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ity-owned water operator PD PAM Jaya seeks to take over PT PAM Lyonnaise Jaya (Palyja) starting this year by negotiating a gradual transition process with the latter.

PAM Jaya president director Erlan Hidayat said that the company'€™s contract with Palyja ended in 2023, but gradual transition would begin soon.

'€œOur contract with Palyja ends in 2023, we only have about eight years left. We will slowly begin the transition of operations from Palyja to PAM Jaya starting this year. [Regarding the takeover], this year we will begin to negotiate with PAM Jaya,'€ Erlan said on Monday.

Erlan explained that, legally, PAM Jaya is unable to acquire Palyja'€™s shares due to an ongoing civil lawsuit.

Last March, the Central Jakarta District Court ruled in favor of the Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ), ordering an annulment of a cooperation struck between city owned PAM Jaya and the two private water operators that began in 1997 and is set to expire in 2023. The lawsuit was filed with the court in March 2013.

The coalition claimed that Palyja and another operator, PT Aetra Air Jakarta, had failed to provide adequate supplies of clean, potable water for Jakarta residents. Since the agreement was signed on June 6, 1998, PAM Jaya'€™s water operating responsibility in Jakarta was given to the two private companies. Palyja is responsible for water operations in North and West Jakarta, while PT Aetra Air Jakarta is responsible for East, Central, South and North Jakarta.

Palyja, Aetra and the central government have since filed an appeal against the court ruling.

Erlan said that, instead, PAM Jaya can begin to expand its area of operation, taking over water treatment facilities as well as customer service. For example, to provide more clean water for residents in West Jakarta, PAM Jaya and Jakpro are developing a water treatment plant in Hutan Kota, West Jakarta. The water from the plant will be piped to residents using Palyja'€™s facilities, but the plant will be managed by PAM Jaya.

'€œWe will begin operating our own plants using Palyja'€™s facilities,'€ Erlan said.

However, to discuss the transition he emphasized that PAM Jaya would first negotiate with Palyja.

Erlan said that, for 18 years, ever since the contract with Palyja and Aetra took place, PAM Jaya had been '€œon a break'€ but was preparing to get back on its feet and return as Jakarta'€™s water operator. To do so, he said, PAM Jaya needs to make careful calculations.

'€œAll things are still under discussion with regard to the transition. We need to make careful calculations,'€ he said.

Separately, Palyja spokeswoman Meyritha Maryanie said that the company was in the midst of internal discussions regarding its negotiation with PAM Jaya. She explained that, for rebasing, according to Palyja'€™s contract with PAM Jaya, the two companies are required to hold discussions every five years.

'€œThe last time we conducted discussions was from 2008 to 2012. Since then, there has been no agreement on rebasing, rebalancing or renegotiation. Such a process is currently ongoing as well,'€ Meyritha said on Monday.

In 2012, the city administration attempted to renegotiate its contract with Palyja to no avail. The city administration then gave city owned developer PT Jakarta Propertindo (Jakpro) the task of acquiring 49 percent of Palyja'€™s shares, however the process was hampered by the ongoing legal procedure.

On the other hand, Aetra renegotiated its contract with the city administration in 2014. Part the negotiation stipulated that Aetra would shoulder the risk of the cooperation and be responsible for the revenue derived from the cooperation.