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The governance of the jakarta water post ppp rn

Dr. Riant Nugroho
Dr. Riant Nugroho

The document discusses the governance of water supply in Jakarta, Indonesia following the implementation of a public-private partnership (PPP) model. It describes the establishment of the Jakarta Water Supply Regulatory Body (JWSRB) to oversee the water concessions and ensure balanced interests between public and private partners. The JWSRB operates independently from government and is comprised of technical, financial, legal and customer experts. It monitors concessionaire performance, facilitates tariff negotiations every five years, and acts as a mediator for disputes. The document argues effective water governance requires independent oversight like the JWSRB to ensure PPP policies achieve intended outcomes of effectiveness, accountability, transparency and impartiality.

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THE GOVERNANCE OF THE JAKARTA WATER POST PPP: THE ROLE OF THE REGULATORY BODY Dr. Riant Nugroho Lecturer of the University of Malaya (2010-201), Indonesia Defense University (2011-now) Board Member of the Jakarta Water Supply Regulatory Body, Jakarta Member of Steering Committee of Global Committee for 1% 7Cs of MDG Member of Steering Committee of World Alliance of Cities Against Poverty (WACAP) The World Water Week, 23 August 2011 Stockholm Stockholm International Water Institute (SIWI)
The governance of the jakarta water post ppp rn
Jakarta Water Supply Policy: 25 years of full concession to the private sector Term : 1998-2022 Method: Full cost recovery West concession (PAM LYONNAISE JAYA): Prior to July 2006 : Suez Environtment formerly Ondeo Service (majority) and PT. and PT. Bangun Tjipta Sarana. After July 2006 : Suez Environtment (majority), PT Astratel Nusantara, Citigroup Financial Products East concession (AETRA AIR JAKARTA) Prior to 2007 : Thames Water Overseas Limited (majority) and PT. Tera Meta Phora 2007 : Acuatico Pte. Ltd (majority) and PT. Alberta Utilities
Java Sea Jakarta West Area Jakarta East Area PALYJA AETRA Ciliwung River
Performance (2010) Technical target Palyja Aetra 1. Water loss (NRW) 42.60% 50.17% 2. Production 169.79 million m3 272.83 million m3 3. Connection 419.776 385.377 4. Volume sold 147.27 million m3 135.95 million m3 5. Coverage ratio 64.66% 59.98%
Governance: about modality governance is the institutional capacity of public organizations to provide the public and other goods demanded by a countrys citizens or their representatives in an effective, transparent, impartial, and accountable manner, subject to resource constraints (The World Bank, 2000).
Pre: PPP governance
Post (existing) : PPP
Jakarta Water Supply Regulatory Body (JWSRB) Founded in Jakarta, November 2001 Mission : to maintain balanced interest between public, the cooperating parties and Government of Jakarta City to undertake water service provision in the DKI Jakarta Province Vision : to originate the regulatory body as an independent, professional, efficient, and accountable institution functioned as a mediator, a facilitator, and a regulator to undertake water service provision in the DKI Jakarta Province. Governance : 1. 5 Member of The Board: a) Chairperson : Irzal Djamal, M.Eng. b) Technical : Dr. Firdaus Ali c) Finance : Agus Kretarto, MBA d) Legal : Rusdiati Utami, SH e) Customer & Communication : Dr. Riant Nugroho 2. Independent & impartial a) Publicly selected b) No government officer and member of the related parties NAN AI R M YA I A N N L c) Accountable to the Governor, but no government intervention U PE M 3. Board-collegial decission making 4. 3 years of the term of office of each member
JWSRB in hierarchical structure Jakarta Authority Executive & Local Technical expertise Parliament Financial expertise Legal expertise Governor of Jakarta Customer expertise Chairperson Member 1 Member 4 Member 3 Member2 (Secretary) Assistants Assistants Assistants Assistants Secretariat
JWSRB in the center-less model of governance Chairperson Member Member 4 1 (Secretary) Member Member 3 2 Consultants
Macro governance, still center-less
Main tasks : Water (Good) Governance 1. Oversight the concession 2. Setting tariff policy (recommendation) 3. Conflict mediation Among PAM and private partners (operators) Among operators and customers Among parties and other parties 4. Developing and Promoting WGG
1. Customer small scale meeting
2. Customer annual meeting
3. Stakeholders annual meeting
5. Monthly Working Group Meeting
6. Transparency : Performance (and Promise)
Five Yearly Rebasing : facilitator, mediator PPP driven by central government and supported by the international financial institution : 25 years of a full Rebasing process : 5 years of the concession of water services new/revised target and water charge and therefore water tariff 1998 2022 1998-1999 : 2002 2007 2012 2017 Economic crises Jakarta water services provided by Local State Owned Enterprise (LSOE/PAM Jaya)
Policy Decision before the establishment of JWSRB Jakarta Authority (Governor) 3. New tariff 2. Tariff proposal PAM Jakarta 4. New tariff 4. New tariff 1. Tariff proposal Palyja Aetra 5. New tariff Customer
Policy Decision post-JWSRBs establishment Jakarta Authority (Governor) 5a.YES: agree for 5b. NO: not agree the the new tariff proposal of the new tariff 4a. YES: Promote the new tariff JWRB 3b. Public Customer assessment 4b. NO: Not promote the 2.Tariff 6. Jakarta 3a. Financial and new tariff proposal Authority performance assessment decision PAM Jakarta 7. New tariff 7. New tariff 1. Tariff proposal Palyja Aetra 8. New tariff Customer
Policy Guideline for Tariff Setting Proposal Performance Financial Service quality Affordability Judgment requirement improvement* 1 Y Y Y Y Confirmed: new tariff proposed 2 Y Y Y N Proposed new tariff 3 Y N Y Y Proposed new tariff 4 Y Y N Y Proposed new tariff 5 Y Y N N Proposed new tariff 6 Y N N N Considering to propose new tariff 7 Y N Y N Considering to propose new tariff 8 Y N N Y Considering to propose new tariff 9 N Y N Y Not to propose new tariff 10 N Y Y Y Not to propose new tariff 11 N Y Y N Not to propose new tariff 12 N N Y Y Not to propose new tariff 13 N Y N N Confirmed: Not to propose new tariff 14 N N Y N Confirmed: Not to propose new tariff 15 N N N Y Confirmed: Not to propose new tariff 16 N N N N Confirmed: Not to propose new tariff * Survey on perception
Probability (opportunity) for each option no option probability of option 1 Confirmed: new tariff proposed 1/16 2 Proposed new tariff 4/16 3 Considering to propose new tariff 3/16 4 Not to propose new tariff 4/16 5 Confirmed: Not to propose new tariff 4/16
Conclusion PPP (public private partnership) policy implementation need independent institutions as oversight body to assure its performance: regulatory body Professionalism, independency, and impartiality Jakarta water good governance 1. Effectiveness : performance base cooperation 2. Accountability : revise the signed contract 3. Transparency : Jakarta Water Voice 4. Impartiality : conflict resolution, proposal for policy improvement
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The governance of the jakarta water post ppp rn

  • 1. THE GOVERNANCE OF THE JAKARTA WATER POST PPP: THE ROLE OF THE REGULATORY BODY Dr. Riant Nugroho Lecturer of the University of Malaya (2010-201), Indonesia Defense University (2011-now) Board Member of the Jakarta Water Supply Regulatory Body, Jakarta Member of Steering Committee of Global Committee for 1% 7Cs of MDG Member of Steering Committee of World Alliance of Cities Against Poverty (WACAP) The World Water Week, 23 August 2011 Stockholm Stockholm International Water Institute (SIWI)
  • 3. Jakarta Water Supply Policy: 25 years of full concession to the private sector Term : 1998-2022 Method: Full cost recovery West concession (PAM LYONNAISE JAYA): Prior to July 2006 : Suez Environtment formerly Ondeo Service (majority) and PT. and PT. Bangun Tjipta Sarana. After July 2006 : Suez Environtment (majority), PT Astratel Nusantara, Citigroup Financial Products East concession (AETRA AIR JAKARTA) Prior to 2007 : Thames Water Overseas Limited (majority) and PT. Tera Meta Phora 2007 : Acuatico Pte. Ltd (majority) and PT. Alberta Utilities
  • 4. Java Sea Jakarta West Area Jakarta East Area PALYJA AETRA Ciliwung River
  • 5. Performance (2010) Technical target Palyja Aetra 1. Water loss (NRW) 42.60% 50.17% 2. Production 169.79 million m3 272.83 million m3 3. Connection 419.776 385.377 4. Volume sold 147.27 million m3 135.95 million m3 5. Coverage ratio 64.66% 59.98%
  • 6. Governance: about modality governance is the institutional capacity of public organizations to provide the public and other goods demanded by a countrys citizens or their representatives in an effective, transparent, impartial, and accountable manner, subject to resource constraints (The World Bank, 2000).
  • 9. Jakarta Water Supply Regulatory Body (JWSRB) Founded in Jakarta, November 2001 Mission : to maintain balanced interest between public, the cooperating parties and Government of Jakarta City to undertake water service provision in the DKI Jakarta Province Vision : to originate the regulatory body as an independent, professional, efficient, and accountable institution functioned as a mediator, a facilitator, and a regulator to undertake water service provision in the DKI Jakarta Province. Governance : 1. 5 Member of The Board: a) Chairperson : Irzal Djamal, M.Eng. b) Technical : Dr. Firdaus Ali c) Finance : Agus Kretarto, MBA d) Legal : Rusdiati Utami, SH e) Customer & Communication : Dr. Riant Nugroho 2. Independent & impartial a) Publicly selected b) No government officer and member of the related parties NAN AI R M YA I A N N L c) Accountable to the Governor, but no government intervention U PE M 3. Board-collegial decission making 4. 3 years of the term of office of each member
  • 10. JWSRB in hierarchical structure Jakarta Authority Executive & Local Technical expertise Parliament Financial expertise Legal expertise Governor of Jakarta Customer expertise Chairperson Member 1 Member 4 Member 3 Member2 (Secretary) Assistants Assistants Assistants Assistants Secretariat
  • 11. JWSRB in the center-less model of governance Chairperson Member Member 4 1 (Secretary) Member Member 3 2 Consultants
  • 12. Macro governance, still center-less
  • 13. Main tasks : Water (Good) Governance 1. Oversight the concession 2. Setting tariff policy (recommendation) 3. Conflict mediation Among PAM and private partners (operators) Among operators and customers Among parties and other parties 4. Developing and Promoting WGG
  • 14. 1. Customer small scale meeting
  • 17. 5. Monthly Working Group Meeting
  • 18. 6. Transparency : Performance (and Promise)
  • 19. Five Yearly Rebasing : facilitator, mediator PPP driven by central government and supported by the international financial institution : 25 years of a full Rebasing process : 5 years of the concession of water services new/revised target and water charge and therefore water tariff 1998 2022 1998-1999 : 2002 2007 2012 2017 Economic crises Jakarta water services provided by Local State Owned Enterprise (LSOE/PAM Jaya)
  • 20. Policy Decision before the establishment of JWSRB Jakarta Authority (Governor) 3. New tariff 2. Tariff proposal PAM Jakarta 4. New tariff 4. New tariff 1. Tariff proposal Palyja Aetra 5. New tariff Customer
  • 21. Policy Decision post-JWSRBs establishment Jakarta Authority (Governor) 5a.YES: agree for 5b. NO: not agree the the new tariff proposal of the new tariff 4a. YES: Promote the new tariff JWRB 3b. Public Customer assessment 4b. NO: Not promote the 2.Tariff 6. Jakarta 3a. Financial and new tariff proposal Authority performance assessment decision PAM Jakarta 7. New tariff 7. New tariff 1. Tariff proposal Palyja Aetra 8. New tariff Customer
  • 22. Policy Guideline for Tariff Setting Proposal Performance Financial Service quality Affordability Judgment requirement improvement* 1 Y Y Y Y Confirmed: new tariff proposed 2 Y Y Y N Proposed new tariff 3 Y N Y Y Proposed new tariff 4 Y Y N Y Proposed new tariff 5 Y Y N N Proposed new tariff 6 Y N N N Considering to propose new tariff 7 Y N Y N Considering to propose new tariff 8 Y N N Y Considering to propose new tariff 9 N Y N Y Not to propose new tariff 10 N Y Y Y Not to propose new tariff 11 N Y Y N Not to propose new tariff 12 N N Y Y Not to propose new tariff 13 N Y N N Confirmed: Not to propose new tariff 14 N N Y N Confirmed: Not to propose new tariff 15 N N N Y Confirmed: Not to propose new tariff 16 N N N N Confirmed: Not to propose new tariff * Survey on perception
  • 23. Probability (opportunity) for each option no option probability of option 1 Confirmed: new tariff proposed 1/16 2 Proposed new tariff 4/16 3 Considering to propose new tariff 3/16 4 Not to propose new tariff 4/16 5 Confirmed: Not to propose new tariff 4/16
  • 24. Conclusion PPP (public private partnership) policy implementation need independent institutions as oversight body to assure its performance: regulatory body Professionalism, independency, and impartiality Jakarta water good governance 1. Effectiveness : performance base cooperation 2. Accountability : revise the signed contract 3. Transparency : Jakarta Water Voice 4. Impartiality : conflict resolution, proposal for policy improvement