EVALUATION ON THE PRICE OF PDAM KOTA BANDUNG PIPED WATER BASED ON AFFORDABILITY AND EQUITY PRINCIPLES

• Main Author: Koesoemo Roekmi NIM : 25406035 , R.A.
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/9009
• Institution: Institut Teknologi Bandung

Abstract: <br /> <br /> <br /> <br /> <br /> <br /> Local Government is responsible to deliver qualified fresh water for all its citizen, including for low income families. The price of fresh water must be arrange so that low income families could afford these facilities. Base on affordability and equity principles in Permendagri no. 23/2006, the price of PDAM piped water should be affordable and equitable. The price is affordable if (1) charge for using minimum consumption for any family would not excess four percent of labour income in that province and (2) any family who use minimum consumption would not spend more than four percent of their income. The price is equitable if there are cross subsidies between costumers by applying different pricing. The objective of this study is to evaluate new price structure of PDAM Kota Bandung piped water whether it is more affordable for low income families and whether the price have accommodate differences between low, middle and high income families. The evaluation is held by comparing previous and present tariff using affordabitily and equitability principles in Permendagri no 23/2006. The result is that labour income families and less who does not live in Rusun Perumnas (low class apartment) could not afford PDAM water fee and its hookup fee. Actually the price could be affordable for low income families by applying more progressive rate so that the cross subsidy can flow from high income families to low income families. Unfortunately, different prices between consumer are inconsistent with the progressive pricing. It is happen to social group and government institution. The study recommend PDAM to make improvement in water tariff. First, charge for minimum consumption for any family must be affordable. Second, make different block consumption between social and government institution group with other group. Third asking consumers willingness to pay before defining new tariff.