Water rate hike in January despite protests

Water rate hike in January despite protests

Bambang Nurbianto, The Jakarta Post, Jakarta

After much debate and public criticism since November over a 30
percent tap water rate hike proposed by the city administration,
councillors have decided that Jakartans will kick off the new
year with an increased water bill.

"I have been informed by an official at the administration
that City Council has approved the proposal for the tap water
rate hike," Achmad Lanti, chairman of the City Water Regulatory
Body, told The Jakarta Post on Friday.

He said, however, that he had not yet received a copy of the
council's letter of approval.

Achmad reaffirmed a statement made on Wednesday by City
Council speaker Agung Imam Sumanto that the council had approved
the proposal submitted by the administration on Nov. 10.

Agung stressed that his staff had sent the letter of approval
to Governor Sutiyoso, but could not provide details on the new
rate.

Earlier, chairman of the council's Commission D for
development affairs, Koeswadi Soesilohardjo, had said the new
rate would meet the demands of the city administration.

Sutiyoso's proposal for the 30 percent hike was made in an
effort to meet the demands of city tap water operator PD PAM Jaya
and its two foreign partners: PT Thames PAM Jaya (TPJ) and PT PAM
Lyonnaise Jaya (Palyja).

The proposal explains that 17 percent of the increase would be
used to pay off PD PAM Jaya's Rp 900 billion (US$105.88 million)
debt to the partners and the remaining 13 percent to cover
inflation and the two foreign firms' operational costs.

The debt is a cumulative result of the commutative difference
between water fees paid by customers and water charges paid by PD
PAM Jaya to its foreign partners since 1998.

With the approved hike, PD PAM Jaya will repay 24 percent of
its debt, or Rp 237.59 billion, to TPJ and Palyja next year.

PD PAM Jaya has already raised the water rate by 18 percent in
February 1998, by 35 percent in April 2001 and by 40 percent in
April 2003.

The hike has been strongly opposed by consumers, consumer
protection activists and a number of councillors.

Two factions in City Council -- the National Mandate Party
(PAN) and the Justice Party -- have openly opposed the decision,
which was taken by the council's leaders.

The factions argued that the water operators had failed to
improve services and efficiency, with frequently disrupted
supply, poor water quality and a 45 percent water leakage rate.

When the hike takes effect in 2004, poor customers will be the
first to be affected, even though it is proposed that the rate
for poor customers be increased from Rp 375 per cubic meter to Rp
500 or Rp 650 per cubic meter.

Such an increase will still affect an individual like Sumadi,
40, a street vendor at Palmerah market, whose daily income is
between Rp 25,000 and Rp 50,000. He pays around Rp 25,000 monthly
for water.

"Of course, it will be an added burden if I have to pay more
for water next year," said Sumadi, who lives in a rented house
with his wife and two children in Grogol Utara, South Jakarta.