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

Solid Waste Management, Indonesia

Traditionally considered a key component of sanitation, the WSS does not address the problems of solid waste management in Indonesian towns and cities in detail, apart from noting the main deficiencies and the important inter-linkages with wastewater management that, taken together, could result in significant urban environmental improvements at street level and contribute to expansion of local economies as each area is improved.

Solid waste disposal also has an impact on raw water quality in river catchments; this relationship needs to be examined by the water resources sector.
In general, solid waste management suffers from (i) low levels of investment, (ii) low standards of collection and transportation, (iii) poor community attitudes towards disposal of garbage, (iv) burning of garbage at street level and at final disposal sites that contributes to severe air pollution in many cities, and (v) almost all solid waste disposal is conducted with complete disregard to regulations and acceptable practice.

Source: KKPPI, Sector Review 2006

Water and Sanitation Sector Review, Indonesia

Water is a finite and vulnerable resource, essential to sustain life, development and the environment. One of The United Nations Millennium Development Goals is a target of reducing by half the number of people who do not have access to clean water and sanitation by 2015. However, Indonesia-wide the water and sanitation sector faces the prospect of having to make large investments in water provision, primarily because coverage of water and sanitation services is presently much lower than envisaged by the MDGs, and secondly because of an increase in the scope and stringency of water and sanitation quality standards.
The water and sanitation sector (WSS) in Indonesia was in crisis even before the 1997/1978 Asian crisis. Because many regional water enterprises (PDAMs) are financially unsound and because of uncertainty in the legal framework during the early stages of decentralization, there has been no significant investment in the sector in recent years. Only 8 percent of the water supply system in Indonesia is currently under public-private partnership. Aging infrastructure, budget constraints (central and local government), and escalating demand have shifted policy towards private sector involvement in water service provision.
The absence of high-quality and universally accessible water and sanitation sector (WSS) services have significant environmental, economic, and social implications. Environmental concerns include the need for resource conservation, ecosystem impacts from water extraction, allotment and conveyance, and downstream effects from pollution and wastewater disposal. Economic concerns include efficiency, principle-agent conflicts, and externality considerations. Social implications include human health and water quality concerns, resource control issues, and distributional effects of water management decisions.

Source: KKPPI, Sector Review 2006