| Summary: | This research explains the privatization policy scheme and investment plan of
PDAM Kota Makassar and its implication to water commodification. Using two
concepts, investment and commodification, this research explores the theoretical
debates over water privatization. Generally, those debates are classified by two
contrary mainstream paradigms. First, paradigms argue that drinking water have an
economic value and legally owned by individual or private institution who doing
some efforts to add its value. Second, the contra paradigm arguing that water is
publicly needed by people and must be managed by the collective community for
collective interest.
PDAM Kota Makassar believes in the first paradigm that privatization is the
most rational policy to develop PDAM capacity and expand its services. These
purposes become PDAM argument to participate capital from private investment,
especially foreign direct investment. Motivation to reach those purposes is more
clearly by identifying three aspects. The first is structural political pressures from The
Government of Indonesia and the international monetary institutions. The second is
the PDAM interest to develop its production capacity by 2.500 litters/second addition
capacity in 15 years. The three is the ROUT privatization scheme as stepping stone to
attract foreign or multinational investors by creating well institutional image. The
investors, then, come through N.V. Waterleiding Maatschappij Drenthe and Moya
Asia Limited.
But, in process to attract the investment, PDAM contrary implement some
contra-productive policies to privatization purposes. These policies are also the
critical point of the second paradigm, water commodification. The commodification
implement in PDAM Kota Makassar by three policies. First, creating positive profit
trend implement by changing the function or value of water from public goods to
economic goods and increase the water prices (tariffs). The Second, is decreasing the
government intervention on PDAM structure for loosing the public control to PDAM
working mechanism. And the last is proposing debt restructurization to Indonesian
Government by PMK 120/2008.
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