Water operator defends hike plan
Water operator defends hike plan
P.C. Naommy and M. Taufiqurrahman, The Jakarta Post, Jakarta
A top executive at city tap water operator PT PAM Lyonnaise Jaya
(Palyja), claimed on Tuesday that the company would not be able
to provide better services unless the Jakarta administration
increased the water rate by 30 percent early next year.
Palyja commissioner Bernard Lafrogne said inflation in the
past five years had increased over 150 percent, but water rate
hikes during that time only covered 127 percent of the inflation.
"We were told by the government not to increase the water rate
during the height of the economic crisis in 1998, while the
company's operational costs increased due to the soaring
inflation rate. That has been a great burden to us," he said.
The company had called a media gathering to defend the city's
plan to increase the tap water rate by 30 percent. In the hike
proposal, the administration said it would use 17 percent of the
increase to pay off its debts to its two foreign partners, Palyja
and PT Thames PAM Jaya (TPJ).
The foreign partners have reported a Rp 990 billion (US$116.47
million) shortfall in the debt payments from city-owned water
company PD PAM Jaya.
The remaining 13 percent of the water rate increase would be
used to cover inflation and the foreign partners' operational
costs.
In the ongoing debate on the plan at City Council, many
councillors urged the administration to wait for the result of
the audit being carried out by Stone Webster's Independent
Combined Experts (ICE) team in collaboration with experts from
the Development Finance Comptroller (BPKP) on the real extent of
the shortfall.
Bernard said the simultaneous increase in electricity rates
and the price of raw water supplied by a Tangerang water operator
would make impossible for Palyja to maintain operations at the
current rate.
He said despite regular complaints from around 3,000 consumers
on the quality of its services and product, he stressed that
Palyja did not sell water, but services, to the customers.
From the total Rp 670 million investment made by Palyja by
September 2003, he said the firm had repaired 1,300 kilometers of
4,000 km of old pipeline and had installed 700 km of new
pipeline.
Palyja also said it had surpassed its 47 percent target of
reducing water leakage and had achieved 45 percent as of October.
The previous rate of water leakage stood at 61 percent.
However, consumers' criticisms on the latest 40 percent rate
hike has yet to subside, as the Central Jakarta District Court
ruled on Tuesday that it would proceed with a class action filed
by the Jakarta Tap Water Consumers' Community (Komparta) against
the administration and City Council.
Presiding judge Andi Samsan Nganro said the decision to
increase the water rate "did not merely affect an individual or
private entity, but concerned the general public".
Komparta claims to represent about 200,000 out of 650,000 tap
water consumers in the capital.
P.C. Naommy and M. Taufiqurrahman, The Jakarta Post, Jakarta
A top executive at city tap water operator PT PAM Lyonnaise Jaya
(Palyja), claimed on Tuesday that the company would not be able
to provide better services unless the Jakarta administration
increased the water rate by 30 percent early next year.
Palyja commissioner Bernard Lafrogne said inflation in the
past five years had increased over 150 percent, but water rate
hikes during that time only covered 127 percent of the inflation.
"We were told by the government not to increase the water rate
during the height of the economic crisis in 1998, while the
company's operational costs increased due to the soaring
inflation rate. That has been a great burden to us," he said.
The company had called a media gathering to defend the city's
plan to increase the tap water rate by 30 percent. In the hike
proposal, the administration said it would use 17 percent of the
increase to pay off its debts to its two foreign partners, Palyja
and PT Thames PAM Jaya (TPJ).
The foreign partners have reported a Rp 990 billion (US$116.47
million) shortfall in the debt payments from city-owned water
company PD PAM Jaya.
The remaining 13 percent of the water rate increase would be
used to cover inflation and the foreign partners' operational
costs.
In the ongoing debate on the plan at City Council, many
councillors urged the administration to wait for the result of
the audit being carried out by Stone Webster's Independent
Combined Experts (ICE) team in collaboration with experts from
the Development Finance Comptroller (BPKP) on the real extent of
the shortfall.
Bernard said the simultaneous increase in electricity rates
and the price of raw water supplied by a Tangerang water operator
would make impossible for Palyja to maintain operations at the
current rate.
He said despite regular complaints from around 3,000 consumers
on the quality of its services and product, he stressed that
Palyja did not sell water, but services, to the customers.
From the total Rp 670 million investment made by Palyja by
September 2003, he said the firm had repaired 1,300 kilometers of
4,000 km of old pipeline and had installed 700 km of new
pipeline.
Palyja also said it had surpassed its 47 percent target of
reducing water leakage and had achieved 45 percent as of October.
The previous rate of water leakage stood at 61 percent.
However, consumers' criticisms on the latest 40 percent rate
hike has yet to subside, as the Central Jakarta District Court
ruled on Tuesday that it would proceed with a class action filed
by the Jakarta Tap Water Consumers' Community (Komparta) against
the administration and City Council.
Presiding judge Andi Samsan Nganro said the decision to
increase the water rate "did not merely affect an individual or
private entity, but concerned the general public".
Komparta claims to represent about 200,000 out of 650,000 tap
water consumers in the capital.