Indonesia: Neighborhood Upgrading and Shelter Project (Phase 2)
ADB is helping some 20 large and medium-sized towns in Indonesia to upgrade basic facilities and services in poor neighbourhoods and establish new settlements for poor families through public private partnerships. The project will develop the capacity of local governments for pro-poor urban planning and management, and establish mechanisms to engage communities in the planning process.
van Etten, Joris G. P.
Southeast Asia Department
Request for information
- Water and other urban infrastructure and services
|Project Name||Neighborhood Upgrading and Shelter Project (Phase 2)|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
|Sector / Subsector||
Water and other urban infrastructure and services / Urban housing - Urban policy, institutional and capacity development - Urban slum development
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The expected impact of the project will be improved living conditions in urban areas. The outcome will be improved infrastructure and access to service delivery in poor urban neighborhoods in 20 project cities. The Project will have three outputs: (i) Institutional capacities for managing pro-poor urban development are strengthened; (ii) Infrastructure investment plans to upgrade poor neighborhoods are aligned with the overall city development plans and implemented; and (iii) Public private partnerships are established to promote new settlements for poor families.|
|Project Rationale and Linkage to Country/Regional Strategy||
Indonesia is one of the fastest urbanizing countries in Asia. Today, about half of the population (51%) lives in cities. The rapid urbanization rate is set to continue. By 2025, it is projected that about 68% of the population will live in urban areas. Many of Indonesia's growing cities face issues to cope with the rapid growth of in-migrants, who are seeking new economic opportunities in cities, but forced to settle in disadvantaged neighborhoods due to limited financial resources, lack of affordable adequate housing and/or failure to find well paid jobs . In 2011, about 12% of the urban population was forced to live in slum areas.
Better public infrastructure is considered vital to sustain inclusive economic growth and further stimulate economic opportunities of the growing urban population. Yet infrastructure improvements have not been able to keep up with the rapid urbanization and infrastructure investment has lagged economic development. Mostly, infrastructure and public services in poor neighborhoods are inadequate to serve the needs of their growing inhabitants. Environmental and social problems related to accessibility to adequate services for the people's daily needs are increasing due to widespread constraints in provision of clean water, insufficient sanitation facilities, deteriorating roads, pathways and drainages, ineffective flood control, lack of constant power supply, and poor solid waste management. Only about 40% of the urban population has access to safe water, and about 28% do not have access to improved sanitation facilities. About 35% of urban areas lack proper drainage systems. Problems are further aggravated by the absence of sound land use planning and land management regulations that are contributing to increased congestion and haphazard informal development. A multi-faceted approach is required to address these challenges, which include strengthening the capacities of city administrations to manage urban development in an environmentally and socially sustainable manner, modernization of land policies and permitting regulations; expanding access to, and targeting of, housing finance and subsidies; increasing community involvement in spatial planning; and engaging the private sector in development planning. Aside from investment in basic urban infrastructure, the rapid urbanization has triggered a growing demand for housing, which needs additional attention. The availability of affordable housing in cities for low-income groups appears to be declining. While estimates of Indonesia's housing deficit vary, all indicate a significant backlog in supply.
Insufficient investments in infrastructure had been identified as one cause for poverty in the National Medium Term Development Plan 2010-2015 (RPJMN), thus improving basic infrastructure is considered an effective catalyst to alleviate poverty and close gaps in income inequality in disadvantaged urban neighborhoods. While Indonesia has generally made good progress towards accelerting achievement of the millennium development goals (MDG), the MDG targets for achieving significant improvement in the livelihood of slum dwellers (MDG target 7D) and halving the proportion of urban households without sustainable access to safe drinking water and basic sanitation (MDG target 7C) need special attention. The project's purpose of upgrading basic public infrastructure in slums will contribute towards meeting both MDG targets.
To address issues of the rapid urbanization the Government launched the _Cities without Slums Program_ and issued Law No. 1/2011 on _Housing and Settlement Areas_. To contribute to the _Cities without Slums Program_ the Government requested the ADB to prepare and partly finance the Neighborhood Upgrading and Shelter Project (NUSP). NUSP will assist about 20 large and medium sized towns to develop and implement inclusive pro-poor city development plans and improve living conditions in slums, through (i) providing resources to local governments and communities for upgrading basic infrastructure in slum areas; (ii) strengthening planning and management capacities of local administrations for inclusive pro-poor urban planning; (iii) establishing sustainable mechanisms to engage communities in urban development planning processes; and (iv) launching public private partnerships (PPPs) to establish affordable housing areas for poor families.
The proposed project is included in the ADB Country Operations Business Plan (COBP 2013-2014). Supporting government's efforts to achieve more inclusive growth through improving infrastructure, particularly by supporting catalytic projects to develop community-driven basic infrastructure for poor communities, and improving access to water supply and sanitation in selected cities is included in ADB's country partnership strategy (CPS) 2012-2014. The project will contribute to achieve the targets of the CPS Results Framework and ADB's Strategy 2020. The project is also aligned with ADB's Urban Operational Plan 2010-2012 as it (i) provides support to urban shelter sector programs; (ii) contributes to upgrading of local infrastructure in the four core areas of water supply, sanitation, water management and urban transport; and (iii) improves community services, employment opportunities and livelihood development. The proposed project builds on lessons from (i) the Neighborhood Upgrading and Shelter Sector Project (NUSSP, Loans 2072/2073-INO), which closed in December 2010 and was rated successful , (ii) the Rural Infrastructure Support to PNPM Mandiri Project (Loan 2449-INO), and (iii) the ongoing Urban Sanitation and Rural Infrastructure Support to PNPM Mandiri Project (Loan 2768-INO). All projects were/are implemented by MPW. In particular the following lessons have been incorporated into the project design: (i) the importance of involving beneficiaries in the planning and implementation of neighborhood upgrading, (ii) clearly defined landownership and strong political commitment to support pro-poor urban development, (iii) advantages to promote integrated development approaches and link upgrading investments of individual communities with the overall city development planning, (iv) reduce the number of project cities and neighborhoods to cut down transaction costs in project management, (v) increase the investment amount per neighborhood to boost up means for improving the living conditions in slums in a more broader way, (vi) transparent fund flow and implementation mechanisms and promoting community control of decision-making over resources and investment choices; (vii) strong accountability procedures, such as public disclosure of budgets and contracts; and (viii) training for communities in establishing effective mechanisms to operate and maintain new infrastructure.
|Impact||Improved living conditions in urban areas.|
|Description of Outcome||Improved infrastructure and access to service delivery in poor urban neighborhoods in project cities|
|Progress Toward Outcome||Achieved. 770,679 households living in the slum neighborhoods benefitting from the infrastructure upgrading. 99.1% community members in project locations were satisfied with improvements in roads, provision of drinking water, sanitation facilities, and other basic infrastructures. Women were 90.0% satisfied with the improvement of the facilities and infrastructures.|
|Description of Project Outputs||
Institutional capacities for managing pro-poor urban development in an environmentally and socially sustainable manner are strengthened
Infrastructure investment plans to upgrade poor neighborhoods are aligned with the overall city development plans and implemented
New Settlements for poor families established.
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Achieved. 20 SIAP documents are formulated by local governments and serve as the reference for slum alleviation implementation in 20 cities.
Achieved. 561 local government staff participated in training, short course, and master's degree program with 176 (31%) of the participants being women.
Achieved. The project reviewed 209 NUAPs in 2017 and compiled 215 CAPs in 99 subdistricts in 2018 based on the reviewed NUAP. The project compiled 61 CAPs in 31 subdistricts in 2019 based on NUAPs that had been reviewed in 2019.
Partly achieved. The project established functioning BKM in project neighborhoods with 33.2% representation of women involved in the decision-making meetings.
Achieved. The project upgraded 770.69 kilometers of roads in 209 neighborhoods.
Achieved. The upgraded water supply facilities and systems benefitted 105,371.
Achieved. The upgraded sanitation facilities and systems, which include the drainage system benefitted 311,849 households.
Partially Achieved. 97.76% infrastructures were in accordance with the national standard. MPWH approved the handover of 38 infrastructures in 2020. DGHS in February 2021 requested 14 provincial governments to expedite the process and Semarang and Pekalongan cities responded to proceed. Other 22 infrastructures are being verified and the documents for the remaining 6 infrastructures are being collected. However, participating cities allocated their own budget for the infrastructure maintenance while waiting for the completion of the assets handover process.
Achieved. The NSD has been implemented in Kendari, Kapuas, Bima, and Palopo cities.
" The affordable housing rental scheme had been introduced in all NSD locations. Beneficiaries who occupied the NSD houses in Kendari, Palopo, Bima, and Kapuas signed rental agreement which included the tenancy provision.
" The Mayor Decree on the NSD implementation arrangements had been issued in all NSD cities. Rental rate has been set in Kapuas, Bima, and Palopo through the Mayor Decree while in Kendari the tariff was provided in the rental agreement but not yet established through Mayor Decree.
" 650 houses were constructed of which 501 houses were occupied. The government of Bima started the construction of 20 units in 2021 and requested budget for 58 units in 2022. In Bima, 5 houses are retained as empty for government commitment use in disaster emergency response, while 165 units in Kapuas are empty as the units are being used as COVID-19 quarantine facility.
Rental payment was collected in May 2019 in Palopo and in August 2019 in Bima. Rental payment was not collected in Kendari as the government focused on the establishment of NSD management and occupancy administration. Moreover, the rental payment cannot be collected in Kapuas as the government waited until the Regent Decree in 2020 was lifted.
|Summary of Environmental and Social Aspects|
The project was categorized B for environment. An environmental assessment and review framework (EARF) was prepared and disclosed on ADB's website in January 2014. The EARF required the civil works, depending upon its nature and scale, to be subject to UKL-UPL (environmental management and monitoring plan) or SPPL (commitment letter to manage and monitor the environment) according to the Government Regulation No. 27 of 2012; and an initial environmental examination (IEE) for each NSD site according to ADB's Safeguard Policy Statement 2009. However, civil works implemented from 2015 to 2016 did not conform to UKL-UPL and SPPL environmental management practices due to lack of consultant capacity as well as limited ADB support. To address this issue, ADB recruited an environmental safeguards consultant in 2017 to ensure compliance with the EARF.
The IEEs, including the Environmental Management Plans (EMPs), for the four NSD sites were prepared in 2018 and were cleared by ADB within the same year. Prior to construction of infrastructure in NSD, consultations with the affected communities, related stakeholders, and the contractors were conducted to disseminate the project information, anticipated adverse impacts and proposed mitigation measures during the construction. The participants were informed of the Grievance Redress Mechanism (GRM) for the project. EMP implementation was reported semiannually to ADB. The monitoring reports suggest that the NSD generally complied with EMP requirements. Corrective actions were few and quickly resolved. There was no outstanding environment-related complaint at project completion
The project was categorized B for involuntary resettlement. The resettlement framework was prepared and disclosed on the ADB website in January 2014. Five cities triggered the involuntary resettlement, thus a due diligence report (DDR) for acquired land in each city was prepared and disclosed on the ADB website. The livelihood income recovery programs for the affected people in Palopo were fully completed in 2018. The affected structure in NSD Bima was rebuilt in early December 2019 near the NSD location and ownership was transferred to local government on 20 December 2019. At completion, there were no outstanding issues in Kendari, Palopo, or Bima.
The construction of drainage in Pekalongan and bridges in Kapuas in 2016 affected 38 households. Lack of consultation on safeguards requirements led to construction without any land acquisition and resettlement document prepared. The executing agency and ADB agreed to continue the construction in parallel with the preparation of the DDRs, which were approved on 27 March 2018 for Pekalongan and 25 May 2018 for Kapuas. The local government paid compensation to all affected households in 2016 and topped them up with livelihood restoration programs to close the compensation gap. At completion, some of those programs were not completely delivered. Both LCOs carried over the program for the following years using the government budget in 2021.
The project received voluntary donations of affected land and non-land assets. The donations were in accordance with the principles and procedures for voluntary donation as set forth in the resettlement framework. However, due to lack of consultation on safeguard requirements, the donation in 2016 was conducted verbally without any written record. Land donation did not cause significant losses to the owners, who were project beneficiaries. During the project implementation, a total of 4,001 square meters (m2) land ownership and 1,085 m2 land-use were donated, most of which was non-productive land.
|Indigenous Peoples||The project was categorized C for indigenous people. No indigenous people were identified in the project and the project had no impact on indigenous people.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||Consultations with all project stakeholders including potential beneficiaries had been carried out.|
|During Project Implementation||During projec implementation, consultations particularly with community members (beneficiaries) was continued.|
The project will require an estimated 2,297 person-months of national consulting services at national and district/city levels. Community advisors to assist community in planning and implementing the project will also be recruited (About 3,900 person-months of community advisors will be required under the management consultant team at the regional level).
Consulting service requirement:
A national team of management consultants will assist the PMU and three regional teams of management consultants will cover the following regions: (i) West (Sumatra and Kalimantan), (ii) Central (Java and Nusa Tenggara), and (iii) East (Sulawesi and Maluku). The national management consultant (NMC) will be responsible to help the DGHS in the overall project management and implementation. The NMC will also be tasked to supervise and evaluate the performance of the RMCs. NMC should ensure that works carried out by the RMCs are in line with the project design and guidelines. RMCs will report to the DGHS and the NMC. In implementing their tasks and responsibilities, RMCs will be guided by project guidelines and procedures (JUKLAK/JUKNIS and other guidelines) that will be prepared by DGHS with the supports from the NMC.
Each regional team will also have city coordinators; which will be assigned specifically in each participating city/district. The community advisors will also be contracted under the regional consultant contracts. The national team will assist the DGHS is the overall project management and implementation. The RMCs will assist DGHS and LCOs in the project management and implementation at the regional level through providing technical and managerial support, establishing and implementing a sound financial management and monitoring system, implementing the complaints-handling mechanism, implementing the PPMS, which is a part of the M&E framework, and (vi) undertaking training of community advisors, and community members (BKM/CIO).
Three individual consultants will also be recruited to carry out an independent monitoring and evaluation of the safeguards. At the end of project implementation, a team of consultant will be recruited to conduct an impact evaluation and assist the EA in the preparation of a project completion report.
Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality cost ratio of 80:20. The consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). The management consultants as well as the impact evaluation consultants will be recruited through national firms.
|Procurement||All procurement to be financed under the ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2012, as amended from time to time). Depending on the complexity of technical designs to upgrade infrastructure, civil works will be carried out directly by the communities or tendered to construction firms. It is expected that a large proportion of civil works will be managed by communities through their CIOs and carried out by local manual labor. Simple civil works for neighborhood investments will be contracted out to the communities based on an agreement between a BLM/CIO and city Satker/LCO, and in compliance with the requirements for community participation in procurement as specified in ADB's Procurement Guidelines. Community contracts 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 selected five cities will be submitted to ADB for prior approval. All contracts will be monitored under the management information system. More complex infrastructure upgrading works, which the community is considered not to have sufficient capacity, will be contracted out to firms/contractor to be engaged by the EA through the city satkers.|
|Responsible ADB Officer||van Etten, Joris G. P.|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Indonesia Resident Mission|
Directorate General of Human Settlements, Ministry of Public Works and Housing
Jl. Pattimura No. 20
|Concept Clearance||14 Jun 2013|
|Fact Finding||04 Jul 2013 to 19 Sep 2013|
|MRM||21 Oct 2013|
|Approval||31 Mar 2014|
|Last Review Mission||-|
|Last PDS Update||07 Jul 2021|
|Approval||Signing Date||Effectivity Date||Closing|
|31 Mar 2014||23 Apr 2014||17 Jul 2014||30 Jun 2018||31 Dec 2019||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||102.00||Cumulative Contract Awards|
|ADB||74.40||29 Sep 2021||71.22||0.00||100%|
|Cofinancing||0.00||29 Sep 2021||71.22||0.00||100%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
|Tender Title||Type||Status||Posting Date||Deadline|
|INDIVIDUAL CONSULTANT FOR MONITORING AND EVALUATION OF COMMUNITY PARTICIPATION||Individual - Consulting||Closed||16 Apr 2019||22 Apr 2019|
|INDIVIDUAL CONSULTANT FOR MONITORING AND EVALUATION OF GENDER||Individual - Consulting||Closed||16 Apr 2019||22 Apr 2019|
|INDIVIDUAL CONSULTANT FOR MONITORING AND EVALUATION OF SAFEGUARDS||Individual - Consulting||Closed||16 Apr 2019||22 Apr 2019|
|CONSULTANT FOR PREPARATION OF PROJECT COMPLETION REPORT AND ASSESSMENT OF PRELIMINARY PROJECT IMPACTS||Firm - Consulting||Closed||13 Mar 2019||19 Mar 2019|
|Contract Title||Approval Number||Contract Date||Contractor | Address||Executing Agency||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|CONSULTANCY SERVICES FOR THE PREPARATION OF PROJEC T COMPLETION REPORT AND ASSESSMENT OF PRELIMINARY PROJECT IMPACTS||Loan 3122||08 Oct 2019||PT. CIRIAJASA ENGINEERING CONSULTANTS | JL. RAYA PASAR MINGGU NO 36D, PANCORAN, JAKARTA SELATAN INDONESIA||Directorate General of Human Settlements,MPWH||194,426.45||194,426.45|
|CIVIL WORKS SKALA LINGKUNGAN 2018||Loan 3122||23 Jul 2018||VARIOUS | VARIOUS INDONESIA||Directorate General of Human Settlements,MOPW||7,061,084.00||7,061,084.00|
|CONSTRUCTION OF INFRASTRUCTURE AT NSD PURIRANO KOTA KENDARI||Loan 3122||07 Jun 2018||PT ARCHITA GRAHA INDAH LESTARI | JL. MAYJEN KATAMSO LR NURUL FALAH NO.1 KOTA KENDARI INDONESIA||Directorate General of Human Settlements,MOPW||1,812,764.00||1,757,141.00|
|UPGRADING OF SLUM AT TUNGKAL JAYA TANJUNG JABUNG BARAT||Loan 3122||18 Oct 2017||PT ZULAIKHA | JL. JENDRAL SUDIRMAN NO. 01 RT 05 KEL. TUNGKAL, TUNGKAL ILIR INDONESIA||Directorate General of Human Settlements,MOPW||3,054,179.00||305,517.00|
|CIVIL WORKS THROUGH COMMUNITY CONTRACTS IN 20 CITI ES, 2017||Loan 3122||17 Jul 2017||VARIOUS | VARIOUS INDONESIA||Directorate General of Human Settlements,MOPW||9,795,091.00||9,793,621.00|
|Reconstruction of Tumnub Kork Srok Irrigation System at Varin Commune, Varin District, Siem Reap Province||Loan 3122||02 Jan 2017||Various | Various Indonesia||Directorate General of Human Settlements, MOPW||237,408.72||240,241.25|
|Title||Document Type||Document Date|
|Neighborhood Upgrading and Shelter Project (Phase 2): Updated Procurement Plan||Procurement Plans||Dec 2019|