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Jakarta Post

Groups demand delay on Palyja buyout

  • Corry Elyda and Sita W. Dewi

    The Jakarta Post

Jakarta   /   Wed, October 30, 2013   /  08:36 am

The Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ) is advising Governor Joko '€œJokowi'€ Widodo to delay his plan to buy the shares of private water operator PT PAM Lyonnaise Jaya (Palyja).

KMMSAJ lawyer Arif Maulana said on Tuesday that his team, who was now filing a lawsuit to annul the work contracts between city water operator PT PAM Jaya and its foreign partners Palyja and PT Aetra Air Jakarta (Aetra), had sent a subpoena to the Governor regarding the latter'€™s plan for French company Suez Environnment to acquire a 51 percent stake.

'€œThe subpoena is advice for the governor not to make a move in regard to the water privatization issue pending a court decision,'€ he said, adding that the letter was sent on Oct. 3.

Jokowi, however, insisted to continue with the acquisition plan.

'€œThe negotiation is ongoing and we will continue with the acquisition plan as we have allocated the budget this year,'€ Jokowi said at City Hall on Tuesday, arguing that it would take longer to re-insert the plan into the annual budget.

Jokowi pointed out that it would be easier to just retract the lawsuit should the city'€™s acquisition plan be completed.

'€œ[The coalition] was the one who encouraged the city administration to take over the water firm. Don'€™t just easily change things,'€ he said.

Arif said the coalition had asked the court to order all parties, including the city administration, not to take any legal measure, such as trading stocks or assets, with both private firms before the court made a decision estimated early next year.

City-owned developer PT Jakarta Propertindo recently received a capital investment of Rp 600 billion (US$54 million), which will be used to complete the acquisition. Meanwhile, KKMSAJ estimated that it cost around Rp 9 trillion to buy the shares of two companies.

Arif further said the acquiring of the share could also be perceived as a form of violation to the residents rights as it had yet to involve the public in making the decision.

'€œBuying the stocks will not solve the problem as the public cannot ask for responsibility from both private companies,'€ he said.

According to the coalition, the partnership with both Palyja and Aetra has hindered public access to affordable clean water. In its 16th year of operation, both Palyja, which manages the west side of the city and Aetra, which manages the east side, only fulfilled the needs of 34.8 percent of Jakartans.

The contracts have also kept the city deep in debt with dual financing that differentiates between the price PAM Jaya pays operators to supply water to households and prices charged to customers, allowing the firms to book huge profit by overcharging customers.

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