPJ was signed, he said.

The agreement stipulates that water tariffs will be increased every six months in line the inflation index. But the city administration has not increased the tariffs because Jakarta residents are still suffering from the prolonged economic crisis.

In exchange for the tariff hike, the foreign firms were obliged to invest in projects such as water installation and pipeline projects.

The foreign firms, according to the agreement, will also help settle PDAM Jaya's foreign debt which amounts to Rp 1.6 trillion (US$20 million).

The agreement has long been protested by PDAM Jaya workers, who claimed to have suffered a significant drop in their monthly income. They demand that the deal be canceled.

Sutiyoso has repeatedly said he would not cancel the water deal in order to avoid a lawsuit from the foreign parties.

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 is set at Rp 390, while social service buildings, including orphanages, places of worship, and hospitals, must pay between Rp 390 and Rp 930. (jun)