Access to Clean Water: A Problem for Indonesia

Access to clean water is one of Indonesia's biggest

problem. According to the Millennium Development

Goals (MDGs) Report 2007, published by the National

Development Planning Board, piped water is accessible

to 30.8 per cent of households in the country's cities

and 9 per cent in its villages. Such fi gures show the

limitations of the municipality's water service provider,

PDAM.

Lack of investment in clean water is one reason

PDAM gives for its limited outreach. Based on a

government statement, to meet the MDGs target by

2015, Indonesia needs Rp43 trillion (US$4.6 billion)

in clean water funding. The government currently

provides Rp500 billion.

In order to close the funding gap, the government

expects private investment in drinking water

infrastructure.

The need for clean water funding is something that

cannot be covered by private investment. In Indonesia,

most PDAM utilities have small scales of economy and

are therefore unattractive to investors.

There is no evidence to suggest private investors

will improve the effi ciency and effectiveness of water

services, whereas the government has a duty to do so.

Increasing public funding for clean water

infrastructure is the most rational approach for

Indonesia. This effort should begin with an analysis

of the needs of locals. This should be done through a

democratic and participatory process.

There are resources and mechanisms the government

could employ to increase clean water funding, such as

state and local budgets, grants, government bonds and

community-public partnership.

In order to use a grant system, the government

should improve its proposal management and clearly

focus on real needs in order to widen clean water

services.

PDAM could use existing funds more effi ciently.

if it could reduce leakages from 40 per cent to 20 per

cent, it would have more disposable funds to invest

in infrastructure. PDAM should use cost recovery

principles, as long as costs are not passed on to

consumers. Cost recovery principles should also be

supported by a proper subsidy mechanism.

Bond investing is a traditional lending instrument

for public services. The mechanism needs conditions,

such as strong capital structure at local level.

A few of mechanisms in place now do help the

poor access clean water at affordable prices. The most

important thing is to make sure the mechanisms run

properly and that the needs of people at the local level

are met through appropriate funding.

Source: Developing English Competencies for Grade XI of Language Programme