'We're not soft', city water company says

The Jakarta Post ,  JAKARTA   |  Sat, 01/17/2009 5:29 PM  |  City

City tap water company PAM Jaya has denied public allegations that it is "too lenient" on its partners, private-owned water suppliers, PT PAM Lyonnaise Jaya (Palyja) and PT Aetra Air Jakarta.

On Wednesday, Jakarta Water Supply Regulatory Body held a press conference, saying Palyja and Aetra missed most of the five targets for 2008, and that the companies had set weak targets for the next five years.

The report implied PAM Jaya had failed to push its partners to work harder.

"We agree with the body's evaluation that both of our partners have been inefficient, but we do not agree with the opinion of one of its members that we are being too soft," PAM Jaya director Haryadi Priyohutomo said Thursday.

Firdaus Ali from the regulatory body's technical department on Wednesday said the city suffered around Rp 250 billion (US$25 million) in losses because of leakages and theftusually referred to as NonRevenue Water (NRW).

Lowering NRW was one of the targets the operators had to meet.

Last year, Aetra's NRW stood at 53.23 percent, missing the 38.6 percent target while Palyja at 46.18 percent, over the 35.25 percent target.

The other targets are for the number of customers, coverage, production capacity and volume of water sold.

Firdaus said PAM Jaya did not penalize Palyja and Aetra enough. He said both companies paid Rp 800 million each for their failure to meet the targets in 2008.

"Yes the fine was less than 1 percent of the total loss. But, on top of the fine, the operators have also paid compensation," Haryadi said.

"Palyja paid around Rp 165 billion and Aetra around Rp 183 billion, so we are not being soft."

To show their seriousness, PAM Jaya raised the penalty in October last year, he added.

"For example, the fine for NRW has been raised from Rp 50 million to Rp 80 million for each percentage point over the target," PAM Jaya technical director Kris Tutuko said.

Haryadi said the regulatory body needed to see water distribution issues in a more comprehensive manner.

"Last year's inefficiency was because of a huge flood in 2007, which drowned Palyja's distribution center in Lebak Bulus *South Jakarta* and Aetra's tap water infrastructure in Buaran *East Jakarta*," he said.

"Despite some differences of opinion with some individuals from the regulatory body, we agree both operators need to improve performance."

PAM Jaya has appointed Palyja and Aetra to handle the city's water distribution since 1998. Palyja distributes water to the western part of the city, while Aetra the eastern.

The body evaluates the suppliers' performance every five years in a discussion called a rebasing deal. As part of the discussion, the regulatory body, with the assistance of the State Development Comptroller (BPKP), determines whether their performance has been satisfactory.

Aside from the five targets, every year the operators plan to widen the water pipe networks.

According to data from PAM Jaya, both operators failed to meet their targets.

Last year, Palyja planned to add 264,000 meters of pipe, but only managed 79,216 meters, while Aetra was expected to add 121,216 meters, but only managed 53,033 meters. (hdt)

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