Photograph: JP/Dhoni Setiawan
The Supreme Court has sealed the deal for Jakarta. A ruling has ordered the end to water privatization in the capital after years of public condemnation for depriving access for the city’s poor. City-owned water company PAM Jaya has begun the transition to take over operations from its two private partners — PT PAM Lyonnaise Jaya (Palyja) and PT Aetra Air Jakarta (Aetra) — as their 25-year partnership contract is slated to end in 2023.
With the court verdict, the water company is not permitted to seek new private partners to handle tap water operations in the city and it will have to produce and distribute clean water on its own. PAM Jaya president director Erlan Hidayat said on Wednesday that the company and the city administration were still assessing the impact of the ruling, but he was optimistic that it would bring residents a better service.
“It is very likely that it is the start of the [ideal] tap water service that we’ve all wanted.”
A panel of justices presided by Nurul Elmiah overturned the privatization on the grounds that it violated Jakarta Bylaw No. 13/1992 on city-owned water operators, which mandates that all tap water services must be provided by PAM Jaya.
The justices also found that the water company and the two private operators made the service inaccessible to poor people because of its high rates.
The Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ), the petitioner of the lawsuit that had fought the case since 2013, expressed joy over the verdict.
The group faced an uphill battle in 2016 when the Jakarta High Court overruled the lower court’s decision, granting the government’s appeal to continue the privatization.
KMMSAJ lawyer Arief Maulana said that despite the ruling, the plaintiffs and Jakartans would have to understand that it would take time for the city administration and PAM Jaya to take over operations.
Nonetheless, he said that PAM Jaya and the city administration must show their commitment to complying with the ruling by publicly announcing their transition plans.
“We understand that the transition takes time. At the very least, [they] need to show their commitment to following the ruling,” said Arief.
Since 1997, PAM Jaya has handed the rights to produce and distribute clean water to the two private water operators, with Palyja in the western part of the city and Aetra — then Thames Pam Jaya (TPJ) — in the eastern part.
The operations have been facilitated by PAM Jaya’s seven water plants.
At the beginning of the partnership, PAM Jaya had 201,000 connections for the western part and 268,000 for the eastern part. By last year, the numbers grew respectively to 404,000 and 426,000.
Despite the increasing number of connections, both of the private companies cover only 60 percent of the population in the respective areas, having grown from 32 percent in the west and 47 percent in the east at the start of operations.
“PAM Jaya actually had the ability to process and manage Jakarta’s water supply from the upstream to the downstream as the existing pipes and water plants in the capital belonged to the company,” said Nila Ardhianie, the director of Amrta Institute for Water Literacy.
By managing tap water on its own, Jakarta can follow in Surabaya’s steps in providing water at a lower price, she said.
According to data from Amrta Institute, Surabaya serves 95.6 percent of its population with water rates averaging at Rp 2,800 (USS$20 cents).
Distributing water through the privatized service costs the city Rp 8,395, yet problems related to poor coverage remain.
“If the water was fully managed by PAM Jaya, the rate could be reduced by 40 percent,” she said.