Brick business

The Jakarta Post, Antara, Sat, 08/29/2009 2:37 PM

Workers mold bricks at a factory in Lamongan, East Java, on Saturday. The bricks will be sold in Gresik for Rp 250 (3 US cents) each. Antara/Syaiful Arif

Firms to tap into growing market

Prodita Sabarini , The Jakarta Post , Jakarta | Thu, 08/27/2009 11:25 AM

A tap water operator said it would need six months to build piping networks for businesses switching to tap water following a hike in groundwater taxes.

“We have piping networks that supply customers in the southern part of our area so we are prepared for businesses wanting to switch from mixing groundwater and tap water to completely using tap water.

“However for industries that are not customers of ours, we would have to build new pipes. That could be completed within five to six months,” said Aetra Air Jakarta’s director of business services, Rhamses Simanjuntak.

Aetra caters to the eastern part of Jakarta. Rhamses said that industries located on Jl. Raya Bogor were yet to become Aetra customers.

In order to reduce groundwater usage, the administration recently increased taxes for groundwater extraction, making it four to 14 times more expensive than previous rates.

The new groundwater taxes range from Rp 8,000 to Rp 20,000 per cubic meter from the previous rate of Rp 525 to Rp 3,000 per cubic meter.

Due to the discrepancy between groundwater tariffs and tap water rates, businesses have generally chosen the cheaper groundwater option, despite a 1998 ordinance intended to restrict businesses and industries from using groundwater if they are located close to tap water service areas.

Another water company, PAM Lyonnaise Jaya (Palyja) that serves the western part of the city, said it had repaired piping networks to anticipate a surge of demand in tap water due to the hike in groundwater taxes.

The two operators impose rates of Rp 5,932 (64 US cents) per cubic meter on average, the highest water taxes in Indonesia.

Palyja spokeswoman Meyritha Maryanie said the company would try its best to provide water to more areas in Jakarta.

“But that doesn’t mean that we can provide water to all areas, we have to be realistic as well,” she said.

Meyritha said the company’s water supply in South Jakarta was good, but was lacking in the western part of North Jakarta.

She added the company had provided booster pumps for the Kuningan area in South Jakarta, home to numerous high-rise office buildings, hotels and apartments that use deep wells, to anticipate the rising demand for tap water.

The Jakarta administration’s move to increase taxes is intended to reduce groundwater exploita-tion that can be environmentally damaging.

Jakarta’s land level decreases every year partly due to groundwater extraction and pressure from buildings, according to the Regional Environmental Management Board (BPLHD).

According to Jakarta administration data, some areas in Jakarta have decreased by 20 to 60 centimeters over the past eight years. BPLHD’s head of law enforcement, Ridwan Panjaitan, said he hoped the tax increase would help to prevent the environment from further damage.

The agency has carried out raids investigating the exploitation of groundwater usage and has found around 100 offenses this year.

Based on the agency’s data, the most common violation was customers using more groundwater than permitted by their quota.

Ridwan said the quota of groundwater extraction was 100 cubic meters per day.

The agency said it would close the wells after several warnings were issued to owners. Ridwan said that multi-story buildings were usually the biggest violators of groundwater usage.

Palyja’s Meyritha said the company was yet to see any significant increase in tap water usage as the tax hike had only recently been passed.