Water tariffs to be cut by a quarter
Water tariffs to be cut by a quarter
JAKARTA (JP): The city administration, beset by a deluge of
complaints over new tap water rates, decided yesterday to lower
them by an average of 25 percent starting next month.
Governor Sutiyoso said the decision was made after the two
foreign business partners of city-owned water management company
PDAM Jaya agreed to the new tariff proposals.
Tariffs for affluent customers will not be affected.
Customers categorized in middle and low economic brackets --
such as residents of low-cost apartments, buildings for social
services, houses of worship and hospitals -- would have their
rates lowered by 17 percent, he said.
"The new tariff is still set under the cross-subsidy principle
in that the wealthy customers subsidize those of the middle to
lower class."
Sutiyoso could not provide further details on new tariffs and
told reporters to check with PDAM.
The city administration raised tap water tariffs by an average
of 25 percent April 1. The highest increase of 65.71 percent was
imposed at that time on affluent customers, with the cost per
cubic meter of water rising from Rp 1,175 to Rp 2,545.
Tariffs for middle income families were raised by 38.36
percent, from Rp 930 to Rp 1,935 per cubic meter, while those for
poorer families went up 38 percent from Rp 775 to Rp 1,600.
PDAM made the increases after it signed a 25-year cooperation
agreement with PT Kekar-Thames Airindo (Kati), a joint venture
between former president Soeharto's eldest son Sigit
Hardjojudanto and Thames Water International of Britain, and PT
Garuda Dipta Semesta (GDS), a cooperation between the giant Salim
business group and Lyonnaise des Eaux of France.
Customers strongly protested the increase in the midst of the
economic crisis.
The administration subsequently canceled the cooperation last
month as the contracts with the two joint venture firms were
believed to have been won through nepotistic and collusive
practices.
PDAM then established new deals with the foreign partners.
City Council urged the administration on Monday to lower the
tariffs as promised following the revocation of the cooperation
agreements.
Sutiyoso said yesterday the administration had not dragged its
feet on its previous pledge to lower the tariffs. The delay was
due to lengthy negotiations with its partners, he said.
"The decision was made through a hard struggle because we had
to negotiate with our partners as we have a commitment to them."
The governor mentioned several issues which had to be
considered before establishing the new tariffs, such as the
smaller revenues to be collected by PDAM even as it had to pay
off huge debts.
"We also had to consider maintenance costs, salaries for
employees and so on. Following that, we found the 25 percent
decrease to be the most reasonable."
The governor said he would ask members of his staff to soon
make an explanation before the City Council.
Meanwhile, head of the council's Commission C for financial
affairs, Amarullah Asbah, warmly welcomed the tariff decrease and
said: "We are waiting for the executive's explanation on it."
He recommended that the move should be followed by efforts to
reduce leakages in water production and distribution, estimated
to reach up to 40 percent. (ind)