New tap water calculation to be completed soon

Saturday, May 01, 2004 Damar Harsanto, The Jakarta Post - Jakarta

City-run tap water operator PD PAM Jaya and its foreign partners, British firm Thames PAM Jaya (TPJ) and French PT PAM Lyonnaise Jaya (Palyja), will have a newly revised basis for calculating the rate for tap water services by the end of May. "There will be a final decision on the revised basis for the calculation. We shall adjust the contract (with the two partners) in line with the new basis," Assistant to the City Secretary for Development Affairs IGKG Suena said at City Hall on Thursday. Suena said the revisions included a new basis for calculating water charges and capital expenditure, and would form the guidelines for tap water operation in the next five years.

"Under the new basis, we hope to be able to finish paying off our debts by 2007." City Regulatory Agency head Ahmad Lanti said earlier that the total debt owed by PAM Jaya to the Ministry of Finance amounted to Rp 1.8 trillion (US$208 million). According to Suena, PAM Jaya, TPJ and Palyja would meet next week to discuss several recommendations made by an international combined experts team of London-based independent auditor Stone Webster, which finished its audit report in mid-March.

"There are significant differences, relating to the recommendations made by the ICE team, between PAM Jaya and its two partners. That's why they asked the administration's help to resolve the differences," he said. Suena added the meeting would come up with a calculation that would be approved by the three companies. The new calculation would then be presented to Governor Sutiyoso and Minister of Settlement and Regional Infrastructure Soenarno for their approval. When asked if the new calculation would lead to another water rate hike, Suena nodded. "But the increase will be based on the companies' needs and the prevailing situation," he said.

Many of Jakarta's 900,000 tap water consumers have complained about poor services provided by tap water operators, including repeated disruption of water supply. Despite increases in tap water rates, PAM Jaya's financial position has continued in the doldrums. Water theft and a leaky pipe network have been blamed as a cause of massive losses.