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Indonesia Corruption Watch has reported Jakarta’s water authority to anticorruption investigators on suspicions of fiddling with figures in collusion with Palyja, the French-controlled company that runs the western half of the city’s piped water system.

ICW pointed to irregularities in the most recent “rebasing” process in 2008. During rebasing, PAM Jaya meets with Palyja and Aetra, which runs the eastern half, to set certain technical and financial parameters for the next five years, including performance targets the companies are supposed to meet.

“There has been a practice of setting loose targets in order to enrich private parties,” an ICW investigator, Agus Sunarto, said on Tuesday. “We suspect this has cost the country Rp 561.4 billion [$62 million].”

“The [target for] volume of water expected to be sold was reduced, and the expected rate of leakage [NRW’ was increased.”

In 2008, PAM Jaya’s president director was Harjadi Priyohutomo, but it has since come under new management, with Mauritz Napitupulu taking over in 2010 and now Sri Kedari, who came on last month.

Since Mauritz tenure began, PAM Jaya, backed by the city, has been trying hard to renegotiate the contract it has with the two operators.

PAM Jaya currently owes them more than Rp 600 billion.

Agus said the contractual “water charge,” which is what PAM Jaya pays the operators for their services, had been inflated because Palyja was including a number of unreasonable expenses as costs of production.

One example he gave was exorbitant compensation for Palyja staff. Unbeknownst to residents of Jakarta, Agus claimed, they paid, via their water bills, non-wage benefits of Rp 3.8 billion over two years to foreign staff at Palyja. This included Rp 1.2 billion in private school fees for the children of expatriate staffs and Rp 2.1 billion for housing.

“The high profit margin on water is making it difficult for the poorer members of the public to afford piped water,” said Agus, speaking at the Corruption Eradication Commission (KPK) on Tuesday. The ICW, he added, had obtained the data from the results of an audit undertaken by the Supreme Audit Agency (BPK) into PAM Jaya’s accounts from 2007 and 2008.

Agus said it was possible that some PAM Jaya staff had personally enriched themselves through dealings with the operators.

The ICW asked the KPK to work with the Financial Transaction Reports and Analysis Center (PPATK) to examine bank accounts and assets to look for possible personal enrichment of those involved in price negotiations.

Meyritha Maryanie, a spokesman for Palyja, said in a statement on Tuesday that Palyja had been transparent with its finances and had explained them to the BPK.

“Palyja has already published [its financial records] in the audited financial statement that [was] published in the media and also reported to the related parties, such as Bapepam and PAM Jaya,” she said in reference to the Capital Market and Financial Institution Supervisory Agency, which monitors Indonesian companies.

PAM Jaya could not be reached for comment on Tuesday.

Additional reporting by Philip Jacobson