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The views expressed in this paper/presentation are the views of the author and do not
The views expressed in this paper/presentation are the views of the author and do not
The views expressed in this paper/presentation are the views of the author and do not
The views expressed in this paper/presentation are the views of the author and do not
The views expressed in this paper/presentation are the
views of the author and do not necessarily reflect the
views or policies of the Asian Development Bank (ADB),
or its Board of Governors, or the governments they
represent. ADB does not guarantee the accuracy of the
data included in this paper and accepts no responsibility
for any consequence of their use. Terminology used may
not necessarily be consistent with ADB official terms.
"New Thinking on Water Governance“ Conference Public Private Partneship City of Jakarta Example Barce Simarmata
"New Thinking on Water Governance“ Conference Public Private Partneship City of Jakarta Example Barce Simarmata

"New Thinking on Water Governance“ Conference

"New Thinking on Water Governance“ Conference Public Private Partneship City of Jakarta Example Barce Simarmata
Public Private Partneship City of Jakarta Example
Public Private Partneship
City of Jakarta Example

Barce Simarmata Luc Martin

Lee Kuan Yew School of Public Policy Singapore July 2009

1 Public Private Partnership (PPP) Principles 2 PALYJA and its concession contract 3 Challenges for
1
1

Public Private Partnership (PPP) Principles

2
2

PALYJA and its concession contract

3
3

Challenges for the Future

1 Public Private Partnership (PPP) Principles 2 PALYJA and its concession contract 3 Challenges for
1
1

Public Private Partnership (PPP) Principles

2
2

PALYJA and its concession contract

3
3

Challenges for the Future

Degree of Private Partner Involvement PPP Contract Structures Municipality Fully Privately Owned CONCESSION BOT /
Degree
of Private
Partner
Involvement
PPP Contract Structures
Municipality
Fully
Privately Owned
CONCESSION
BOT / ROT
AFFERMAGE
(Lease Contract)
Design Build
Operate
Operations
&
Joint Venture
Public/Private
Maintenance
Management
Contract
Technical
Assistance
Private Company
3
5
10
20
30

Contract Duration in Years

Partnership Approach • Integration of SUEZ ENVIRONMENT global water skills into the local context. •
Partnership Approach • Integration of SUEZ ENVIRONMENT global water skills into the local context. •
Partnership Approach
Partnership Approach

• Integration of SUEZ ENVIRONMENT global water skills into the local context.

• Partnership with local industrial and commercial organisations.

• Formalised partnership relationship with community leadership on long term basis.

• Mutual respect & understanding.

• Combining strengths.

Creation of specialised LOCAL WATER COMPANY to SERVE the COMMUNITY
Creation of specialised
LOCAL WATER COMPANY
to SERVE the COMMUNITY
Key Elements of PPP • Contract provides : – Clear objectives – Clear standards –
Key Elements of PPP • Contract provides : – Clear objectives – Clear standards –
Key Elements of PPP
Key Elements of
PPP

Contract provides:

Clear objectives

Clear standards

Strong control

Regulated price (decided by the Public Authority)

Assets ownership remains with public authority

Operational responsibilities delegated to private sector

Long term planning and control firmly in hands of public authority

Balance of Stakeholder Interests Consumers Market Sphere Service Quality & Performance Public Authority Political
Balance of Stakeholder Interests Consumers Market Sphere Service Quality & Performance Public Authority Political
Balance of Stakeholder Interests
Balance of Stakeholder Interests
Consumers
Consumers
Market Sphere
Market Sphere
Service Quality & Performance
Service
Quality &
Performance
Public Authority
Public Authority
Political Sphere
Political Sphere
Operator
Operator
Commercial Sphere
Commercial Sphere
Review of Key Questions Who Owns the Infrastructure ? Who Takes the Decisions ? Who
Review of Key Questions Who Owns the Infrastructure ? Who Takes the Decisions ? Who
Review of Key Questions
Review of Key Questions

Who Owns the Infrastructure ?

Who Takes the Decisions ?

Who Sets the Water Tariff ?

Who Operates ?

Who Regulates?

Public Authority

Defined in the Contract Public Authority Private Operator

Public Authority

1 Public Private Partnership (PPP) Principles 2 PALYJA and its concession contract 3 Challenges for
1
1

Public Private Partnership (PPP) Principles

2
2

PALYJA and its concession contract

3
3

Challenges for the Future

Concession Area UPP UPP Barat Pusat UPP Selatan PALYJA Western Part of DKI Jakarta Westward
Concession Area
Concession Area
UPP UPP Barat Pusat UPP Selatan
UPP
UPP Barat
Pusat
UPP Selatan

PALYJA Western Part of DKI Jakarta

Westward of Ciliwung river

3 UPP : Unit Pelayanan Pelanggan + 1 UPP for Key Account
3 UPP : Unit Pelayanan Pelanggan
+ 1 UPP for Key Account
PALYJA Ownership (since July 2006) Suez Environnement - Lead Operator - 51 % PT. Astratel
PALYJA Ownership (since July 2006)
PALYJA Ownership
(since July 2006)
Suez Environnement - Lead Operator - 51 % PT. Astratel Nusantara (ASTRA Group) Citigroup Financial
Suez Environnement
- Lead Operator -
51 %
PT. Astratel Nusantara
(ASTRA Group)
Citigroup
Financial Products Inc.
30%
19%
PALYJA
- Lead Operator - 51 % PT. Astratel Nusantara (ASTRA Group) Citigroup Financial Products Inc. 30%
Institutional Stakeholders Mapping DKI Jakarta Administration PAM JAYA Regulatory Body PALYJA DPRD City Council
Institutional Stakeholders Mapping
Institutional Stakeholders Mapping
DKI Jakarta Administration PAM JAYA Regulatory Body
DKI Jakarta
Administration
PAM JAYA
Regulatory
Body
Mapping DKI Jakarta Administration PAM JAYA Regulatory Body PALYJA DPRD City Council Cooperation Agreement Customers
PALYJA
PALYJA

DPRD City Council

Cooperation Agreement

Customers

Contractual Performance Objectives Technical Targets • Volume of water billed. • Water production. • Non
Contractual Performance Objectives
Contractual Performance Objectives

Technical Targets

• Volume of water billed.

• Water production.

• Non Revenue water.

• Number of connections.

• Service coverage ratio.

Service Standards

• Quality of water supplied to the customers.

• Pressure at customers connection level.

• Customer care.

• Interruptions in distribution network.

• New connections.

at customers connection level. • Customer care. • Interruptions in distribution network. • New connections.
Raw Water & Bulk Treated Water Supplies 1% Cikokol 90 L/sec 62% 5% 32%
Raw Water & Bulk Treated Water Supplies 1% Cikokol 90 L/sec 62% 5% 32%
Raw Water & Bulk Treated Water Supplies
Raw Water & Bulk Treated Water
Supplies
1% Cikokol 90 L/sec 62% 5% 32%
1%
Cikokol
90 L/sec
62%
5%
32%
2 majors Water Treatment Plants (62 % of the total supply) WTP Pejompongan 1 (Degremont
2 majors Water Treatment Plants (62 % of the total supply) WTP Pejompongan 1 (Degremont
2 majors Water Treatment Plants (62 % of the total supply)
2 majors Water Treatment Plants
(62 % of the total supply)
2 majors Water Treatment Plants (62 % of the total supply) WTP Pejompongan 1 (Degremont 1953)
WTP Pejompongan 1 (Degremont 1953)
WTP Pejompongan 1
(Degremont 1953)
Water Treatment Plants (62 % of the total supply) WTP Pejompongan 1 (Degremont 1953) WTP Pejompongan
WTP Pejompongan 2 (Degremont 1965)
WTP Pejompongan 2
(Degremont 1965)
Extension & Improvement of Water Supply 1998-2008 1998 2008 Continuous supply Unstable supply Approximate limit
Extension & Improvement of Water Supply 1998-2008 1998 2008 Continuous supply Unstable supply Approximate limit
Extension & Improvement of Water Supply 1998-2008
Extension & Improvement of Water Supply
1998-2008
1998
1998
2008
2008
& Improvement of Water Supply 1998-2008 1998 2008 Continuous supply Unstable supply Approximate limit of

Continuous supply

of Water Supply 1998-2008 1998 2008 Continuous supply Unstable supply Approximate limit of salinity in shallow

Unstable supply

Approximate limit of salinity in shallow wells

Supply 1998-2008 1998 2008 Continuous supply Unstable supply Approximate limit of salinity in shallow wells No

No water

Number of Customers 398 557 400 000 Number of customers increased by almost 100% 350
Number of Customers 398 557 400 000 Number of customers increased by almost 100% 350
Number of Customers
Number of Customers
398 557 400 000 Number of customers increased by almost 100% 350 000 300 000
398 557
400
000
Number of customers increased by almost 100%
350
000
300
000
250
000
201 662
200
000
150
000
100
000
50 000
0
Feb 1998
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Num ber of Custom ers
Coverage Ratio
Coverage Ratio
Coverage Ratio
Coverage Ratio
Coverage Ratio
Customer base evolution + 31 % + 46 % + 76 % + 614 %
Customer base evolution + 31 % + 46 % + 76 % + 614 %
Customer base evolution
Customer base evolution
+ 31 % + 46 %
+ 31 %
+ 46 %

+ 76 %

+ 614 %

+ 92 %
+ 92 %
Customer base evolution + 31 % + 46 % + 76 % + 614 % +
6-Month Average Sales and NRW since Take Over 61 % 51 % 45 %

6-Month Average Sales and NRW since Take Over

61 %

6-Month Average Sales and NRW since Take Over 61 % 51 % 45 %
51 % 45 %
51 %
45 %
1 Public Private Partnership (PPP) Principles 2 PALYJA and its concession contract 3 Challenges for
1
1

Public Private Partnership (PPP) Principles

2
2

PALYJA and its concession contract

3
3

Challenges for the Future

New business model : Output Based Aid

New business model : Output Based Aid

New business model : Output Based Aid
New business model : Output Based Aid
New business model : Output Based Aid DKI Jakarta Regulator PAM Jaya Concession Contract Escrow
New business model : Output Based Aid DKI Jakarta Regulator PAM Jaya Concession Contract Escrow

New business model : Output Based Aid

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI

DKI

Jakarta

Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
Regulator
Regulator
business model : Output Based Aid DKI Jakarta Regulator PAM Jaya Concession Contract Escrow Account Bank
PAM Jaya
PAM Jaya

Concession Contract

Escrow Account Bank

GPOBA

World Bank

Subsidy
Subsidy
PALYJA
PALYJA
Connect Communities + Provide Service Water Services Jakarta
Connect Communities +
Provide Service
Water
Services
Jakarta
Communities + Provide Service Water Services Jakarta Outputs First Output: connections laid 75% re-imbursement

Outputs

First Output: connections laid 75% re-imbursement

Second Output: 3 consecutive bills with water consumption > 10 m3/month 25% re-imbursement

Communities not yet connected (at least legally)

With the GPOBA grant of US$ 2.5 million, PALYJA will provide access to the water system to about 7,000 low-income households by 2009

Main challenges faced by Jakarta The city of Jakarta is still looking for an increase
Main challenges faced by Jakarta
The city of Jakarta is still looking for an
increase of the piped water coverage
Groundwater usage, on which rely
currently 25% of the population, is likely
to be gradually reduced:
– The city of Jakarta is “sinking” because
of the groundwater over-exploitation and
risk of flooding increase
–Groundwater is getting more and more
polluted (salt intrusion, chemical and
microbiological pollutants)
–Groundwater tariffs will be increased
and aligned with piped water tariffs
Therefore, new water resources and
additional treatment facilities will be
needed within the next 5 years to face
growing demand and service coverage
expansion
Thank you Terima Kasih Merci Muchas Gracias Matur Nuwun Hatur Nuhun Mauliate Te ş ekkürler
Thank you Terima Kasih Merci Muchas Gracias Matur Nuwun Hatur Nuhun Mauliate Te ş ekkürler

Thank you Terima Kasih Merci Muchas Gracias Matur Nuwun Hatur Nuhun Mauliate Teşekkürler Xie-xie Obrigado