Water Privatization in Jakarta ‘Not Working’

By webadmin on 11:03 pm Apr 29, 2012
Category Archive

Ezra Sihite

Two groups on Sunday criticized the privatization of clean water in the capital, and received the support of a candidate for the city’s governorship.

The Coalition of People Rejecting the Privatization of Water in Jakarta (KMMSAJ) and the Legal Aid Institute (LBH) Jakarta expressed their opposition during a forum on the city’s clean water supplies.

“LBH Jakarta and KMMSAJ took up the water problem in Jakarta because the issue has been forgotten and marginalized,” LBH Jakarta chairman Nurkholis Hidayat said. “This is a general need that should have been fought for by those concerned, especially the government.”

Nurkholis said that even with the privatization of the Jakarta clean water company — state controlled PAM Jaya subcontracts water services to private companies PAM Lyonnaise Jaya (Palyja) and Aetra Air Jakarta — about 40 percent of Jakarta households do not have access to piped water.

The poor have to buy water at between Rp 37,000 and Rp 85,000 per square cubic meter, he said.

Nurkholis said that since signing the 25-year contracts with the two private companies in 1997, PAM Jaya has suffered from debts of up to Rp 1.3 trillion ($142 million). Its assets dropped from Rp 1.49 trillion to Rp 204.46 billion a 2007 audit showed.

Those organizing Sunday’s discussion invited all six of Jakarta’s gubernatorial candidates but independent candidate Hendardji Supandji was the only one who attended.

“Privatization is not problem if it alleviates the burden of the people, but it is if it’s adding to the problem,” said Hendardji, who is in the race with running mate Riza Patriya.

“It was said that the government debt to the private sector stood at Rp 1.3 trillion while PAM [Jaya]’s assets are only at around Rp 200 billion,” Hendardji added. “That the assets of the state are smaller than the debt of Rp 1.3 billion does not make sense,” Hendardji said.

He said that the debt should be paid and the contracts reviewed.

“A 25-year contract can still be reviewed and the debt does not have to paid all at once, but can be paid during the term of the governor,” he said.

He said that it was also unacceptable that water from PAM was still smelly and dirty.

“Smelly water should be checked. If there is any sabotage, then it should be investigated Hendardji said. “Or maybe it is because procedures are not being followed.”

The central government has been tried to make changes to the contracts in the water sector. PAM Jaya has been aggressive on this front but has met with limited results.

Aetra, which manages water services in the city’s eastern half, has largely conceded to PAM Jaya’s demands. Palyja, which runs the western half, has taken a harder line.

The main point on which the companies differ concerns the water tariff. Aetra has agreed to cap the charge for the remainder of the contract, which ends in 2022.

However, Palyja is adamant that it be raised, or that the government subsidize the system, which it always has been unwilling to do.