PAM Jaya Involves The Prosecutor's Office To Dispute The Privateization Of Water Contract With Palyja

Illustration. Workers fill clean water sourced from PAM Jaya to jerry cans for sale in the Muara Angke area, Jakarta, Monday, July 2019. (ANTARA-Aprillio A)

JAKARTA - Perumda PAM Jaya involved the State Attorney at the DKI Jakarta High Prosecutor's Office to settle a state administration case with Palyja ahead of the termination of the cooperation contract for water management or water privatization.

This problem was initiated by the recommendation of the DKI Jakarta Representative BPKP asking for internal of return (IRR) or the return of capital for the PAM Jaya water privatization cooperation agreement together with the two private partners to be lowered.

Then, PAM Jaya asked the two partners, namely Palyja and Aetra, to renegotiate after a recommendation to reduce capital returns. However, Palyja did not agree on that.

"Aetra agreed to reduce IRR from 22 to 15.82 percent, while Palyja has not been willing to reduce IRR," Arief said in his statement, Thursday, December 15.

For this disagreement, PAM Jaya frozen water charge or Palyja's reward since 2010. Then, Palyja filed a claim of a lack of income for freezing the reward to PAM JAYA of 10 trillion.

Finally, PAM Jaya asked the State Attorney for the DKI Jakarta High Prosecutor's Office to facilitate the resolution of this problem.

"Achieved the agreement, Palyja's shortfall was completed through frozen project funds in an escort account worth Rp481 billion," said Arief.

Furthermore, Arief revealed, the calculation of IRR's achievement by taking into account the additional reserve account funds amounting to Rp481,850,718,708 (Rp481 billion), still below the Master Agreement Aetra value of 15.82 percent.

So, according to Arief, this calculation is more profitable for regional-owned enterprises (BUMD) belonging to the DKI Provincial Government.

"With this agreement, the transitional process of operational transfer from the two partners will not be disrupted, and PAM Jaya can realize water sovereignty for Jakarta residents with 100 percent service coverage by 2030 it can be realized immediately," he added.

As is known, the water privatization contract was agreed since 25 years ago. On June 6, 1997, PAM Jaya signed a water privatization collaboration with PT Garuda Dipta Semesta with Lyonnaise desaux (now Palyja) and with PT Kekarpola Airindo with Thames Water Overseas Ltd (now Aetra).

As of February 1, 1998, PAM Jaya gave a letter of assignment to a number of its employees to be seconded in Private Partners for 25 years, and he will end his seconded status on January 31, 2023, coinciding with the end of water privatization.

After the end of water privatization, the status of the assisted employees will return to PAM Jaya as of February 1, 2023. In addition, 1,097 employees of Palyja and Aetra will officially become employees of Palyja at the same time.