Indonesia: Urban Sanitation and Rural Infrastructure Support to PNPM Mandiri Project

Sovereign Project | 43255-013

Summary

The Project forms part of the Government of Indonesia's ongoing flagship poverty reduction program the National Program for Community Empowerment (PNPM Mandiri), which was launched in 2006 with the commitment to reduce poverty by adapting a community-driven development approach and providing direct support to poor rural and urban communities to improve essential social services and basic infrastructure. In line with the overall objective of the PNPM Mandiri Program, the expected outcome of the Project is improved access to service delivery and healthy livelihoods for the poor, near poor, and women in the project communities. The Project will have three outputs: (i) strengthened capacity for community planning and development; (ii) improved rural basic infrastructure through community development grants; and (iii) improved sanitation services through neighborhood development grants.

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Project Name Urban Sanitation and Rural Infrastructure Support to PNPM Mandiri Project
Project Number 43255-013
Country Indonesia
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2768-INO: Urban Sanitation and Rural Infrastructure Support to PNPM Mandiri Project
Ordinary capital resources US$ 100.00 million
TA 7843-INO: Strengthening Sanitation Planning and Efficiency Improvement
Japan Fund for Poverty Reduction US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Agriculture, natural resources and rural development - Irrigation - Rural water policy, institutional and capacity development - Rural water supply services
Transport - Road transport (non-urban)
Water and other urban infrastructure and services - Urban sanitation
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Project forms part of the Government of Indonesia's ongoing flagship poverty reduction program the National Program for Community Empowerment (PNPM Mandiri), which was launched in 2006 with the commitment to reduce poverty by adapting a community-driven development approach and providing direct support to poor rural and urban communities to improve essential social services and basic infrastructure. In line with the overall objective of the PNPM Mandiri Program, the expected outcome of the Project is improved access to service delivery and healthy livelihoods for the poor, near poor, and women in the project communities. The Project will have three outputs: (i) strengthened capacity for community planning and development; (ii) improved rural basic infrastructure through community development grants; and (iii) improved sanitation services through neighborhood development grants. The Project will be implemented in a geographic slice of the PNPM Mandiri Program and include about 600 rural communities in four provinces; and 1,350 poor urban neighborhoods in 34 cities.
Project Rationale and Linkage to Country/Regional Strategy

The Government of Indonesia requested ADB support to scale up ongoing assistance to the PNPM Mandiri scheme to (i) further upgrade basic rural infrastructure in poor villages located in provinces covered by ongoing ADB supported projects, and (ii) promote community-driven sanitation development to contribute to achieving the MDG target, to halve, by 2015, the proportion of people without sustainable access to basic sanitation. The Project is included in the Country Operations Business Plan (COBP 2010 2012).

The Government has made poverty alleviation a development priority, thus the new Medium-Term Development Plan (RPJM) for 2010-2014 targets an average growth rate of 6%-7% per year, with a reduction in the poverty rate from 14.2% in 2009 to 8-10% by 2014. The Government's foremost poverty reduction program is PNPM Mandiri, which provides assistance to poor rural and urban communities nationwide through up to three cycles of block grants for improving essential social services and basic infrastructure. The RPJM for 2010-2014 includes PNPM Mandiri as a development tool to accelerate poverty alleviation with an indicative budget allocation of $6,754 million over five years for seven PNPM programs.

Currently, ADB is supporting Government's PNPM Mandiri scheme through two projects: (i) the Rural Infrastructure Support to PNPM Mandiri Project (RIS-PNPM) for $50.0 million; and (ii) RIS-PNPM Project II for $84.2 million.

While Indonesia has generally made good progress towards accelerting achievement of the MDGs; the MDG targets for access to basic sanitation need special attention. The percentage of Indonesians with access to improved sanitation facilities has doubled since 1993, but progress has been slower than in other countries in the region at similar levels of economic development. In 2009, only 51% of the national population had access to improved sanitation, while the MDG target for accessing basic sanitation facilities is 62.37% of the population by 2015. Particularly the poor often do not have access to safe water sources and basic sanitation facilities; their lack of access has severe consequences for their health and livelihoods. Water borne diseases have a high cost in terms of health among those without access to improved water and sanitation. Two of the most important causes of mortality for children under five years of age are faecal-borne diseases and some 30% of Indonesians suffer from water-borne diseases, including cholera, diarrhea, and typhoid fever which are linked to use of unprotected water supplies, poor sanitation and inadequate awareness among communities of hygienic practices.

To address these issues, the Government has given special attention to encourage communities, the private sector, NGOs and local governments to accelerate sanitation development. The Ministry of Public Works (MPW) and the state-run water companies (PDAM) aim at improving community access to clean water supply by increasing access to house connections, especially in rapidly expanding urban areas and by expanding community-based water supply systems in rural areas. MPW and local governments also increased investments in centralized and community-based sewerage systems with a focus on serving the poor. In addition, the Ministry of Health (MOH) supports efforts to increase public awareness on the importance of clean water and sanitation. MOH will scale up implementation of the Community Led Total Sanitation during 2010-2014, aiming at eliminating open defecation practices by the end of 2014.

Impact reduced poverty at the project areas
Project Outcome
Description of Outcome improved access to service delivery and healthy livelihoods for the poor, near poor, and women in the project communities
Progress Toward Outcome

Overall, the project is on track. The quality of infrastructure constructed under the project is generally satisfactory, which contributes to improve the living conditions in poor villages and urban slums. Efforts of the EA to improve the performance of the CF teams have improved the overall community participation in the planning and implementation of upgrading and constructing infrastructure, and contributed to mobilize the capacity of disadvantaged communities to prioritize their development needs, design activities, manage resources, and implement civil works. Overall, the Project promotes good governance through transparent planning, procurement, disbursement and implementation based on jointly agreed procedures, and transparent mechanisms for transferring block grants to community-managed bank accounts.

As of March 2015, community contracts to construct rural infrastructure have been awarded and completed in 800 villages (600 villages with three cycles of block grants and 200 with 1 cycle) amounting to about $40 million. It is estimated that about 1.3 million village residents have benefited from the Project.

As of March 2015, the project supported 1438 neighborhoods in 34 cities. The total contract amount for the community contracts stood at $46 million.More than 0.5 million residents of urban neighborhoods have benefitted from the project.

Implementation Progress
Description of Project Outputs

Strengthened capacity for community planning and development

Improved rural basic infrastructure through community development grants

Improved sanitation services through neighborhood development grants

Status of Implementation Progress (Outputs, Activities, and Issues)

800 CIOs in villages and 1,438 CIOs in urban neighborhoods were established.

Two separate meetings for women are carried out in villages and urban neighborhoods during project planning and implementation.

MTPRs for project villages were completed and community sanitation improvement action plan (CSIAPs) were completed in urban neighborhoods prior to construction of civil works. All community members, including women and the poor participated in all project stages. Overal, the targets of 40% of women participation and 50% of the poor were met.

800 vilages and 1,438 urban neighborhoods have completed the provision of rural infrastructure and urban sanitation facilities.

Completed. Three cycles of block grants were distributed to 600 villages, and 1 cycle of block grants were distributed to 200 villages. The additional (third cycle of block grants and additional 200 villages) was from the unused loan proceeds due to depreciation of Rupiah againts the US dollars

completed.

observations indicated that the majority of the built infrastructure meet the national standard (more than 80%). This will be further confirmed during the impact evaluation, which will be carried out on 2015.

About 90,000 person-months of immediate employment opportunities were created, of which 24^% were allocated to women.

completed in 1,439 urban neighborhoods.

completed in 2014.

completed in 2014.

The majority of sanitation facilities (more than 90%) are considered meeting the national standards. User groups have been established to operate and maintain the facilities. In general the built facilities are well operated and maintained.

About 125,000 pms of immediate employment opportunities were created of which about 20% were for women.

Geographical Location The provinces of South Sumatra, Lampung, Riau, Jambi, Central Java, Daerah Istimewa Yogyakarta, East Java, North Sulawesi, South Sulawesi
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project is classified environmental category B. Overall, the project will have significant positive impacts on the quality of life and environment of the project communities. Because of the small scale of expected civil works, most of the expected negative effects are site-specific, short-term and temporary, and easily mitigated to acceptable levels. The environmental assessment and review framework has been prepared.
Involuntary Resettlement The project has been classified category B as the scope of land acquisition and resettlement is expected to be insignificant. In urban neighborhoods, the project might require limited land acquisition occasionally for small community sanitation facilities, but will not entail any resettlement of people, relocation of houses, or significant impact upon productive land or other productive assets. It is expected that small land acquisitions will be provided by project beneficiaries voluntarily. ADB s Safeguard Policy Statement (2009) and its requirements will be adopted if any compensation is needed in case of land acquisition. Safeguard specialists at national, provincial, and district levels have been included in the consultant packages. The resettlement framework has been prepared.
Indigenous Peoples The project is not expected to have any negative impacts on indigenous peoples. It will not discriminate against them or other marginalized groups. Following CDD principles, the project will include opportunities for screening project impacts on indigenous groups and incorporating mitigation measures, if any, into the overall design and implementation of any investment. In accordance with ADB s Safeguard Policy Statement, the project has been classified category C
Stakeholder Communication, Participation, and Consultation
During Project Design Project preparation included a number of consultations with community members, usually in the form of stakeholder analyses, workshops, and focus group discussions, held throughout the urban and rural areas to be affected by the Project. City sanitation strategies will be prepared through this consultation process, and the results will be reviewed. Consultations included city government down through the sub-districts and neighborhood/village leaders, as well as consultations with local (non-government) leaders and interested persons from all income levels.
During Project Implementation The Project applies the community driven development (CDD) planning and implementation mechanism. Community members will deeply participate in planning, implementation/construction and operation and maintenance of project facilities.
Business Opportunities
Consulting Services

All consultants will be recruited according to ADB's Guidelines on the Use of Consultants.

The Project will require an estimated 4,195 person-months of national consulting services at national, provincial, and district levels. To strengthen training, particularly for community facilitators, a training design and management team will be responsible for developing and managing the project training program.

The consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The national training design and management team will consist of three consultants to be contracted as individuals. The management consultants will be recruited through national firms. The fixed budget selection method, which requires submitting a simplified technical proposal within 35 days, will be used to select the management consultants. The fixed budget selection method is justified to ensure recruitment of highly competent consulting firms with the required mix of specialties, the demand for which has increased considerably because of PNPM Mandiri. The terms of reference of project management consultants will follow the format and contents of those developed under PNPM Mandiri.

Procurement

All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines, which allows the use of national competitive bidding procedure. The procedures to be followed for national competitive bidding (for procurement of goods and works) shall be those set forth in Presidential Regulations No.54/2010 of the Republic of Indonesia, dated 6 August 2010.

All procurement to be financed under the ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). Civil works for village/neighborhood investments will be contracted out to the communities based on an agreement between a CIO and a DPIU, and in compliance with the requirements for community participation in procurement as specified in ADB's Procurement Guidelines. Community contracts, to be based on the format of the community contracts under the overall PNPM Mandiri, will include evidence of community facilitation, the design of facilities to be constructed under the contract, a community O&M plan for these facilities, and clear duties and responsibilities of both parties for the project activities. The first two community contracts in each participating province will be submitted to ADB for prior approval. All contracts will be monitored under the management information system

Responsible ADB Officer Siti Hasanah
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
Directorate General of Human Settlements,MOPWJl. Pattimura No. 20
Kebayoran Baru
Jakarta, Indonesia
Timetable
Concept Clearance 01 Oct 2010
Fact Finding 01 Sep 2010 to 30 Sep 2010
MRM 19 Oct 2011
Approval 05 Aug 2011
Last Review Mission -
PDS Creation Date 04 Nov 2010
Last PDS Update 26 Mar 2015

Loan 2768-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Aug 2011 30 Sep 2011 15 Nov 2011 30 Jun 2015 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 136.10 Cumulative Contract Awards
ADB 100.00 05 Aug 2011 96.37 0.00 96%
Counterpart 36.10 Cumulative Disbursements
Cofinancing 0.00 05 Aug 2011 97.47 0.00 97%

TA 7843-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Aug 2011 22 Sep 2011 22 Sep 2011 31 Dec 2015 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,000,000.00 0.00 0.00 0.00 0.00 1,000,000.00 05 Aug 2011 511,787.96

Evaluation Documents

See also: Independent Evaluation

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