Indonesia’s water service sector has undergone transition and transformation since the introduction of private sector participation during the 1990s and the economic and political reforms of 1997. The provision of water services in Indonesia is the responsibility of PDAMs (Perusahaan Daerah Air Minum), Local Government Owned Water Utilities of which there are around 430. Most PDAMs are very small, with less than 10 000 connections, and the majority remains administratively and technically weak with little investment in training having taken place for many years. Most PDAMs are heavily in debt and while some may make a profit, in the past they have often been used by district administrations for political capital by the setting of ludicrously low tariffs which have not allowed them to invest in operations and maintenance.
Actual Services provided:
Undertook an independent review of the various programs and modalities currently being used to improve the financial performance and capacity of PDAMs for which the 20 PDAMs program represents just one modality with value for money, program impact and sustainability the key focus areas of the review. The key factors considered critical to success in gaining access to commercial borrowing through Perpres 29. They were:
• Strong buy-in and engagement with local government (DPRD), the Mayor (Walikota) or Regent (Bupati)
• Access to reliable and clean water source(s)
• Adequate technical expertise and capacity – management and engineering
• Sound existing relations with banks and commercial lenders