Policy Directions on Water and Sanitation, Indonesia

A major goal for the sector is to increase access to long-term financing to providers of piped-water, mainly from soft loans and to lesser extent from private investors in order to improve the health and living conditions of the population by providing access to safe and adequate water supply and sanitation. To achieve this goal, several policies need to be implemented including: supporting existing water enterprises to increase their service delivery capacity and to do this more efficiently; create an enabling environment for community participation and participation of the private sector promote an improved sector regulation regime to improve efficiency of service providers; strengthening the institutional capacity and policy framework at the national and regional levels; promoting governance; promoting full cost recovery of water and sanitation enterprises; and contributing to meeting the related MDG target.
In order to meet the related MDG target, the government needs to facilitate the development of existing and new service providers through a mixture of public, private and community participation to substantially increase the number of households connected to piped water supply. The development of the private sector whose participation in water supply and sanitation has drastically decreased in recent years, will be crucial to improved sector performance and its development. The government will therefore need to facilitate private sector participation by creating suitable enabling conditions, including adopting professionally prepared project proposals, and transparent and rigorous procurement methods.
Source: KKPPI, Sector Review 2006