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eputy Governor Basuki “Ahok” Tjahaja Purnama insists that the city administration will seek other options to avoid penalties and other legal consequences instead of canceling the city’s contracts with private water firms.

Governor Joko “Jokowi” Widodo said that contracts would be audited to assess the legal consequences of a city opt out.

The administration wants to take a 51 percent stake in tap-water operator PT PAM Lyonnaise Jaya (Palyja) as Paris-based Suez Environment wants to sell.

In October, Suez agreed to sell its stake in Palyja to Manila Water — a subsidiary of the Philippines holding company, the Ayala Corporation — which has raised the eyebrows of activists, who think the Suez move is a way of dodging their responsibilities. However, the move is on hold until the city administration approves it.

“If we cancel the contracts, we will have to pay trillions in penalties or be sued. I have told Suez to just sell the stake to us if they can’t do their job,” Ahok said on Thursday at his office.

Ahok admits he has yet to check out penalty clauses in the contract. “They were reluctant to open up the contract [to the city]. I haven’t read the contract yet,” he said.

Ahok has repeatedly expressed the city’s intention to take a majority shareholding in the water firm and to include a city-owned enterprise in the water business.

However, Suez Environment is under no obligation to accept the city’s offer. “If they refuse our offer, we will insist on a contract renegotiation,” he said.

The unfair contract and double-financing scheme has kept the city deep in debt. The scheme differentiates between water charges — the price PAM Jaya pays operators to supply water to households — and prices charged to customers, allowing the firm to book huge profits by overcharging customers.

Jakarta’s Financial Development Comptroller recommended in 2011 that water suppliers profits be set at 14.8 percent, but the companies insisted on 22 percent.

City water operator PAM Jaya and the Jakarta administration would owe private water firms Palyja, which serves the western side, and PT Aetra Air Jakarta (Aetra), which serves the city’s eastern half, Rp 18.2 trillion (US$1.87 billion) if the contracts continue until their scheduled expiration date in 2022.

A coalition of Jakarta residents opposed to water privatization has filed a class-action lawsuit against the city at Central Jakarta District Court over the policy that allowed water privatization in the first place. They claim the deal violated a Constitutional requirement for the government to control the provision and distribution of vital natural resources for the people. The coalition won a previous suit filed with the State Administrative Court that required PAM Jaya to make public the content of contracts with the private firms.

“The lawsuit is in an ongoing process. I want sufficient and affordable water supplies,” Jokowi said on Thursday, declining to further explain his stance on the matter.

One of the coalition members, the People’s Coalition for Fisheries Justice (KIARA) said it was the administration’s responsibility, not private firms, to handle the management of water for public use as stipulated in the 1945 Constitution.

“Participation of private companies in the matter only results in commercialization and high prices that the public has to pay to enjoy the water,” KIARA executive director Abdul Halim said on Friday.

At the time of writing, PAM Jaya president director Sri Widayanto Kaderi could not be reached for comments.

Palyja spokeswoman Meyritha Maryanie said that changes in the company’s ownership would not affect the company.

“Whoever owns Palyja, be it the city administration or anyone else, we will work professionally,” Meyritha said. (tam)