Water firms pressed to improve service
Water firms pressed to improve service
Novan Iman Santosa, The Jakarta Post, Jakarta
Jakartans may have to dig deeper into their wallets as soon as
the city administration and City Council agree on an inevitable
hike in tap water charges in the coming months, despite what
consumer groups say is the continuing poor service provided.
The hike will be an additional burden on some 648,000 tap
water subscribers following the central government's decision to
hike fuel and electricity prices, claim the consumer groups.
However, the city-owned tap water company, PAM Jaya, was quick
to defend itself.
"The revenue we receive from our customers does not cover
production costs. The deficit is worsened by the fact that we are
subsidizing subscribers from the lower income groups," the
operational and technical director of PAM Jaya, Chris Tetuko,
told participants during a discussion with the City Council on
Wednesday.
Chris said the cost of water was Rp 3,100 (34 U.S. cents) per
cubic meter while water was being sold at only Rp 2,700 per cubic
meter.
He also said that the subsidy given to the lower income groups
reached Rp 120 billion per year while the upper income groups
could only contribute some Rp 20 billion of this under a cross-
subsidy scheme.
The last time subscribers experienced an increase in water
charges was in October 2001, when the price of water went up by
35 percent. Earlier in 1998 there was another hike of some 20
percent.
Other speakers at the discussion were the chairman of the City
Council's budget commission, Anna Rudhiantina, development
commission chairman Koeswadi Susilo Harjo, and Sudaryatmo of the
Indonesia Consumers' Foundation (YLKI).
Sudaryatmo emphasized that the hike had to be accompanied by
improvements in service and products.
"Water quality is still poor while most of the time residents
have to wait very late in the evening to get the water flowing.
"Not to mention that the network coverage mostly only reaches
those from the upper income groups. It is very unfair to
residents from the lower income groups," he said.
Sudaryatmo also said that the water pricing policy should be
made accountable by providing all relevant information to the
public.
"The process must consider the interests of both consumers and
producers. The subscribers' ability to pay and willingness to pay
have also to be taken into consideration."
PAM Jaya and its foreign partners should improve their
performance before increasing water charges, he added while
pointing to the fact that the company still lost some 46 percent
from its water production due to decrepit pipe network and theft.
PAM Jaya no longer directly produces and distributes tap water
to its subscribers as these duties have been delegated to its two
foreign partners from England and France.
Thames Pam Jaya (TPJ), a subsidiary of Britain's Thames Water
International, serves the city to the east of the Ciliwung River
while the area to the west is served by PAM Lyonnaise Jaya
(Palyja), a subsidiary of ONDEO (formerly Lyonaisse des Eaux).
Their contracts stipulate that the foreign partners are
entitled to increase water charges annually to cover their
production costs.
"Cutting these losses by at least 10 percent could greatly
reduce the companies' costs instead of them keeping increasing
water charges," said Sudaryatmo.
Chris said that the foreign partners had managed to reduce
water losses from some 57 percent in 1998 to 48 percent last
year.
Meanwhile, Palyja spokeswoman Maria Sidabutar said the hike
was needed not only to finance further investment but also to
make up for the high level of inflation over the past five years.
"Inflation during the past five years has reached some 150
percent while we have only enjoyed price increases of about 50
percent.
"It is hoped that this year's hike can reduce our burden
especially as there was no hike last year," she added.