REPUBLIKA.CO.ID, JAKARTA -- The government would remove debt of local water company (PDAM) as much as Rp 3.2 trillion to improve the company's performance in distributing clean water.

"We want the problem is resolved. So that PDAM throughout Indonesia could improve its capacity in distribution of water," said Finance Minister Bambang Brodjonegoro after meeting with Vice President Jusuf Kalla at the Vice President's Office, Jakarta, Tuesday (12/1).

Therefore, the central government took initiative to immediately resolve the debt problem by 'debt to equity swap', that is changing its debt to the central government into equity of regional government in each PDAM.

"The process will be submitted in 2016 revised state budget and of course there will be a process to ensure that the government will be ready to change the debt into capital in PDAM," said Bambang.

A total of 114 PDAM were still owed to the central government. Five of them owed more than Rp 100 billion. Executive Director of Association of Indonesian Water (Perpamsi) Subekti said, the Rp 3.2 trillion debt as a debt accumulated since 1989 until the 2000s.

"This is good news and will allow PDAM to get funds from banking," said Subekti.

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