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Jakarta to take over water management from Aetra, Palyja despite court decision

Selasa, 12 Februari 2019 / 08:00 WIB

Jakarta to take over water management from Aetra, Palyja despite court decision

KONTAN.CO.ID - JAKARTA. Jakarta Governor Anies Baswedan said on Monday that Jakarta would gradually take over tap water management from private operators Aetra and Palyja despite a recent Supreme Court ruling that approved the continuation of water privatization.

“A potable and clean water supply is a basic right of residents and it is the city administration’s priority. The Constitution mandates that earth, water and natural resources in them are controlled by the state for people’s welfare as much as possible. Thus, our standpoint here is clear: The Jakarta administration will immediately take over tap water management in Jakarta to achieve the target of tap water coverage in the city,” Anies told a press conference at City Hall.


The governor said the takeover was very important to “correct” the agreement between Indonesia and two private firms in 1997. “We know after 20 years since the agreement was signed, tap water management has yet to improve according to expectations,” Anies said.

Anies cited numbers that showed the small improvement in tap water management such as the rise of water coverage from 44.5 percent in 1998 to only 59.4 percent today.

He said he made the decision after listening to a recommendation from the Water Management Team.

The team gave Anies a recommendation to terminate the contract with PT Aetra Air Jakarta and PT PAM Lyonnaise Jaya (Palyja) using a civil suit avenue.

The team said the city could not immediately terminate the contract unilaterally because the compensation the city had to pay to the two companies would be exorbitant, potentially reaching more than Rp 1 trillion (US$71.4 million). Team member Nila Ardhianie said on Monday that this step would also be bad for Jakarta’s business climate.

However, the team did not recommend the city administration allow what they called the “status quo”, which was to just let the contract end as agreed in 2023. “The service would not be improved if we choose this option,” Nila said.

Nila said taking a civil suit avenue would not be easy but there were several things they could do. First, the Jakarta administration could buy Aetra and Palyja’s shares, she said. Second, the administration and the two firms make a new agreement, which includes terminating the contract. The last option, she said, was taking over some of the services before 2023.

Anies said the course of action the city had decided to take had a strong legal basis, including a 2015 Constitutional Court decision on water supply. “God willing, we will proceed with it,” he said. “And I hope it can finish as soon as possible.”

The group who filed the citizen lawsuit against privatization in 2013, called the Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ), argued that Aetra and Palyja had failed to provide clean water for all.

After a long legal battle, the Supreme Court in 2017 ruled in favor of the KMMSAJ but the Finance Ministry challenged the ruling in March 2018 and the same court ruled against KMMSAJ in a ruling in November last year. The public knew about the ruling only last month and KMMSAJ said the ruling only touched the formal material of the 2017 decision.

Lawyer Alghiffari Aqsa of the KMMSAJ said the city administration still could use the substance of the 2017 ruling to take the next steps.

“Besides, there is also the Constitutional Court that forbids water privatization. So even though we lost in the latest Supreme Court ruling, we should refer to the [2015 ruling],” Alghiffari said, referring to a Constitutional Court ruling that ordered water management be given to state-owned companies.

Constitutional law expert Feri Amsari said the latest Supreme Court ruling did not nullify the substance of its own 2017 ruling that ordered to end Jakarta water privatization, and the latter could still be relied on by decision makers.

He said the judicial review only argued that the 2017 ruling did not fulfill the criteria as a citizen lawsuit but did not challenge its substance.

“If the Jakarta governor still wants [the city] to take over water [management] it is still possible,” Feri said.

Aetra corporate communication and customer manager Astriena Veracia told the Post on Monday that the firm would comply with any applicable decision regarding the issue.

“We [Aetra] will comply with any decision put into effect,” she said.

Palyja spokesperson Lydia Astriningworo has yet to respond to telephone calls and text messages made by the Post seeking comments on the matter.


Reporter: Herlina KD
Editor: Herlina Kartika
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