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City eyeing tap water rate increase
Wed, 06/17/2009 1:22 PM | City
The city administration is seeking to raise tap water rates, but plans to maintain the rates for low-income households with low water use.
Jakarta Governor Fauzi Bowo said Tuesday he had met with the Water Regulatory Body (BR PAM) on Monday and Tuesday to discuss the possible increase.
He pledged there would be no water rate hike for low-income households currently charged Rp 1,050 per (1 US cent) cubic meter of water.
Current rates range between Rp 1,050 and Rp 12,550 per cubic meter, since the last rate increase in January 2007.
"The point is I will not increase the rates for consumers who pay Rp 1,050 per cubic meter with limited water usage," Fauzi said at City Hall.
The governor did not say what the new rates would be.
"I will not disclose *the new rates* yet because they have yet to be decided," he said.
BR PAM head Irzal Djamal also refused to comment on the matter.
One of Jakarta's private tap water operators, PT PAM Lyonnaise Jaya (Palyja), proposed last December an average increase of 22.7 percent over the next four years in water rates to fund investments to improve tap water distribution in the city's west.
The Jakarta Water Company (PAM) appointed two contractors to handle water distribution - Palyja for the western part of the capital and PT Aetra Air Jakarta for the eastern part.
Fauzi said the operators' demands were exorbitant.
"I asked the regulatory body to re-examine it. There is also in the contract a calculation for a gradual decrease in taxes. I want that to be clearer," he said.
In December, Palyja said it would invest Rp 853 billion to improve distribution.
Of that amount, Rp 200 billion is earmarked for 2009 and will be used to replace old pipes and perform production maintenance.
The company said the 20 percent inflation over the last two years was also a factor in the rate hike.
Palyja said it would add 21 kilometers of primary pipes and fix the 877-kilometer distribution network. The company expects the repair projects to be completed in 2012.
The repairs are expected to eventually reduce the rate of non-revenue water (NRW), Palyja said. NRW occurs mostly because of theft and leaks from pipes.
- JP/Prodita Sabarini
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