TPJ, Palyja seek 25% increase in water rates

Bambang Nurbianto, The Jakarta Post, Jakarta

Tap water customers will need to be ready to dig deeper into their pockets as two utilities -- PT Thames PAM Jaya (TPJ) and PT PAM Lionaisse Jaya (Palyja) -- are seeking to increase water charge by between 23 percent and 25 percent beginning January.

Water Supply Regulatory Board chairman Achmad Lanti said on Monday that the two operators had submitted their requests to his office and that the proposals were currently being discussed by members of the board.

"We are now discussing the proposals. We will consider the interests of both water customers and operators," Lanti told a press conference on the sidelines of a seminar on the sustainability of water supplies in the capital on Monday.

The Water Supply Regulatory Board consists of customers, city officials and experts. They are appointed by the city administration.

The board will submit its non-binding recommendation to Jakarta Governor Sutiyoso, who has the final say on the issue. Usually, the increase approved by the governor is lower than that requested by the water utilities.

The hike, if approved, would be the third increase since the City Council issued a bylaw authorizing the Jakarta governor to make the decision on an automatic tariff increase every six months until 2007 without asking permission from the Council.

Previously, any tariff increases had to be approved by the Council.

Sutiyoso raised tap water charges by between six percent and 63 percent last July. In January, the governor also raised the charges by between 4 percent and 16 percent.

Currently, the lowest tariff is Rp 900 (9 U.S. cents) per cubic meter for poor households, while the highest tariff is Rp 12,150 per cubic meter for well-off households and the businesses sector.

The automatic hike arrangement was part of a plan to pay off the debts of city-owned water utility PAM Jaya. PAM Jaya owes around Rp 600 billion to Thames PAM Jaya and Palyja, and Rp 1.6 trillion to the Ministry of Finance.

Sutiyoso said on Monday that he was not surprised by the proposal as the City Council had authorized him to automatically raise water charges in the city every six months.

"You shouldn't ask these sort of questions. We have to increase the water charges every six months as ruled by the City Council bylaw," he told journalists when asked about the proposal.

Palyja, a subsidiary of France's ONDEO (formerly Lyonaisse des Eaux), supplies customers in western Jakarta, while Thames PAM Jaya, a subsidiary of Britain's Thames Water International, supplies water to eastern Jakarta, with the Ciliwung river serving as the demarcation line.

Palyja currently only has 343,020 customers, or 48.12 percent of the total need in its territory, while TPJ serves around 364,548 customers, or 66.47 percent of the total need in its territory.