Water sector privatization looms, NGOs warn of risks

Muninggar Sri Saraswati, Jakarta

Less than three months after the House of Representatives approved the water bill amid public outcry, the government has talked about a plan to privatize state-run regional water companies.

After a meeting with House legislators in mid-May, director-general of city and village planning at the Ministry of Settlement and Regional Infrastructure Patana Rantetoding disclosed the government's plan "to revive over 300 ailing regional water companies across the country, and to provide clean water".

He announced that several international financial institutions and foreign governments had pledged to fund the program.

Among them are the Asian Development Bank (ADB), the World Bank and the governments of France, Australia, Spain, Italy and the Netherlands, Patana said.

"We will fund the program from the state budget, and loans or grants from foreign (institutions and countries). We also welcome investors, both foreign and local," he said.

Patana said the government would be able to repay the loan within 20 years, thanks to the huge market in the country.

The government, he said, has decided to borrow the money from foreign institutions and governments, some Rp 4 trillion (around US$434,000), to finance the program.

The program follows Indonesia's commitment to the United Nation's 2000 Millennium Development Goals (MDG) that require participating countries to double people's access to clean water by 2015.

In 2000, only 42 million residents, or over 20 percent of the country's population of 200 million, had access to clean water, Patana said.

Under the program, the government expects the figure to rise to 150 million, or 60 percent of the population, and reach 80 percent of residents in urban areas and 40 percent of people in rural areas by 2015.

The government blames the regional water companies' huge debt burden for their failure to provide clean water to people.

"Of some 300 state-owned water companies in the country, only 9 percent are considered healthy," Patana said.

Non-governmental organization activists consider the government's plan a clear confirmation of their suspicion, long before the bill was passed by the House, of the possible privatization of water management. The activists had warned that privatization would only benefit a few giant foreign water companies.

"It's clear now. The privatization of water management has affected the country," said Heine Nababan, a member of the Coalition of People's Right to Water, which was among staunch critics of the water resource bill.

He said privatization was not the only way to provide people with access to clean and affordable water, as private companies would turn water into a profit-oriented business, therefore blocking the poor's access to clean water.

Heine pointed to cases in Argentina, Bolivia, Ecuador, Panama and South Africa, where people took to the streets to protest the commercialization of water. Some of the protests turned violent.

Assisted by the Jakarta Legal Aid Institute, the coalition is set to file a judicial review with the Constitutional Court against the new law, saying it violates the Constitution.

"We hope the Constitutional Court justices understand the consequence of the privatization of water management. Many people will suffer as most of them, including farmers, cannot afford to buy water, the basic necessity of human beings," he said.