Indonesia plans billions in investments in the water sector


Indonesia urgently needs to expand drinking water supply and sewage disposal in cities. The greatest need is in the metropolis of Jakarta.

The Indonesian water sector is as heterogeneous as the living conditions in the huge archipelago with its 280 million inhabitants and more than 6,000 populated islands. Indonesians' access to drinking water or wastewater disposal is mainly determined by whether they live in villages, small towns or large cities.

More than half of all Indonesians already live in cities, and by 2035 this figure is expected to rise to two thirds, or in absolute numbers: 205 million people. This development is a major driver of the need for drinking water supply, wastewater disposal, and recycling. 

In many larger cities such as Jakarta, Makassar (Sulawesi), Jambi (Sumatra), or the new capital Nusantara, sewage and recycling systems are planned. This requires a great deal of tunnel drilling, water treatment technology, piping systems, pumps, valves and measurement technology. 

According to the statistics office Badan Pusat Statistik (BPS), 92% of all Indonesians currently have access to "improved drinking water". Almost 41% get this from plastic bottles. But only a few percent have access to a central sewage system. Such a system only exists in parts of a few large cities. 

Jakarta expands drinking water supply 

A special situation prevails in Jakarta. The metropolis of 10 million with a further 24 million people in the surrounding area is sinking because a large part of the population is supplied by pumped groundwater. This makes the city vulnerable to flooding. At the same time, the city administration has defused the danger in recent years by clearing waste from sewers and rivers, installing pumps and building dams. In the PIK2 development area, which is located directly on the sea, land prices are reaching record highs. 

The extraction of groundwater in Jakarta is regulated by licenses, but is done illegally in thousands of cases due to a lack of alternatives. Only two thirds of the population is connected to the piped water network. According to the plans of the Jakarta provincial government, all residents should have a drinking water connection by 2030. To this end, reservoirs in West Java and in the province of Banten, west of Jakarta, are currently being developed as sources and pipes are being built from there.  

Billions invested in Jakarta's wastewater treatment system 

There is also a severe undersupply in the wastewater sector. In the growing cities there is hardly any regulated wastewater disposal, let alone recycling. In villages, small towns and on the poorer outskirts of larger cities, the wastewater simply sinks into the ground, and there are septic tanks for feces. In developed urban areas, households usually have so-called septic tanks for feces, which have to be emptied regularly. Wastewater flows into canals and rivers via underground drains.  

A huge project that will one day supply the entire metropolis is the so-called Jakarta Sewerage System (JSS). For this purpose, the city was divided into 14 areas. Five northern areas are to have their own sewage treatment plants by 2030, the other nine by 2050. The investment sum is stated to be US$5.2 billion. The main source of funding is to be the Jakarta province budget. Additional funds will come from the Japan International Cooperation Agency (JICA). But private financing is also planned. 

International organizations are also financing wastewater disposal. The Asian Development Bank (ADB) is currently providing a loan of $420 million for projects in Semarang (Central Java), Pontianak (West Kalimantan) and Mataram (Lombok). This will reach around 2.5 million people. 

Water pipes are in poor condition 

Even outside of Jakarta, the need for investment in the underdeveloped Indonesian water sector is enormous. Over the coming decades, it is likely to reach three-digit billion US dollars. In the previous development plan for 2020 to 2024 alone, the equivalent of $10 billion was earmarked for connecting 10 million households to drinking water pipes and $11 billion for access to wastewater disposal. The largest share of this was to be raised from state funds. 

Only a minority of households are connected to a water supply network, and this sometimes even applies to larger cities. They are supplied by one of the approximately 380 municipal water suppliers, the so-called PDAMs (Perusahan Daerah Air Minum). Their pipe networks are in poor condition; according to official statistics, 17% of the water volume is lost through leaks. The PDAMs supply households with domestic water from rivers, lakes or reservoirs. The water charges are often not enough to cover business operations. According to 2021 data, around 40% of all PDAMs are considered to be at least financially troubled. 

The involvement of private companies in the water sector is a sensitive issue. A widely-publicized ruling in 2018 limited their commercial influence in Jakarta. Nevertheless, partnerships, especially with foreign players, are essential for the progress of the sector. In parts of Jakarta, for example, the formerly French and now Singaporean PAM Lyonnaise Jaya (Palya) manages part of the water supply. Foreign water suppliers are also active in other Indonesian cities. 

These public-private partnerships are a common business model in Indonesia and are awarded through public tenders. The Build-Operate-Transfer (BOT) model is popular. The private company covers the construction costs and operates the plant for a defined period of time (usually between 15 and 30 years). The local water authorities pay an agreed price per cubic meter. 

For the most part, people simply pump their water from the ground, either using a pump in their own home or using a local pumping station that supplies surrounding households. If these have filters and other purification devices, drinking water is produced. The water is usually boiled. 

High consumption in agriculture 

Indonesia is a tropical archipelago that is hot all year round. The seasons are divided into rainy and dry seasons. In the rainy season, water is plentiful, leading to floods and landslides. It also rains occasionally in the dry season. However, longer dry periods can lead to water shortages in some regions. The Lesser Sunda Islands to the east are particularly affected by this. The weather phenomenon El Ninho intensifies dry periods. In some places, parts of the population then have to be supplied with water by tanker trucks. Many large rivers, particularly on the densely populated island of Java, are heavily polluted and are not suitable for drinking without complex treatment.  

Small-scale farming and extensive plantation farming also require large amounts of water. According to Bappenas' Ministry of Planning, agriculture as a whole is responsible for 80 percent of national water consumption. In the dry season, water can be pumped out of the ground close to the surface in many places. Elsewhere, the lack of availability limits the cultivation of crops. Almost half of the agricultural irrigation systems are in poor condition, according to Bappenas. 

Source: GTAI