Thursday, 20 November 2008

Regulatory Bodyin Water and Sanitation Sector, Indonesia

PP 16/2005 on the Development of Water Supply System stipulates the establishment of BPP SPAM, a consultative body for water supply at the national level. BPP SPAM is a ministerial body established by and responsible to the Minister of Public Works. The functions of BPP SPAM, according to the PP include the following: To assist the government in formulating sector policy and strategy; To enforce operational standards concerning water supply and provision; To evaluate service standards and performance; To provide recommendation on acceptable deviations from service standards and performance; To provide recommendations to the government in the implementation of water supply systems by cooperatives and the private sector; and To provide recommendation to the government in maintaining a balanced interest between the operator and the community it serves.
The body is composed of no more than five members. The chairperson, appointed by the Minister, could be a civil servant. However, for the duration of the appointment, the civil servant must relinquish his civil service duties without the loss of status as a civil servant.
BPP SPAM is not a contracting authority, this being the role of the local governments or PDAMs, nor a regulatory body. Funding and secretariat support comes from within the MPW.
Local government is expected to appoint a water regulator and to adopt the standard recommended by BPP SPAM in respective areas. Several local government that have implemented PPP in the water supply sector (such as Jakarta) have established a local regulatory entity. However, there is no provision in the law for the establishment of a regulatory body for the sector. This is a deficiency that needs to be rectified if PPP is to materialize.
The contracting authority would be the local government, excluding the PDAMs. Policy, as usual, would be under the ministry. The PDAMs, other ROEs and the private sector could be the operator. However, for new PPP projects, in the interest of transparency, the local PDAMs (owned by the local government contracting authority) should desist from bidding for projects tendered by their local government.
In order to strengthen the regulation in the water & sanitation sector, government is preparing the draft law on solid waste, and has issued PP 82/2001 on water quality and water pollution control and a draft is preparing Kepmen on the basis of PP 16/2005 on drinking water development system.
It is also intends to establish the integrated national water resource management, including watershed management, developing tariff policy on drinking water.
Source: KKPPI, Sector Review 2006

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