World Bank Supports National Program to Improve and Expand Water Supply Services

July 28, 2009

New loan to help increase water production and sales in three urban areas of West Java, Central Kalimantan and South Sumatra

Jakarta, July 29, 2009 – The World Bank today approved a new loan designed to support the Indonesian government in its effort to increase access to piped water supplies for urban populations. The Urban Water Supply and Sanitation Project will be implemented in local water utilities or PDAM (perusahaan daerah air minum) in Bogor City, West Java; Kapuas, Central Kalimantan; and Muara Enim, South Sumatra. The project will be implemented over a five year period until 2014, using a $ 23.56 million loan. Additional funding is provided by Ministry of Public Works and each respective local governments.

“This project marks a new beginning in long-term investment for the water sector, and directly supports the national program to create 10 million new water connections,” said Budi Yuwono, Director General of Human Settlements at the Ministry of Public Works. “We hope that the reform-minded PDAMs and local governments receiving this support will achieve the projects aim of improving and expanding water supply services, as well as set an example for others to follow.”

The PDAMs of Bogor city, Kapuas district and Muara Enim district were self-selected after about 20 PDAMs expressed interests in the project. Many of the 20 PDAMs dropped out later on, while these three PDAMs showed the necessary commitment and prepared the documents required to remain in the project. Specific activities to be undertaken in each area include:

  • Bogor (West Java) will receive an estimated $ 10.95 million to (a) construct a new water treatment plant adjacent to the existing Dekeng water treatment plant; (b) construct two additional units of rapid sand filters for the existing Dekeng water treatment plant; (c) construct a new water reservoir; (d) construct new water distribution pipelines including new household connections; (e) implement a non-revenue water (NRW) reduction program.
  • Kapuas (Central Kalimantan) will receive an estimated $ 5.65 million to construct a new water reservoir and new water distribution pipelines. Local government will provide budget for installing new household connections and implementing a NRW reduction program
  • Muara Enim (South Sumatra) will receive an estimated $ 14.58 million to (a) construct river intakes and raw water transmission pipelines for three different existing water treatment plants; (b) new water treatment facilities; and (c) improve the water distribution network in Muara Enim and Tanjung Enim. Other activities to be funded by local government budget include construction of three new water reservoirs, a NRW reduction program, and installation of new household connections.

“This project marks a complementary effort to the major water reforms pioneered by the PDAMS and local governments of Bogor, Kapuas and Muara Enim. In Kapuas and Muara Enim especially, local governments are investing significant portions of their budget to building new water reservoirs, implementing non-revenue water reduction programs and installing new household water connections,” said Joachim von Amsberg, Country Director of World Bank Indonesia. “Our support is aimed at increasing production and sales of water, thus increasing revenue and making PDAMs financially sustainable. Hopefully the lessons learned from this project can be applied to other water reform throughout Indonesia.”

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