Jakpro to keep Palyja profit-oriented firm
The Jakarta Post
City-owned property developer PT Jakarta Propertindo (Jakpro), which is currently acquiring private water operator PT PAM Lyonnaise Jaya (Palyja), plans to maintain it as a profit-oriented firm.
Jakpro president director Budi Karya Sumadi said after a discussion on water services on Thursday that it was impossible to make Palyja a non-profit organization after the shares were acquired.
'We need to generate revenue in order to guarantee the welfare of employees and the company's progress,' he said.
Budi said the company should be independent in operating the water service, so it that would not require subsidies from the city administration.
'We also have to expand company so it can manage water in areas outside Jakarta,' he said.
The city administration ordered Jakpro and city-owned developer PT Pembangunan Jaya to consecutively acquire 49 percent and 51 percent shares of Palyja owned by France-based utility company Suez Environment and PT Astra's subsidiary PT Astratel.
Jakpro has pocketed Rp 600 billion in capital injection to be used to complete the acquisition.
However, the acquisition has been hindered by a lawsuit, filed by members of the public, grouped under the Coalition of Jakarta Residents Opposing to Water Privatization (KMMSAJ), demanding the court to annul the 25-year contract between city-owned water operator PAM Jaya with its two private partners ' Palyja and PT Aetra Jakarta (Aetra) signed in 1997.
The coalition also demanded that the water operation in Jakarta be taken over by the city administration.
The lawsuit was filed because coalition feels that both private operators have failed in fulfilling their tasks to provide clean and potable water to Jakarta residents, especially low-income families in its 16 years of operation.
Febi Yonesta, the chairman of one of the coalition members the Jakarta Legal Aid Institute (LBH Jakarta), said the coalition did not have plans to withdraw the lawsuit.
'The lawsuit is the only way that for public to have a bargaining position in its fight to reclaim the water rights,' he said. Febi said he was not convinced that acquisition would lead to better access to water low-income families.
Budi said although the company was profit-oriented, the new contract ensured that low-income families and developing the infrastructure would be the main priorities.
'In the newly rebalanced contract, we plan to reduce the non-revenue water from 41 percent to 29 percent in five years and invest funds of Rp 1.4 trillion to Rp 3.2 trillion in six years,' he said, adding that they also had a quota to install piped water in low-income areas.
He said, however, that the low-income families should limit their water usage, adding that a study conducted by the Atma Jaya University found that low-income families used more water than high-income households.
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