Water price hike draws angry public response

Water price hike draws angry public response

JAKARTA (JP): The PAM Jaya City Water Company's decision to
raise the prices of water by an average of 40 percent has drawn
unfavorable reactions from consumers and the Indonesian
Consumers' Organization (YLKI).

"This is a selfish act by PAM Jaya," Agus Pambu, an executive
of the organization told The Jakarta Post here yesterday.

Agus explained that the increase should have been in line with
the inflation rate of just under 10 percent.

PAM Jaya president, Sjamsu Romli, announced on Wednesday that
as of this month the company will increase prices to help finance
projects to extend access to clean water to a larger portion of
the city's residents and to repay its Rp 1.4 trillion (around US$
650 million) debt to foreign creditors.

Most of the loans were made to the company by the
International Bank for Reconstruction and Development and the
Overseas Economic Cooperation Fund, which financed
the construction of its water treatment plants.

Despite the reasons given by the company, Agus Pambu questions
the motives behind the increase, asking if such a jump in prices
is really necessary.

"Does this mean PAM Jaya's services will also improve?" he
asked.

A number of housewives contacted by the Post said they were
bewildered at the water company's recent decision. They asked why
such a large hike in prices was required and whether anything
would improve as a result of it.

"I was staggered when I read about it, everything is so
expensive. Why do they have to burden us even more?" said Mrs.
Rohayah Soekardji of Rawamangun, East Jakarta.

Despite being concerned at PAM Jaya's decision, Rohayah
believes that there is nothing she can do but accept it.

"No matter what, we need water and I guess you could say we're
quite lucky since we have access to clean water ... there are
many who don't even get running water," she said.

PAM Jaya has revealed plans to serve 65 percent of the city's
population by the year 2000. At present the firm's services cover
less than half of the city's 8.4 million population.

"Why are they doing it again? Didn't they just raise the price
not too long ago?," asked Mimmy Gunawan, a resident of Matraman
in East Jakarta.

This is the fourth time in a little over 10 years that PAM
Jaya has increased its prices. The first rise was a 60 percent
increase in 1983, followed by a massive 212 percent hike in 1988
and a 40 percent rise in September 1991.

Fraud

The City Council expressed displeasure at PAM Jaya directors'
move to increase the prices of public tap water, calling it
fraudulent.

"We couldn't comply with the City Council's plea to lower the
costs at public water reservoir taps," PAM Jaya's director of
administration and finance, H. Machmud Ranusemito, said
yesterday.

The council had previously approved an increase from Rp 250
(11 U.S. cents) to Rp 390 per cubic meter from at public water
taps. Prices have now tripled to Rp 790 per cubic meter, far
above the level the council was willing to agree to.

When the proposal was taken to the Ministry of Home Affairs
for final approval, it was determined that Rp 790 per cubic meter
was acceptable, Machmud said as quoted by Antara.

Agus Pambu lamented the increase at public water taps, saying
that it would directly affect those who have to purchase their
water from private water sellers, especially low-income people.

People living in Tanjung Priok, North Jakarta, where fresh
water is scarce, will bear the brunt since the water-sellers will
raise their prices, he said.

To soften criticism, Machmud said PAM Jaya is telling public
water tank and reservoir owners not to increase prices because
their current profit margin is such that the new prices won't
cause them a loss.

"We will take stiff action against those who fail to comply,"
he warned.

Machmud also revealed to reporters yesterday that PAM Jaya's
leakage level was still high at about 46 percent. The national
average is 40 percent, while international standards stand at 30
percent.

He vowed that the company is doing its utmost to stop these
leakages, saying that since 1992, 4,450 illegal water connections
have been discovered and sealed. (mds)