Blontank Poer, The Jakarta Post, Surakarta
Hundreds of Indonesian water companies face serious debts they have no hope of repaying, while others have put into action policies that benefit the poor and the environment.
Of the country's roughly 320 Perusahaan Daerah Air Minum (PDAM) -- local tap water companies -- only 10 are financially healthy, while another 50 are running at the average. The rest face some Rp 6 trillion in foreign debts.
""There's still no solution to paying off such huge debts. In the end, selling PDAM shares to foreign private companies seems like the only alternative,"" Hamong Santoso, coordinator of the People's Coalition for the Right to Water, told The Jakarta Post.
He said the mindset of local administrations was responsible for the situation.
""In many regions, some regencies and mayors do not want to raise water tariffs (in order to) boost their popularity (but) while sacrificing production costs. In the end, the PDAMs suffer,"" he said.
Another problem is the inconsistency of policies between old and new municipal and regency administrations.
""As a result, the obligation to pay debts is regularly being put on hold, trapping the PDAM in debt and interest,"" said Abimanyu, director of Central Java PDAM in Surakarta.
Unlike most tap water companies, Surakarta's is not only financially healthy but also contributes to improving the environment and economically benefiting the public.
Hamong said the company has provided hydrants in several poor areas, the management of which is trusted with local communities. The water tariff is specially set at Rp 1,000 a cubic meter, of which only 40 percent is paid to PDAM while the rest is managed by the community and used for important initiatives, such as holding mass vaccinations.
""This policy is pro the poor,"" he said.
Apart from the public hydrants, the tap water company has also provided two potable water fountains located outside the company's office in the heart of the city for passersby, as well as sidewalk vendors and pedicab drivers, for free.
Some Rp 100 million was invested two years ago to develop drinking water. It has since produced 1.5 million liters of tap water worth Rp 2.5 billion for public consumption. The Rp 20 billion the company netted was channel to the regency.
The company serves 55 percent of the regency's population of 550,000. It supplies 860 liters of water per second. Almost half of the water comes from a source in Klaten, while the rest of the demand is met by 27 artesian wells across the regency.
""But I'm worried that if the wells continue to be used the land will be damaged and allow the bacteria E. coli to become a health threat,"" Abimanyu said.
With that concern in mind, the company is looking for alternative water sources, including building a water treatment plant on the banks of the Bengawan Solo River.
The plant, with a capacity of 100 liters per second, is running successfully and was built at cost of Rp 10 billion to provide water for 6,000 customers. The investment is expected to pay for itself within three to four years.
Abimanyu plans to build three more water treatment plants of the same capacity by 2011. The move is expected to cut the number of wells by half. However, dozens of wells would continue to serve as water catchment areas.
Should the plan goes as expected, he said the company would see large profits. ""We can use the profits for other investment,"" Abimanyu said.
The investments include the construction of a pipeline network to dump liquid domestic waste, which will be treated and made safe to be directly pumped into rivers.
The company now has two liquid waste treatment plants serving 10,000 customers. By 2001, the company plans to build more to treat waste coming from 25,000 customers.
""By treating waste we will reduce land pollution while the treated water is safe to be dumped in the river,"" Abimanyu said.
Abimanyu is against the privatization of public services, including PDAMs.
He said the local company was not tempted to take out loans even though it needed more money to finance its projects. Its only debt is US$7.2 million owed to the World Bank, which should be paid in full by 2018.
He said the company was offered $9.5 million in loans when Indonesia was hit by the economic crisis in 1997. ""But we only took $7.2 million based on the company's needs and ability to pay it back. Why take more if it complicates our business?"" he said.
In running the business, the company implements a cross-subsidy policy, where poor customers are charged Rp 1,100 per cubic meter water and middle-class and business customers pay between Rp 3,000 and Rp 4,700 per cubic meter for using more than 30 cubic meters of water per month.
As a result of the company's policies he was invited by a network of non-governmental organizations to attend the World Water Forum in Mexico last year.
""He became the forum's star. Apart from his attitude, against privatization, he has issued many policies that help the poor, protect the environment and maintain a commitment to respecting the tribal right to water,"" Hamong said.
In a show of the company's respect for tribal rights, it has provided a tap water pipeline for some 300 families in Gebang village above the Ingas water source in Cokro, Klaten regency.
""They lived near a water source but had limited access to water. We couldn't let this situation go on,"" Abimanyu said.
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