Written by Andreas Haryono on his blog, November 1st 2007.
What kind of investment that yields a 500-percent profit? Annur Sukarya, a water vendor in Bandung, might provide one example. Water trade! It is not difficult. It sells a highly needed commodity.
Sukarya simply took tap water from his house and sold them, in 30-litre jerry cans, at a price more than six times than the one he pays the Bandung Public Water Company, or locally known as PDAM. “I’m just trying to help my neighbors,” he argued.
Sukarya lives in Cicadas, one of Bandung’s oldest and most crowded working class areas. He sells a jerry can of water at 500 rupiah, or around US$ 6 cents. The deliverymen, who bring the water to consumers, subsequently sell the water at 1,000 rupiah per jerry can.
Cicadas consumers, like Harry Harsono, pay 5,000 rupiah for a cart of five jerry cans. “We obviously also need to tip the deliveryman,” said Harsono .
Welcome to Cicadas! It is one of the areas where PDAM serves poorly. Many Cicadas houses have tap water albeit no running. “Sometimes we joke that we pay only for the wind inside our pipes,” quipped Harsono. His tap only delivers water every other day, “It is only one hour, between 5:30 and 6:30 in the morning,” he said. His neighbors used water from their wells, for shower, but bought Sukarya’s water for drinking and cooking.
Bandung is Indonesia’s fourth largest city, dominated by the Sundanese ethnic group and located only two hours driving from Jakarta. Sundanese is the second largest ethnic group in Indonesia after the Javanese. During the colonial period, the Dutch built tree-lined boulevards, art deco villas, gardens, and fountains, earning Bandung the nickname of “Parijs van Java.” It was a beautiful, greenish and flowery town. When the Dutch left Java in the late 1940s, Bandung experienced massive urbanization.
The population skyrocketed from 230,000 in 1940 to one million by 1961. It created social tension. In 1963, an anti-Chinese riot broke out in Cicadas, spreading to many other parts of Bandung. In the 1970s, oil boom in Indonesia pushed this population further to two million. Now it is a living space for more than three million people, with chronic problems such as waste disposal, floods, chaotic traffic system and water crisis. Today PDAM could serve not more than half of the Bandung population. Officially it cannot install new water tap but corrupt officials could always benefit from new installations at marked up prices.
Rufina Handayani, a homemaker in Kopo Permai area, said, “Almost all houses in Kopo Permai have no tap water.” Handayani buys eight to nine gallons of water for drinking and cooking at 4,000 rupiah per gallon. She spends 130,000 (US$150) per month on water.
Mulyani Hasan, a young journalist living by herself, pays 800 rupiah per jerry can in her Ciwastra neighborhood. She said, “I can’t even use my well water to brush my teeth. It is so murky.” Her house is located behind a complex of shopping malls, including a Carrefour, office buildings and star hotels, which very probably used powerful pumps to suck up water from deep artesian wells. “The water vendors sell water from their PDAM taps. If I want to install my own tap, I have to pay five millions,” she said.
Fitriadi Alibasah, a broadcaster at radio Mara FM, said that everyday his station receives a water complain. Most callers complained about their tap waters stop running, erroneous bills or vanishing water meters. “Some people also complained when seeing their neighbors could have a new installation when officially PDAM, for many years, says no more new installation due to the lack of water sources,” said Alibasah. It is a common suspicion that PDAM workers themselves steal the water meters for new installations.
Ati Kusmiati, a homemaker in Turangga area, said, “Suddenly I received a bill, stating that I have not paid the tap water for some years. It was totaled at 800,000 rupiahs when I usually paid only 30,000 per month.” Kusmiati did not keep all his water receipts. She had no option but paid. “Later it happened once again but this time I collected all my bills. I showed them the receipts. PDAM just decided that it was a mistake. That’s all,” she said.
PDAM spokeswoman Melliana Saptarini routinely addressed the public concern by repeating her daily ritual, “We apologize for the inconvenience. We will send our officials to investigate the problem.” Sometimes something happened. But mostly nothing happened.
The Bandung administration, which owned PDAM, tried to solve these problems. In 1974, the Asian Development Bank helped PDAM with a US$11.5 million loan. It was extended again in 1979 with another US$8 million credit. But PDAM could not return the bank credit as well as its interests.
In 2002, the Bandung government planned to privatize PDAM. The Adelaide-based South Australia Water submitted a proposal to take over PDAM. It also offered to pay the ADB loan, then amounted to 298 billion rupiahs.
PDAM president Soenitiyoso Pratikto rejected the plan. Pratikto mobilized his workers to rally against the plan from their head office on Badak Singa street. They visited Gedung Sate, or the Bandung government office, with 12 water trucks, yelling and watering its compound. Politicians supported such a call on nationalist grounds. The plan was finally shelved.
Ironically, a few months later police questioned Pratikto on corruption charges. His collaborator was found guilty for embezzling a piping project. Pratikto claimed his innocence. Bandung mayor Dada Rosada replaced Pratikto despite his refusal to hand over his job to a successor. Today his legal case is still hanging in the air. “Journalists rarely see him now. We heard that he moved to Jakarta, working with Jakarta party bosses,” said radio broadcaster Fitriadi Alibasah.
Pratikto’s saga also revealed another dimension of PDAM’s management. Its workers are mostly members of the notorious militia organizations, Angkatan Muda Siliwangi and Pemuda Pancasila. Pratikto himself is a member of the Angkatan Muda Siliwangi. Indonesian Army officers established the militias in the 1960s to fight communism. Now these organizations controlled many semi illegal businesses, including the water installation. Their members also regularly support competing politicians and generals.
This October, Pratikto’s succesor, Jaja Sutardja publicly said that the company plans to ask Indonesia’s Ministry of Finance and the House of Representatives in Jakarta to write off the ADB loan, totaled at 300 billion rupiah, or around US$33 million. “The interest is too high, the loan had grown from 190 billion to 300 billion rupiahs,” said Sutardja.
Not everyone in Bandung is happy with such an idea. “It means that they want to wash their hands,” said Harry Harsono. His colleague, Fauzi Zulkarnain, said that PDAM is run like a mafia network. “Everybody knows that it has many thieves and robbers,” he said.
Dadan Junaedi, an activist of the Working Group for Water Community, questioned such a policy, saying that the problems did not originate from the ADB loan. Junaedi questioned the PDAM management. “It’s not transparent. We don’t know for sure how they manage PDAM,” he said.
Junaedi cited an Eco Asia survey that concluded that the PDAM problems laid on the water distribution and the water management sectors. PDAM is also among 110 troubled water companies in Indonesia. But it is also among 44 water companies whose prices and expenses are considered to be reasonable. “The government should solve this problem. Water is a human rights,” said Junaedi.
Many Bandung residents, however, are getting indifferent with this water crisis. They have been living with this problem for more than 50 years. They give up hope that their government can solve the problem. There is no sense of crisis.
Now their options are quite limited. They could either bribe PDAM officials to install expensive water tap or set up a deep and costly artesian well. Unfortunately, the poor people, like those living in Cicadas or Kiara Condong, cannot afford these options. They have to rely on water vendors like Annur Sukarya.
In September, Sukarya’s water bill showed that he used 40 cubic meters of tap water totally priced at 102,000 rupiah. It means that in average Sukarya paid 2,550 rupiahs per meter cubic. If he sells the water at 500 rupiah every 30 liters, it meant that he sell them at 16,700 rupiah per meter cubic. Just make a small calculation: 2,550 divide 16,700. The result is 6.5 or a 550 percent profit. A good investment, no?
There’s many problems inside PDAM Bandung wasn’t covered by this article. Although these article has been published 2 years ago, the problem described and the problems I’m going to write are still exist. I couldn’t run my own research on this issue but I’d be glad if someone’s could dig it out to the mass media. Enough with those tyrants :(
– A lot of Bandung citizen’s installed illegal water tap (drill yourselves a ground water well isn’t included, but drill yourselves a well from a pipe under the ground is most likely stealing from PDAM). Few of them, caused another customer’s bill bubbled. Not only home customer, but also several big companies such as hotel, malls, restaurant… emm too many I couldn’t mention it one by one.
I know one method to check whether it’s an illegal installation or not. First, check the watering meter is it exist or not? If it’s not, and no well either, and you saw a person use water coming out from the tap of house/building, then it’s likely to be illegal. If it’s exists, you have to check whether the water meter flows necessarily. For this last step, requires further research on the customer’s water meter since (yes it’s true!) some area only receives water at some time, not 24 hours, due to lack of main source water flow debit.
– Yap, the joke that customer had to pay for the wind flow inside the tap is true. One cause has already explained. The other cause, Metering Officer, which usually hired by not examining their qualifications (some of them even not graduated from elementary school), bubbled the customer’s water meter note. He could get money from the difference between what customer paid and the real revenue for PDAM. There’s a big “business” here, since the metering officer usually responsible for taking notes of more than 100 house a day.
Few years ago there’s a program to train these officer about manners and the SOP of metering water, I heard that the crime of bubbling customers meter notes decreased but I don’t know whether it’s still continued or not.
– Well, old classic method to get away from bills, especially for a company. Many restaurants do this, they have their legal water tap installed, but they pay the metering officer to modify the metering notes. They pay, indeed, but not for the right usage of the water.
– Management issues. Since the president of PDAM Bandung is chosen by the Bandung’s major, the PDAM president often pressured by Bandung’s major to flow the money from PDAM to another account. Err… what to say, corruption? That’d be the right term for this. So you can see, the privatization issue faced by PDAM in 2002 was intended to flow really big money to several accounts and institutions.
– PDAM’s officer is a government officer (PNS). The thing is, they lack qualified persons to have “C” positions. Usually the C’s hold only bachelor degree of unrelated subject. Well I think this happen not only to PDAM but also several government companies as well. Hmm…