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Low Water at Sky High Prices in Bali

Some Bali Businesses Experiencing a Ten-Fold Increase in the Cost of Ground Water.

(10/31/2009) Stricter enforcement on ground water usage and higher tax rates on those who tap into Bali's underground water reservoirs are causing financial pain to many island businesses.

In response to diminishing water supplies and growing salt water intrusion into Bali's natural water supplies, governor Made Mangku Pastika increased tax rates and ordered tighter control on illegal use in June of 2009.

Quoted in The Jakarta Post, the Chief of Denpasar's Environmental Management Agency, I Gede Ngurah Alit Sudibya, said that at least 12 major property owners, including hotels and supermarket operators, are threatening to discontinue use of groundwater due to high cost.

1,062 registered users of groundwater and a large number of illegal wells tap into Bali's limited ground water supplies on a daily basis. With the State Water Board (PDAM) able to supply only 2.3 million cubic meters of an estimated 3 million cubic meters needed to meet daily demand, ground water represents a large and important component of meeting the water demands of Bali consumers.

Higher taxes on the use of ground water and stricter monitoring has resulted in substantial increases in water costs. One small medical clinic in Denpasar said that their monthly groundwater bill had increased from Rp. 300,000 (US$30) to Rp. 3 million (US$300). Hotels in Bali report that they are now paying Rp. 27,000 (US$27) per cubic meter of ground water as compared to only Rp. 1,500 (US$1.50) per cubic meter prior to the recent increase.

As a result, the chairman of the Bali branch of the Indonesian Employees Association has filed a formal complaint regarding the tax increase with the Bali House of Representatives, alleging the higher water rates will eventually result in job losses.

Among the other changes introduced under the new ground water regime, medicine and cosmetic producers pay Rp. 75,000 (US$7.50) per cubic meter. Hospitals, formerly exempted from the tax, are now compelled to pay.

Officials admit that Bali has hundreds of illegal ground water users who have sunk wells without obtaining the necessary permits and enrolling in the under ground water tax program.

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