Small Scale Water Provider. Indonesian Water Supply and Sanitation Magazine. April 2006


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Small Scale Water Provider. Indonesian Water Supply and Sanitation Magazine. April 2006

  1. 1. Information Media for Water Supply and Editorial 1 Environmental Sanitation Readers Voice 2 Published by: HeadlinesWorking Group for Water Supply and Sanitation Small Scale Water Provider Advisor: Director General for Urban and A drop of water in the barren land 3 Rural Development, Department of Public Works Drink Water Provision in Ho Chi Minh City Board of Trustee: Considering Small Scale Water Providers 7 Director of Human Settlement and Housing, ReportageNational Development Planning Agency Republic of Indonesia SMU 34 Jakarta, the Winner of National UKS Competition Director of Water and Sanitation, UKS, not a symbol of Healthy School 9 Ministry of Health Director of Water Supply Development, Telescope Department of Public Works Director of Natural Resources and Appropriate WSS Working group of Banten Province, Technology, Director General on Village and going with spirit and commitment 11 Community Empowerment, Department of Home Affairs Story Director for Facilitation of Special Planning Lost Water, scarce drops 13 Environment Management, Department of Home Affairs Interview Director of Multilateral Foreign Financing of Bappenas, Chief Editor: Oswar Mungkasa Delthy S. Simatupang, SH: Project Preparation is a key to success 15 Board of Editor: Around AMPL 18 Supriyanto, Johan Susmono, Around WASPOLA 22 Indar Parawansa, Poedjastanto Abstract Editor: Community Empowerment in Rural Water Provision 24 Maraita Listyasari, Rewang Budiyana,Rheidda Pramudhy, Joko Wartono, Essy Asiah, Innovation Mujiyanto, Andre Kuncoroyekti Water Treatment Plant (IPA) of Air Mandiri 26 Design/Illustrator: Insight Rudi Kosasih Water for the Poor in Jakarta 27 Production: Water Infrastructure and Poverty Alleviation Policy 30 Machrudin AMPL Role for Sustainable Facility 33 Distribution: Toward Independent, Transparent and Agus Syuhada Professional PDAM (Water Supply Enterprise) 36 Address: Jl. Cianjur No. 4, Menteng, Jakarta Pusat Book Info 46 Phone/Fax.: 62-21-31904113 CD Info 47 e-mail: Website Info 47 IATPI Clinic 50 Agenda 51 Unsolicited article or opinion items AMPL Literature 52 are welcome. Please send to our address or e-mail. Dont forget to be brief and accompanied by identity. This magazine can be accessed at Water Supply and Environmental Sanitation Website at Percik magazine can be accessed through WSS website
  2. 2. E D I TO R I A LD SOURCE: WWS WORKING GROUP ear readers, welcome again in Percik edition one of 2006. Issued last year, Percik is co-ming to see you all, the loyal readers,around the country. We are always pre-sent beside you though with unfixedschedule. What do you think of waterand sanitation in your place? Is it betteror worse than last year? In general, were being exposed towater service issues. Not all people getappropriate service and this is ourhomework left unsolved. On the otherside, the competent parties expected tomeet such demand are also encoun-tering many problems. As result, allhave to go with market rule. People must therefore meet waterdemand from alternative sources. Oneof them is small scale water provider.Although more expensive than PDAMand uncontrolled quality, people referchoosing them as their water sources.Water is an irreplaceable basic need. Economically, the ongoing process isreasonable. Where there is demand,there is supply. However, seen fromcharacters of water buyers, which are Exhibition: Pokja AMPL Working Group and WASPOLA participated on ICE-FTUI exhibition in March.commonly from the poor level, it is lessadvantageous for poverty alleviation. water providers is thus possible. This is tion, thesis or other research findings.The poor have to pay more. When would what we will present in the headlines of We hope this presentation will brightthey improve their living standard if this edition. and increase your knowledge.they spend money just to meet basic Dear readers, relating to drink water In reportage column, you will seeneeds that should be obtained with and sanitation issues, well establish how SMU 34 Jakarta wins 2005lower price? interview with Director of Multilateral National UKS (School Health Program) On the other side, many problems Foreign Financing of Bappenas. This is competition. Imagine if each school im-are still encountered to access to them. important to give clear description of plements the UKS program, it will bringBUMD (Local Owned Companies) or our position in relation to foreign loan great outcome. In the story column, weprivate ones are reluctant to serve them and how we can manage the loan in present WSLIC 2 Project damage due tofor some reasons, for example, some of order to avoid people from sustaining natural disaster. This will be valuablethe poor live in the illegal settlement or increased loan without optimum out- lessons for us, how to deal with publicthey are unable to pay water connection comes. facilities under serious advance. Therefore, there should be a In this edition, we will also present Finally, we hope Percik will serve asbreakthrough in discretion and ideas on new columns, namely regulation and your reference in the water supply andhow to provide them with cheap water. abstract columns. Regulation column sanitation issues. We are looking for-Small scale water providers can be contains recently issued regulations ward to your feedbacks in the form ofbridge for this purpose, but they need serving as socialization, while abstract articles or other contributions.nurture. Cooperation with large scale column contains abstracts of disserta- Regards. Percik April 2006 1
  3. 3. R E A D E R S VO I C E WSLIC 2 vs CLTS cal team, health team, there should be CIANJUR 43213 special persons-in-charge of CLTS. They Titih Titisari The two programs are different. may be part of health team called (, lets see what makes these two Sanitation Coordinator. They are In every publication, we alwaysdifferent programs a useful thing. responsible for collecting data of people send one exemplar to all relevant ser- WSLIC 2 is water and sanitation for who always move in the exposed places vices. We find your service has beenlow income community program, espe- and recording change in their behavior listed in our record. But if you need thecially those living in the village. This without subsidy or fund from anyone. same, were pleased to send it to youprogram runs with community partici- Certainly the people should be informed via abovementioned address.patory approach in the decision making, that latrine is not identical with septic Thank you.planning, implementation, operational tank.and maintenance. All is driven by com- We have been doing this in Pono-munity. It has four main components, rogo for WSLIC 2 during 2006. Al- SANIMAS Infonamely increased institutional and com- though CLTS training is not providedmunity capacity; increased hygiene and yet and we only learn from the guide- My friends and I are interesting insanitation; water and sanitation deve- book, we find this program applicable SANIMAS program, which is now beinglopment; and project management. and welcomed by the local people. developed. We also propose to make This program is granted by World such a Community Sewerage Course.Bank, AusAID, the Government of Bambang Apriyanto, ST We think that what we propose will beIndonesia, and beneficiaries through PMC of Ponorogo Regency in line with SANIMAS program. Weincash and inkind. hope you will give us information and CLTS (community-led total sanita- technical concept on SANIMAS imple-tion) is sanitation program focusing on We never receive Percik mentation and, if youre favorable,community awareness of latrine impor- please send us Proceedings of 2004tance for personal hygiene and sanita- I, representing Subdin Teknik SANIMAS National Seminar held intion, which is implemented by conside- Penyehatan Lingkungan (Sanitary Bali. Also, wed like to know how toring mapping, transect, contamination Engineering Sub-service) of Urban establish cooperation with WASPOLA.route, and simulation. This program is Development Plan Service of Cianjur Thank you for kindly assistance.awarded to community by referring to Regency, inform you that delivery oftheir language and understanding. Percik magazine never arrives in subdin Nurul IchsanWomens role is therefore important in so far, which is directly related to water Sanitary Engineering ofthe respect since they have sense of and sanitation service. So, to avoid UNDIPhumility. missing in disposition considering If we look into both programs, they importance of this magazine as commu- For more information on compre-are not contradictive each other. They nication and information media, we ho- hensive SANIMAS program, includingcan even be integrated into an advanta- pe you will send the Percik magazine to seminar proceedings, please contactgeous package because they all use Head of Settlement and Regional Infra- BORDA, Jl. Kaliurang Km.6 Yogya-demand-responsive approach. structure Service of Cianjur Regency karta 55283, Phone: 0274.888273. To For example, in the preparation of via: establish cooperation with WASPOLA,Community Working group in WSLIC 2, Dinas Cipta Karya Kab. Cianjur please contact Jl. Cianjur No. 4,in addition to chairman and deputy Cq. Subdin Teknik Penyehatan Lingkungan Menteng, Jakarta Pusat, Phone:chairman, treasurer, secretary, techni- Jl. Prof. Moch. Yamin No. 131 (021)3142046 . 2 Percik April 2006
  4. 4. HEADLINES Small Scale Water Provider A DROP OF WATER IN THE BARREN LAND SOURCE: MUJIYANTO W ater cannot be viewed as social property. It also has More than 100 million Indonesian people economic value and both cannot be separated each other. do not have access to water and sanitation. Treating water as economic property will eliminate its social function andIn accordance with Millennium Development Goals, undermine needs of the poor. In this regard, government is required to Indonesia should have been capable of reducing increase water access and quality half of such amount in 2015 later. throughout community since it cons- titutes their basic needs. This is anCould it come true? How could we pursue the goals? unanswerable challenge, not only by Indonesia but also other countries. Are there any alternative services? Experiences found in several coun- tries show that government tends to Percik April 2006 3
  5. 5. HEADLINES SOURCE: MUJIYANTOapply low price for water managementso that they cannot increase quality ofthe service or even maintain the existingone. Though low price is said to givebenefit to the poor, not all can access tothe service and they will in turn seekalternative water source with high cost. This condition emerges ideas of pri-vate involvement in the water provision.On other side, water has become fasci-nating blue gold for the private compa-nies to make profit. They invest largecapital into this sector. There are twopatterns of this large scale water supply,namely state owned companies and pri-vate ones. They serve water supply for decades.Unfortunately, the result is still unsatis-fied. Many people cannot access to theirservice, especially the poor. It is mostlikely due to tariff and management li-mitations. There are reasons why peoplecannot access to water service provided cal studies, the small scale water c. Community scale water plant inby the company, such as (i) high cost providers are divided into several cate- Dhulikel (Nepal) (Snell, 1998 andand advance pay of connection prevent gories: McIntosh, 2003).the poor from water subscription; (2) a. Providers having fixed relation with These small providers have distinc-water cannot always satisfy their needs, water company, from which they tive characters, namely individual ini-especially the poor; (iii) tariff structure distribute water via stalls or hy- tiative, flexible, market-adaptable in theand low consumption by the poor make drants. For example, water stalls in context of financial regulation and tech-the water company reluctant to serve Nairobi (Kenya), Lilongwe (Malawi), nical selection. Besides, such businessthem; (iv) people living in the illegal Batam (Indonesia); public hydrants has operational efficiency in terms of (i)settlement are not eligible to public service. in Dakar (Senegal), Mopti (Mali), cost recovery, (ii) leakage free, (iii) not On the other side, water company Dhaka (Bangladesh); and public requiring public subsidy and loan.are less informed of the poor so that (i) hydrants are managed by small- "Small Scale Water Provider" studyservice is unsuitable with demand and holders association in Segou (Mali). funded by ADB showed that communityonly focusing on unachievable technical b. Community that sell pipeline water scale water service has some characters:standard; (ii) on-time payment is to those who havent accessed to (i) flexible strategy and management.unsuitable with irregular income of the facility. For example, water plant Investment and operating cost limita-poor; (iii) lack of good communication built by community of Buenos Aires tions are addressed by choosing com-between water company and the poor. (Argentine); water plant built by munity based technology. Community In such a condition, Small Scale entrepreneurs of Guatemala City under service is mostly casual workersWater Providers are thriving. They are (Guatemala) and water selling cen- so that invoicing is not conductedthere to meet water need of the poor, ter in Manila (Philippines) produced monthly but as frequent as possibleespecially those living in the urban area, from river water solar treatment; according to their financial ability; (ii)which are inaccessible by large scale tank truck and cart which take water Water company is as standard of ser-water company or otherwise having dis- from pipeline water from which vice. Small scale providers considercontinuous water supply. This business water company cannot do service. water company their competitor so thatis potential service for the poor with low For example: Dakar (Senegal), Por- they always improve service quality asinvestment. tau-Prince (Haiti), Jakarta (Indo- equal as competitors; (iii) less apprecia- Based on purposes of some empiri- nesia). tion from local government and water 4 Percik April 2006
  6. 6. HEADLINEScompany. Investment is difficult as they ness can make 2% contribution to ser- This independency is seen from its inde-are alleged illegal, unprofitable, and vice coverage. pendent management. Everything istheir asset cannot be audited. As result, arranged by themselves, including lossaccess to credit is limited with high a. Distribution and Service and profit, while relationship with otherinterest and thus investment risk is also Distribution adopted by small scale distributors, such as mobile sellers,high; (iv) close relationship between water service has distinctive characters. serves only as provider (See table).validity and service level. Some of them use tiered distribution Type of water service varies, such as and some of them distribute directly to b. Priceusing cart, pipeline to home (water ter- consumers. According to characters, small scaleminal), tank truck, water stall, etc. Most of them are private and inde- water providers use their own ways toWater stall is a rapid growing business, pendent. Some come from foundation, fix water price. This depends on sourcesespecially I cities, for the following rea- self-support community or individual. of standard water, access distance tosons: (i) consumers can buy water in theadequate amount and time; (ii) capital Service and Service Area of Private Water Companyexpense per house is low; (iii) bettercost recovery for water company be- NO SERVICE TYPE OF SERVICE SERVICE AREAcause these small scale providers make 1 House connection - Continuous/shift - Crowd housingpayment as per quantity. service - Mid level housing Furthermore, small scale water pro- - Daily supply - 40 Families rangeviders can upgrade themselves as per - Runoff/bore well - Economic scaleprevailing condition. Some cases indica- connectionte that water cart can be converted to 2 Pipeline and fleet - Water purchase using - Tank trucktank truck and even underground wa- tank truck in the fleetterline. In Indonesia however, there isnever small scale water providers con- baseverted to large water company. 3 Tank truck - Custom-based service - Housing with Therefore, their existence can pro- - Minimum 4 m3 undergroundmote MDGs achievement in 2015. They - Downtown and off reservoir, 6 mare eligible to be incorporated into town coverage distance from roadwater investment strategy for their - Industriesimportant role in accelerating service - Officecoverage. Nevertheless, there should bespecial attention to them, especially in - Storesterms of expensive rate as well as lack of - Refill depotinvestment and legality. 4 Cart - Custom-based service - Housing with - Service for retailer undrinkable wellCondition in Indonesia - Urban service, about water Small scale water providers are easi- 1 RT coverage - Relatively plainly found in the cities of Indonesia. - 20 liter gallon housing and easilyHowever, there is no complete data on accessed by cartsuch business, either from quantity orservice coverage. This is well under- - Water for drinkingstood since the business is commonly and cookingillegal. 5 Refill - Standard water - Custom-based service General description of this business treatment - 1-2 km coveragecan be seen from the result of survey - Custom-based service distance (drivingconducted by Settlement Research and or on-site purchase range, motorcycleDevelopment Center of Public Work Mi- delivery, direct carrynistry and Hydroconsell in five cities of within 200kmIndonesia (Bandung, Subang, Jakarta,Palembang and Makassar). This busi- distance) Percik April 2006 5
  7. 7. HEADLINESconsumer, and facility used. In general, Distribution of Small Scale Water Supplysmall scale water providers fix muchhigher price than formal ones, in this TYPOLOGY SUPPLIER DISTRIBUTOR DISTRIBUTOR CONSUMERrespect, PDAM. Comparison of water L e v e l1 1 TKT LTKTl 22 eveprice is presented in the following table: No WATER VENDOR SELLING / M 3 (Rp) Small Terminal Cart House well CART 1. PDAM 4.250 2. Small Terminal 17.500 – 15.000 Refill Depot House well 3. Bulk Terminal 10.000 – 15.000 PDAM water TANK TRUCK Bulk Terminal Industry 4. Electric Pump 20.000/month (40 KK)=2.222/m3 treatment 5. Refill Mineral Water 184.210 Office 6. Sealed Mineral Water 447.368 Artesian PIPELINE well House well People cannot do anything to facesuch a high price. This is because water Cartis basic need that should be met even Tank Truckwhen in the outlandish price. Wordmust is the only answer since there are Pipelineno other alternatives.c. Legal Base It should be recognized that articles in Government has issued Government this government regulation just provide large scaleRegulation No. 16 of 2005 regardingWater Provision System (SPAM). This water providers. Article 1(9) pronouncesregulation deals with water provision, that provider includes state/local owned company,standard water protection, authority cooperative, private company and/or communityand responsibility, supporting entity, group which undertake drink water provision system.financing and pricing, development andsupervision, and administrative penalty. It does not pertain toFrom articles contained therein, none small scale water providers at all.relates to small scale water providers. Article 10 of PP, for example, says"Distribution unit shall confirm fixedquantity, quality, and continuity of dis- 1(9) pronounces that provider includes to give them equal opportunity.tribution" (paragraph 2), and the next state/local owned company, coopera- International experience showed thatparagraph says "24 hours guaranteed tive, private company and/or communi- authorized small scale water providersservice". Besides, article 6 provides that ty group which undertake drink water can render continuous service withdrink water supplied by SPAM shall provision system. It does not pertain to equal quality as the formal ones butmeet quality standard (paragraph 1) and small scale water providers at all. with lower price than their illegal coun-substandard drink water shall not be Indeed, existence of small scale terparts.distributed to the people. Both articles water providers can be incorporated For sure, the existing small scalewill certainly be difficult to be imple- into private company or community water provider can deal with issues thatmented by small scale water providers. group, but it only regards institution large scale water company cannot. Their It should be recognized that articles while their activities have no legality. operation is like a drop of water in thein this government regulation just pro- Accordingly, there should be space barren land.vide large scale water providers. Article for them in the form of permit/contract (MJ) 6 Percik April 2006
  8. 8. HEADLINES Water Supply in Ho Chi Minh City Considering Small Scale Water ProvidersH o Chi Minh City is the largest Ho Chi Minh City to give water access to tion program is also developed (i) to city in the Socialist Republic of the people was materialized into policy increase water production, (ii) to Vietnam, larger than Hanoi framework called Socialization Pro- improve quality and service coveragecapital of Vietnam. In 2004, population gram, namely a program to promote mainly in the inaccessible area, and (iii)of Ho Chi Minh City was 6.1 million with involvement of local private companies to reduce leakage level through repair ofan area of 2,094 km2, while population to invest in the water business. This pro- water distribution network, especially inof Hanoi City was 2.9 million with an gram was materialized into regulations the area with high leakage. To achievearea of 921 km2. As with large cities in developed by and between the govern- the goals, these regulations offer sixthe developing countries, Ho Chi Minh ment of Ho Chi Minh City and SAWACO cooperation schemes:City is constrained in the basic infra- in 2002. The regulations have been rati- Scheme 1: Investment for Compre-structure provision for its people, fied and announced by Peoples Com- hensive system; investors are to investincluding water provision. mittee of Ho Chi Minh City on August their capital for comprehensive system In the water sector, this city is 2003. Commencing with tryout of one development, from production unit toexposed to (i) lack of water due to rapid of small scale water providers, Hiep An distribution network and home connec-domestic and industrial needs along Co. Ltd, and then implemented in the tion. This investment is conducted inwith economic growth, (ii) significant broader extent. the area having no access to urban waternon-revenue water, and (iii) limited In addition to creating favorable distribution network.government fund to improve water ser- water investment climate for private Scheme 2: Investment for Produc-vice as people demand. Such factors companies, regulation on the socializa- tion unit; investors are to invest theirmake public water service called Saigon SOURCE: LINA DAMAYANTIWater Supply Corporation (SAWACO,formerly Ho Chi Minh City WaterCompany) lies below target. In the 2001-2005 master plan, thegovernment of Ho Chi Minh City tar-geted 90% people will have wateraccess; however until end of 2001,SAWACO service coverage was only50% with 40% leakage. This conditionencouraged government of Ho Chi MinhCity to abstain from relying only onSAWACO. Accordingly, on December2001, government of Ho Chi Minh Citydecided to establish policy frameworkfor promoting involvement of privatecompanies, including small scale waterproviders as SAWACOs partner to pur-sue the given target.Socialization Program Small scale water provider (the Hiep An Co. Ltd) that become SAWACO partner. Political will of the government of Percik April 2006 7
  9. 9. HEADLINES SOURCE: LINA DAMAYANTIcapital for production unit scale water providers anddevelopment. Water production community, but also byis sold to urban water company. government of Ho ChiThis investment is conducted in Minh City and urban waterthe area having access to SAWA- company. Besides increas-CO but always exposed to lack of ing water access for thewater and low pressure. community, this program Scheme 3: Investment for also encourages SAWACOnetwork improvement; to improve its performanceinvestors are to invest their cap- in giving public service.ital to improve and develop Today, its service coverageoverall distribution network in is growing. According tothe certain area. This invest- SAWACO, communityment is conducted in the area served by pipeline systemhaving access to SAWACO dis- is 74%, and since 2005,tribution with high leakage SAWAC has successfullylevel. made profit. Scheme 4: Investment forwater transport; investors are to invest adopted by urban water company, Water Supply to the Poortheir capital to supply water in the either technical or quality standard. For In general, small scale water pro-remote area by taking water from urban the reason, the government of Ho Chi viders supply water to the area inacces-water company. Transport cost is partly Minh City requires SAWACO to provide sible by formal provider, which is com-borne by SAWACO. technical assistance for the small scale monly inhabited by the poor. In Ho Chi Scheme 5: Investment for perform- water providers. Minh City, water supply to the poor isance development in the production Benefits of the innovative underta- not only conducted by small scale waterunit; investors are to invest their capital kings are not only received by small providers but also public serviceto improve and develop performance in providers such as SAWACO, includingthe production unit. Sales profit will be for the poor living in the illegal settle-shared proportionally between urban ment. This policy is just made by go-water company and investors. Ho Chi Minh City vernment of Ho Chi Minh City, while in Scheme 6: Investment for distribu- Peoples Committee the previous time public service Ption network; investors are to invest providers are not allowed to give service eoples Committee is executivetheir capital to develop new distribution agency that holds central role in to the people living in the illegal settle-network and distribute the water from Socialist Republic of Vietnam. ment.SAWACO main meters. This agency is available in all govern- This policy is made upon considera- Until today, investors are interesting mental levels from central to ward tion that water is the basic need for allin most schemes except scheme 6, some (equivalent to village/kelurahan in people including the poor and having nohave been in operation and some other Indonesia). land title. However, according to Deputyare still in negotiation or contract. In Peoples Committee is elected by Director of Urban Transportation &addition to those schemes, regulations Peoples Council (legislatives), and Public Work, provision of this basicalso provide other aspects such as joint- Peoples Council is elected directly by need doesnt mean to legalize land use, people through general election.operation/investment procedure and thus if city government will use the land, Peoples Committee in Ho Chi Minh Citydelivery mechanism in the end of con- illegal inhabitants should leave the area. consists of 1 Chairman, 4 Deputies, andtract term or when service area has been 7 members, which represent city go- In order for low incomers to access thecovered by urban water company. An- vernmental agencies such as police de- water service, public service providersother interesting thing to investors is in- partment, army, and all departments of should apply rate block or progressivecentives, from easy access to land use, the city level (equivalent to service). rate, in which the lowest consumptiontax exemption, even for imported goods Members of Peoples Committee are block will be charged below productionor equipments, investors are free of usually heads of the departments. cost. (Lina Damayanti)import duty. However, small scale water Visit to Vietnam Reportproviders shall meet standard service 8 Percik April 2006
  10. 10. R E P O RTA G E SMU 34 Jakarta, the Winner of National UKS Competition UKS, not a symbol of Healthy School SOURCE:MUJIYANTOB reeze is blowing to welcome every guest in the school. A big shady tree is swinging its leaves. Just inthe portal, a terraced water pool makessplattering sound. The green plantsadorn each corner of the school. Suchnuance is harmonized with light greenpaint of the wall and sports field. Any corner of the school displaysnotices of keeping cleanliness, say no todrugs, no smoking in school area, andbeware of dengue fever. Dustbin, fororganic and inorganic waste, is postedin front of the classroom. In the outerwall, flower vases are hanging withstems creeping downward. Every class-room is equipped with AC and wash-basin. Model classroom is equipped School’s environment always clean and green.with two washbasins. In the school having 8,747 m2 area, schools in Indonesia in the UKS and UKS should stand independently. "Fewwe find none derelict room. Behind this environmental program. students are always unconscious during3-floor school, students plant home ceremony. Thats why we consider toherbal crops. In the other corner of the Long Process prepare a special treatment room," sheschool, students raise birds in the giant Realizing a healthy school is not remembered again. From the time, UKScage. There is also recycle house to con- easy. It needs long time and hard work. is revived by using a room in the cornervert waste into useful things. In 2000 ago, the school had been reno- of the school. That is condition of State Senior vated. Spirit shown by headmaster and In the early phase, this room justHigh School (SMU) 34 Jakarta. teachers to realize vision and mission is contained one simple table and sleepingEstablished on 13 September 1978, this considerable. This all brings the school bed. However, upon motivation andschool bears mission to increase student as one of the top best in Jakarta. fund subsidized by school in coopera-involvement in the environmental- Outcome of this success is that UKS tion with relevant institutions such asfriendly school program. Target of being is placed in a special attention, which in Health Service, National Educationenvironmental-friendly school has come the past it was less important for some Service and Puskesmas (Local Clinic),true. schools even left unattended. the school succeeded in the UKS devel- This is more remarkable upon suc- "Previously UKS was integrated with opment. These institutions gave hand incess of the school to win the 2005 youth Red Cross (PMR) in the small the form of medicines, cupboards, andNational UKS (School Health Program) room," said Septina Wibarini, SPd, sleeping beds. Since then UKS has quiteCompetition. Not surprisingly to say teacher and UKS SMU 34 coordinator. complete facilities. Now, the UKS hasthat the school is reference for other As with growing demand however, four permanent sleeping beds and one Percik April 2006 9
  11. 11. R E P O RTA G E SOURCE:MUJIYANTOemergency beds and one dental chair.There are also medicine case and otherhealth extension equipments. This UKSoccupies 6 x 8 m room. "A good UKSshould have at least four sleeping bedsfor one thousand students, physicians,and dental clinic," explained Septina.Activities UKS is open every school hour. Onepicket or more is standby every resthour. They are Youth Health Cadres(KKR) serving any students that want toget treatment, or assisting physician oncall. From Monday to Thursday, there isa physician on call, namely dentist andgeneral practitioner, in shift. "The KKRmember can immediately give minortreatment to their friend. If physician inon call, they serve as nurses," said be associated with health," said theSeptina. teacher and UKS pioneer. Meanwhile, UKS is open every Every year, UKS workgroup of this KKR members serve as change agent forschool recruits new cadres. About 30 school hour. One picket other students to pursue healthy life.students are recruited as KKR member or more is standby School facilities and infrastructuresevery year or every generation. They get every rest hour. They are also conditioned to support the pro-special training on handling minor acci- are member of Youth gram. Today, there are 36 special wash-dent, sexology, narcotics, and AIDS. Health Cadres (KKR) rooms for 24 classrooms. Drainage alsoThis training involves relevant institu- gets attention, including waste manage-tions and NGOs. Sometime, KKR mem- ment. "So, school health doesnt alwaysbers involve in extension program in the mean UKS," Septina affirmed.Puskesmas. "They are core cadres ofschool health program," Septina con- activities such as sport match and Challengesfirmed. others. Maintaining is more difficult than About physicians, this teacher of acquiring. This phrase also applies tobiology explained that they come from Effects UKS SMU 34. The problem lies on thestudents parents. "They work here vo- Septina explained that UKS helps KKR recruitment, not because it is diffi-luntarily. Especially dentists, they work increasing students understanding of cult to recruit the KKR cadre, but how tounder agreement," she said and health and the relevant issues. For impart a spirit of the winning team asexplained that these dentists are hired example, AIDS issues. Programs they performed last year. "Their spirit isbased on parents and teachers during designed by UKS make students AIDS different from the predecessors. It isregistration of new students, while for literate. Besides, students can make likely that theyre less forged," saidprescribed medicines, the school, via direct consultation with school physi- Septina while explaining that first ge-school committee, has established spe- cian in case they have a disease. "For neration of UKS has remarkable spirit.cial budget every year. sure, they are more care for healthy life. Besides maintaining UKS, the work- Every Friday, UKS and its And an important thing is that they can group still has another obsession, name-cadres initiate mosquito control pro- easily get medicine when they get ill, ly they will build a public clinic for thegram (PSN) in the school. This activity free of charge," she said in a smile. poor. The obsession is to realize schoolsinvolves al students for half an hour. UKS existence will inevitably moti- social awareness. "This is our dream,"UKS cadres serve as health team when vate all school persons to success the concluded Septina waiting the dreamSMU 34 students arrange outbound program. "Almost every subject should come true. Good luck. (MJ)10 Percik April 2006
  12. 12. TELESCOPE Water Supply and Sanitation Working Group (Pokja AMPL) of Banten Province Going with Spirit and CommitmentN o money, no program. This is a alth Service, Educational Service and 7 members from echelon III, 2 members common myth always encoun- Public Work Service arranged monthly from echelon II and 1 member from ech- tered by Indonesian bureau- coordination meeting, sometimes held elon I. The relevant institutions arecrats. It is most likely that money is the at the beginning of the month. Fur- Bapeda, Bapedal, BPM, Health Service,key. Is this myth eliminated? The ans- thermore, additional meeting was Educational Service and Public Workwer is: Yes. sometimes held in a month. Budget for Service. Since then, Pokja has its own Water Supply and sanitation all working groups activities, either operational budget. In 2005, budgetworking group of Banten Province is meeting or outbound activities, is allocated to BPM was Rp. 127,500,000.-one that can make it true. This team was charged to the relevant parties in shift. . In 2006, budget allocated to BPM,established in 2003. Although no mo- In other words, they subsidize the Bapeda and Health Service increasedney and incorporation legality, this working group. Rp. 215 million.working group went forward until Go- Existence of the working group with-vernor Decision was issued two years la- out legality is not apart from concern of Socializationter (2005). the Working group Leader, which is also Socialization plays important role Incorporation of WSES working the then Head of Bappeda, Ir. H. for the successful program, includinggroup of Banten Province was triggered Hilman Nitiamidjaya. He was the only AMPL. Socialization is directed towardby activities of National Working group echelon one official actively involved in all stakeholders including DPRD (Localand WASPOLA held in Yogyakarta in the organization. Besides, role of House of Representative). The process2003. Banten participants then estab- Governor and Provincial Secretary has been conducted so far althoughlished a Provincial working group. On should not be undermined as well. The individually, but the outcome is not bad.the other side, provincial government triumvirate officials always served as New Leader of Pokja AMPL of Bantenitself was committed to support this inviters in the working group activities. Province, Ir. Harmin Lanjumin, advisedeffort since water and sanitation cover- As result, spirit and commitment of that DPRD (Local House of Representa-age in this province was still low. Water those officials were transmitted among tive) support is great. According to him,coverage was 64.35% and sanitation working group members. the DPRD agrees to allocate budget tocoverage was 53.64% of total population Activity of Pokja AMPL Banten is this sector provided that there should beof 8,939,946 individuals. Another trig- prominent among others. From 20 real activities that touch lower levelgering factor was frequent visit by working group available, it is likely that community.National Working Group. Pokja AMPL is the one with frequent For bureaucrats, NGO, and universi- Therefore, this activity runs al- and continuous activities. It is then a ty, the existence of this Pokja is wellthough without money. A lack of budget "trade mark" for other sectors as well as known. This is because they alwaysto fuel this Working group is due to cities/regencies in Banten Province to involve in the activities held by Pokjaadministrative problem of the local go- do the same. AMPL. Regency/city government in thevernment. It is required that budget In 2005, the Pokja AMPL was legal- province has also recognized Pokja.should be allocated clearly whereas this ized upon the issuance of Governor of Even, three of six regency governmentscannot be realized since incorporation Banten Province Decision No. 618/- have acknowledged community-basedlegality is not issued yet. Kep.173-Huk/2005v dated 2 May 2005 program of AMPL, namely Lebak Since its establishment, the working regarding incorporation of Pokja AMPL Regency, Pandeglang Regency andgroup with membership being represen- Banten. The team has 20 members con- Tangerang City, while Serang Regency,tatives of Bapeda, BPM, Bapedal, He- sisting of 10 members from echelon IV, Tangerang Regency and Cilegon City Percik April 2006 11
  13. 13. TELESCOPEwill follow the same this year. nity in the AMPL development. socialization of Pamsimas and SANI- Today, stakeholders, especially DPRD MAS programs.Restrictions (Local House of Representative), are This year, Pokja AMPL Banten will As a new working group using the waiting for the implementation of the pro- arrange 15 activities such as road shownew approach, it is reasonable if Pokja gram. They find that it takes too long to in regencies/cities that have notAMPL is facing restrictions in the imple- make dissemination and socialization. involved in AMPL program; public dia-mentation of the work program. The Thus, it is possible that DPRD will cut off log with regency/city; finalization ofdata shows that restrictions available budget allocation to the sector. draft AMPL strategic plan to make it de-are as follows: finitive and looking forward to Go- Lack of valid data on water and sani- Pokja Activities vernor Decision; regular coordination tation coverage During 2005, Pokja AMPL Banten meeting in provincial, regency and Less attention from local government has facilitated establishment of Pokja national levels; hearing with Pokjanas to water and sanitation (AMPL) AMPL in Lebak Regency, Pandeglang (National Working group), WASPOLA development, which implies to limi- Regency and Tangerang City. All 2005 and foreign donors; following training ted fund work program has been implemented held by Pokjanas; organizing national, Inadequate peoples awareness of except one, namely Public Dialog, which provincial and regency workshops clean and healthy life behavior will be realized this year. Pokja also pro- accomplishing APML data; assistance Work program in local level has not vides CLTS training and development in and work visit to regency/city; synchro- been implemented yet three villages, namely Parigi, Kertasana nization of 2007 Pokja AMPL pro- Lack of concrete cooperation between and Rahayu Villages of Pandeglang gram/implementation; and monitoring local government, NGO and commu- Regency. Besides, the Pokja facilitates and evaluation. THEIR COMMENTS Ir. Harmin Lanjumin, Leader of Pokja AMPL of Banten Province regency/city working group. I always say, "Never confusing about money." In fact, we could make action without money. Now Pokja AMPL is a model for other institutions and Pokja. Even some foreign donors visit Pokja AMPL P okja AMPL Banten has been over two years. What can we expect now for the implementation? We have allo- cated budget to Health Service and BPM; now, what will Banten to see our condition, which they consider successful. Existence of Pokja can eliminate sector-centric because Pokja itself involves in the activities. It means that Pokja also makes control. The rele- we do with the budget? About preparation, Provincial vant institutions also involve and even request to be controlled by Pokja. They Working group is ready, and it should be followed by are not offended if we give them ideas. regency/city working group because they will be in direct We hope Pokja will go forward in the future along with fact that former contact with the people. Leader of Pokja, Ir. H. Nitiamidjaya, MM is appointed as Secretary Local DPRD (Local House of Representative) has afforded financial support to this Government. We hope he will give more attention to Pokja. I think that sector. All they expect is implementation of the program. They dont want to Banten people will not be healthy and get substandard life if they always know that the budget is expended only for holding numbers of meeting. So there drink inappropriate water. is no much time by focusing only to community empowerment. AMPL has been two years old; the DPRD likes to see reality other than strategic plan. If result is clear, they will increase budget. That is their commitment. So, socialization Saprudin, Pokja member from BPM A should not take too much time to do. I think water and sanitation (AMPL) deve- ctually empowerment model has been established before Pokja AMPL lopment is very effective for the people, especially relating to health. exists. However, it is sectoral and scattered. With Pokja, those activities will be directed well. There will be agreement and meeting to determine direction of AMPL development. Ir. H. Nuryanto, MM, member of Pokja AMPL Banten Rustiantoko, anggota Pokja AMPL dari Bapedal P reviously I was confusing of how to build Pokja (working group) without money. But I could remove such confusion. We then made action without money and Previously clean water and sanitation project (APBL) was available. Each sector has its own program. Now, the relevant institutions may involve in the program by using the same data. It means that all components will move in legality. Accordingly, I use the same way to encourage one point. Pokja will ensure success, togetherness, and sustainability. (MJ)12 Percik April 2006
  14. 14. H I S TO RY Lost Water Source, Scarce Course SOURCE:MUJIYANTOP eople never think that their wa- ter has gone away. They live at the foot of Mountain Anjasmorofor tens of years without lacking waterfrom Kali Sekopek. Therefore, whenWSLIC 2 project existed in this area in2003, Kali Sekopek is one of threesources, Luh and Benda Putih sources,for people of Banaran Village, Kan-dangan Sub-district, Kediri Regency ofEast Java Province. Until one morning, 24 January2006, large flood swept away Kandang-an area and the vicinity, which was avai-lable in slope of Mountain Anjasmoro.Sungai River, the so-called river, as themain of Kali Sekopek overflowed. Theflood brought large mass of water,woods, mud and rocks. The flood takingsix tolls dead and destroying teens ofhouses in Medowo River, 1 km fromBanaran Village, blocked upstream of Dried off: Sekopek River spring is bone-dryKali Sekopek. Ongoing flow from the bigriver never drops anymore at Sekopek to collection tank provided before. "The viduals available in one hamlet or 17River. Upstream of the river is now only important thing, we have water," he RTs. In addition to water lost, a maina bulk of irremovable boulders. said. collection tank of 7 m3 capacity does not Sekopek River is but a monument, This creeks water debit is small. operate anymore.waterless river. People of RW 1, Putuk Therefore they block the flow using sand Hadi explained that his people doHamlet of Banaran Village which usual- sacks. Tens of sand sacks were put in not have any alternatives so far toly rely on this river are now desperate. rows. And water intake from Sekopek replace water of Kali Sekopek. If thereWater flow to houses stopped for two River was removed to this source. The were any adequate alternatives how-days. Hadi Suwito, Head of Banaran result is not bad. Water flows again. But, ever, his people would be ready to giveVillage and Chairman of HIPAM (Water people should be patient. Water is given contribution. "People have no problemConsumers Association) Margorukun in shift, yet it is dirty and odor. "In the to collect money because they fully relyexplained that such condition has forced past water of Kali Sekopek was clean," on the board," Hadi confirmed.HIPAM board to find the way to run Hadi said. Hendra CF that ever assisted WSLICwater back to their homes. As emer- WSLIC 2 plant delivered in 2005 2 in the village contended that there aregency alternative, people run the creek was serving 3133 families or 1,800 indi- two alternatives available, namely to Percik April 2006 13
  15. 15. H I S TO RY SOURCE:MUJIYANTO theft ever occurred in the source loca- tion, while it was close to the village. Hadi Suwito admitted that he never thinks so far. Moreover, his side has no idea where to find such fund that he ever got from the WSLIC 2 project. Since disaster, people have never ar- ranged meeting to discuss their water fate in the future. All to be done is to take emergency response to damaged installation. "People can actually make contribution, but it is surely not impo- sed on them, isnt it?" he said. People contribution of Rp. 1,500 per family per month, which has been collected so far was expended for maintenance cost. Even HIPAM board is not paid for the work. Today, since water is clogged, people do not pay contribution anymore, except those continuously receiving water from Emergency: Residents make emergency dam to catch water Bendo Putih source (51 families) and Luh source (50 families).maintain the existing emergency water the year. "I think the latter is appropri- Water installation in Bandaran issource or to take water from Medowo ate but it depends on people and fund different from that in Medowo. InRiver through pipe. Limitation of the availability," Hendra said. Medowo, whole water installations fromformer is that water contains mud, Hendra valuated that pipe procure- WSLIC 2 project is totally defect. Assmall debit and often dried during dry ment requires about Rp. 25 million. It result, local government of Kediri re-season. However, it is cost saving. excludes installation and intake base gency allocates fund for settlement re-Limitation of the latter is that it needs cost. "This is rough valuation. We have pair, including water facility. Mean-large cost to procure pipe of over 1,200 not considered pipe safety and other while, Banaran as affected village, is outm long. However, the water runs along factors," he said and added that pipe of attention. (MJ) B anaran village is situated in the foot of Mountain Anjasmoro. Topo- Banaran alternative was chosen. People flowed three water sources at G l a n c e graphically, it lies in the hillside, available in the village. The three so- northeast of Kediri Regency. It is bor- urces were situated in Perum Per- dered by Jombang Regency. Population hutani area. Each of them was alloca- totaled 2,200 individuals. They live ted for different people as per dis- from agriculture and plantation. tance, house location and water ca- Water is the main problem for the me being, every person was willing to pacity. people. Previously, they took water pay in cash. Therefore, fund collected was also from the creek crossing in the Perum With MPA/PHAST process, people different. For those getting water Perhutani area. Water management determined themselves what to be from Bendo Putih should contribute was self-supported by people. Those built. There were three options, na- Rp. 20,000/month; from Luh was Rp. living in the downstream can get wa- mely pipeline, manual well and pump 18,000/month and from Sekopek was ter by digging wells. well. Second alternative was difficult Rp. 26,000/month. When WSLIC 2 project entered in to meet because well depth varies, Before disaster, all goes smoothly. 2003, people welcomed them enthusi- some might reach 50 m deep, while Peoples contribution was also ade- astically. They gave contribution as third alternative was not chosen due quate. But since the incident, water required to get the project. In the ti- to high maintenance cost. Finally, first flow is sluggish. (MJ)14 Percik April 2006
  16. 16. I N T E RV I E W Director of Multilateral Foreign Financing of Bappenas, Delthy S. Simatupang, SH. Project Preparation is a Decisive Factor sectors. Provided water and sanitation N ational Budget is not ade- Today, Bappenas is establish- SOURCE: MUJIYANTO sector is priority for the government, it quate to meet the deve- ing Government Borrowing Stra- lopment demand. The govern- tegy to improve foreign loan should always be financed from both so- ment should inevitably bor- management. From macro econo- urces. row from foreign creditors. my, the strategy includes demand Until December 2005, Go- and usage plan of the foreign Where do we get financing so- vernment of Indonesias debt loan for 2006-2009. From micro to foreign creditors totaled economy, the strategy includes urces come so far? US$ 61.048 billion. Such strict evaluation on project pro- We divide the sources into three: amount was 45% of Gross Do- posal through three screening first, bilateral countries; second, multi- mestic Product (GDP). devices, namely focus on priori- Government proposes to ty, criteria of project implemen- lateral agencies (ADB, World Bank, reduce credit amount by set- tation and preparation, and European Community, etc.); and third, tling the credit that has been already allocated, improved and evaluation quality. The only well- commercially. Meanwhile, credit itself is clearance of the credit in progress, and taking prepared and qualified project will get foreign divided into three, namely grant, soft into full consideration when establishing new loan, while the unprepared ones will be removed credit proposal. On the other side, the govern- away. credit and commercial credit, and from ment will take necessary efforts to increase GDP To know more about foreign loan and its soft and commercial credits, we know growth through an increase in investment and relation to the new strategy, the following is pre- such a mix credit. improved economic foundation as well as main- sented interview between Percik and Director of taining stability of macro economy. In 2009, fo- Multilateral Foreign Financing, Delthy S. reign loan will expectedly reduce to 31.8% of GDP. Simatupang, SH. What characteristics of the credit? Characteristics of one credit toI s it likely that we dont rely on source to accelerate MDGs in this sec- another are different. Bilateral credit is foreign loan in water and sa- tor. I think we still need foreign loan. commonly soft credit with 25-40 years nitation sector? installment period and 0.75-2.5% inte- We dont need to rely on foreign loan Is there guarantee that using rest. There is usually grace period of 5-7as long as our APBN is adequate. How- foreign loan, we will achieve the years. Credits differ based on their cha-ever, water and sanitation sector has goals? racteristics, namely tied and untied.been included into World MDGs. If we At least we will approach the Tied means that goods and services sho-see, to achieve the 2015 Millennium De- expected condition in 2015. uld be procured by creditors. Unitedvelopment Goals (MDGs), we will be left means that goods and services may bebehind when only relying on our Na- Hows the trend of this sector procured through international compe-tional Budget (APBN), while we cannot financing in the future? tition. There is also exception, for exam-even make investment for water sector. If our APBN tends to recovery, we ple Japan, where 30% goods should beMr. Basah ever stated that we need Rp. will use APBN and PHLN (Foreign Lo- procured from Japan and the remaining15 trillion to meet only clean water, not an) to finance this sector. This is a rea- may be done through internationaldrink water. Until today, our APBN can- sonable choice although it will change competition. Multilateral credit is usu-not subsidize such amount. Therefore, if financing composition. If APBN gets re- ally general untied.we only rely on APBN, well need too covered, the portion will be better aslong to realize the MDGs, maybe until well. We hope that PHLN portion will be Which is cheaper, bilateral or2030. So, foreign loan is one financing reduced. This certainly applies to all multilateral? Percik April 2006 15
  17. 17. I N T E RV I E W There are two opinions based on If this is not fixed, the ownership posal and negotiation is the most criticalproject operators experiences. Con- will be highly insufficient. This occurs one. We will consider it carefully and weventional bilateral is cheaper based on during pre-design phase, then how if will apply the so-called readiness crite-cost of borrowing. However it is much this occurs during negotiation phase. I ria.more expensive based on cost project often find that during negotiation,since it is tied. On the other hand, the donors or their consultants talk more. Why should we be stringent inInternational Competitive Bidding This indicates that their ownership is the readiness criteria?(ICB) has high cost of borrowing but small. We cannot expect that project Because complying with all criterialower cost of project since it is obtained runs well if the ownership issue emerges will reduce issues available in the pro-from international competitive bidding. since in the design phase. ject implementation. We have evaluatedThe bilateral one is LCB (Limited Com- the project for the recent 10 years of whypetitive Bidding), meaning that it is only the projects are not on time, projecttendered in the donor country. We can Therefore, to avoid higher cost, extension does not run, etc. We find, forimagine how could it be if companies in government should provide example, issues of land provision, assis-the relevant country regulate the pricing money for preparation of the tance fund, and other minor issues suchand bear higher cost from the set ten- project. Why should the project PMU and PMG that should be esta-der. The price will not as competitive as be expensive? Because we blished from the beginning. We wantin ICB. We just choose which one we that all issues have been fixed from the usually get the price from PPTAprefer. beginning. So far, the issues are not or TA of the creditor. This clear. We used to go for negotiation with How far does the bidder/pro- makes larger size of the project unclear issues. As result, as we executeject owner involve in project quo- and this relates to portfolio negotiation, the project does not run.tation during preparation phase? of their credit. And as consequence, we should pay the The important thing is that owner so-called unnecessary commitmentestimate should be well supported. This So, the projects do not run well charge, which means government what the project owner must take into just because of ownership issue? The project will take longer time andaccount. In determining price unit, they Ownership is not large because it all this also bears cost and benefit willshould know in detail. Experiences indi- depends on consultant. The project change. For example, we would like tocated so far that owner estimate is do- ownership is under question. build water facility in a city. It should beminantly worked on by external techni- completed in 2012 but it is in fact com-cal assistance so that the price is more Does it mean that project pre- pleted in 2012. This is beyond theexpensive. Therefore, to avoid higher paration crucial? schedule. And service coverage will becost, government should provide money Preparation of the project is crucial. smaller because of increase in popula-for preparation of the project. Why We in Bappenas will be strict in making tion. We do not pay attention to this soshould the project be expensive? Because preparation of the project, from pre- far and we tend to work out of proce-we usually get the price from PPTA or paratory work, negotiation, until moni- dure. Creditors do not care becauseTA of the creditor. This makes larger si- toring. It means that we should have upon execution of contract, they receiveze of the project and this relates to port- quality since presentation of the idea. 1%. Bank remains a bank although it is afolio of their credit. Just make sense. This is called quality at entry. This will development bank. They do not knowConsultant is paid by them other than be in the bluebook. So it has been select- free charge. Therefore, we should take itby our government in providing us tech- ed from national priority, budget and seriously into account regarding thenical assistance. It is reasonable that suitability with Mid-Term Development readiness criteria.their ownership is in the donor country, Plan. When the project enters into thenot in ours. The design is therefore mo- bluebook, it means that project is ready Does it mean there is a changere expensive. The problem now is that to be funded through foreign loan. After in paradigm in relation to projectthe government does not provide money that, the project will compete again in preparation?for preparation of the project. If any, it our proposal to donor country. And we Our previous experiences showedis not sufficient so that preparation is will see again selection of priority that when we want to make negotiation,taken over by the foreign consultant. among sectors. Timeframe between pro- they (creditors) set out such criteria. But16 Percik April 2006
  18. 18. I N T E RV I E Wit is not negotiation criteria but post- Work. Now it must be shared. This is government. Loan for local governmentnegotiation criteria. What happened exactly for ready and priority project. has its own criteria. One of them isthen? After negotiation we cannot meet And this is not only for the project ha- measured from their fiscal capacity.the criteria. Now we reverse, we will not ving cost recovery but also for social Many local governments do not meetmake negotiation if not meeting the cri- projects. This never occurs before. such given criteria. It means that localteria. They got shocked because there government is not eligible for the loan,was no one stepping forward for negoti- whereas water is the basic need. This is READINESS CRITERIA:ation. From creditor side, theyll lose a dilemma. On the other side, eligible Project organizationmarket. Finally, all portfolios were local government may borrow through Financing plan and provision of assistancereduced. World Banks reduced. Just central government; this is calledimagine, from US$1.2 billion it reduced fund onlanding. This also bears problem be-to US$100-200 million. ADBs even got Preparation of goods and services procure- cause theyre not willing to do so. Theyzero. Now, project with good prepara- ment document in the first year only want the fund is used for costtion will result in good implementation. Land relinquishment and people relocation recovery project so that they can settleTherefore, readiness criteria should be (for physical project) the loan. Meanwhile, water and sanita-considered either local government or Establishment of project achievement indi- tion, especially for the poor, are inclu-the relevant ministry. cators as basis for monitoring and evalua- ded into non cost recovery. Local go- tion vernment will not take the loan for such How to make effective and effi- Project implementation directive purpose.cient foreign loan? Project preparation is so crucial. How to solve the problem?Now Bappenas is establishing the borro- With the project preparation, Today, Ministry of Finance is pro-wing strategy, which provides our bor- will it not delay implementation of cessing KMK 35 for revision. There isrowing capacity and the projects funded the project? also revision of Ministry of Financefrom foreign loan should be derivative Actually the project should not be Regulation for on granting. We hopeof projects under Mid-Term Deve- delayed. On the other hand, better this will give contribution to problemlopment Plan. The project is no more preparation of the project will accelerate solution.standing alone. Were looking forward project implementation. Project prepa-that the strategy will reduce government ration is inadequate so far and thus Is it likely that we cannotloan to 31.8% in 2009. And we can con- implementation is delayed. Therefore, expect grant?trol our loan stock. Thus we can allocate preparation should require longer time. Grant is always available but thethe loan to each priority sector and each amount is not large, so that we cannotsector will have ceiling value. With fixed What would be challenges in expect them as development fund. Theborrowing capacity, creditors will com- the future encountered by AMPL amount is not significant. Grant given topete to finance the projects. For exam- sector in relation to foreign loan? us is more related to preparation of theple, our borrowing capacity is US$2.5 AMPL sector has its own challenges. project. We even call them foreder.billion per annum. With large number These relate to application of Law No. Therefore, we should be careful whenof creditors, the value offered may be 33 regarding decentralization. It means receiving such grant because it couldthree folds larger. However, we can only that with this Law, AMPL issue has been undercover loan. This is important forborrow such extent so that they will authorized to local government. Inter- us to identify and anticipate. PPTAcompete to fund the projects. Thus, vention of central government should be (Project Preparation Technical Assis-project preparation will be better and eliminated. In fact, capacity of local go- tance) could in turn undercover theput in priority. Besides, we also have to vernment is limited. And central go- loan, except IDTA from ADB, which isbe discipline against foreign budget. It is vernment will finally make intervention. soft loan. To be or not, it doesnt matter.different now. Each ministry wants to No problem if the funding sources are So that, relevant ministries and localborrow according to its demand. For from APBN (National Budget). But if government should take necessary careexample, if US$2.5 billion were to be the fund is originating from foreign when receiving any grants becauseborrowed by Ministry of Public Work, it loan, it will bring about the problem PPTA is tied although it does not men-might be all for the Ministry of Public because the financing should be for local tion the same. (MJ) Percik April 2006 17