INSTITUTIONAL AND CONTRACTUAL INSTITUTIONAL AND CONTRACTUAL CHARACTERISTIC OF THE JAKARTA WATER CHARACTERISTIC OF THE JAKARTA WATER

SUPPLY CONCESSIONSUPPLY CONCESSION

FIRDAUS ALI, PhD.FIRDAUS ALI, PhD.JAKARTA WATER SUPPLY REGULATORY BODYJAKARTA WATER SUPPLY REGULATORY BODY

THE FIRST INTERNATIONAL FORUM THE FIRST INTERNATIONAL FORUM ON REGULATION OF WATER SERVICES AND SUSTAINABILITYON REGULATION OF WATER SERVICES AND SUSTAINABILITY

ROMEROME--ITALY, JANUARY 21, 2009ITALY, JANUARY 21, 2009

INDONESIA:INDONESIA:Geographical: 16,346 Islands & 33 Geographical: 16,346 Islands & 33 Provinces Provinces Population Population ++ 222 millions (2008)222 millions (2008)Population Annual Growth: 1,36% Population Annual Growth: 1,36% GNI per capita : USD 1,250GNI per capita : USD 1,250Largest archipelago country (2/3 of country Largest archipelago country (2/3 of country area is seas)area is seas)

GENERAL INFORMATIONGENERAL INFORMATION

JAKARTA:JAKARTA:Geographical Status : Capital City of Geographical Status : Capital City of IndonesiaIndonesiaPopulation Population : : ++ 12 millions (1.04%)12 millions (1.04%)Total AreaTotal Area : 662 km: 662 km22

Consist of 5 Cities & 1 RegencyConsist of 5 Cities & 1 Regency

MAP OF JAKARTAMAP OF JAKARTA

MAP OF INDONESIAMAP OF INDONESIA

JAKARTA CRUCIAL JAKARTA CRUCIAL ECOLOGICAL PROBLEMSECOLOGICAL PROBLEMS

•• WATER SUPPLY PROVISIONWATER SUPPLY PROVISION•• SANITATION (SOLID WASTE AND SANITATION (SOLID WASTE AND

WASTEWATER)WASTEWATER)•• WATER RESOURCES MANAGEMENT (FLOOD WATER RESOURCES MANAGEMENT (FLOOD

CONTROL & MITIGATION)CONTROL & MITIGATION)•• AIR POLLUTION CONTROLAIR POLLUTION CONTROL•• URBAN TRAFFIC MANAGEMENTURBAN TRAFFIC MANAGEMENT•• GROUNDWATER CONTAMINATION & OVER GROUNDWATER CONTAMINATION & OVER

EXPLOITATION EXPLOITATION •• CLIMATE CHANGE INPACTSCLIMATE CHANGE INPACTS

MAIN ISSUES IN WATER RESOURCES MANAGEMEN MAIN ISSUES IN WATER RESOURCES MANAGEMEN IN DKI JAKARTAIN DKI JAKARTA

1. CLIMATE CHANGE 2. PEAK TIDAL CYCLE

Sea Water Intrusion Flood Threat and Tidal Sea Water

1. Increasing flood prone areas.2. Land subsidence. 3. Decreasing elevation of coastal

river embankment in coastal area.4. Decreasing elevation of drainage

system (macro & micro) causing low urban drainage capacity

LAND SUBSIDENCE

GROUNDWATERWATER SUPPLY WASTEWATER

1. High ground water abstraction due to low coverage.

2. Low recharge capacity.3. Polluted shallow ground

water by wastewater.4. Very low ground water

charge/tariff.

1. Low service coverage ratio

2. Relatively high water losses (50,6%).

3. Raw water becoming critical

4. Average tariff increasing (Rp. 7,025/m3).

5. Water quality not drinkable.

1. Very low service coverage (2,8%).

2. Lack of wastewater facilities.

3. Increasingly high pollution of surface water and ground water bodies.

1. Kualitas dan kuantitas terus menurun.

RAW WATER

ECOLOGICAL ISSUES IN THE COASTAL AREA WATER SUPPLY CRISIS

JAKARTA WATER SUPPLY SERVICE JAKARTA WATER SUPPLY SERVICE CONDITION CONDITION

No. Parameters Unit 1998 2008TPJ PALYJA JKT AETRA PALYJ

A JKT

1 Total Population (1,000)Total Population (1,000) CapCap 4.3124.312 5,1185,118 9,4309,430 4.5364.536 5.4605.460 9,9969,996

2 Service CoverageService Coverage %% 60.9860.98 33.2833.28 45.8945.89 66.1066.10 58.7258.72 62.0762.07

4 House Connection House Connection UnitUnit 278.083278.083 209.895209.895 487.978487.978 377.594377.594 375.291375.291 752.885752.885

5 Raw Water DemandRaw Water Demand L/sec.L/sec. 8.1298.129 5.3495.349 13.47813.478 8.7658.765 5.8635.863 14.62814.628

6 Water ProductionWater Production L/sec.L/sec. 7.7997.799 4.7714.771 12.57012.570 8.2448.244 5.1855.185 13.42913.429

7 Volume SoldVolume Sold L/sec.L/sec. 2.9162.916 2.8272.827 5.7445.744 3.8573.857 4.0704.070 7.9267.926

8 Unaccounted for Unaccounted for Water (UFW)Water (UFW) % 61.3 58.63 61.17 53.12 48.12 50.68

Soucres: PSES Operators Report & JWRSB Analysis ,2008

JAKARTA WATER SUPPLY SERVICE CONDITION:JAKARTA WATER SUPPLY SERVICE CONDITION:SOURCE OF RAW WATER AND WATER TREATMENT PLANT CAPACITYSOURCE OF RAW WATER AND WATER TREATMENT PLANT CAPACITY

No.No. OPERATOR & WTPsOPERATOR & WTPsPRODUCTION PRODUCTION

CAPACITY CAPACITY (L/Second)(L/Second)

SOURCE OF SOURCE OF RAW WATERRAW WATER NOTENOTE

11 AETRA:AETRA: FOR EASTERN FOR EASTERN REGION OF JAKARTAREGION OF JAKARTA

1.11.1 •• BUARAN 1 WTPBUARAN 1 WTP 2.0002.000 JATILUHUR JATILUHUR DAMDAM

99% DEPEND ON SUPPLY FROM

JATILUHUR MULTI PURPOSES DAM

1.21.2 •• BUARAN II WTPBUARAN II WTP 3.0003.000 JATILUHUR JATILUHUR DAMDAM

1.31.3 •• P. GADUNG WTPP. GADUNG WTP 4.0004.000 JATILUHUR JATILUHUR DAMDAM

22 PALYJA:PALYJA: FOR WESTERN FOR WESTERN REGION OF JAKARTAREGION OF JAKARTA

2.12.1 •• PEJOMPONGAN I WTPPEJOMPONGAN I WTP 2.0002.000 JATILUHUR JATILUHUR DAMDAM

64% DEPEND ON SUPPLY FROM

JATILUHUR MULTI PURPOSES DAM

(THROUGH WEST TARUM CANAL)

2.22.2 •• PEJOMPONGAN II WTPPEJOMPONGAN II WTP 3.6003.600 JATILUHUR JATILUHUR DAMDAM

2.32.3 •• CILANDAK MINI WTPCILANDAK MINI WTP 400400 KRUKUT RIVERKRUKUT RIVER

2.42.4 •• BULK WATER SUPPLYBULK WATER SUPPLY 2.7022.702 CISADANE R.CISADANE R.

TOTAL DISTRIBUTION TOTAL DISTRIBUTION CAPACITY CAPACITY 17.702

Sources: JWSRB Analysis, 2008

JAKARTA WATER SUPPLY SYSTEM AND RAW JAKARTA WATER SUPPLY SYSTEM AND RAW WATER SOURCE CONDITIONWATER SOURCE CONDITION

KIMPRASWIL 206 April 2004

JAKARTA WATER BALANCE & WATER DEMAND ANALYSIS JAKARTA WATER BALANCE & WATER DEMAND ANALYSIS 20102010--20252025

No Design Parameter UnitYear

Note2010 2015 2020 2025

1 Total Population (1.000) capita 11.437 12.333 13.272 14.258 Incude commuters

2 Service Coverage Target % 70 80*) 85 100 *) City MDG Target by 2015

3 Suggested Groundwater Extraction Level % 30 20 15 0

Jakarta GW reduction strategy in order to control sea water intrusion and land subsidence.

4 Total Pop. Supplied (1.000) capita 8.006 9.866 11.945 14.258

5 Domestic Consumption Rate l/c/d 160 175 200 200

6 Domestic Water Demand l/s 14.826 19.983 27.650 33.005

7 Non-Domestic Water Demand l/s 4.892 6.594 9.125 10.892

30% of Domestic Water Demand

8 Non Revenue Water (NRW) % 40 35 30 25

9 Total Water Demand l/s 27.605 35.879 47.808 54.871

10 Total Raw Water Demand l/s 28.985 37.673 50.199 57.614

11 Total Production Capacity l/s 19.328 21.828 21.828 21.828 After upgrading all WTPs facilities

12 Bulk Water Treated from TKR

l/s 2.800 2.800 0 0 Supply treated bulk water from TKR will be decreased over time

13 WATER DEFISIT l/s 6.857 13.045 28.370 35.786

Sources: JWSRB Analysis, 2008Sources: JWSRB Analysis, 2008

DRIVING FORCE OF THE COOPERATION AGREEMENT BETWEEN PAM –JAYA* &

INTERNATIONAL OPERATORS**

25 years of Concession Contract with relatively very high IRR (22 %)

** Local Jakarta Government Local Jakarta Government Owned Water Supply Owned Water Supply CompanyCompany

**** Palyja and Aetra (Previously Palyja and Aetra (Previously was Thames PAM Jaya/TPJ)was Thames PAM Jaya/TPJ)

Asia Monetary Crisis

HISTORICAL & TIME LINE JAKARTA WATER SUPPLY CONCESSION CONTRACT

• Restated CA (RCA)• Establishing of

JWSRB

• Co(Initial Water Charge)

• 5 years F/S & FINPRO

• 22% IRR

• 5 years F/S & FINPRO

• New Co

• 22% IRR

• Low Performance (NRW/UFW)

• Saturated Water Tariff

• 5 years F/S & FINPRO

• New Co

• 22% IRR ??

• Decreasing Performance (NRW/UFW)

19981998 20012001 20032003 20082008 20122012 20172017

Disputes . Conflicts, and Complaints

CURRENT JAKARTA WATER SUPPLY CURRENT JAKARTA WATER SUPPLY SERVICES COVERAGESERVICES COVERAGE

Good SupplyGood SupplyDisruption SupplyDisruption SupplyBed SupplyBed Supply

WESTERN REGION OF JAKARTA

Region does not have supply at allRegion does not have supply at all

EASTERN REGION OF JAKARTA

CURRENT WATER SUPPLY SERVICES CONDITION

LACALACA, , REBASING, OPERATORS PERFORMANCEREBASING, OPERATORS PERFORMANCE, , WATER CHARGEWATER CHARGE,WATER ,WATER TARITARIFFFF CYCLECYCLE

AMANDED RCA

ExistingCooperationAgreement

EVALUASIKINERJA

INBALANCE LACALACA

REBASING

FEASIBILITY STUDY

Co Cn TARIFF

REBATE

FINPRO

MULTIPLE STAKEHOLDERSMULTIPLE STAKEHOLDERS

CONFLICTING INTERESTSCONFLICTING INTERESTS

(Fines, sanctions, punitive actions)

Force of Law

- Public Interest Protection

- Harness Market

Command & Control

(Market Forces, Reliable Information, Benchmarking

& Social Control)

Economic Incentive

B A L A N C E D I N T E R E S T

Other

CHALLENGES FOR THE JAKARTA WATER SUPPLY CHALLENGES FOR THE JAKARTA WATER SUPPLY REGULATORY BODY TO BALANCE THE INTEREST OF REGULATORY BODY TO BALANCE THE INTEREST OF

THE PARTIESTHE PARTIES

JAKARTA WATER SUPPLY REGULATORY BODY

PAM Jaya

PALYJA AERTA

Consumer

FKPM

KPAM

Governor’s of Jakarta Local Parliament

REGULATORY BODY

JAKARTA WATER SUPPLY GOVERNANCE SYSTEM

CHAIRPERSON

CHAIRPERSON

MEMBER 1(Technical)MEMBER 1(Technical)

MEMBER 2(Financial)MEMBER 2(Financial)

MEMBER 3(Legal)

MEMBER 3(Legal)

MEMBER 4(Customer)MEMBER 4(Customer)

SecretariatSecretariat

StaffsStaffs ConsultansConsultans

JAKARTA WATER SUPPLY REGULATORY BODY ORGANIZATION CHART