Indonesia: Has the Multi-subsector Approach been Effective for Urban Services Assistance?

Evaluation Document | 31 March 2010

This evaluation focuses on the approach used to design and implement urban infrastructure projects in Indonesia.

Introduction

This evaluation focuses on the approach used to design and implement urban infrastructure projects in Indonesia. Evaluating the approach has become important, because evaluation results available for urban projects approved since 1991 under the multi-subsector approach show that the project success rate is 44% compared with 68% for other projects. It is important therefore to examine whether the multi-subsector approach is suitable for urban projects.

In early 2009, ADB's Indonesia Resident Mission requested the Independent Evaluation Department to conduct an urban services study to provide sector-specific input to the forthcoming ADB country partnership strategy for Indonesia. Evaluating the recent performance of the urban sector in Indonesia and learning from the experience are important because the "big-bang" decentralization put pressure on the management of urban areas, and the demand for urban infrastructure is expected to escalate due to population growth and rapid urbanization.

Key findings

This study assessed how ADB multi-subsector projects in Indonesia have fared against the three key evaluation criteria of relevance, resource use, and results:

The multi-subsector approach is rated relevant. ADB assistance responded to the government's successive five-year plans (REPELITAs), however, it is not evident that ADB made an effort to steer Indonesia in a new direction that would show how urban development should be addressed to achieve the best results.

Multi-subsector projects in Indonesia are less efficient in resource use. All multi-subsector projects reviewed experienced substantial implementation delays due to consultant recruitment, local government approval procedures, and irregularities in procurement. Land acquisition was a common problem for urban infrastructure projects, as locations were densely populated.

The rating for results is less likely. Having multi-subsector components did not yield visible improvements in various indicators and impacts defined in the project document (e.g., livelihood and health). Multi-subsector projects saw no increase in operation and maintenance budgets or resources.

Overall, ADB assistance for urban services in Indonesia under the multi-subsector approach is assessed partly successful.

Recommendations

1. The multi-subsector approach should not be adopted in urban projects unless there are agreements between the government and ADB on the following:

  • adequacy of the experience of the project director and the capacity of the project management unit;
  • there are clear application procedures, requirements, and rules for financing mechanisms for a multi-subsector project;
  • there is a local figure to champion the project or an existing master plan vetted by key stakeholders that stipulates the prioritization or sequencing of the urban developments needed;
  • there is a single authority that has powers to prioritize subprojects so that delays are minimized.

2. If local conditions do not favor adoption of a multi-subsector approach, then ADB should adopt a sector-specialized approach with fewer components (e.g., the conventional three components of water supply, sanitation, and capacity building).The rating for results is less likely. Having multi-subsector components did not yield visible improvements in various indicators and impacts defined in the project document (e.g., livelihood and health). Multi-subsector projects saw no increase in operation and maintenance budgets or resources.

3. There should be a financing scheme that strongly supports the multi-subsector approach.

4. A focused and long-term vision of ADB's role in capacity building should be developed.

Overall, ADB assistance for urban services in Indonesia under the multi-subsector approach is assessed partly successful.

Contents 

  • Executive Summary
  • I. Introduction
  • II. Key Messages from Literature Review
  • III. Methodology
  • IV. Urbanization in Indonesia and Government Strategy
  • V. History Of ADB's Indonesia Urban Development Projects
  • VI. Key Findings Relating to Project Design and Implementation
  • VII. Performance Assessment Based on Evaluation Criteria
  • VIII. Suggestions for Future Project Formulation
  • Appendixes