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Public questions transparency in Jakarta's tap water service takeover

Jakarta Post - September 23, 2020

Sausan Atika, Jakarta – In February last year, Jakarta Governor Anies Baswedan announced that his administration would gradually take over the city's water management from the private operators that have operated in the capital for more than 20 years.

More than a year after the announcement at City Hall, Jakarta's residents remain in the dark about the progress of the public takeover, sparking outcry from civil society groups that are demanding greater transparency.

An alliance of "Jakarta Residents Opposed to the Privatization of Water", consisting of 15 civil society organizations and more than 20 individual stakeholders, demanded Anies fulfill his promise to grant Jakartans their right to clean and potable water.

"We urge the governor to [...] terminate and not extend cooperation with and take over Jakarta's water management from private firms to prevent further losses to the state and the public," the signatories wrote in a recent open letter to the city administration.

They also demanded that the policymaking process concerning the city's tap water be "transparent, participative and non-discriminative".

The topic of privatization has reemerged over recent concerns the city administration is ready to award the private operators another extension to manage the city's water, flying in the face of previous commitments.

Anies established a Water Management Team in August 2018 that was tasked with following up a Supreme Court ruling from 2017 in favor of a group of Jakarta residents fighting against tap water privatization in the capital.

The former education and culture minister announced the ad hoc team's recommendations last February, including suggestions to terminate the contracts with PT Aetra Air Jakarta and PT PAM Lyonnaise Jaya (Palyja) through a civil lawsuit.

After the experts reported their recommendations, the team was declared inactive. Anies then assigned the president director of city-owned PAM Jaya, Priyatno Bambang Hernowo, to formulate a heads of agreement (HoA) to be adopted in contracts with Aetra and Palyja for the takeover.

The resulting HoA document was signed by PAM Jaya and Aetra in April last year – announced in a written statement released by the former, with due diligence to be carried out soon after and with the expectation of completion within six months. Meanwhile, PAM Jaya and Palyja are still in discussions over their HoA, Hernowo said.

However, the lack of updates has members of the antiprivatization alliance concerned.

"We expect [the administration to] provide regular updates on the progress of the takeover [...] and to ask for feedback from the public, especially from the plaintiffs," Nelson Nikodemus, a public lawyer from the Jakarta Legal Aid Foundation (LBH Jakarta) – one of the organizations that signed the open letter – told The Jakarta Post on Monday.

Jakarta Ombudsman head Teguh Nugroho expressed a similar sentiment, deploring the lack of updates after April of last year, noting that Aetra and Palyja had both failed to reach their target for tap water service coverage. The firms have only increased coverage by 18.5 percent since 1998.

Jakarta aims to have 82 percent coverage by 2023, roughly 19 percent higher than the current level of 63 percent.

The takeover process has dragged on due to the lack of guidance the city administration has provided to PAM Jaya since last year, which resulted in a "loss of momentum" in regaining public control of water management when the COVID-19 outbreak hit, Teguh said.

"The pandemic has been a blessing in disguise for the private companies. The administration was financially capable of taking over water management before the outbreak, but now it is experiencing thinning cash flow due to the pandemic," he said.

Meanwhile, PAM Jaya's Hernowo defended the process, saying the public had been involved in focus group discussions and hearings with the Supreme Audit Agency (BPK), the Corruption Eradication Commission (KPK) and the Development Finance Comptroller (BPKP) when the Water Management Team was drafting its recommendations.

He also said PAM Jaya was working with several institutions in the takeover process.

"PAM Jaya took the civil lawsuit route for the takeover, which involves hiring an independent consultant to confirm financial due diligence with the partner [Aetra], requesting legal assistance from the Jakarta Prosecutor's Office and asking for a review of the due diligence results with the BPKP," Hernowo told the Post on Tuesday.

He said the company would inform the public of any progress.

When asked about the possibility of extending cooperation with private operators, Hernowo refused to disclose details of the ongoing discussions, saying only that no conclusion had been reached.

"The process is still ongoing, so I can't disclose it. But we are talking within the framework of reaching the ultimate goal, that is, how Jakarta's residents can get access to clean water, and also what we have to do to ensure compliance with existing regulations and the principles of fairness," he said.

LBH Jakarta's Nelson was doubtful there would be updates about the takeover, owing to the continued lack of transparency. He demanded the Jakarta administration stick to its original goal: terminating cooperation with private companies in the management of the city's tap water.

"Progress should be made in line with the recommendations of the Water Management Team. If the city administration doesn't adhere to these recommendations, then what's the point of deploying a team of professionals [hired] using the city budget?" he said.

Source: https://www.thejakartapost.com/news/2020/09/23/public-questions-transparency-in-jakartas-tap-water-service-takeover.html