Court Ruling Dries Up Private Water Provision in Jakarta

Jakarta Globe, Lenny Tristia Tambun, Mar 25, 2015

City-owned water operator PAM Jaya will now handle water supply to
Jakarta exclusively. (JG Photo/Jurnasyanto Sukarno)

Jakarta. Two private companies have lost their right to supply water to customers in some parts of Jakarta after a court ruled in favor of a coalition seeking to have water privatization struck down.

PAM Lyonnaise Jaya (Palyja) and Aetra Air Jakarta (Aetra) had their contracts with city-owned water operator PAM Jaya severed by the Central Jakarta District Court on Monday, ending an 18-year partnership.

Jakarta City Council will form a transition team to take over their operations, while Governor Basuki Tjahaja Purnama has said employees of the two companies could possibly find employment with PAM Jaya.

“They are professional workers and we cannot abandon them, we will make preparations so they can work at PAM Jaya,” Basuki was quoted as saying by Tempo.co on Wednesday.

Basuki said he was confident PAM Jaya would be able to manage the capital’s water distribution without Palyja and Aetra.

The court ruling ends a controversial experiment in water privatization in Jakarta, and is a major victory for the Coalition of People Rejecting the Privatization of Water in Jakarta (KMMSAJ), which filed the lawsuit.

The group had argued that the sub-contracted water service was too expensive and many Jakarta residents could not afford it.

The coalition, which includes the Jakarta Legal Aid Fuundation (LBH Jakarta), and are opposed to private ownership of water, also said the service provided by Palyja and Aetra was not up to scratch.

Both Aetra and Palyja have stated that they would file an appeal.

Aetra’s Corporate Secretary Pratama S. Adi said that the company was aware that his company’s contract with PAM Jaya was not favorable to the Jakarta City Council and it was willing to negotiate.

“We have been conducting internal consolidation and next week we will file an appeal,” Pratama said.

Palyja’s spokeswoman Meyritha Maryanie confirmed the company would challenge the ruling.

“During the legal process the contract between Palyja and PAM Jaya is still valid,” Meyritha added.