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Doubling Water Financing and Results–
Conference on Water Financing Program 2006-2010

Indonesia- Detailed Analysis of Barriers, Strategies and Opportunities for Water Investments

  Urban Vision     Rural Vision     Basin Vision  
Safe affordable water supply, clean healthy environment
Urban Barriers Key Areas Strategies Opportunities
  • Tariff not sufficient for cost recovery
  • Private sector discouraged from investment as tariffs low
  • Will new MOHA decree solve the tariff issues?
  • Political interference in tariff setting
Tariffs and regulation: inadequate tariffs with political interference in none transparent tariff establishment discourages investment. New MOHA Tariff regulation needs applying with good governance over 350 Regulators to establish (see below debt restructuring implementation program)
  • Autonomy of PDAM WS utility
  • Local Government commitment
Utility Governance : allow PDAM to function independently Apply conditional support programs (hard/soft)  
  • High percent of Water utilities bankrupt >70% owe MOF $500 million
  • No long-term finance available
  • High-level of outstanding debts of some PDAMS (owed to MOM)
Operator financial performance: inefficient bankrupt utilities need restructuring and operation in true business environment Restructure debt over 250 PDAMs GR under drafting. Issue new financial instrumentds Look at an implementation program to support PDAM debt restructuring country wide.
  • Bulk water supply limited
  • Raw water quality poor
  • Forest declaration PDAM on water quality
  • No payment for environmental services
  • Ground water mining
Bulk water supply: volume and quality rapidly diminishing due to urbanization and inadequate attention to catchments and river basins Provide storage and protect water catchments. Set up measures to provide raw water. Invite and facilitate Private sector Possible MFF starting with identification, planning, and securing raw water.
  • Poor sanitation services
Sanitation: prioritize sanitation government spending Prioritize sanitation at national level Support for big city sanitation programs. (See ADB current PPTA)
  • Lack of policy on public service obligations
  • No benchmarking being used to measure performance
  • Low levels of service
  • Inefficient old infrastructure
  • High NRW
  • Low coverage of piped water particularly to poor
Services provision and Development: no measures of services provision or accountability Expansions and asset management systems needed to ensure systems able to meet needs Expand systems reduce NRW, introduce new technology TA for PDAM Road Map leading to specific support to PDAMs. Expand ongoing design WSS to MFF over larger area.
  • No river planning in urban area
  • Availability of land for infrastructure
Spatial planning: urban planning and development inadequate Enforce the adoption of spatial planning. ADTA support to strengthen spatial planning implementation in the Decentralised Environment
  • Lack of resources people capacity
Human resources: technical and managerial expertise inadequate Implement HR action plan Focused knowledge sharing support. HR ADTA