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Jakarta Post

Suez to offer city assistance to manage water

  • Indah Setiawati and Fikri Zaki Muhammadi

    The Jakarta Post

Jakarta   /   Tue, August 6, 2013   /  11:33 am

An official of GDF Suez has revealed the company'€™s intention to give assistance to city-owned PT Pembangunan Jaya, which will take over a majority share in water firm PT Pam Lyonnaise Jaya (Palyja).

GDF Suez is the world'€™s largest private utility company which owns 35.7 percent of shares in French'€™s Suez Environment, which controls the majority shares in Palyja.

The remaining 49 percent in Palyja is owned by PT Astratel Nusantara, a subsidiary of automotive giant PT Astra International.

Jean Claude Depail, GDF Suez'€™s executive vice president in charge of infrastructures business line, cited a possibility of Suez Environment to assist the city'€™s company after the acquisition.

'€œIt is possible to have a special contract to help the company to manage the water. We will offer this possibility to the company,'€ he told The Jakarta Post on Friday during a three-day official visit of a French delegation led by French Foreign Minister Laurent Fabius.

He said no company could run the water firm, but he trusted that Pembangunan Jaya would succeed. He refused to reveal details of the acquisition, saying that the business negotiation process was still ongoing.

'€œWe are waiting for their proposition that is acceptable for us. It is a private discussion, but it seems to us that an agreement is possible,'€ he said.

Pembangunan Jaya entertainment director Winarto had stated his company'€™s determination to run the water firm. '€œWe are owned by the city administration. Once the city assigns and appoints us, as professionals, we have to be ready.'€

However, Pembangunan Jaya president director Sutopo Kristanto said that his side has yet to receive a formal notice from Suez regarding the offer.

When asked about the reason behind the agreement to sell the majority stake of Suez Environment in Palyja, Depail simply said that it was just the right time to do it.

'€œIt was time to change and to have a new opportunity. I think we want to continue to invest, but after 15 years, it was time to release this investment,'€ he said.

He also declined any circular speculation behind the reasons to sell the stake, such as a shift in business interests and the business losses the company might experience in operating the water business.

'€œI have no figures, but I think it has to be profitable because if it'€™s not possible during 15 years, it is impossible to continue,'€ he said, adding that in the future, water would remain a good business in Jakarta.

Last October, Suez Environment wanted to sell its 51 percent stake in Palyja to Manila Water South Asia, a subsidiary of the Philippines-based Manila Water, but the request was rejected by Jakarta water company PT PAM Jaya.

The city later used the exit move as an opportunity to take over Palyja.

The city has been facing a clean water crisis as it heavily depends on other provinces to get raw water, while struggling to reduce the water loss caused by illegal connections and aging pipes.

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