Value of domestic water economy and sustainability of regional cross water resources management

Abstract

Water resources has economic, political, social and cultural values becomes a commodity desired by many people. On a cross-border administrative scale, the struggle for water can be a problem and is a source of conflict between communities, regions and even countries. A view of water resources as a public commodity that is not subject to prices is time to change especially for water use in a business. Water companies need to take into account the water value in relation to the cost of supply, in order to create sustainable water resources. The principle of paying users is applied to obtain compensation for the benefits received. Costs charged to water users need to be calculated through a reasonable payment mechanism in order to cover the costs of managing water resources that have been spent. The value of water benefits is the basis of the application of economic instruments to help the calculating process of water prices. This paper discusses the case of cross-regional water resource management in Indonesia Kuningan Regency – Cirebon City by emphasizing the value of water benefits as a basis for calculating water prices. Thus this paper will examine how the contribution of water resources if used for domestic water business (drinking water) based on the value of economic benefits and how the implications for the continuity of water resources management. Based on the results of the analysis it has been shown that if the raw water source is used for domestic water business, PDAM in Cirebon City is able to return 75% of the total cost of managing water resources that have been spent. Considering regulations where users of water sources outside the administrative boundaries are required to pay water prices, with this capability, water resources management across the Kuningan Regency -Cirebon City area has the opportunity to continue. On a global scale, the application of economic benefit values as a basis for calculating water prices can be used as a lesson for resolving cases of water resources conflict with characteristics similar to regions in Indonesia. By ensuring sustainable water resource management, at least the completion of cross-regional water resources in Indonesia can reduce the burden to resolve the problem of the water crisis in Southeast Asia.