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.