Water operator seeks contract review

The Jakarta Post, Jakarta

While the Jakarta administration reviews the performance of two private water operators -- PT Thames PAM Jaya (TPJ) and PT PAM Lyonnaise Jaya (Palyja) -- city-owned water company PAM Jaya wants to review their water contracts.

"We are not satisfied with the operators' performances. Therefore, we are reviewing their contracts to reset targets and standards for the next five years," president director of PAM Jaya, Didit Haryadi, said Tuesday.

The contract appraisal would include legal adjustments to cooperation agreements, which are expected to raise its bargaining position.

In 1997, the city signed a 25-year contract that made PAM Jaya give water concessions to the two private operators to manage the distribution of clean water in Jakarta's eastern and western areas. The contract is subject to an evaluation process every five years.

"The 1997 contract stipulated we must provide the two partners with raw water from Jatiluhur dam. We don't handle such things anymore. We want to have a win-win solution," Didit said

Many customers have complained about the two operators' performances and increasing water tariffs.

Didit said PAM Jaya wanted the partners to reach 75 percent service coverage in the next five years. As for leakage levels, he added, the company expected Palyja to reach 38 percent and TPJ 44 percent.

Coordinator of People's Coalition for the Rights to Water (Kruha) Hamong Santono said according to contractual targets, the two partners had been expected to reduce leakage levels to 39.87 percent and reach 70.18 percent service coverage in 2006.

However, he said, TPJ's leakage level had been recorded at 51 percent and Palyja's at 47 percent.

"Although the administration can review the contracts to improve its bargaining position, I think it would be better to terminate the contracts. It's just a matter of political will," Hamong told The Jakarta Post last week.

TPJ communications director Rhamses Simanjuntak claimed his company had reached 67 percent in service coverage and 51 percent in leakage levels in October. While Palyja public relations manager Meyritha Maryanie said in October her company had reached 58.4 percent in service coverage and around 47 percent in leakage levels.

"Although both operators claim to have broadened their service coverage, it doesn't mean the quality of their service has improved," Hamong said.

Both companies claim high leakage levels were caused by water theft.

Rhamses said in order to fight water theft, his company had curbed illegal connections and set a district meter system. Meyritha said Palyja had reduced its leakages by persuading people who stole water to become customers.

Even though the two water operators have failed to meet their targets, Didit said PAM Jaya did not plan to terminate the contracts, as it would involve a penalty of more than Rp 5 trillion. (tif)