New Water Deal Leaves Rates on Hold, Aids City Hall

Lenny Tristia Tambun

City-owned water operator PDAM Jaya and private contractor Aetra Air Jakarta signed a renegotiated contract on Tuesday that will see Aetra maintain its water rates while promising hefty savings to the utility and the Jakarta administration.

Mohammad Selim, the Aetra director, said at the signing ceremony that the master contract was a “win-win solution for Aetra, PDAM Jaya, the Jakarta administration and of course our customers.”

Under the agreement, Aetra will maintain the price per cubic meter of water until the end of its contract in 2022, as well as write off PDAM Jaya’s debts until 2016.

At the end of last year, the city utility owed a combined Rp 635 billion ($69.9 million) to Aetra and PAM Lyonnaise Jaya (Palyja), the two private water operators working in Jakarta.

“So with the new contract, Aetra will bear all the risks in the working contract,” Selim said.

“Compared to the old contract, this renegotiated master agreement will enable our customers to save Rp 13 trillion by 2022 because there are no rate hikes.”

Aetra has also agreed to cut its share of profits with PDAM Jaya from 22 percent to 15.8 percent, to help the city utility service its future debt.

This, in addition to the debt write-off until 2016, will save PDAM Jaya and the Jakarta administration Rp 11 trillion by 2022, Selim said.

Sri Kaderi Widjayanto, the PDAM Jaya director, said the debt write-off would allow his company to turn a profit from 2017 through 2022.

He said the contract also obliged Aetra to almost double its target for water supplies by 2022, from the initial figure of 1.7 billion cubic meters to 3.3 million cubic meters, as well as cut the proportion of non-revenue water, or lost water, from 29 percent to 25 percent.

Aetra supplies water for all of East Jakarta as well as the eastern portions of Central and North Jakarta.

Palyja, which has not yet reached an agreement with PDAM Jaya, supplies water for the city’s western half.