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n a preliminary move to end water privatization in Jakarta, two water operators agreed on Monday to hand over parts of their operation to a city-owned company, after maintaining full control for two decades.

City-owned water operator PD PAM Jaya and the private water operators, PT PAM Lyonnaise Jaya (Palyja) and PT Aetra Air Jakarta (Aetra), signed a memorandum of understanding (MoU) to allow the city to share control of the supply of clean water, which is still not available to all residents.

“Within six months from now, what will happen is that PAM Jaya will directly supply the public as [they are currently supplied] by Palyja and Aetra,” said PAM Jaya president director Erlan Hidayat after signing the MoU on Monday at City Hall in Central Jakarta.

The agreement, Erlan said, would amend the city’s contracts with the operators but it was not likely to terminate or curtail the long-term contracts that would end in 2023.

With the restructuring, PD PAM Jaya is expected to take over a series of tasks, including provision of raw water and customer billing, before taking over full operation in 2023.

The two private water operators will still do the major work of producing clean water as well as maintaining treatment plants and pipes.

Since 1997, PAM Jaya has been relying on the two private water operators — Palyja, a subsidiary of French firm Lyonnaise des Eaux, for the western part of the city and Thames Pam Jaya (TPJ), initially a subsidiary of British Thames Water, for the eastern part — to supply water in the capital.

Thames later withdrew from TPJ and sold its stake to several companies, which then changed the name of TPJ to Aetra.

In 18 years of privatized operations, the two companies have provided clean water to only about 50 percent of Jakarta’s 10-million population.

Unlike Aetra, which renegotiated its contract in 2012, Palyja has refused to do so. In 2014, the city administration planned to take over Palyja’s shares but the move was hampered by a lawsuit filed by activists and residents, who demanded the court annul the company’s contract. The case is still ongoing.

The agreement will not immediately go into full effect since the parties have yet to agree on rates that PAM Jaya should pay to the operators for the water supplied. The city company previously refused to even discuss the issue during its negotiations with Palyja.

“We could not find agreement on the water charges. If we could find it, it [the authority handover] would have been finalized,” Erlan said.

Palyja president director Alan Thompson said his company was in line with PAM Jaya’s aims and expected “a win-win solution” for all parties.

“We just did not really get into detailed discussions [in the previous agreement]. No one on either side said they wanted to stop [the agreement discussions],” he added.

Aetra president director Mohamad Selim said Aetra eventually agreed to hand parts of the tap-water operation to PAM Jaya because so far it had not seen any downside to the agreement.

“This is still a MoU, meaning there is nothing binding. We will discuss first about what will happen,” he said, adding that there was a possibility that the parties could terminate the MoU over disagreements over details.

It is unlikely, however, that PAM Jaya’s taking over parts of the tap-water operation would affect clean-water supplies in the capital, said Amrta Institute for water literacy director Nila Ardhianie.

“If PAM Jaya fully manages the water supply, water charges to residents should be much lower given that the company does not have to pay dividends to shareholders [as the operators do],” she said.

“However, since they are aimed at only a part of the work, it will not have a significant impact,” she continued, saying that water production, in which raw water is processed into tap water, was the most expensive part of the operation.