T

he Batam Free Trade Zone Authority (BPK FTZ) is exploring the possibility of maintaining the privatization of water-resource management in Batam, Riau Islands, to support investment activities following the repealing of a law that allowed the monopolization of water resources by private companies.

In a move to maintain access to clean water, the Constitutional Court repealed earlier this month Law No. 7/2004 on water resources, which allowed the private sector to monopolize water resources.

The BPK FTZ, however, wants to maintain the supply of water from a private company to maintain investor confidence in clean water availability amid concerns over poorly managed regional and state tap-water companies.

BPK FTZ head Mustofa Widjaja told The Jakarta Post on Tuesday that his office was studying the Constitutional Court'€™s decision to annul Law No. 7/2004 on water resources.

'€œI don'€™t want foreign investors to fret about the decision. We will study whether or not we will be affected by the decision or whether the decision applies only to bottled water companies that dominate certain water resources,'€ said Mustofa.

Since 1995, clean water resources in Batam have been managed by PT Adhya Tirta Batam (PT ATB), a joint venture between private Indonesian and Singaporean companies.

Mustofa said that state and regional enterprises had not performed to the utmost in managing water resources, resulting in fear that water treatment by less experienced regional enterprises would have an impact on investor confidence in Batam.

PT ATB has been given exclusive rights, meaning that it is the only company in Batam to benefit, exploit and treat raw water as well as distribute it to customers in Batam.

When development began on Batam Island in 1971, the government, through the Batam Authority (OB) '€” BPK FTZ'€™s predecessor '€” managed and distributed clean water.

However, along with Batam'€™s rapid development and to meet market demand, the OB worked together with PT ATB to manage clean water in Batam for 25 years, from 1995 until 2020.

PT ATB spokesman Enrico Moreno Ginting said his company managed four clean water reservoirs and distributing water to 200,000 customers in Batam. PT ATB is a joint venture between PT Bangun Cipta Kontraktor and Singapore-based Sembawang Corporation.

'€œFollowing the Constitutional Court annulment of water resources privatization, PT ATB is still operating as usual. From out viewpoint, there'€™s no problem. We work as usual,'€ said Enrico.

According to Enrico, in the mechanism of the cooperation between PT ATB and BPKFTZ in managing clean water, PT ATB did not own the reservoirs in Batam as they were fully under the authority of the BPK FTZ. PT ATB, he said, was only the operator.

In the landmark decision, the Constitution Court ruled that the 2004 Water Resources Law contravened the Constitution, which stipulates the right to water as a basic right and mandates the state to control and regulate water resources.

The judges decided that the private sector could not be granted exclusive rights to manage water resources, such as rivers, springs, lakes and swamps, but may apply for licenses to sell a specified amount of water that would be decided upon by the government and local residents.