In a soup

Published: Monday 15 December 2003

Indonesian capital city Jakarta's privatised water supply scenario is swirling in thick, intriguing soup. On Tuesday, November 12, 2003, the Jakarta Tap Water Consumers Society (komparta) filed a class action suit in the Central Jakarta District Court against city-run tap water company pd pam Jaya. Specifially, komparta demands the company's private partners -- pt pam Lyonnaise Jaya (Palyja) and pt Thames pam Jaya (tpj) -- pay Rp 1 billion (us $117,647) in damages for their failure to provide proper services to customers. tpj, a subsidiary of Britain's Thames Water International, supplies customers in the eastern part of Jakarta. Palyja, a subsidiary of France's ondeo, serves customers in the western part. Together the two joint ventures, which started operating under a water-distribution disinvestment law itself prompted by a 1999 aid package from the World Bank, cater to -- or don't -- about 6,50,000 consumers.

The suit comes in the wake of a fresh demand from pd pam Jaya for an increase of tap water rates by 30 per cent. The tap water operator says that 17 per cent of the hike is to pay its debts to its partners and the remaining 13 per cent is to cover inflation and operational costs. This is the second such demand in a year, the company citing recovery of losses as the reason in both cases. In March, the two joint ventures threatened to pull out of their agreement with the city's administration and the water company itself if their demands for price hike were rejected. In April, a 40 per cent increase was duly approved by city council leaders, subject to the conditions that the two operators must report to the council every three months, slash the number of expatriate employees and reduce water leakage.

Meanwhile uk ambassador to Jakarta Richard Gozney upped the stakes even more, mid-November, by lobbying vice president Hamzah Haz to push the Jakarta administration for another hike. Gozney warned that if tpj kept bleeding money it would pull out of the country.

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