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.