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Where is Community-Based Piped Water Supply Headed in Indonesia?<br />Results of the Indonesia Multi-Village Pooling Proje...
Outline Presentation<br /> Indonesia at a Glance<br /> Context of Rural Water Supply Development<br />Capacity Assessment ...
Indonesia at a Glance<br /><ul><li>Population 230.6 m in 2009; 57,86% live in rural  areas
17,504 islands across 1,890,754 km2
GDP per capita US$4,149 <35 million (15%) below poverty line.
Human Development Index ranking 111 of 182 countries
Culture: More than 300 ethnic groups; 580 languages and dialects
Access to improved water supply 80%, (89% urban, 70%rural)</li></li></ul><li>Why the interest in community water?<br /><ul...
Since 1990s, Government has been investing in projects through community schemes expected to reach over 40,000 villages by...
Evidence of high level of unmet demand in areas where community-managed systems have been introduced.
Under current model, pace of overall progress will be slow, even as future sustainability of access is uncertain.</li></ul...
Status of “First Generation Project” <br />Even though under decentralization, local governments (LGs) were given the auth...
CBOs Post Project Performance Results from a Capacity Assessment in 5 Districts<br />Method<br /><ul><li>Questionnaire
Objective indicators
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Session Governance - Dev Setiawan future piped ws indonesia

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Session Governance - Dev Setiawan future piped ws indonesia

  1. 1. Where is Community-Based Piped Water Supply Headed in Indonesia?<br />Results of the Indonesia Multi-Village Pooling Project (2008-2009)<br />DeviariandySetiawan<br />13 April 2010<br />
  2. 2. Outline Presentation<br /> Indonesia at a Glance<br /> Context of Rural Water Supply Development<br />Capacity Assessment of Community-Based Water Supply Organizations (CBOs) and their Support Systems<br />Main Challenges <br />Proposed New Mechanisms to Support CBOs<br />
  3. 3. Indonesia at a Glance<br /><ul><li>Population 230.6 m in 2009; 57,86% live in rural areas
  4. 4. 17,504 islands across 1,890,754 km2
  5. 5. GDP per capita US$4,149 <35 million (15%) below poverty line.
  6. 6. Human Development Index ranking 111 of 182 countries
  7. 7. Culture: More than 300 ethnic groups; 580 languages and dialects
  8. 8. Access to improved water supply 80%, (89% urban, 70%rural)</li></li></ul><li>Why the interest in community water?<br /><ul><li>Indonesia has 70,000 villages (in more than 400 cities/districts in 33 provinces), 80% rural, 30% rely on unimproved water
  9. 9. Since 1990s, Government has been investing in projects through community schemes expected to reach over 40,000 villages by 2014 with support from development banks, corporate philanthropies and national revenues
  10. 10. Evidence of high level of unmet demand in areas where community-managed systems have been introduced.
  11. 11. Under current model, pace of overall progress will be slow, even as future sustainability of access is uncertain.</li></ul>Significant investment is being made in community water systems in part because of the very poor state of local water utilities. Going forward, community systems need to interface with institutionally provided services – parallel delivery is not desirable as it may undermine both the overall sector objectives and the sustainability of community systems themselves.<br />
  12. 12. Status of “First Generation Project” <br />Even though under decentralization, local governments (LGs) were given the authority & responsibility for WSS service, most LGs take a hands-off approach to the post-project development………. <br />Central Government invests in RWSthrough community based approach & CBOs creation<br />CBOs trained & expected to perform well in their new role to operate and maintain the system <br />Most CBOs have difficulties to perform as expected; especially when system expands<br />Most LGs take a hands-off approach to the post-project development & supervision of CBOs. <br />Community-based water organizations (CBOs) ‘coping’ mechanisms organically emerging under those investment programs<br />
  13. 13. CBOs Post Project Performance Results from a Capacity Assessment in 5 Districts<br />Method<br /><ul><li>Questionnaire
  14. 14. Objective indicators
  15. 15. Self-assessment
  16. 16. Administered by support organizations
  17. 17. Sampling framework
  18. 18. 632 CBOs identified from East and West Java through Ministry of Health, ministry of Public Works, and NGOs projects
  19. 19. At least 25% sample from each area
  20. 20. 171 samples</li></li></ul><li>Highlights from Capacity Assessment<br /><ul><li>Many rely on CBOs for water
  21. 21. Average CBO customers is 260 HH or 1300 people
  22. 22. More than 100 CBOs in a district
  23. 23. 70% of House Connection is metered
  24. 24. Many have significant assets & are investing more
  25. 25. Average current fixed assets of US$ 50,000 per CBO
  26. 26. Assets include water supply production facilities and networks, land and office </li></ul>Total people served by CBOs in a district is more than average of 80% utilities’ customer in Indonesia<br />
  27. 27. CBO expansion potential is high<br /><ul><li>About 207 component projects have been expanded by CBOs, Mostly financed from internally generated cash or additional community contribution
  28. 28. Technically possible, service level satisfactory
  29. 29. 101 out of 171 have no water availability restrictions
  30. 30. Majority provides 7 days/week (84%); 20-24 hours/day (67%)
  31. 31. Customer perception confirms satisfactory performance
  32. 32. Financially probable, but constrained
  33. 33. 67% generate surplus income
  34. 34. Collection management and financial reporting could be issues, Collection period for about 30% is more than a month
  35. 35. Borrowing capacity is present, but very limited, US $ 1,500 to 15,000 average per district</li></li></ul><li>CBOs also need to workon their corporate systems<br />
  36. 36. Support organizations capacities also limitedAssessment of 5 district-level organizations supporting CBOs<br />
  37. 37. Summary Findings<br /><ul><li>Water supply through community-based organizations continues to be a relevant strategy for increasing water supply coverage
  38. 38. Government, national and local is looking to invest more
  39. 39. A great many people will continue to rely on them, for better or worse
  40. 40. Significant demand in areas where CBOs were introduced remain unmet
  41. 41. The first generation of project investments focused on building systems and organizing CBOs where there was none before
  42. 42. Complicated enough, so understandably, these were formed to a minimum level of viability
  43. 43. CBOs are increasing in numbers, looking for ways to cope
  44. 44. Cracks in the status quo are showing:
  45. 45. High potential CBOs are unable to take full advantage of the market opportunity by improving/expanding – which is linked both to their ability to become better viable and to sector objectives of increasing access to improved water services
  46. 46. Local government resources are becoming tied up to supporting the same CBOs
  47. 47. Building more could lead to fragmentation down the line – also not a good place</li></li></ul><li>Given the findings,what is the way forward?<br />Opportunities<br /><ul><li>Build on previous investments to meet unmet demand
  48. 48. Use the current strength of CBOs; align incentives to sustain systems
  49. 49. Involve local governments in oversight
  50. 50. Introduce improved support mechanisms</li></ul>Strategy proposed<br /><ul><li>Target high potential CBOs for expansion support
  51. 51. Introduce market-based CBO financing with performance incentives
  52. 52. Introduce local regulations and performance monitoring
  53. 53. Explore limited service contracts with private sector</li></li></ul><li>Emerging conceptof a 2nd generation project<br />Public Entity<br />Private Entities<br />Financing<br />Local <br />Government<br />Bank Rakyat <br />Indonesia<br />Component 1<br />Community <br />Organizations (Cooperatives)<br />Service <br />Obligation<br />Agreement <br />(Operational<br />License)<br />Credit<br />Agreement<br />Owner’s equity<br />Banks & other sources of finance<br />Component 2<br />Service Contractor<br />Contract for <br />Service<br />(Cooperation<br />Agreement)<br />Component 1: Market (Micro) Financing for CBOs<br /><ul><li>Micro-loans with performance grants</li></ul>Component 2: Local Government-Community-Private Partnership <br /><ul><li>LGs outsource technical operation and financial support to private parties to support CBOs in exchange for performance agreements</li></li></ul><li>Summary Conclusions<br />New mechanism could be introduced to manage a transition to ‘scale’<br /><ul><li>Accountability framework between local government and CBOs
  54. 54. Service agreements with clear timelines, targets and consequences
  55. 55. Local regulation
  56. 56. Reduced subsidy policy for existing CBOs
  57. 57. They have been subsidized once before and now generating cash internally
  58. 58. However, expansion projects are not likely to be fully financed by internally generated revenues, even with financing available
  59. 59. Financing service to maximize the use of CBO internally generated revenues for investments now
  60. 60. Support institutions/intermediaries are emerging, but have limited resources
  61. 61. Building demand for services by outsourcing support activities for a group of CBOs (pooling)
  62. 62. Building demand for services by partnering with local governments on ‘delegated’ functions such as performance monitoring
  63. 63. Possibly, introduce a third party player such as the private sector
  64. 64. Testing the waters
  65. 65. Gradually building trust through a commercial relationship
  66. 66. Strengthen ability on both sides of the table to ‘bargain’</li>

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