Water Resources Management Financing in Indonesia

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Water Resources Management Financing in Indonesia

  1. 1. Workshop on IWRM National Water Financing Country Report on Water Resources Management Financing Yangon, Myanmar 3 October 2013 Sutardi Indonesia Water Partnership
  2. 2. Outline of Presentation 1. 2. 3. 4. 5. 6. 7. 8. 9. Scope of Water Resources Management Financing Water Resources Financing Policy Program & Funding for WRDM Analysis of Problems Sustainability of Water Resources Ecosystem Water Security Food Security Water Resources Financing Implementation Plan Recommendation
  3. 3. 1. Scope of Water Resources Management Financing Objective:  To collect data & information on scope and actors of IWRM Water Resources Financing  To analyse financing policies and its implementation  Assessment to financing policies and its implementation  Recommendation
  4. 4. 1. Scope and Institution in Water Resources Financing No. Scope of Water Resources Management Sectors/ Related Institutions 1 Urban flood damage reduction 2 Rural flood damage reduction DG. Water Resources; BNBP 3 Drainage DG. Water Res. and DG. Human Setl 4 Agricultural water supply DG. Water Res. & Min. Forestry 5 Erosion and runoff control Min. Forestry & DG. Water Res. 6 M&I water supply DG.Water Res. ; DG. Human S; PDAM, Private Sector DG. Water Resources; BNBP
  5. 5. 1. Scope and Institution in Water Resources Financing (lanjutan) No. Scope of Water Resources Management Sectors/ Related Institutions 7 Water quality management Min. of Environment & DG. Water 8 Water Recreation Min. Tourism; DG. Water Res.; Private Sector 9 Fishing and hunting Min. Fishery; Private Sector 10 Ecological systems Min. Environmental, Min. Forestry, DG. Water Res. 11 Navigation Min. Communication; DG. Water Res 12 Hydroelectric power and Mining Min. Energy & Mineral, DG. Water Res. , PLN, Private Sector
  6. 6. 2. Water Resources Financing Policy A. Financing for Water Resources Management & Development Formulation of laws & regulations on water resources; Development & management and allocation of water resources; Provision of raw water supply for DMI, agriculture, environment, etc Funding by government & managed by DG. Water Resources, Min. P.Ws B. Financing for provision drinking water & sanitation Regulating, controlling and fostering drinking water providers Provision & operating of drinking water and sanitation facilities Funding by central and local governments and private sectors. DG. Human Settlements, Min. of PWs carried out government tasks
  7. 7. 3. Program & Funding for WRDM  Programs on Water Resources Development & Management : Development, management & conservation of rivers, lakes,etc; Development & management of irrigation & swamp systems; Provision and management of raw water supply; Provision of flood management and coastal protection measures ; Institutional and management improvements.  Funding and source of funding; Total estimated costs for 5 programs (2004-2009) US$4,042 million Most of funding from central government, funding from local gov’nts. only very small About 30-40% from loan of ADB, JBIC, IDB, World Bank, etc
  8. 8. 4. Analysis of Problems • • • • For the purpose of analyses financing water resources management are grouped in 3 main themes: a) Sustainability of function & benefits of water resources ecosystem b) Water Security c) Food Security To identify problems in three 3 groups above To analyze financing policy and government program in respond to problems in 3 themes above Assesment on enhancement of government policies implementation
  9. 9. 5. Sustainabilty of Water Resources Ecosystem 1) Problems that threathen sustainability of function & benefit of water resources ecosystem • water pollution and adverse impacts of untreated municipal wastewater discharge, including industrial and mining effluent disposal; • adverse impacts of watershed degradation such as increasing flood peaks causing economic damages, decreasing dry season flow and sedimentation damages to water infrastructure; • Landslides due excessive heavy rainfall
  10. 10. Watershed and River Condition 1010 1100 1120 1130 1. Increase of critical lands (13,1 mil. Ha in 1992, now (2010) already > 18,5 mil Ha). 2. Increase distribution of critical RCA (22 RCAs in 1984, 39 RCAs in 1992, become 62 RCAs in 2005). 1984 ---22 Critical RCA 1180 5090 4010 5150 5160 5170 1260 2010 2020 2040 2100 2050 2080 2120 2140 2090 2130 1010 1090 1100 1120 1130 1180 0 4140 1992 --- 39 Critical RCA 4030 4020 1210 1240 1290 5090 4010 51505100 5160 1260 2010 2020 2040 2100 2050 2080 5170 2120 2140 2090 2130 3010 2070 2110 2005 --- 62 Critical RCA Watersheeds conservation program covering 70 DAS of 23 million Ha, since 2012 to 2022 7020
  11. 11. STATUS OF WATER QUALITY IN SOME RIVER DI INDONESIA No. Province Name of River Status of Quality UpStrm Dwns 12. DKI Jakarta Ciliwung HP HP 13. Jawa Barat Citarum HP HP 14. Jawa Tengah - DIY Progo LP PL 15. Jawa Timur Brantas LP PL 16. Bali Tukad Badung LP LP 17. Nusa Tenggara Barat Kali Jangkok LP PL 18. Nusa Tenggara Timur Kali Dendeng Good LP 19. Kalbar Kapuas LP LP 20. Kalteng Kahayan LP PL 21. Kalsel Martapura LP PL 22. Kaltim Mahakam LP LP LP = ligthly polluted; PL = polluted; HP= highly polluted; Good = not yet polluted
  12. 12. 6. WATER SECURITY Definition by Hoffman (2004): “the ability to access sufficient quantities of clean water to maintain adequate standards of food and goods production, sanitation and health” UN-Water and its Members and Partners (2013): Water security is defined as the capacity of a population to safeguard sustainable access to: i) adequate quantities of acceptable quality water for sustaining livelihoods, human well-being, and socio-economic development, ii) for ensuring protection against waterborne pollution and water-related disasters, and iii) for preserving ecosystems in a climate of peace and political stability.
  13. 13. Water Storage per person (m3) 7000 6150 6000 4729 5000 4000 3255 3000 2486 2000 1287 1406 746 1000 43 54 A m er ic a al ia us tr N or t h A ra zi l B hi na C La os Th ai la nd ia In do ne s ca fri A So ut h Et hi op ia 0
  14. 14. V. Water Resources Status (5) Plan to achieve MDGs in 2015 Proportion of house hold having access to a safe and clean water in 2009 47.71% to be increased in 2015 68.87%
  15. 15. Policies to Achieve MDGs Target (1) Policy Direction: 1. Increase coverage and quality of water supply service in consistent and staging manner 2. Decrease water losses level through improvement and rehabilitation 3. Priority of water supply development is given to low income community 4. Increase allocation of funding for development of water supply system through alternative funding sources 5. Strengthen financial capacity of local water supply public company
  16. 16. Policies to Achieve MDGs Target (2) Plan to Achieve MDGs target 1. Plan of achievement based on National Medium Term Development Plan (2004-2009) or “Interim Achievement of MDGs” 2009: • Increase of coverage of pipe system by 30% in 2009 (in 2004 18%) • Decrease of coverage of protected non-pipe system by 51% in 2009 (in 2004 61%) • Decrease of coverage of unprotected non-pipe system by 19% in 2009 (in 2004 21%) Estimated total cost about US$ 2,500million, 40-50% will be funded by central and local governments including loans and grants from international funding agencies. The rest is expected from commercial investment schemes 2. Plan of achievement of MDGs by 2015: • Increase of coverage of pipe system by 46% • Decrease of coverage of protected non-pipe system by 36% • Decrease of coverage of unprotected non-pipe system by 18%
  17. 17. Jumlah puting beliung 12x
  18. 18. Watershed and River Condition Impact of Floods and Droughts 1. Decrease of rice production due to floods (about 374,000 ha/yr or equal to 919,000 ton rice/yr) or due to droughts (about 350,000 ha/yr or equal to 700,000 ton rice/yr). 2. Urban floods also caused significant economic lossess due decrease of productivity of service and industrial areas and traffic jams 3. In Jakarta 1 hour traffic jam due to road innudation causes economic loss of Rp 1.5 billion RP Apakah dampak dari kerusakan DAS, tanah longsor, polusi, sedimentasi telah menyebakan kenaikan biaya O& M, serata mengurangi pendapatan dalam Penegeloaan Wilayah Sungai??
  19. 19. Financial Performance 2001 - 2010
  20. 20. Watershed and River Condition Impact of Climate Change Impact of the rise of sea water level due to global warming :  This will directly affect to socio-economic life of about 16 milion peoples in 10.666 villages in coastal areas.  More productive areas in coastal area will flooded and this will be occured more frequently and in incrasing intensity.  Erotion and abration of of coastal areas will spread over.  Retreat of coastal line.
  21. 21. 7. FOOD SECURITY
  22. 22. ARAH KEBIJAKAN KETAHANAN PANGAN • Def : Gizi cukup dan berimbang • Produksi nasional cukup problem pada aksesibilitas • No global trading (mandiri) KONTRIBUSI PEMBANGUNAN POSISI 2004 (SWASEMBADA BERAS) • Produksi Nasional : 54,01 jt ton GKG • Luas panen : 11,9 jt Ha • Laju pertumbuhan : 1,46% ) SASARAN KETAHANAN PANGAN) IRIGASI PER TAHUN (2005-2009 • REHAB Eq. 200.000 Ha AT 500.000 Ha • LANJUTAN Eq. 90.000 Ha AT 100.000 Ha • PENINGKATAN Eq.10.000 Ha AT 60.000 Ha AT ? • Laju pertumbuhan 1,46% Eq. 175.000 Ha AT per th • DEGRADASI PRASARANA (O&P) • DAMPAK BENCANA ALAM • ALIH FUNGSI LAHAN • PENURUNAN DEBIT SUNGAI 22
  23. 23. LUAS TARGET IRIGASI 2009 7,2 JUTA HA TERBANGUN BELUM TERBANGUN 6,7 JUTA HA 0,5 JUTA HA KONDISI RUSAK KONDISI BAIK 1,5 JUTA HA 5,2 JUTA HA RUSAK BERAT RUSAK RINGAN SUDAH SAWAH BELUM SAWAH LUAS TARGET IRIGASI 2009 340 RIBU HA 1,16 JUTA HA 4,9 JUTA HA 0,3 JUTA HA 7,2 JUTA HA TERBANGUN BELUM TERBANGUN 7,2 JUTA HA 0 KONDISI RUSAK KONDISI BAIK 0 7,2 JUTA HA RUSAK BERAT RUSAK RINGAN SUDAH SAWAH BELUM SAWAH 0 0 7,2 JUTA HA 0 23
  24. 24. Ratio of Rice Field and Population (ha/person) and Rice Yield (ton/ha) in 2010 Countries Brunei Cambodia Indonesia Malaysia Myanmar Lao PDR Philippines Singapore Planted Area (1000ha) (2) 1.30 2,585.91 12,993.28 670.52 8,089.65 818.62 4,525.51 --- Thailand Vietnam 11,229.94 7,400.20 (1) Population (1000) 0.417 14,478 244,769 29,322 46,734 6,374 96,474 5,266 Ratio planted area & population (4)=(2): (3) 0.003 0,17 0.010 0,022 0,172 0.128 0.047 --- 69,892 89,790 0,160 0.082 (3) Production (1000 ton) Rice yield (ton/ha) (5) (6)=(5): (2) 4.9 2.83 4.98 3.73 4.02 3.86 3.69 6.37 7,315.93 64,776.46 2,499.54 32,487.08 3,163.88 16,940.81 ----31,277.35 38,800.00 2.79 5.24
  25. 25. Self-sufficiency Ratio (ratio rice production to domestic utilization) Unit: Ton 2009 Country 2010 Domestic Utilization Production Ratio (%) Domestic Utilization Production ASEAN 125.449.397 107.867.551 Brunei 869 33.797 2,57 4.140 38.056 10,88 Cambodia 4.590.000 2.927.000 156,82 4.682.193 2.961.392 158,11 Indonesia 40.346.922 38.433.251 104,98 40.938.721 38.904.962 105,23 Lao PDR 1.820.750 1.764.642 103,18 1.898.330 1.825.961 103,96 Malaysia 1.585.708 2.531.159 62,65 1.641.985 2.590.004 63,40 Myanmar 20.196.456 19.157.000 105,43 20.466.859 19.346.000 105,79 Philippines 10.737.201 13.163.706 81,57 11.079.288 13.421.363 82,55 - 262.000 - - 270.000 - Thailand 20.889.417 11.267.000 185,40 20.643.048 11.767.000 175,43 Vietnam 25.282.075 18.327.996 137,94 25.220.000 18.458.458 136,63 Singapore 116,30 126.574.564 109.583.196 Ratio (%) 115,51
  26. 26. Food Security Ratio (ratio rice stock to domestic utilization) Unit: Ton 2009 Country Production 2010 Domestic Utilization Ratio (%) Production Domestic Utilization ASEAN 20.592.404 107.867.551 19,09 Brunei 15.505 33.797 45,88 14.871 38.056 39,08 Cambodia 128.000 2.927.000 4,37 320.000 2.961.392 10,81 Indonesia 1.172.435 38.433.251 3,05 3.269.647 38.904.962 8,40 Lao PDR 30.169 1.764.642 1,71 86.276 1.825.961 4,72 Malaysia 275.899 2.531.159 10,90 424.867 2.590.004 16,40 Myanmar 4.345.208 19.157.000 22,68 4.717.664 19.346.000 24,39 Philippines 2.638.287 13.163.706 20,04 1.849.937 13.421.363 13,78 55.000 262.000 20,99 40.000 270.000 14,81 Thailand 6.251.800 11.267.000 55,49 7.374.217 11.767.000 62,67 Vietnam 5.680.101 18.327.996 30,99 6.684.180 18.458.458 36,21 Singapore 24.781.659 109.583.196 Ratio (%) 22,61
  27. 27. 9 Water Resources Financing Implementation Plan 2004-2010
  28. 28. Water Resources Investment Source Water Resource Investment Funding Source 2004 – 2009 (%) 2010 – 2014 (%) Government 70 62,33 Loan 25 24,25 Foreign Aid (Grant) 5 4,60 Private Sector (KPS Air Minum) 2.8 8.82
  29. 29. Water Resources Funding Allocation Water Resources Program 2004 – 2009 (Rp T) 2010 – 2014 (Rp T) 1 Water Resource 6,29 10,79 2 Irrigation 18,10 29,98 3 Raw Water Supply 1,57 2,40 4 Flood Control Management 10,05 16,79 36,01 59,96 Total Notes: 1. Increase of 66,5% budget allocation for 2010 – 2014 2. Food Security Program in 2013 Irrigation improvement Rp19,8 T (111.251 Ha & 275 unit Embung) 3. Food Security for increase of food production Rp 63,2 T (3x Tahun 2007)
  30. 30. Physical Target of Water Resources Development Water Resource Implementation Program 1 New Construction of Irrigation Networks 2 Target of 2004 – 2009 (Completed) Target of 2010 – 2014 (Under Construction) 494.853 Ha 500.000 Ha Rehabilitation of Irrigation Netwokrs 1.387.968 Ha 1.340.000 Ha 3 Operation and Maintenance of Irrigation Networks 2.002.275 Ha 11.120.000 Ha 4 Upgrading and Maintenance of Swamp Reclamation Networks 1.015.199 Ha 548.500 Ha 5 Operation and Maintenance of Swamp Reclamation Networks 647.895 Ha 5.444.277 Ha 6 Flood Control Infrastructure 9.555 KM 1700 KM 7 Raw Water Supply Capacity 16,13 M3/second 56,3 M3/second 8 Coastal Protection Infrastructure 96,30 KM 50 KM 9 Conservation of Watersource Area - 63 Watersheeds 10 New Construction of Reservoir, Situ, and Embung - 252 Unit 11 Rehabilitation of Reservoir, Situ, and Embung - 440 Unit
  31. 31. 9. Recommendations (1) 9.1 Identification funding need for water resources management: • Activities for conservation of upstream watershed to stop degradation of function of watershed • Management of surface and ground water quantity • Management of water quality and water pollution control • Management of flood control • Management of river environment including biodiversity • Management of water resources infrastructures for O&M of water sources, river systems, infrastructures • Capacity building for public participation in inclusive and comprehensive manners
  32. 32. 9. Recommendations (2) 9.2 Identification funding need for water service management: • Agreement in the cost sharing between local & central governments, public utility in consumers in cost for planning & design, investment and O&M of water service systems • Activities for planning, design, O&M and monitoring & evaluation of water service systems • Expanding investment in water service systems that include drinking water supply, waste water and sanitation to achieve the MDGs by 2015 • Extra efforts and funding to settle current outstanding debts of local government drinking water utilities including for cost recovery • Capacity building for public participation in inclusive and comprehensive manners
  33. 33. 9. Recommendations (3) 9.3 Identification of source of funding for water resources and water service managements: • Local governments (province & district) budget and central government budget • Users and beneficiaries in term of tax, fees, polluter charges and penalty for party or individual against watershed conservation rules • Semi and/or private sector investors in term of issuance of bonds and ownership share, etc • International funding institution in term of grants, soft loans, guarantees, etc • Innovative funding such as “debt swap mechanism”, and • Implementation of “Kyoto protocol” especially for develop countries in term of “clean development mechanism” incentives for developing countries to protect natural forest for carbon absorption
  34. 34. 9. Recommendations (4) 4.4 Identification of measures to ensure proper fund management: • Implementation of “good governance” principles such as: effective, efficient, transparency, accountable and participative in a consistent manner • Implementation of principle: “funds from water must return for water” • Implementation of assurance of service principle commensurate amount fees and charges being paid to • Issuance of periodic report to relevant stakeholders on fund usages and services enhanced to public • Implementation consistent monitoring and evaluation procedures and mechanisms by relevant authorities including public
  35. 35. 9. Recommendations (4) 9.4 Identification of measures to ensure proper fund management: • Implementation of “good governance” principles such as: effective, efficient, transparency, accountable and participative in a consistent manner • Implementation of principle: “funds from water must return for water” • Implementation of assurance of service principle commensurate amount fees and charges being paid to • Issuance of periodic fund usages and services enhanced to public • Implementation consistent monitoring and evaluation procedures and mechanisms by relevant authorities including public
  36. 36. 9. Recommendations (5) 9.5 Identification of institutional issues to be proposed to government: • Formulation of implementing government regulations and other rules conducive for * participation private sectors, users, and beneficiaries * implementation of “good governance” principles • Public capacity building programs to ensure improvement and increase of public participation • Improvement measures to improve performance of water service provider and increase public participation by considering the following model and suggestions
  37. 37. A Model on Urban Water Supply Management for Sustainable Livelihoods Policy Makers Vulnerability Context Sustainability Context Urban Water Supply Providers Households
  38. 38. Some Key Points • Participation of the society • Strong commitment from the workers and management • Independency of the water supply provider • Taxes based on benefit principle, cost recovery, polluter-pay principle and solidarity principle in a local or regional catchment area could contribute to IWRM and solve financial problems
  39. 39. A Governance Model for Urban Water Supply Financing Governments Financial Market share of capital loan Water Banks Urban Water Supply Providers interest subsidies subsidies share of Households ownership
  40. 40. Strategic Business Planning Model Element 1 Goals and Needs Element 2 Long-range Strategic Elements Element 3 Short-range Business Plans/Implementation Programs Community Utility mission/ Vision customer needs Overarching utility policies Financial Program Regulatory compliance Stakeholder Objectives Regulatory agencies requirements Master plan& related documents Management actions Construction projects Agreement/contracts evaluation & adjustment Public affairs & outreach
  41. 41. Implementation improve management performances Regulations ● public participation ● public-public partnership (unhealthy with healthy PDAM) improve coverage ● co-operatives ● public initiatives financial resources ● water bank ● water taxes or charges

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