Water rate to increase by 30 percent

Bambang Nurbianto, The Jakarta Post, Jakarta

The Jakarta administration submitted to the City Council its proposal for a 30 percent increase in tap water rates starting Jan. 1, 2004. However, the hike may not guarantee better service because the money will be used to pay debts and cover inflation.

Chairman of the City Water Regulatory Body Achmad Lanti said on Monday that 17 percent of the hike would be used to pay off debts to city-owned tap water operator PD PAM Jaya, which amount to Rp 900 billion (US$105.88 million), to European-based partner companies PT Thames PAM Jaya (TPJ) and PT PAM Lyonaisse Jaya (Palyja) and the central government.

He said that the remaining 13 percent of the increase would be used to cover inflation and the two international firms' operational costs.

According to Lanti, the debt was a result from the difference between water fees paid by customers and water charges that must be paid by PAM Jaya to its foreign partners.

"The debt is a commutative shortfall because of the difference since 1998," he said, adding that PAM Jaya must also pay another Rp 1.7 trillion installment to the central government.

The city water operator plans to pay an installment of 24 percent of its shortfall, or Rp 237.59 billion, to TPJ and Palyja next year.

PAM Jaya president director Didiet Haryadi said the water company could only pay Rp 50 billion of its Rp 124 billion installment to the central government. The figure is a small part of the government's loan of Rp 1.7 trillion.

Lanti said that some 13 percent of the increase would be used to cover inflation and operational costs because the commutative inflation since 1998 reached some 152.42 percent while the three increases in that period only covered 123 percent.

The water operator raised the rate by 18 percent in February 1998, 35 percent in April 2001 and 40 percent in April 2003.

Lanti also called on the two foreign partners to optimize water supply to houses that already have water pipelines.

He said that if all customers received optimal water supply, that would increase the revenue to Rp 740 billion in the next four years.

The European-based companies have also been encouraged to continue reducing water leakage that is estimated at some 45 percent of the 550 million cubic meters of total water delivery.

The water service covers about 51 percent of the 8.3 million population of Jakarta, but only about 18 percent of poor households. Forty-five percent of middle class households and 37 percent in the high income bracket.