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Jakarta to stop privatization of water supply

Jakarta to stop privatization of water supply

PT PAM Lyonnasise Jaya (Palyja) installation is located in Pejompongan, Jakarta. (ANTARA FOTO/Rivan Awal Lingga)

After entrusting private companies with supplying clean water to Jakarta residents for two decades, the Jakarta administration has decided to give the task to its own clean water supply company, PT PAM Jaya.

“The plan to restore water management concessions in Jakarta continues to run smoothly. PT. Aetra Air Jakarta signed a head of agreement (HoA) with PAM Jaya on Friday, April 12, 2019, in Jakarta,” PT PAM Jaya recently said in a statement.

Managing Director of PT. PAM Jaya Priyatno Bambang Hernowo, who signed the HoA, outlined four points of the initial agreement.

The points include PAM Jaya and Aetra agreeing to return water management concessions in Jakarta to PAM Jaya, and arranging a transition in the management of the Drinking Water Supply System in the capital city after ending the privatization of water.

Since 1998, the management of drinking water in Jakarta was managed by two private companies, namely Aetra for the eastern region of Jakarta, and PT PAM Lyonnaise Jaya (Palyja) for the western region of Jakarta, while PAM Jaya acted as a supervisor.

A study conducted by an evaluation team set up by Jakarta Governor Anies Baswedan concluded that it is unlikely for private partners to reach targets set at the beginning of the agreement under the current cooperation scheme.

Hence, the governor has asked PAM Jaya to take over piped water management. This is part of a larger global trend toward remunicipalization, under which local authorities can retake control of previously privatized water and sanitation services.

The remunicipalization plan is part of the city’s efforts to achieve at least 82 percent tap water coverage by 2023, which is also in line with the UN Sustainable Development Goals (SDG), targeting 100 percent coverage by 2030.

During the 1998-2018 period, the coverage of clean water supply service only increased by 14.9 percent. In 1998, the coverage was 44.5 percent, and in 2017, it went up to 59.4 percent, far from the coverage target of 82 percent by 2023.

The two-decade privatization of Jakarta’s clean water supply has failed to meet the target of 100 percent coverage of tap water supply.

Governor Anies Baswedan was pleased that the private operators responded positively. Water services should be perceived as a basic need, not as a mere business, he remarked.

Tommy Albert Tobing, a member of the Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ), said direct remunicipalization would ensure the profits from the lucrative tap water business would be used for the good of the city’s residents, rather than for the benefit of a handful of people.

“The profits from PAM Jaya will be for the residents,” Tobing said.

He said the plan would also return Rp 1.77 trillion in assets to the city administration that was currently in the hands of PAM Jaya’s private partners.

Fahira Idris, Jakarta’s senator, also lauded the governor's decision to take over clean water supply management and service. The move was in accordance with Baswedan’s pledge during the Jakarta gubernatorial race campaign called "The City Advances, The Inhabitants are Happy", she said.

The decision is good news for the residents of Jakarta after two decades of having depended on private companies to get clean water, the senator remarked.

"It is the right decision because it has been taken following a comprehensive study and the takeover was done through a civil process with talks held with Palyja and Aetra," she noted.

It is a bold decision, as the governor does not have to wait for the termination of the contract in 2023, according to the member of the Jakarta Representative Council, or DPD.

"The decision to stop the privatization of water supply has demonstrated that Governor Anies has chosen to stand with the people," she emphasized.

Idris believes that until the time clean water is an expensive and exclusive commodity, a city will never advance, as clean water is a basic necessity for human beings. When clean water becomes expensive and exclusive, the productivity and economy of its residents will be affected, as they have to allocate a large sum of money to avail of clean water, she pointed out.

"Hence, over a decade ago, major cities in the world had kicked out the privatization of water, and they preferred to independently manage the supply of clean water for their residents," she remarked.

In line with the Constitution, the state must meet the public need for clean water, she said, adding that no significant progress has been achieved since private companies took over the management of clean water supply.

"The Jakarta provincial administration has taken a strong stance to take over the management and service of clean water supply for its residents to ensure that every person has access to clean water supply," she stated.  

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