1 Jakarta, May 12, 2009 OPENING AND KEYNOTE SPEECH MINISTER OF PUBLIC WORKS REPUBLIC OF INDONESIA MINISTRY OF PUBLIC WORKS INDONESIAN-DANISH WATER DAYS 2009 THE CHALLENGES AND POLICY FOR DRINKING WATER AND SANITATION IN INDONESIA

2 Millennium Development Goals (MDGs) target: To reduce half of people without access to water and sanitation in year To reduce half of people without access to water and sanitation in year Indonesia has also committed to achieve the MDG targets. Indonesia has also committed to achieve the MDG targets.

3 Challenges in drinking water and sanitation development in Indonesia: 1.The population increase rapidly that cannot be followed by the appropriate provision of drinking water and sanitation infrastructures. This condition impacts to environmental degradation, pollution and poor quality of bulk water. 2.Low coverage of water supply services which only covers 24% national population, which is 45% in urban areas and 10% in rural areas. This coverage is still far behind the MDG targets to cover 80% of Indonesian population in 2015.

4 3.High level of water losses due to poor implementation of technical standard for water services. The average water loss nationally is 37%. 4.People access to sanitation facilities is currently covering 49 % of national population. The on-site sanitation facilities can not fulfill the technical standards. Next.. Challenges in drinking water and sanitation development in Indonesia:

5 5.Institutional capacity in handling drinking water provision and sanitation infrastructures in most cities are still limited. 6.Limited capacity of the government has constrained the government to increase quality and level of services of drinking water and waste water infrastructure. The limited capacity is resulted from the low tariffs, debt arrears owned by many water supply enterprises and limited participation of private sectors and communities. Next.. Challenges in drinking water and sanitation development in Indonesia:

6 The Government of Indonesia has enacted decentralization of development in order to give a broader role of local governments. It means that drinking water and sanitation infrastructures development has also become local government responsibility. The role of central government will focus on providing regulation in terms of norms, standards, guidance and manuals as well as promoting technical assistance and supervision of infrastructure development in provinces and cities.

7 Community is very potential to finance drinking water process based on full cost recovery and to expand the coverage of water services in the cities. In this case, we encourage socialization and dissemination of the role and responsibility of the community in drinking water provision.

8 The Government of Indonesia has prepared National Policy for Water Supply and Sanitation Development, including its strategy to achieve the national target. Government budget (central and local) for drinking water and sanitation infrastructure provision is prioritized for low income community. Strategy of development is associated with characteristic and entity of the area. The strategy is classified as: cost recovery and cost recovery and non cost recovery. non cost recovery.

9 Non cost recovery approach in drinking water: 1.Facilitating bulk water unit and production unit in IKK (kecamatan/district), border areas, frontier islands, underdeveloped areas (slum area, fisherman area), and capital city of new regency (kabupaten) 2.Facilitating drinking water provision in rural area with scarcity of water by promoting community empowerment for living healthy, social capital development, capacity building for community and the community based drinking water management. 3.Financing small scale drinking water development through DAK (Special Allocation Budget).

10 For Sanitation sector, the strategy is prioritized to public campaign, promotion and preparation of national plan. In sanitation development, the government is preparing and replicating activities of Clean Development Mechanism (CDM) and implementing some pilot projects.

11 Cost recovery approach in drinking water: 1.Facilitating bulk water provision for drinking water. Government ensure availbility of water resources as well as promoting efficient water utilization through regional system 2.Facilitating improvement and expansion drinking water provision by local government’s drinking water enterprises (PDAM). Government inviting private sectors, private bankings to involve in water supply development funding

12 The government of the Indonesia is very welcome to the partnership between government and private sector to improve innovation in drinking water and sanitation. The partnership between Indonesia and Danish have taken place for a long time. The partnership between Ministry of Public Works and Danida in providing 44 IKKs in West Java and in handling the emergency activities, rehabilitation, and reconstruction of tsunami disaster in Aceh.

13 Thank you very much