Page 32 - AW MayJune 19

SPECIAL FEATURE

goals, and the strength of the evidence base for the private sector actors. In addition, the existing targeting
solution proposed. The following summarizes the key mechanism for Hibah beneficiaries that is based on
recommended actions and the responsible agencies/ electricity usage could be combined with income
stakeholders. targeting to better identify eligible low-income
households for financial subsidies.
KEY FACTS AND RECOMMENDED ACTIONS • Raise awareness of the benefits of piped water—both
among consumers and among local government
Fact 1 actors—to shift consumer behavior and dependence
The government of Indonesia’s 100-0-100 target is on alternatives, and to build the political will for
universal access to improved water supply, but current improvements in water supply to poor households.
patterns in equity of access to piped water suggest that Awareness campaigns have been missing from most
low-income households are likely to remain on a non- water supply programs. Although most households
piped service for longer than non-poor households. A treat their water before drinking, either through
number of barriers, including (1) financial sustainability boiling or filtration, they are unaware of the potential
and performance of PDAMs; (2) government budget for recontamination during storage. Awareness
allocation and spending; (3) perceptions and behavioral campaigns, in accordance with a Water Safety Plan to
constraints; and (4) lack of legal frameworks for equitable achieve water quality standards, can be coordinated
service delivery prevent low income households from by the Ministry of Public Works and Housing (MoPWH)
accessing piped water connections. and Ministry of Health (MoH), and implemented in
part by PDAMs. These campaigns can help to increase
Recommended Action: demand for clean water and put pressure on PDAMs
Expand piped water services to a larger share of the and LGs to expand provision of piped water services
bottom 40 percent in urban areas. to unserved communities and/or improve the quality
• Improve the efficiency and performance of Perusahaan of existing services.
Daerah Air Minum (water utility; PDAMs) to generate • Adjust the current intergovernmental fiscal transfer
a virtuous cycle of performance, tariff increases, cost system to better align transfers to needs. Although
recovery, and expansion of connections, especially current levels of government budget allocation to
to poor households. The National Urban Water Supply water supply are insufficient to achieve the universal
Program (NUWSP), the main delivery mechanism for access targets for water supply, existing fiscal transfers
the urban water supply platform, includes a robust could be allocated more efficiently to address
emphasis on performance improvement of PDAMs. needs. Basic information on water access is readily
The program could be enhanced through capacity available; however, data on the Special Allocation
building for LGs and PDAMs on incorporating equity Fund (Dana Alokasi Khusus, or DAK) transfers show
and social concerns into tariff structures, and guidance a declining association between DAK allocations
on structuring cross-subsidization between customers and water coverage at the district level. Additional
in order to protect the poor and vulnerable. Additional considerations for aligning fiscal transfers to needs
capacity building on project preparation and project through the General Allocation Fund (Dana Alokasi
proposal development should cover (1) how to assess Umum, or DAU) point to population growth in urban
affordability of water tariffs; (2) willingness among poor centers, and in suburban districts in particular.
households to pay for piped water connections; and To better align fiscal transfers with population
(3) incorporation of low-income households, including growth trends will require adoption of a per capita
customers of Water Hibah (an output-based grant calculation, as opposed to the current per region
scheme for piped water), in the overall performance calculation, to ensure equitable distribution of public
improvement and investment plan. resources according to population density of cities
• Expand financing options for low-income households and districts. This alignment does not address the need
to connect to piped water. Piped water connection for more financing to the sector overall. Commercial
fees are unaffordable for households living near loans and private investment, including business-to-
or below the poverty line, and although the Hibah business collaboration, should be explored to better
scheme has incentivized more poorinclusive service understand how these additional sources of financing
delivery, not all PDAMs are eligible to participate, can help bridge the gap.
leaving a large share of poor households unable
to connect. Subsidized credit and savings schemes,
including microfinance, could be an alternative that Fact 2
allows households to spread the cost of the connection Groundwater quality is not consistently monitored, and
over time. Better coordination between Hibah and representative data are not available. However, water
microfinance schemes can be achieved through the quality surveys conducted in several cities show the
platform approach, taking advantage of a common potential risk for contamination is severe. A large share
policy framework regardless of the source of financing of the B40 uses groundwater sources for drinking. In 2015
and greater flexibility at the LG level to partner with data showed that over a quarter (27 percent) of the B40

30 MAY/JUNE 2019 Asian Water