Public private partnership for efficient and sustainable water supply development in Indonesia

Abstract

More than 90% of the water supply companies in Indonesia are in serious trouble and face bankruptcy. Water services are poor and the situation is worsening. The critical condition of the water companies is due to several factors, amongst others the lack of know-how in the company, the political influence in human resource management and on water price. These factors prevented the introduction of sound economical principles for the daily management. As the income of the company did not cover all costs, service hours were reduced and finally led to the negative spiral resulting in the current troublesome situation. Water supply company Drenthe (WMD), together with local Indonesian Government and central Government in the Netherlands, developed a long-term public-private partnership approach for the development of water supply companies in Eastern Indonesia. Customer relations and introduction of new billing procedures are of highest importance for the success of the approach. The new water companies can only operate successfully when the willingness to pay is restored and when the cash flow is secured. Important elements in this field are the introduction of a computer system supporting the monthly billing system and an innovative pilot with digital water meters.