A NATIONAL FRAMEWORK
FOR INTEGRATED URBAN
WATER MANAGEMENT
IN INDONESIA
INTEGRATED URBAN WATER MANAGEMENT - IUWM
DISCLAIMER
This publication received the support of the Global Water Security & Sanitation Partnership
(GWSP). GWSP is a multidonor trust fund administered by the World Bank’s Water Global Practice
and supported by the Australian Department of Foreign Affairs and Trade, Austria’s Federal
Ministry of Finance, the Bill & Melinda Gates Foundation, Denmark’s Ministry of Foreign Affairs,
the Netherlands’ Ministry of Foreign Affairs, the Swedish International Development Cooperation
Agency, Switzerland’s State Secretariat for Economic Affairs, the Swiss Agency for Development
and Cooperation, and the U.S. Agency for International Development.
This report is a product of the staff of the World Bank. The findings, interpretations, and conclusions
expressed in this volume do not necessarily reflect the views of the World Bank, its Board of
Executive Directors, or the governments they represent. The World Bank does not guarantee the
accuracy of the data included in this work.
RIGHTS AND PERMISSIONS
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All photos by Irma Setiono
ACKNOWLEDGEMENTS
This report was produced as part of the Indonesia Towards Water Security and Integrated Urban
Water Management Study, which emerged out of a longstanding interest and partnership between
the Government of Indonesia and the World Bank to address the complexities of urban water issues
in Indonesia. This report has benefitted from a broad range of input at the design, data collection,
and analysis stages, involving various stakeholders within central and local governments. The
iterative and collaborative approach to the report aimed to address immediate and long-term
water security concerns vested in various agencies tasked with complex governance roles and
responsibilities at different scales.
The study was convened and facilitated by the World Bank’s Indonesia Country Office and Water
Global Practice, in collaboration with the Institute for the Public Understanding of Risk (IPUR),
National University of Singapore. The team acknowledges the supportive guidance from Satu
Kristiina Kahkonen (Indonesia Country Director), Jennifer Sara (Global Practice Director), Benoit
Bosquet (Sustainable Development Director for East Asia Pacific), and Sudipto Sarkar (Practice
Manager for East Asia Pacific). The study was peer reviewed by Diego Rodriguez, Fook Chuan
Eng, Marcus Wishart, and Marcus Lee. Key inputs and guidance have been provided throughout
implementation by Gustavo Saltiel, Eileen Burke, Martin Gambrill, and Lizmara Kirchner. The
study also benefitted from inputs from the Water Security Diagnostic team, including Abedalrazq
Khalil, Jennifer M. Gulland, Tarasinta Perwitasari, Jun Matsumoto, and Ilham Abla.
The study team was led by task team leader Irma Magdalena Setiono (Senior Water Supply and
Sanitation Specialist). The report was researched and written by Olivia Jensen (Lead Scientist,
IPUR, National University of Singapore), Adilah Khalis (Research Associate, IPUR, National
University of Singapore), Micah Fisher (Planning and Policy Consultant), Urban El-Fatih Bani Adam
(Spatial Analysis Consultant), Arief Mulya Ramadhian (Institutional and Governance Consultant),
and Achmad Firas Khudi (Consultant).
The study was made possible by the financial contribution of the Global Water Security and
Sanitation Partnership (GWSP), the Local Services Delivery Trust Fund supported by the United
States Agency for International Development (USAID), and the Indonesia Sustainable Urbanization
(ID-SUN) Trust Fund supported by the Switzerland State Secretariat for Economic Affairs (SECO).
a national framework for integrated urban water management in indonesia
CONTENTS
ABBREVIATIONS iii
EXECUTIVE SUMMARY v
1 Introduction 1
2 Integrated Urban Water Management 4
2.1 Overview of IUWM 4
2.2 IUWM Framework 6
2.3 IUWM Interventions 8
3 International Experience of IUWM 12
3.1 Overview 12
3.2 Evaluating the Benefits of International IUWM Projects 13
3.3 Cases and Lessons Learned 15
4 Drivers and Challenges for IUWM in Indonesia 19
4.1 Water Insecurity as a Driver of IUWM Adoption 19
4.2 Law and Regulation 21
4.2.1 Law 21
4.2.2 Regulation 21
4.3 Governance and Institutional Arrangements 23
4.3.1 Fragmented spatial governance and metropolitan area governance 26
4.3.2 Private sector participation 28
4.4 Planning and Implementation 28
4.4.1 Targets 28
4.4.2 Planning processes 29
4.4.3 Performance evaluation 31
4.5 Information Management 32
4.6 Financing 32
5 IUWM Experience in Indonesia 35
5.1 Public Initiatives 35
5.1.1 Ongoing local actions and interventions 35
i a national framework for integrated urban water management in indonesia
5.1.2 Trans-jurisdictional cooperation in metropolitan areas 37
5.1.3 Cooperative initiatives 38
5.2 Private Sector Partnerships 39
6 National Framework Recommendations 42
6.1 Recommendations 42
6.2 Concluding Remarks 57
References 58
Annexes 66
Annex 1 : Case Examples 66
Annex 1.1 : International Examples 66
Annex 1.2 : National Examples 73
Annex 2 : Selected Examples of IUWM Benefits and Relevance to Indonesia 76
Annex 3 : Water-Related Targets in RPJMN 2020–2024 78
Annex 4 : Plans Relevant to IUWM 79
Annex 5 : Water Supply Performance Indicators 81
Annex 6 : Useful IUWM References: World Bank 83
Annex 7 : Useful IUWM References: External Resources 84
List of Tables
Table 1 : Indicative Lower-Bound Cost Range for IUWM Interventions 9
Table 2 : Cost-Benefit Estimates of IUWM Projects 14
Table 3 : Summary of International IUWM Experiences 16
Table 4 : IUWM Implementing Framework Recommendations 45
Table 5 : Roadmap of Recommendations 52
List of Figures
Figure 1 : Interlocking Elements of the Urban Water System 5
Figure 2 : IUWM National Framework for Indonesia 8
Figure 3 : Interrelationships between Urban and Selected Non-Urban Water Challenges
and Co-Beneficial IUWM Interventions 10
Figure 4 : Urban Water Governance in Indonesia 25
List of Boxes
Box 1 : Urban Categorization in Indonesia 6
Box 2 : Implementing Framework: Immediate Priority Actions 50
Box 3 : Interventions: Immediate Priority Actions 51
a national framework for integrated urban water management in indonesia ii
ABBREVIATIONS
Bappenas Badan Perencanaan Pembangunan Nasional (Ministry of National
Development Planning)
B2B Business to business
BPPSPAM Badan Peningkatan Penyelenggaraan Sistem Penyediaan Air Minum
(Supporting Agency for the Development of Drinking Water Supply System)
BKSP Badan Kerja Sama Pembangunan (Local Government Development
Cooperation Agency)
BNPB Badan Nasional Penanggulangan Bencana (National Disaster Management
Agency)
BOT Build-Operate-Transfer
BUMD Badan Usaha Milik Daerah (local government enterprise)
CCFI Coca-Cola Foundation Indonesia
CEW China Everbright Water
CSR Corporate Social Responsibility
DAK Dana Alokasi Khusus (special allocation fund)
DKI Jakarta Daerah Khusus Ibukota Jakarta (Jakarta Special Capital Region)
GDP Gross domestic product
GIS Geographic Information System
IIGF Indonesia Infrastructure Guarantee Fund (PT Penjaminan Infrastruktur
Indonesia, PT PII)
IUWASH PLUS Indonesia Urban Water, Sanitation and Hygiene Penyehatan Lingkungan
Untuk Semua (a USAID project)
IUWM Integrated Urban Water Management
IWRM Integrated water resources management
JICA Japan International Cooperation Agency
MAR Managed aquifer recharge
MASP Ministry of Agrarian Affairs and Spatial Planning
MOEF Ministry of Environment and Forestry
MEMR Ministry of Energy and Mining Resources
MOF Ministry of Finance
MOH Ministry of Health
MOHA Ministry of Home Affairs
MOU Memorandum of understanding
MPWH Ministry of Public Works and Housing
MSS Minimum service standard
NGO Non-governmental organization
iii a national framework for integrated urban water management in indonesia
NRW Non-revenue water
NUDP National Urban Development Project
NUWAS National Urban Water Supply Framework
O&M Operation and maintenance
PDAM Perusahaan Daerah Air Minum (local government-owned water utility)
PD PAL Perusahaan Daerah Pengelola Air Limbah (local government-owned
wastewater management utility)
PES Payment for ecosystem services
PPP Public-private partnership
PSP Private sector participation
RBO River Basin Organization
RDTR Rencana Detail Tata Ruang (Detailed Spatial Plan)
RISPAM Rencana Induk Sistem Penyediaan Air Minum (Drinking Water Supply
Master Plan)
RPJMN Rencana Pembangunan Jangka Menengah Nasional (National Medium-
Term Development Plan)
RTRW Rencana Tata Ruang Wilayah (spatial planning)
SCADA Supervisory Control and Data Acquisition
SISDA Sistem Informasi Sumber Daya Air (Integrated Water Resources
Information System)
SOE State-owned enterprise
SWRO Seawater reverse osmosis
TKPPN Tim Koordinasi Pembangunan Perkotaan Nasional (Inter-Ministerial
Steering Committee for Urban Development)
UPTD Unit Pelaksana Teknis Daerah (Technical Implementing Unit at Local
Government)
USAID United States Agency for International Development
WIMS Water Information Management System
WSS Water supply and sanitation
WTP Water treatment plant
WWTP Wastewater treatment plant
a national framework for integrated urban water management in indonesia iv
EXECUTIVE SUMMARY
Water insecurity is a major threat in many Indonesian cities, affecting economic stability,
environmental quality, and the daily lives and livelihoods of communities. Many cities currently
face a situation of severe interlinked water security challenges. They commonly face low access
to safe sanitation and water services, declining ground and surface water availability and quality,
persistent flooding, and, in some regions, dramatic land subsidence . Risks to health, safety,
economic growth, and productivity are high. As a result of decentralization, local governments
in Indonesia have the authority to play a leading role in water planning and management.
However, fragmented water governance and uncoordinated planning processes are hindering the
identification and implementation of integrated solutions at the local level.
Integrated Urban Water Management (IUWM) is an approach to water policy, planning, and
management for cities and their surrounding regions. Under the IUWM approach, all water sources,
all stages of the water cycle, all uses of water, and the protection of the urban water environment
are coordinated, taking into account local conditions and priorities. IUWM encompasses a
framework – of law and regulation, governance and institutions, planning and implementation,
and information management and financing – that supports the design and application of specific
IUWM interventions and projects at appropriate scales.
Evaluating the benefits of IUWM is an ongoing challenge, due to supplemental non-market benefits
such as improved livability, equality, and biodiversity. However, most ex-ante cost-benefit studies
of IUWM reveal overall positive social and environmental impacts. IUWM approaches have been
adopted successfully in cities around the world, especially those confronted with water insecurity
and resource constraints. Examples are presented in Chapter 3, and include urban river cleanups
(Singapore), demand management efforts (Zaragoza City), and mitigation of land subsidence
(Tokyo). Some of these examples precede the term “IUWM” but embody its spirit of managing
water-related urban and environmental issues through a package of coordinated action.
For Indonesian cities, IUWM is appropriate and appealing for several reasons. Firstly, many
Indonesian cities face cross-cutting water challenges – inadequate and inequitable access to water
supply and sanitation services, flooding, poor environmental water quality, slum settlements,
land subsidence – and these are exacerbated by climate change. This makes IUWM apt, as its
framework incorporates urban water and non-water elements into urban water management
and translates them into interventions on the ground. Secondly, the traditional, infrastructure-
focused approach has not been able to resolve current urban water challenges. These issues call
for a more comprehensive package of policy interventions, data management, and partnerships
with public and private stakeholders. Thirdly, several laws and regulations concerning water are
v a national framework for integrated urban water management in indonesia
in the midst of revisions, providing an opportunity to legislate some IUWM values to create an
enabling framework for IUWM interventions. Regulations under revision include Law 17/2019
on Water Resources, Government Regulation 122/2015 on Drinking Water Supply Systems, and
Government Regulation 28/2018 on Regional Cooperation. Lastly, consultations with policymakers
and stakeholders from the central and local governments indicate an interest in IUWM as a water
management framework and in direct IUWM interventions.
However, cities in Indonesia face several hurdles in implementing IUWM. These are analyzed
in Chapter 4 of the report, which is organized into the five categories of the IUWM framework:
law and regulation, governance and institutions, planning and implementation, and information
management and financing.
For law and regulation, Law 17/2019 on Water Resources provides a solid basis from which to
implement IUWM. This law mandates the responsibilities of government agencies related to
water; however, there remain ambiguities in implementing regulations for some aspects of
water management, including groundwater, surface water quality, and stormwater management.
Additionally, water considerations are not taken into account in several non-water regulations – in
particular, building and private residential and industrial estate regulations, which are important
components in the urban fabric and which affect water management. For example, such regulations
may set standards concerning surface runoff and water supply and sanitation services.
Governance for water in Indonesia remains fragmented. A map of urban water governance in
Indonesia (figure 4) shown in Chapter 4 of this report shows horizontal fragmentation across water
sub-sectors; vertical fragmentation between layers of government; and spatial fragmentation
between administrative jurisdictions. There is a need for authority to be more clearly allocated,
with adequate mechanisms and incentives for coordination and cooperation, without radical
institutional restructuring. Currently, the central government predominantly plays the role of an
infrastructure provider to local governments, which does not incentivize local governments to
optimize and maintain infrastructure, nor to establish partnerships with neighboring jurisdictions.
This relationship can be improved by transitioning the central government toward a more
supervisory role, providing not only funding but also coordination, oversight, and enforcement of
regulations within the scope of the decentralization policy. In many resource-constrained cities in
Indonesia, public-private partnership (PPP) is a viable option but has been limited to only certain
types of contracts related to water distribution infrastructure. There is scope to review PPP
regulations and processes to enable different types of contracts, such as performance-based or
service contracts that do not involve transfer of ownership of water resources.
Planning and implementation of water projects are influenced by the targets, planning processes,
and performance evaluations of water-related government agencies. National-level medium-
term targets form the basis for local government targets and plans. These targets are often
complemented by priority action plans for rehabilitating degraded watersheds and expanding
a national framework for integrated urban water management in indonesia vi
strategic urban areas. However, the targets are ambitious and seldom achieved. Plans and
planning processes are not coordinated among local government agencies managing water
supply, sanitation, drainage, land use, solid waste, and transportation, despite interlinkages
and interdependencies among these sectors. The plans are published on different timelines and
schedules, with no mechanism to ensure consistency. For some planning documents, future
population and demand projections are not accurately reflected.
There are numerous water-supply performance indicators that can potentially support IUWM
approaches, but they are hindered by inadequate data and information management protocols.
Due to a lack of incentives and standardization for data collection and reporting, data across water
sectors in many Indonesian cities is incomplete or inconsistent. In terms of water resources, there
are too few monitoring stations, and data on surface and groundwater quality is too infrequently
collected, posing a challenge for effective policy formulation. Where data is available (for example,
flood impact data), its reliability and accuracy can be of concern due to a lack of transparency and
differences in calculation methods. The Water Resources Information System (Sistem Informasi
Sumber Daya Air, or SISDA) is an ongoing central government effort, but it has not been actively
managed and updated.
Financing for water supply and sanitation projects predominantly comes from the central
government, providing an opportunity to incentivize local governments to adopt IUWM approaches
and projects. A performance-based funding framework for water supply has recently started
to incentivize local water supply agencies (Perusahaan Daerah Air Minum, or PDAMs) to improve
operational performance. There is potential for local governments to tap into alternative financing
sources from development agencies, local government revenues, partnerships with neighboring
jurisdictions, and engagement with the private sector.
Despite these challenges, several initiatives in line with IUWM principles have taken place in
Indonesia (see Chapter 5). Some are intra- and interjurisdictional initiatives by local governments;
others are private sector partnerships. Intra-jurisdictional initiatives include city-scale blue-
green projects such as infiltration wells, urban forests, and policies for runoff management.
Interjurisdictional initiatives comprise cooperation among administrative zones (particularly in
metropolitan areas, such as Greater Jakarta and Greater Yogyakarta) and payment for ecosystem
services (PES) arrangements between upstream and downstream jurisdictions. Private
companies, particularly those that rely heavily on water resources, have been involved through
Corporate Social Responsibility (CSR) projects. Private real estate developers incorporate blue-
green projects that also increase the attractiveness of their real estate. Although these IUWM
initiatives have achieved various levels of success, they offer lessons and motivation to adopt
IUWM across Indonesian cities.
Doing so calls for a National Framework for IUWM that provides government agencies with
the authority, incentives, and capacity to adopt IUWM as a mainstream approach. The central
vii a national framework for integrated urban water management in indonesia
government should take the lead on establishing the implementing framework for IUWM. Priority
actions include incorporating IUWM principles and practices into the implementing regulations of
the 2019 Water Law and into new regulations for the governance of metropolitan regions led by
the Ministry of Home Affairs (MOHA). In the medium term, the central government should provide
reporting guidelines, benchmarks, and financial support mechanisms to incentivize subnational
governments to engage in IUWM. Ongoing programs consistent with an IUWM approach, such as
NUWAS and Citywide Inclusive Sanitation, should be pursued and expanded.
Given the context of Indonesia’s decentralized governance system, local governments should
take the leading role in planning and implementing IUWM principles and projects. They should
begin immediately by coordinating water planning, spatial planning, and other urban sectors to
avoid locking in inefficient practices, and should initiate collaborative actions with neighboring
jurisdictions where appropriate. The World Bank and development partners have an important
role to play in disseminating knowledge on IUWM to subnational governments and identifying
opportunities to incorporate IUWM within existing urban and water projects. In the longer term,
tailored financial structures can be developed to support subnational governments in IUWM design
and implementation. With threats from climate change increasing, IUWM should incorporate
mitigation efforts and other sound environmental management principles, including energy
efficiency and circular economy for water systems.
a national framework for integrated urban water management in indonesia viii
Introduction
a na tional frame wo rk f or inte gr ated urban w ater man ag ement in indonesia
a national framework for integrated urban water management in indonesia 1
1. INTRODUCTION
Water insecurity in Indonesia imposes high costs on people, the economy, and the environment
(World Bank, forthcoming). These costs are concentrated in the country’s large and expanding
urban regions, which face interlocking challenges in water resources, water and sanitation
service provision, flood risk management, and the protection of the water environment. Currently,
water management in Indonesia is fragmented across administrative boundaries and between
the different elements of the water sector. The interrelationships between water and spatial
planning, disaster risk reduction, and solid waste management are rarely taken into account, and
opportunities to address problems efficiently and effectively may be missed as a result.
IUWM is well established as an approach to urban water policy, planning, and management. It
has been successfully adopted in cities around the world but is not yet well known among local
governments in Indonesia. It encompasses a framework of law and regulation, governance and
institutions, planning and implementation, and information management and financing. Together,
these action areas support IUWM interventions and projects at a range of scales, tailored to local
priorities and capacity.
This report focuses on the potential for IUWM to address the severe and interrelated water security
challenges faced by Indonesian cities. The report:
• Assesses the relevance of IUWM to Indonesia
• Identifies refinements and updates to the IUWM approach to take into account
contemporary policy objectives
• Reviews the feasibility of IUWM in the Indonesian context and pinpoints barriers to its
adoption
• Considers the demand for IUWM – that is, knowledge of and support for IUWM among
policymakers at the national and local levels
• Recommends a set of actions that can be taken at the national level to support uptake of
IUWM approaches in Indonesia
This report does not present an economic analysis of specific IUWM interventions. IUWM is
considered here as an approach rather than a fixed set of actions. After local policy priorities
and conditions have been assessed, specific IUWM actions can be selected and cost-benefit
assessments conducted. In presenting a holistic view of IUWM and its potential in Indonesia, the
report is intended to:
1 a national framework for integrated urban water management in indonesia
• Inform policymakers at national and local levels in Indonesia about IUWM
• Delineate a roadmap for reforms in the legal, regulatory, policy, and planning framework
to support the adoption of IUWM
• Through the accompanying Practical Guide for Cities and other materials, engage local
governments on IUWM and convey initial steps that cities can take to transition toward
IUWM
• Provide a basis for more detailed city-level assessments of water security issues in
specific cities, and for studies of potential IUWM interventions to address them
Beyond Indonesia, the report may also be of interest to other middle-income developing countries
intending to strengthen their urban water management.
Data for this report were gathered from: a review of academic literature and international case
studies of IUWM; an analysis of laws, regulations, planning documents, and primary data on
urban water management in Indonesia; and a series of ideation and consultation workshops with
government officials and other stakeholders primarily in the Greater Jakarta region held in 2019-
2020. The data collection and analysis methods are described in detail in the accompanying report,
Pathways toward Integrated Urban Water Management for Greater Jakarta.
The next section of the report introduces IUWM as an approach, distinguishing between the
framework needed to support adoption and the individual projects and interventions that fall
under the umbrella of IUWM. Section 3 provides examples of IUWM cases from around the world
and draws out relevant lessons for Indonesia. Section 4 covers the drivers and challenges for
IUWM adoption in Indonesia, while Section 5 presents small-scale experiences of interventions
in Indonesia consonant with IUWM that may be replicated or scaled up. Section 6 presents the
recommendations.
a national framework for integrated urban water management in indonesia 2
Integrated
Urban Water
Management
2.
2. INTEGRATED URBAN WATER MANAGEMENT
2.1 Overview of IUWM
Integrated Urban Water Management (IUWM) is an approach in which the development and
management of all water sources (ground, surface, storm water, recycled water, desalination,
etc.), all stages of the water cycle (resource management, treatment, and distribution, and
wastewater collection, treatment, and disposal), all uses of water and sources of demand,
and the protection of the urban water environment and ecology are coordinated, taking into
account specific local characteristics. Additionally, the IUWM approach implies horizontal
coordination between the water sector and other urban infrastructure sectors and policy
areas, including spatial development, solid waste management, and disaster management,
to ensure that policies and plans in these areas take full account of their impacts on urban
water. An IUWM approach does not replace analysis in each of these specific policy areas, but
rather aims to use and complement sector analyses by incorporating them into overall urban
planning to more efficiently use resources and more effectively deliver public services.
The scope of IUWM is illustrated in figure 1. The inner circle represents coordination within
the water cycle, while the outer circle represents links with other sectors that interact with
the urban water system.
IUWM can be thought of as the city-level application of integrated water resources
management (IWRM), a framework that has been adopted by governments across regions
and at all levels of economic development. IUWM shares with IWRM the goal of maximizing
economic and social welfare in an equitable manner without compromising the sustainability
of vital ecosystems (GWP 2000).
IUWM can be applied at varying scales, from a metropolitan region encompassing several
river basins to a single neighborhood or even a single property development. As a flexible
management approach, IUWM may be tailored to all categories of cities in Indonesia, from
metropolitan areas crossing two or more administrative jurisdictions, to small but fast-
growing cities commencing the construction of urban infrastructure (see box 1). In addition
to horizontal coordination across sectors within a single jurisdiction, IUWM also requires
vertical coordination between national, regional, and local levels of governments, and across
upstream and downstream administrative jurisdictions within a metropolitan area.
a national framework for integrated urban water management in indonesia 4
Figure 1: Interlocking Elements of the Urban Water System
Source: Authors’ elaboration, adapted from World Bank 2016.
5 a national framework for integrated urban water management in indonesia
Box 1: Urban Categorization in Indonesia
Government Regulation 26/2008 categorizes cities in Indonesia into four groups
according to population size, as below. Some cities, including Greater Jakarta and
Greater Surabaya, are categorized as metropolitan areas (wilayah metropolitan)
made up of a primary city surrounded by satellite cities.
In keeping with the objective of maximizing economic and social welfare, IUWM emphasizes
efficiency, optimizing the use of available resources and infrastructure and magnifying
the effectiveness of structural and non-structural interventions through coordination. It is
a flexible, adaptive, and participatory process. The involvement of stakeholders from civil
society and the private sector in decision-making is one of its key characteristics.
In many cases, cities adopt IUWM in the aftermath of a severe water crisis, such as a prolonged
drought or major flood, that prompts stakeholders to conduct a far-reaching review of
governance arrangements and consider innovative policy options. Ideally, however, IUWM
would be adopted as a preemptive strategy to address water security, reducing the risk of a
future crisis.
2.2 IUWM Framework
While the design and implementation of individual IUWM interventions or projects generally
takes place at the city level, a framework is needed at the national level to support cities
in the adoption of IUWM. This is illustrated in figure 2, which delineates a framework of
interventions with a primary focus on addressing water resources scarcity – a rising priority in
metropolitan areas. The framework covers five areas: (1) law and regulation; (2) governance;
(3) planning and implementation; (4) information management; and (5) financing.
a national framework for integrated urban water management in indonesia 6
Law and regulation: The legal framework touching on water issues (norms, decrees,
regulations, and laws) must be consistent with IUWM. Laws and their implementing
regulations lay the groundwork for water and sanitation service delivery modes, water
resource allocation and management, and environmental protection. They also provide the
basis for coordination between jurisdictions and levels of government, and they define the
scope of private sector participation. Laws and regulations can be an effective instrument
for setting minimum standards, such as improved piped water supply provision, and
constraining unsustainable practices, such as groundwater abstraction. A legal framework
that incorporates the principles of IWRM would usually be consistent with IUWM, but is not
necessarily sufficient to create an enabling environment for IUWM.
Governance and institutions: The roles and responsibilities of government and non-
government actors must be clearly allocated, gaps closed, and overlap minimized. The
governance framework must include mechanisms to incentivize and ultimately enforce
cooperation between sectors and jurisdictions. Although Indonesia legally mandates1
regional cooperation for critical governance and management areas (including water supply,
watershed management, and spatial planning), implementation of this mandate is lacking
in some metropolitan areas. Rules and mechanisms are needed to encourage cooperation
with the private sector and to enable the participation of stakeholders in decision-making
processes. Institutional fragmentation, both horizontal and vertical, can be a bottleneck
in IUWM implementation, as various departments have a stake in, or affect, how water is
managed. These departments include water supply, sanitation, flooding, solid waste, land
use, climate, environment, and health.
Planning and implementation: The planning process is a core part of IUWM and goes
beyond traditional planning processes. In coordinating across sectors, jurisdictions, and
government levels, planning ensures that resources are managed to maximize the efficiency
and effectiveness of investments. With climate change exacerbating environmental threats,
long-term planning for adaptation and mitigation is also important. The principles of energy
efficiency and the circular economy are particularly relevant for IUWM. Other sectors must
also consider water in their planning processes – particularly in spatial planning. The benefits
of water-sensitive spatial planning may far outweigh additional costs (see section 3.2), and
yet water concerns are not taken into account in many jurisdictions.
Information management: Data availability and quality is an important factor in facilitating
and refining IUWM planning. Statistical and spatial data are required to visualize and
analyze geographical trends and propose IUWM solutions. There is therefore a need to
identify indicators for reporting, monitoring, and evaluating various water and water-related
outcomes. These indicators should enable planners and policymakers to comprehend water
issues holistically.
1
Government Regulation 28/2018.
7 a national framework for integrated urban water management in indonesia
Financing: Financing IUWM is an important consideration, especially in resource-constrained
cities and countries. To support IUWM, governments can consider diversifying funding
sources, implementing cost-sharing mechanisms, and involving the private sector.
Figure 2: IUWM National Framework for Indonesia
2.3 IUWM Interventions
With a sound framework in place, local actors can design and implement IUWM interventions.
The range of possible interventions is wide, and their suitability will vary according to the
nature of the water security challenge and the availability of resources in a particular locality.
Here, we provide examples to illustrate what IUWM can look like “on the ground.” These
examples should not be considered a checklist. One city would not be expected to apply all
these interventions. Rather, they should be seen as a menu from which cities can identify an
appropriate package of interventions. The lower bound of the cost range is indicated for each
(see table 1). Investment costs will vary according to scale, technology, design parameters,
and local conditions. Section 3.2 elaborates further on the economic costs and benefits of
IUWM.
a national framework for integrated urban water management in indonesia 8
Table 1: Indicative Lower-Bound Cost Range for IUWM Interventions
Many of these interventions can help address several challenges simultaneously and
generate beneficial impacts on other elements of the urban environment – for example, by
increasing permeable green spaces or raising river quality. Furthermore, as these examples
illustrate, IUWM actions are not necessarily led by actors within the water sector. They can
be taken up by agencies responsible for spatial planning, climate change adaptation, disaster
risk reduction, transportation, or environmental protection, among others. It is central to
IUWM that decision-makers across policy areas ensure that their actions do not compromise
other sectors, and that they seek common solutions to problems with overlapping benefits or
costs whenever possible. These interconnections are illustrated in figure 3.
9 a national framework for integrated urban water management in indonesia
Figure 3: Interrelationships between Urban Development Challenges and Co-Beneficial IUWM Interventions
a national framework for integrated urban water management in indonesia
Note: Challenges are represented in colored rectangles. IUWM interventions are represented in circles.
10
International
Experience of
IUWM
3.
3. INTERNATIONAL EXPERIENCE OF IUWM
3.1 Overview
Numerous studies have shown that IUWM has the potential to contribute to multiple policy
objectives: improved water security (van Beek and Arriëns 2013); enhanced social, ecological,
and economic sustainability at various scales (Milly et al. 2008; Brown, Ashley, and Farrelly
2011; Kirshen et al. 2018); more resilient systems (Wong and Brown 2009); improved
environmental quality (Rygaard, Binning, and Albrechtsen 2011); resource efficiency (Burn,
Maheepala, and Sharma 2012); and economic development (Pahl-Wostl et al. 2011).
Empirical work, meanwhile, offers evidence of the benefits generated by IUWM at the micro
and district scale (Furlong, De Silva, and Guthrie 2015; Mishra et al. 2020), and at the scale
of the city in Australia (Mitchell 2006; Furlong et al. 2017), China (Wang et al. 2018), the
Netherlands (World Bank 2016), Singapore (Tortajada, Joshi, and Biswas 2013), and the United
States (Kirshen et al. 2018), among others. There are also a smaller number of examples at
the scale of the metropolitan area, such as Seoul (Kim et al. 2018) and São Paulo (World
Bank 2016; Gómez-Álvarez et al. 2017). IUWM approaches have been integrated into World
Bank projects in African cities (Jacobsen, Webster, and Vairavamoorthy 2013 and in Brazil,
with promising results (Closas, Schuring, and Rodriguez 2012). The policy drivers in these
cases range from water resource constraints (Singapore), to increased climate variability
(Melbourne), to flood risk management (Rotterdam) (Tortajada, Joshi, and Biswas 2013;
World Bank 2016).
IUWM delivers direct and indirect social benefits, contributing to slum upgrading and
improving environmental quality, urban resilience, and overall quality of life. For instance,
in the São Paulo Metropolitan Region, low-income communities without proper sanitation
facilities were residing in the catchment, leading to river water contamination. Under a World
Bank project, a sanitation system was constructed to treat and discharge sewage safely, with
a pipeline from the community to the main sewerage network. Not only did water resource
quality improve, but the host community also benefited from increased access to safe
sanitation service. In this case, the need to tackle a pressing water quality problem provided
the basis for developing a community partnership that addressed multiple concerns.
In many cases, a crisis like a prolonged drought, major flood event, or drinking water
contamination incident acts as a trigger for IUWM adoption. These dramatic events push
water issues to the top of the policy agenda and open a policy space to reconsider strategy
and reconfigure governance arrangements to take account of the interconnections between
a national framework for integrated urban water management in indonesia 12
the different facets of the water sector. For example, in Cape Town, Melbourne, and São
Paolo, IUWM was adopted during long droughts that threatened the cities’ water supplies;
in the Netherlands, the United Kingdom, and the United States, cities have adopted IUWM
after repeated and severe urban floods. However, IUWM may also be the result of a strategic
deliberation on how to deal with multiple concurrent water challenges, as in the case of
Singapore or the Seoul metropolitan region.
Singapore provides an example of the successful use of IUWM to address water resource
scarcity. Under its “Four Tap” strategy, Singapore augments its water supply with stormwater,
treated wastewater (known as NEWater), and desalination; maintains a high level of network
efficiency; and uses a variety of initiatives to manage demand. This has allowed the city-state
to radically improve its water security (Jensen and Nair 2019). From being reliant on imported
surface water for 50 percent of its water supply before 2009, Singapore today is able to meet
70 percent of its water locally. By 2060, Singapore’s national water agency, PUB, expects to
be achieve self-sufficiency (PUB, n.d.). The government also takes an integrated approach
to the urban water environment, coordinating efforts between housing, environment, and
water agencies to raise the quality of the Singapore River and create a freshwater reservoir.2
Singapore has also become a center for water technology companies, with a water sector
that in 2018 generated US$1.87 billion per year in added value to the economy (Mahmud 2018).
3.2 Evaluating the Benefits of International IUWM Projects
Evaluating IUWM raises conceptual and practical challenges. These include difficulties
in assessing the system-level effects of high-level changes in regulations, governance,
or planning processes, and in evaluating ex ante the impact of innovative technologies
and services. For cities facing severe water scarcity, the transformative nature of IUWM
approaches makes it is difficult to establish a counter-factual, as in the example of Singapore.
Depending on the nature of the intervention, IUWM may also generate additional non-market
benefits, such as improved quality of life (the “livability” of a community), better ecological
status, increased biodiversity, aesthetic value, and reduced conflict between stakeholders
within a catchment (Hien Wong et al. 2003; Molinos-Senante, Hernández-Sancho, and Sala-
Garrido 2011; Heinz, Salgot, and Mateo-Sagasta Dávila 2011; Fan and Matsumoto 2019;
Smith, McDonald, and Wilson 2010). Additional quantifiable benefits from IUWM strategies
may include benefits over time in reduced flooding, increased tourism revenue, and lower
greenhouse gas emissions. These intangible benefits may be challenging to incorporate into
cost-benefit analysis, and considering them at the planning stage requires additional skills
and resources. As a result, there is a limited number of ex-post comprehensive evaluations
of IUWM at the city or metro level.
2
Further information on Singapore’s urban river strategies is presented in Annex 1.
13 a national framework for integrated urban water management in indonesia
Despite these difficulties, studies evaluating IUWM at the local or district scale show a
range of net benefits. Catchment management and groundwater recharge projects can
offer substantial cost savings over conventional water treatment plants (see table 2). Abell
et al. (2017) finds that upstream catchment management programs have enabled about 16
percent of cities to reduce water treatment costs sufficiently to generate positive economic
returns, and an additional 25 percent of cities to generate smaller but substantial savings.
For example, in Brazil, the São Paulo Water Fund was established to restore 14,200 hectares
of forest in critical catchment areas to decrease sedimentation and increase water provision
for downstream users. In addition to increasing water availability, the project generates an
estimated benefit of 942,500 tons of sequestered carbon3 (Abell et al. 2017). Managed aquifer
recharge (MAR) projects have also generated net benefits in projects worldwide (UNESCO
2021; Perrone and Rohde 2016). Not only do these projects use existing natural systems for
water storage, but they prevent loss from evaporation and can help to prevent saltwater
intrusion (see California case study, Annex 1.1).
Table 2: Cost-Benefit Estimates of IUWM Projects
Ex ante assessments in Azerbaijan, Honduras, and Nairobi found IUWM to be cost-effective
when comparing all water-related investments (Closas, Schuring, and Rodriguez 2012).
However, off-grid water supply systems and blue-green drainage show mixed results. For
example, a study of IUWM plans in Melbourne, Australia, found that IUWM plans incurred
3
Equivalent to 3.46 million metric tons of CO2 .
a national framework for integrated urban water management in indonesia 14
total community costs (incorporating benefits) that were marginally or significantly higher
those of conventional plans, but in several cases achieved better environmental outcomes
(Furlong et al. 2017). Given the wide range of IUWM interventions and the variety of challenges
they are designed to address, cost-benefit analysis of a specific intervention and location will
be necessary and will need to incorporate both tangible and intangible benefits within and
outside the water sector.
3.3 Cases and Lessons Learned
Table 3 provides examples of IUWM4 designed to address a range of water security challenges
(including water resource scarcity, stormwater management, and water environment quality)
and their key lessons for IUWM application in the Indonesian context. We include examples
relating to the five components in the framework – law and regulation, governance, planning
and implementation, information management and finance. These cases demonstrate the
great diversity in IUWM interventions around the world. This diversity is a core part of the
approach, which recognizes that interventions should be tailored to local water-related
priorities and capabilities.
Although these cases are not intended to be taken as examples for direct replication in
Indonesia but rather to serve as inspiration for further exploration, they illustrate IUWM
actions relevant to critical issues faced by Indonesian cities: degraded urban rivers (Case 1),
water wastage in the network (Case 2) and by consumers (Case 5), land subsidence (Case 4),
and surface flooding (Case 3). They also provide examples of good practices in information
management (Case 7), certification (Case 8), and partnerships for planning and financing
(Cases 6, 9, 10, and 11), which could be or are already being implemented in Indonesia.
These examples point to some factors that contribute to the success of IUWM. First,
they demonstrate the value of engaging non-government stakeholders. Examples from
Singapore and Melbourne, Australia, show different routes to engage property developers,
while the case of Zhenjiang sponge city in China demonstrates how the private sector can
provide design and management expertise and financing through a long-term collaboration.
The example of demand management in Zaragoza, Spain, shows the value of engagement
with customers as stakeholders in a collective effort to address water scarcity, using many
aligned interventions to achieve a stretch target.
4
The architects of these IUWM examples may not label their own approach as “IUWM,” referring instead to “water sensitive cities,”
“sustainable urban drainage systems,” etc., but these examples all share the characteristics of an IUWM approach.
15 a national framework for integrated urban water management in indonesia
Table 3: Summary of International IUWM Experiences
a national framework for integrated urban water management in indonesia 16
Cases from Denmark and Brazil demonstrate the value of linking clear targets with effective
mechanisms for gathering and sharing performance information. Maintaining an information
system with reliable, valid, and publicly available data plays a dual role: it supports the
monitoring and evaluation process and provides additional reputational incentives to local
governments and local-level service providers.
Challenges in IUWM adoption include stakeholder willingness, political resistance,
lack of capacity or resources, and weak institutional settings. For example, Case 9 on
interjurisdictional cooperation in Kartamantul is a bottom-up effort driven by the willingness
of leaders under the same provincial government to cooperate, but similar coordination
has not been achieved in other metropolitan areas in Indonesia. However, these cases also
demonstrate the feasibility of adopting IUWM actions even in resource-constrained contexts
(Cases 1, 5, 7, 9, 10, and 11) within and beyond Indonesia. The next section considers the
Indonesian context in detail.
17 a national framework for integrated urban water management in indonesia
Drivers and
Challenges
for IUWM in
Indonesia
4.
4. DRIVERS AND CHALLENGES FOR IUWM IN INDONESIA
A variety of circumstances make the current moment an opportune one in which to adopt IUWM
in Indonesia. The economic costs of water threats and urgent water insecurity problems are
critical drivers encouraging a reimagined approach to water issues. In parallel, high political
buy-in, legislative opportunities, institutional developments, growing capacity, and a governance
structure favorable to the uptake of IUWM all make Indonesia an excellent candidate to take full
advantage of IUWM’s potential benefits. At the same time, there remain significant challenges.
Legal ambiguities and fragmented governance could hamper the development an IUWM framework,
while a lack of coordinated planning and patchy information management may constitute barriers
to implementing IUWM interventions.
The following section explores how Indonesia’s water insecurity issues make the country an ideal
candidate for an IUWM approach; the remaining sections discuss the context and identify both the
drivers and challenges to IUWM adoption in the five categories introduced in Section 2: (1) law and
regulation; (2) governance; (3) planning; (4) information management; and (5) financing.
4.1 Water Insecurity as a Driver of IUWM Adoption
In Indonesia, cities are hotspots of water insecurity. They face challenges of low water supply
and sanitation (WSS) service coverage, minimal or non-existent wastewater treatment,
declining quality and quantity of water resources, flooding, subsidence, and degraded water
environments. The interlinked nature of these challenges suggests that IUWM approaches
could be of great value in Indonesia.
The severity of the water security challenge is increasing. Urban areas in Indonesia have
expanded rapidly in the last two decades, with an urban population growth rate of 3.5 percent
per year from 2000 to 2010 (World Bank 2015). This trend will continue, with 68 percent of
Indonesia’s population expected to be living in cities by 2025. The spatial footprint of cities
has also undergone massive expansion: urban land area grew at an annual rate of 1.1 percent
in 2000–2010, the highest absolute growth rate after China in this period. Across Indonesia,
peri-urbanization and urban agglomerations are incorporating the regions around cities into
the urban fabric. In Greater Jakarta and other coastal cities, urban expansion is spreading
upstream into the catchment, exacerbating flooding and degrading water resources.
Infrastructure, meanwhile, has failed to keep pace with urban growth. Access to urban water
and sanitation services is inadequate. Most alarmingly, only 5 percent of urban wastewater
a national framework for integrated urban water management in indonesia 19
in Indonesia is treated and disposed of safely, creating health risks and raising the costs
of surface water treatment for downstream users. Piped water supply reaches only one-
third of urban residents, implying that many households, commercial enterprises, and
industrial establishments depend on groundwater. This in turn leads to over-abstraction
and contributes to land subsidence, which is a particularly severe problem in northern Java.
Cities are repeatedly affected by seasonal surface flooding, exacerbated by clogged drainage
systems due to poor solid waste management. They also face growing risks from flash floods
and coastal floods due to land use changes, subsidence, and climate change. These trends
aggravate localized water resource scarcity and competing demands for raw water from
other sectors.
The serious threats that water-related issues pose to Indonesia’s people and economy are
presented in detail in a water security diagnostic report, Indonesia: The Path to Water Security
(World Bank, forthcoming). The diagnostic finds that, without the adoption of adequate
measures, water-related threats may lead to an estimated reduction in GDP of up to 4.9
percent by 2030 and up to 7.3 percent by 2045, equivalent to US$40 billion and US$81 billion
at Indonesia’s 2019 GDP.5 Conversely, decisive action to address water-related threats could
increase GDP by as much as 3.2 percent by 2045. Six percent of Indonesia’s river basins face
an annual water deficit, and 35 percent face medium to severe water stress year-round. These
medium-to-severe water-stressed rivers contribute more than two-thirds (70 percent) of
Indonesia’s annual GDP. This is an indication of the potential economic loss in a “no action”
scenario in catchment management.
To avoid these losses, many of Indonesia’s actions to address water-related threats will
have to focus on the management of water in cities and their surrounding regions. The
benefits of taking action on water security will also be most striking in urban hotspots where
competition for water resources is acute, and where harm to people and property from water
shortages, floods, and land subsidence will be concentrated. These are precisely the areas in
which IUWM – which is focused on holistic approaches to water issues across urban sectors,
integrated management of catchments, and creating enabling governance frameworks –
proves most effective.
Indeed, policymakers in Indonesia have recognized the potential of IUWM, and there is
considerable political buy-in for the approach. Consultations with stakeholders in central
and local governments and in local government–owned water utilities (Perusahaan Daerah
Air Minum, or PDAMs) conducted for this report indicated considerable interest in IUWM.
5
These figures are derived from a Computable General Equilibrium (CGE) analysis on specific water-related threats. The analysis
compared the impact of water threats on GDP in a scenario in which mitigative and adaptive actions are taken and in a scenario in
which “business as usual” resumes. The threats analyzed are: (1) water pollution from inadequate sanitation; (2) effects from sea
level rise; (3) subsidence caused by groundwater over-abstraction; (4) impacts from flood events; and (5) water shortages due to
insufficient water storage.
20 a national framework for integrated urban water management in indonesia
Participants were interested in a range of interventions, including stormwater capture,
groundwater recharge via infiltration wells, regulation of on-site retention, and recycling.
They also recognized the need to coordinate on water issues with other local governments
across the urban area, and some had positive experience of such cooperation.
As Indonesian policymakers begin to adopt IUWM interventions and approaches, they face a
range of enabling circumstances and challenging hurdles in the areas of law and regulation,
governance, planning, information management, and financing.
4.2 Law and Regulation
4.2.1 Law
The legal foundation for IUWM is provided by Law 17/2019 on Water Resources (2019 Water
Law). The law allocates responsibility for different aspects of the sector between government
ministries. Importantly for IUWM, the law’s scope covers all water above and below ground
(surface water, groundwater, rainwater, and sea water that is contained within a landmass).
In particular, the law extends the responsibility of River Basin Organizations (RBOs) to
include groundwater, which was not previously the case. However, the law leaves some areas
of ambiguity that will need to be clarified in its implementing regulations. In three important
areas for IUWM – groundwater management, surface water quality management, and
stormwater – ambiguity still remains, particularly surrounding the allocation of rights and
responsibilities and how the interests of upstream and downstream users will be balanced
with regard to flood management and surface and groundwater replenishment.
The law establishes a hierarchy of precedence for the allocation of water resources: first to
meet basic needs and public water supply enterprises, then to satisfy the demand of state-
owned enterprises, private enterprises, and environment flows. The law recognizes water
a principle.
as an economic good and establishes the “beneficiary pays” national Licenses for resource
framework
abstraction are subject to water resource management fees and may only be granted if
for integrated urban
resource utilization is “environmentally sustainable.” Groundwater abstraction is currently
water
charged for through a tax, which may be synchronized with surface management
water abstraction licenses
under the new law. in indonesia
4.2.2 Regulation
Policy developments currently underway in Indonesia provide a window of opportunity to
promote the adoption of IUWM approaches. The Government of Indonesia is in the process
of drafting implementing rules and regulations (Government Regulations on Drinking Water
Supply, Peraturan Pemerintah 122/2015) for both the 2019 Water Law and for the 2020 Omnibus
Law, offering an opportunity to incorporate IUWM. Ongoing discussions with stakeholders
demonstrate a transition toward more integrated approaches. The revised regulations are
expected to enable local governments to implement IUWM more effectively.
a national framework for integrated urban water management in indonesia 21
Within the water supply sector, financing and regulation reforms supported by the World Bank
under the National Urban Water Supply (NUWAS) framework are taking root and starting to
show positive results in strengthening efficiency incentives for water utilities. The adoption
of IUWM should be complementary to these reforms, building on the NUWAS framework
where possible.
To incentivize IUWM in private developments, building regulations and licenses can serve as
an important instrument. In Indonesia, private real estate developers are influential actors
in the urban water cycle. They are responsible for the design, construction, and operation
of water supply, sanitation, and drainage systems; roads; and security services. They also
provide municipal services in industrial estates and to residents and businesses in “new towns”
through “town management companies.” In some cases, these privately developed areas are
very large, with populations of 50,000–100,000 residents on plots of 100 hectares or more. In
certain municipalities, private developments cover a significant proportion of the total land
area. For example, in South Tangerang in the Greater Jakarta region, private developers are
estimated to own 40 percent of the land (see the accompanying report, Pathways to Integrated
Urban Water Management for Greater Jakarta). The quality of infrastructure and services in
these developments often surpasses that of municipal governments. Some developers have
also invested in systems that exemplify the principles of IUWM, for example by retaining and
using stormwater, and treating and reusing wastewater for non-potable purposes. These
projects can act as demonstration cases for municipalities and other private developers
interested in pursuing IUWM.
However, while some new towns and industrial estates perform highly in terms of sustainable,
integrated water management, developers in most jurisdictions are not required to meet
specific standards and actual service levels vary widely. In some cases, infrastructure such
as wastewater treatment plants do not meet standards and are poorly managed. There is a
need for oversight and supervision of privately managed infrastructure. There is also scope
for local governments to incentivize higher standards across the board by making good water
practices (such as site-level water retention, water harvesting, or water recycling) conditions
for abstraction, discharge, and building licenses. A small number of local governments,
including South Tangerang, already do this. Additionally, local governments are able to
provide financial incentives to private companies and community organizations for projects
that fulfill criteria for sustainable and environmentally friendly infrastructure development.
Incentives can take the form of local tax or levy deductions or exemptions (Government
Regulation 24/2019). These can be used more extensively to promote IUWM.
Voluntary regulation, like certification programs, awards, and competitions, could be
employed to enhance other regulatory instruments. The Green Building Council Indonesia
provides a GREENSHIP certification for sustainable developments, which could be extended
or used as a model for “blue” certification for sustainable water management.
22 a national framework for integrated urban water management in indonesia
4.3 Governance and Institutional Arrangements
Indonesia’s underlying governance structure is in many ways well suited to the adoption
of IUWM. Indonesia has a highly decentralized administrative structure, with considerable
authority allocated to local governments. In relation to water, the scope of authority of municipal
governments is broad and covers water supply; sanitation; allocation of abstraction permits
for surface and groundwater and discharge permits for wastewater; spatial planning; flood
management; and disaster protection. These responsibilities lie with local governments,
within frameworks set out by the national government.
While decentralization can pose a challenge for IUWM, as it requires additional mechanisms
for interjurisdictional coordination, it also means that spatial and water-related plans are
currently prepared at the local level. These planning processes can therefore be coordinated
without the need for institutional changes at higher levels of government. Indeed, there are
already examples in Indonesia of local government initiatives that embody the principles of
IUWM and that have the potential to be scaled up (see Section 5 of this report). Furthermore,
the regulatory and institutional framework for governance of urban regions is under review
by the Ministry of Home Affairs (MOHA), and water issues are recognized as an important
area for cooperation between local governments within urban regions.
Coordination between ministries at the national level is also being strengthened under the
National Urban Development Project (NUDP) supported by the World Bank. Within the NUDP
framework, the Inter-Ministerial Steering Committee (Tim Koordinasi Pembangunan Perkotaan
Nasional, TKPPN) will be re-structured and enhanced. The project aims to develop institutional
capacity for coordination, planning, and implementation for infrastructure development at
the city and national levels, in order to transition toward spatially informed infrastructure
planning that enables governments to prioritize capital investments.
Under the 2019 Water Law, the Ministry of Public Works and Housing (MPWH) plays the
leading role in policy, planning, and regulation for water resources management, drinking
water supply, and domestic wastewater. As mentioned above, there is a gap in the current
governance framework regarding allocation of responsibility for groundwater management.
To support IUWM approaches, there must be close coordination between surface and
groundwater resource management, which may be best achieved by allocating authority to the
same ministry. Responsibility for surface water quality management has hitherto been shared
between MPWH and the Ministry of Environment and Forestry (MOEF). These two ministries
will need to cooperate in the revision of the Government Regulation Concerning Water
Protection and Management and, if required, the development of additional implementing
regulations relating to how quality standards are set, monitored, and enforced.
a national framework for integrated urban water management in indonesia 23
However, significant coordination and governance challenges remain – not only horizontally,
across local jurisdictions and between national-level agencies, but also vertically, between
various levels of government. Local governments depend heavily on funding from central
governments to finance investment costs. Faced with resource constraints, municipalities
in Indonesia also tend to look by default to higher levels of government to develop additional
water sources, often in other jurisdictions, which gives rise to potential competition for water
resources, environmental degradation, and high ongoing costs to operate and maintain
assets. Large infrastructure projects may be financed by central government without clear
agreement on how the ongoing operating costs of these projects will be covered.
Despite the positive changes in the governance of the sector under the 2019 Water Law,
fragmented water sector governance is likely to prove a continuing challenge to both adoption
and implementation of IUWM. Figure 4, which shows a map of urban water governance in
Indonesia, illustrates how governance is characterized by horizontal fragmentation across
water subsectors, vertical fragmentation between layers of government, and spatial
fragmentation between administrative jurisdictions.
4.3.1 Fragmented spatial governance and metropolitan area governance
Spatial fragmentation poses problems for many cities that rely on raw water supplies from
outside their jurisdiction and thus face risks to both the quantity and quality of the resource,
and cities that are threatened by growing flood risks due to land use changes further up
the catchments. Spatial fragmentation is complicated by multiple sets of boundaries:
administrative, catchment, river basin, and groundwater basin. Each is associated with
different reporting hierarchies.6
Fragmentation is a particular challenge in large urban regions in which multiple local
government jurisdictions adjoin one another in a contiguous built-up area. The most striking
example is the Greater Jakarta area, where nine local governments in three provinces are
responsible for governing different parts of the metropolitan area. For Indonesia to receive
the full benefits of IUWM, it is essential that there be stronger coordination between local
governments within contiguous metropolitan areas, particularly in cases where several
local governments have jurisdiction over an interconnected urban water system. While this
issue is most urgent in the Greater Jakarta region (discussed in detail in the accompanying
report), it is an emerging problem in other metro regions that have received less policy
attention. Like Jakarta, other metro regions are vulnerable to flooding, landslides, water
pollution, and water scarcity due to uncontrolled and uncoordinated development. Although
River Basin Organizations (RBOs) exist in these areas, they do not have the authority over
6
The accompanying Greater Jakarta report illustrates these overlapping boundaries for the Jakarta metro area and discusses the
consequences for water management.
24 a national framework for integrated urban water management in indonesia
Figure 4: Urban Water Governance in Indonesia
a national framework for integrated urban water management in indonesia 25
local governments to enforce decisions. Establishing a framework for interjurisdictional
cooperation focusing on water risks would help other metro areas to avoid some of the
problems evident in Greater Jakarta.
Cooperation between local governments is supported by Ministry of Home Affairs (MOHA)
under Government Regulation 28/2018. The regulations distinguish between areas of
voluntary cooperation and mandatory cooperation. Cooperation is mandated between and
among provinces and municipalities in particular sectors, either when there are cross-
regional externalities or for the efficient provision of public services. Water supply falls
under the scope of the mandatory regulations, along with spatial planning, public works,
watershed management, transportation, and tourism.
However, the institutions and incentives to support coordination between local governments
are not adequate. Governors and mayors have limited awareness of the benefits of cooperation
and little experience in working together on policy issues. Scholars argue that decentralization
has made local governments “inward-looking,” focusing on local development and inter-local
competition rather than cooperation (Firman 2014). Our review of planning documents for
municipalities in the Greater Jakarta area found that two municipalities acknowledged the
need for transboundary water management and interdepartmental coordination in planning
documents such as the Municipal Spatial Plan (Rencana Tata Ruang Wilayah, or RTRW), but
mention of coordination was absent from the other planning documents. Similarly, there
are few existing coordinated catchment management initiatives. For example, Payment for
Ecosystem Services (PES) schemes (see section 5.1.3) have not been widely implemented in
Indonesia despite their potential to serve as effective mechanisms to coordinate upstream
and downstream jurisdictions across the country.
The absence of PES arrangements and other coordinated approaches underscore the
challenge of spatial fragmentation. In addition to low support from governors and mayors,
barriers to regional cooperation include lack of local government awareness of the importance
of cooperation and of the scope and requirements of the regulations, and limited forms of
cooperation (for instance, cooperation agreements and Memoranda of Understanding do not
provide a solid basis for ongoing cooperation). MOHA recognizes that existing institutional
arrangements do not provide adequate incentives and support for local government
cooperation, and is currently working to establish an effective platform and mechanisms for
collaboration between local governments, with particular attention to urban areas.
Water management issues provide a suitable focus for stronger interjurisdictional
cooperation, as the benefits of cooperation are readily apparent and quantifiable. These
benefits could include reduced flood risk from upstream river management; the extension
of water supply networks across jurisdictions where efficient to do so; optimizing efficiency
26 a national framework for integrated urban water management in indonesia
of water or wastewater treatment plants, especially those located close to administrative
boundaries, to expand service coverage across these boundaries; and collaborative cleanup
of rivers.
While institutional fragmentation raises considerable challenges, its potential negative
effects can be overcome without radical institutional restructuring if authority is allocated
clearly and if adequate mechanisms and incentives for coordination are put in place. These
efforts can be aligned with the gradual shift in the role of the central government away from
supplying infrastructure and toward a more strategic mission of establishing incentives
and providing oversight. The current relationship between levels of government, in which
infrastructure funding is provided by the central government, has resulted in challenges
in implementation and maintenance, which can be particularly observed in sanitation
infrastructure. Local governments may lack a sense of ownership over infrastructure funded
by the central government, and therefore have little incentivize to optimize and maintain it
(Alm 2015). There is a need for the central government to coordinate, oversee, and enforce
sanitation interventions.
4.3.2 Private sector participation
National regulations allow private sector participation (PSP) in bulk water treatment and
distribution and wastewater treatment and reuse. However, under current regulations, PSP
is not permitted in water resource development or in the provision of customer services.
PDAMs may contract with private parties for the construction and operation of treatment
and distribution facilities under a “Business to Business” (B2B) structure, and governments
can provide guarantees and viability gap financing for projects under the official public-
private partnership program. Contract types currently in operation include Build-Operate-
Transfer (BOT) and BOT+ models (construction and operation of treatment plant bundled with
the construction of the water distribution network). Existing concession contracts for water
supply in Jakarta are not expected to be renewed at the end of the contract period in 2023.
Performance-based management and service contracts would be permitted under existing
regulations but have not been pursued. These could be employed to enhance efficiency, such
through NRW reduction, or could include bundled output-based stormwater and wastewater
management contracts, which would enable the mobilization of private management and
technical expertise. The official PPP book of projects for tender published regularly by
Bappenas focuses mainly on infrastructure development, but the scope of projects could be
expanded to include other types of private sector involvement to support cities in designing
and implementing IUWM and create room for innovation.
Private developers currently do not have the authority to partner with local governments or
PDAMs to develop IUWM projects or to provide services to residents living adjacent to but
not within their development zones. To facilitate the development of projects of this kind,
a national framework for integrated urban water management in indonesia 27
regulations on PPPs would need to be broadened to encompass management and service
contracts.
4.4 Planning and Implementation
4.4.1 Targets
Indonesia has allocated substantial funding to achieve the water-related targets in the
National Mid-term Development Plan (Rencana Pembangunan Jangka Menengah Nasional, or
RPJMN) 2020–2024, indicating a commitment from the central government on the criticality
of these issues. Water supply and sanitation feature prominently in the RPJMN 2020–2024,
which includes national-level targets for increasing access to safe water and sanitation, and
a specific target to increase the number of household connections to piped water supply.
Indonesia incentivizes local governments to explore innovative approaches to water
management by stretching policy targets for water service provision, sanitation access, and
flood risk reduction, among other areas. Key policy targets are set out in the RPJMN. The
RPJMN 2015–2019 included the ambitious “100-0-100” goals for water and sanitation: 100
percent access to water, zero percent urban slum areas, and 100 percent sanitation access
across the country. These targets were not met,7 as acknowledged in RPJMN 2020–2024, and
targets were revised to 100 percent access to improved drinking water, 30 percent access
to piped water, and 90 percent access to improved sanitation. In addition, the plan includes
specific targets to be achieved by 2024:
• 10 million new individual household water supply connections
• Nationwide Open Defecation Free status; 15 percent access to safely managed
sanitation
• Nationwide non-revenue water (NRW) average of 25 percent
The current plan also identifies several “priority actions” relating to the urban water sector. It
prioritizes integrated development of Java’s northern coast, providing a national policy driver
to improve sectoral coordination to address interlinked environmental and urban issues in
this key region. Additional priority initiatives include the development and restoration of 15
priority watersheds – including the Citarum, Ciliwung, and Cisadane river basins, which run
through the Jakarta metropolitan area – and the establishment of 18 multipurpose reservoirs
for water storage, recreation, and flood management. These targets involve coordinated
actions from various ministries, including MPWH, MOHA, and MOEF. For example, MOEF and
MPWH are working together on one strategy to rehabilitate the critical watersheds, which
includes the greening of 150,000 hectares of critical land. The RPJMN also specifies the
7
The percentages achieved in the planning period 2015–2019 for access to improved water, housing, and sanitation were 61.3
percent, 54.1 percent, and 74.6 percent, respectively (RPJMN 2020–2024).
28 a national framework for integrated urban water management in indonesia
need for a more integrated approach to water management in key regions, including Greater
Jakarta. There are also plans to expand key metropolitan areas in Palembang, Banjarmasin,
Makassar, and Denpasar. Further details on these RPJMN plans are in Annex 3, along with
their respective budget allocations.
4.4.2 Planning processes
Local governments have considerable authority to prepare plans for water supply, sanitation,
drainage, land use, solid waste management, and transport. Water-related plans prepared
by local governments are listed in Annex 4. In some respects, the devolution of planning
authority should provide a good basis for horizontal coordination of planning across policy
areas. However, there is currently no standard process for such coordination between local
government departments. For example, in relation to flood management, the water resources
department is responsible for drainage infrastructure; the spatial planning department
approves and imposes license conditions for new developments and land use in catchments
and on riverbanks; the solid waste management department is responsible for ensuring
that refuse is not disposed of in waterways; and the disaster management department has
authority over warning systems and disaster response. In central Jakarta, the situation is
complicated by dual jurisdiction over drainage infrastructure, with half the canals under the
RBO and the other half managed by the provincial government. It is not standard practice for
these departments to consult with one another.
Multiple planning processes for water resources, flood management, water supply,
and sanitation run in parallel under the guidance of the related parent ministries of the
central government. The plans have different timeframes and planning cycles, and there
is no requirement or process to ensure that the plans are consistent with one another. The
departments contract out detailed planning to consultants, who prepare plans independently,
often without a thorough understanding of local conditions. Pre-project evaluations do not
systematically include co-benefits, such as a reduction in groundwater abstraction from
increased piped supply, so the benefits of these types of interventions are underestimated.
The central government recognizes the need for stronger incentives and mechanisms to
support coordination at the local level, a need that was expressed by Ministry of National
Development Planning (Bappenas) stakeholders during focus group discussions for this
study.
Water plans in Indonesia tend to evince other gaps, as well. First, there is an emphasis on
supply management through infrastructure over demand management through community
initiatives. The Drinking Water System Masterplans (Rencana Induk Sistem Penyediaan Air
Minum, or RISPAMs), prepared by local governments, and water supply Business Plans,
a national framework for integrated urban water management in indonesia 29
prepared by PDAMs, in Greater Jakarta were reviewed in detail for this report. Both RISPAMs
and Business Plans were found to focus on investments to build or expand infrastructure
to meet future demand projections based on extrapolations of current demand trends.
Some documents mentioned non-revenue water (NRW) reduction,8 but water conservation
and demand management were rarely mentioned and were not a central part of water
supply strategy. The plans of Kota Bogor and Kota South Tangerang acknowledge the role
of the community in water conservation but do not specify strategies to incentivize water
conservation. An analysis of the Jakarta Detailed Spatial Plan 2030 (Rencana Detail Tata
Ruang, or RDTR) also revealed strategies to manage supply but no discussion of the demand
side (Drestalita and Saputra 2019).
Second, the availability of water supply and distribution infrastructure is not taken into
account in spatial plans. As a result, water supply managers find it difficult to plan for and
meet demand from new developments and face the challenge of providing adequate drainage.
4.4.3 Performance evaluation
The central government uses performance indicators to provide signals and incentives to
local governments to implement water policy targets. Currently, local governments and
PDAMs report on a range of performance indicators.
PDAMs report on financial and operational performance to the local government and to MPWH.
Performance indicators are now set by MPWH, but were formerly set by the Supporting Agency
for the Development of Drinking Water Supply System – Badan Peningkatan Penyelenggara
Sistem Penyediaan Air Minum, or BPPSPAM), which has now been disbanded. BPPSPAM used
to categorize PDAMs as “healthy,” “less healthy,” or “sick.” As local government-owned
businesses (Badan Usaha Milik Daerah, or BUMD), PDAMs are overseen by the Directorate
General Regional Finance of MOHA, and report to MOHA on a set of indicators that overlap in
part with the MPWH indicators.
Altogether, PDAMs report on almost 60 indicators to MOHA and MPWH (see Annex 5 for a
detailed listing). Adding further indicators to this list may unduly increase the regulatory
burden on PDAMs. Although the current indicator set does not include any specific indicator
of integrated management, several of the existing indicators could be used to identify cities
with interlinked challenges where IUWM approaches may be of particular value when used in
conjunction with data on sanitation and flooding. For example, areas that have low reservoir
capacity but experience high flooding may consider managed aquifer recharge or other
types of integrated water retention infrastructure; areas where treatment plant utilization
and NRW are high can focus more on investment to reduce NRW rather than investment to
8
NRW management strategies proposed in the RISPAMs include locating and measuring leakages by using area water metering,
monitoring and repairing pipes, inspecting and replacing water meters, and curbing illegal connections.
30 a national framework for integrated urban water management in indonesia
increase water treatment production capacity. Existing indicators that may be of use in this
vein include:
• NRW (target of 25 percent by 2024)
• Piped water quality
• Domestic consumption
• Customer growth
• Coverage
• Water treatment capacity
• Reservoir capacity
• Meter replacement (target of 20 percent annual meter replacement)
However, poor management of data – specifically, poor data reporting, management protocol,
and data quality – remains a challenge.
4.5 Information Management
Currently, data collection at central and local levels is patchy, data management protocols
are inconsistent, and data are little used in the planning process. Responsibility for data
collection on surface water and groundwater quality and quantity lies with the MOEF and
the Ministry of Energy and Mineral Resources (MEMR) respectively, but there are few
monitoring stations and long delays in transmitting data. Groundwater conservation maps
are incomplete and not always easily accessible. Local governments are therefore unable to
refer to accurate and reliable data to calibrate surface water intake, discharge permits, and
groundwater abstraction licenses.
The need to improve information management at the national level is recognized by the
central government and highlighted as a recommendation in the Water Security Diagnostic.
MPWH has developed a proposal for a nationally integrated water resources information
system (Sistem Informasi Sumber Daya Air, or SISDA) which would involve establishing a
modern monitoring system and improving analytical tools. Such a system would support
local governments in making evidence-based decisions on licenses and permits.
Data on water and sanitation infrastructure, service delivery, and flood incidents are collected
by local governments for transmission to relevant national agencies for collation. Focus group
discussions conducted for this study revealed that the flow of information was unidirectional
– local governments did not use the collated data to compare their performance with others
or as the basis for coordinated planning with neighboring jurisdictions. This is likely due
a national framework for integrated urban water management in indonesia 31
to a combination of factors: data are not readily accessible or not in a form that allows for
comparability, and the MOHA does not issue specific guidance on their format, storage, or
use. The reliability and accuracy of the data reported by local governments is also a major
concern.
As part of this study, data on water and sanitation services, flooding, and infrastructure
were collected from local governments in the Greater Jakarta area, collated, analyzed,
and visualized in a series of maps (see accompanying Greater Jakarta report). This effort
demonstrated both the challenges and the potential of better data collection and management.
The pilot database produced could form the basis for a regional water information system,
which could ultimately provide a model for a national water information system.
4.6 Financing
The existing financing structure for urban water supply and sanitation in Indonesia provides
scope to integrate incentives for local governments to adopt IUWM. Currently, the vast
majority of funding for water supply investments comes from the central government:
only 0.3 percent derives from local governments (Setiono 2015). The central government is
seeking to leverage funds more effectively to achieve policy goals and to distribute funds
more equitably.
The central government provides funds through several channels:
• Direct funding of water supply and sanitation infrastructure projects (e.g., water
intake facilities and transmission pipes, water treatment plants, wastewater and
septage treatment plants, and sewerage systems of different scales). MPWH
builds the infrastructure and hands assets over to local governments for
operation and maintenance.
• Debt restructuring program for PDAMs
• Central government guarantees and interest subsidies for commercial loans
(Presidential Regulation 46/2019)
• Output-based grants for connections for the urban poor (water Hibah)
• Special allocation funds and grants from the Ministry of Finance (MOF) for water
and sanitation under the Special Allocation Fund (Dana Alokasi Khusus, or DAK)
DAK funding is based on a formula that considers service coverage, aridity, and fiscal
capacity. Access to several of the other funding streams is linked to operational and financial
performance. In the water supply sector, these funding channels are coordinated under the
overarching National Urban Water Supply (NUWAS) Framework, which is supported by the
32 a national framework for integrated urban water management in indonesia
World Bank. The Framework provides for a range of technical assistance, capacity building,
and financing for urban water supply development. It offers differentiated packages of
support for utilities at different performance levels in a stepwise structure that aims to bring
the recipient to a higher level of performance associated with eligibility for the next support
package.
Under the NUWAS Framework, the Central Government provides financing for investments
in increasing coverage and improving operational efficiency (NRW reduction, utilization of
idle capacity to extend coverage, and rehabilitation or uprating of existing water treatment
plants). The principles and structure of NUWAS are directly in line with the IUWM approach
and provide a basis for other performance-based financing streams.
As local governments progress from exploring the IUWM approach to designing specific
interventions, additional financial support is likely to be required to fund ex ante evaluation
studies for blue-green infrastructure, development of non-conventional water sources,
and demand management projects. Financial support may also be needed for training and
capacity building for PDAMs and local engineering consultants who are not yet familiar
with these types of projects. To stimulate interest in IUWM, additional central government
financing could be considered for pilot or model projects and for challenge funds to support
innovative small-scale projects.
a national framework for integrated urban water management in indonesia 33
IUWM
Experience
in Indonesia
5.
5. IUWM EXPERIENCE IN INDONESIA
IUWM approaches have been taken up in a number of projects in Indonesia, although they may not
have been recognized or labelled as IUWM.9 These projects range from micro-scale IUWM measures
in urban villages (kelurahan) to cooperation between municipal and provincial governments on
water issues, such as the Kartamantul Joint Secretariat and the Jabodetabekjur Development
Cooperation Body (Badan Kerja Sama Pembangunan Jabodetabekjur, or BKSP). Although these
existing IUWM efforts in Indonesia have achieved varying degrees of effectiveness, they indicate
the range of actions that are possible in the current context and that can be scaled up, replicated,
or adapted to different locales. IUWM actions in Indonesia include government initiatives, public-
private partnerships, and private-led actions.
5.1 Public Initiatives
5.1.1 Ongoing local actions and interventions
Local governments are actively engaged in vertical drainage management projects, both as
a flood management effort and for subsurface water recharge. Infiltration wells, infiltration
ponds, retention ponds, and revegetation of riverbanks are quite popular in Indonesian cities
and regencies. These actions are widely reflected in existing and planned projects in the
RISPAMs. Examples include infiltration wells in the Special Capital Region (DKI) Jakarta,
Kota Depok, and Kabupaten Bogor; infiltration ponds in Kota South Tangerang and Kota
Bekasi; retention and detention ponds in Kota Bogor; vegetated banks or green belts along
rivers in Kota South Tangerang and Kota Tangerang; and efforts to restrain development
along rivers in Kota Bekasi and Kota Tangerang. Kabupaten Bogor is exploring strategically
placing infiltration wells such that the percolated rainwater would replenish subsurface
springs. Kota Bogor is also looking at reforestation and at restricting development that can
affect infiltration or cause groundwater pollution. The scale of vertical drainage efforts is still
limited for now, and its positive impacts are not yet officially quantified, apart from general
observations that they have reduced localized flooding and recharged subsurface water.
Increasing the amount of permeable space in the form of open green areas is an ongoing effort.
In accordance with Law Number 26 Year 2007 on spatial planning, municipalities are to create
open green spaces occupying at least 30 percent of the land area within the municipality. DKI
Jakarta has set out to achieve this target by 2030, and has included a stipulation that about
23 percent of this green area should comprise urban forests (Sundara et al. 2017). This is a
9
To gather information on efforts taking place on the ground, we held discussions with local governments, conducted online
searches, and reviewed planning documents, with particular reference to the RISPAMs.
a national framework for integrated urban water management in indonesia 35
challenging target in the densely developed and populated city and may need to be reviewed. In
2015, 646 hectares of the targeted 4,631 hectares of the urban forest area target was achieved
(Sundara et al. 2017). An additional initiative, run by MOEF, is Adipura, a national competition that
recognizes and incentivizes beautification projects and the improvement of environmental quality
and management.
Although some efforts and plans to improve raw water quality exist, they are very limited in
comparison to the scale of the problem. Kabupaten Tangerang has developed a three-pronged
approach to improving water quality: preventing pollution at the water source, ensuring water
quality during treatment and distribution by water operators, and preventing contamination or
re-contamination of drinking water by consumers. Additionally, Kota Tangerang is exploring eco-
tech gardens, which use ornamental plants to treat domestic wastewater before it enters the
receiving water body. Among the intentions laid out in its Detailed Spatial Plan 2030 (RDTR), DKI
Jakarta has included management of wastewater discharge and litter in water bodies, alongside
waterfront development.
There are some efforts to adopt and apply new technologies to diversify raw water sources.
Kepulauan Seribu, a chain of islands north of Jakarta’s coast that is under the jurisdiction of DKI
Jakarta, has several seawater reverse osmosis (SWRO) plants that convert seawater to fresh
water for residents of the islands. These SWRO plants are small in scale, but there are plans
to build a large-scale SWRO plant to transport treated water to other islands. Efforts are also
underway to employ new technologies in wastewater treatment for reuse. DKI Jakarta’s first
Moving Bed Biofilm Reactor is scheduled to begin operation in 2021 (BizIndo 2019). Located in
Krukut, the plant will be operated by PD Pal Jaya, DKI Jakarta’s public sanitation service provider,
and has the capacity to treat and recycle 100 liters of water per second. The recycled water will
be utilized by neighboring buildings for toilet flushing, by the Forestry Department for watering
plants, and by the Firefighting Department for extinguishing fires. There is also a similar initiative
for the Daan Mogot area.
Donor-funded projects have been supporting targeted water issues and needs, aiding in funding
and transfer of technology and skills. The Japan International Cooperation Agency (JICA) has
been active in cooperating with the Indonesian government for projects such as groundwater
monitoring in DKI Jakarta, flood management in Bekasi, and NRW and energy-efficiency training
for PDAM staff in Kabupaten Takalar, Kabupaten Gowa, and Kota Makassar (Ahyar and Makita
2018). The Dutch Embassy has supported extensive studies relating to flood management and
water resources in Jakarta (Dutch Embassy Indonesia 2019).
5.1.2 Trans-jurisdictional cooperation in metropolitan areas
Interjurisdictional cooperation exists within the Greater Jakarta and Greater Yogyakarta urban
regions, with varying levels of success. The Jabodetabekjur Development Cooperation Body
(BKSP) is a collaborative body comprising DKI Jakarta and surrounding local governments
(Kota Bogor, Kabupaten Bogor, Kota Depok, Kota Tangerang, Kabupaten Tangerang, Kota
South Tangerang, Kota Bekasi, Kabupaten Bekasi, and Kabupaten Cianjur). It is the only
metropolitan agency in Indonesia and was established by the national government to improve
coordination on problem areas including flooding, water supply, road transport, and solid
waste management. Although BKSP is recognized by the local and regional governments of
Jabodetabekjur as an official platform for transboundary collaboration, it functions only as
a platform and has no authority or budget to implement projects (Firman 2014). Cooperation
under BKSP has so far been limited (Silfiana 2018). However, BKSP’s administrative status
is being strengthened by MOHA in accordance with Government Regulation No. 28 of 2018 on
Regional Cooperation, and water is likely to be a focus area for cooperation.
The Joint Secretariat of Kartamantul in Yogyakarta is another example of transboundary
cooperation on water issues. The Kartamantul Metropolitan Region consists of Kota
Yogyakarta, Kabupaten Sleman, and Kabupaten Bantul, three municipalities in the Special
Region of Yogyakarta (DIY). In 2001, the Kartamantul Joint Secretariat was formed as a bottom-
up initiative to manage and coordinate transboundary development in the three municipalities
(Firman 2014). The leaders of Kartamantul agreed to coordinate planning and development of
urban infrastructure, including for drinking water supply and transportation, and have since
established interjurisdictional arrangements for solid waste disposal (Piyungan landfill),
wastewater treatment, and sewerage (IPAL Sewon at Bantul). The three urban areas in
Kartamantul face similar issues – namely, a growing urban population, an increase in demand
for clean water and difficulty in sourcing new raw water sources, environmental degradation,
and high demand from the public for basic services. The leaders also recognized that the
neighborhoods at the municipal borders are “grey areas” that receive little attention, as it is
unclear which municipality should be taking responsibility.
The Joint Secretariat creates opportunities for IUWM by enabling transboundary management
of water services. The Secretariat’s integrated approach involves stakeholders from different
municipalities and government levels (regional and local) who manage different parts of
water services and who potentially distribute financial responsibility through cost-sharing
mechanisms. More detail on the Kartamantul case study is found in Annex 1.
Another emerging key economic metropolitan region is Sarbagita in Bali Province, with Kota
Denpasar as its core, surrounded by Kabupaten Badung, Kabupaten Gianyar, and Kabupaten
Tabanan. Sarbagita was a key national strategic area in RPJMN 2015–2019, and collaboration
in this metro region is driven by strong leadership and strong appetite for cooperation from
a national framework for integrated urban water management in indonesia 37
the provincial government, which established a regional Technical Implementing Unit (Unit
Pelaksana Teknis Dinas, or UPTD) to manage regional infrastructure facilities. Sarbagita has
established mechanisms for cooperation for water supply, wastewater, transportation, and
solid waste management.
Other trans-jurisdictional mega-urban regions in Indonesia are Gerbangkertasusila (Greater
Surabaya), Bandung Raya, Kedungsapur (Greater Semarang), Mebidangro (Greater Medan),
and Maminasata (Greater Makassar); none have yet established mechanisms for coordination.
5.1.3 Cooperative initiatives
Despite the barriers to achieving coordinated planning, stakeholder consultations for
this study revealed a number of small-scale initiatives involving horizontal coordination,
demonstrating that projects of this kind are possible, if not common, under the existing
regulatory framework. Local government interagency coordination occurs in the form of
taskforces (Kelompok Kerja, or Pokja), typically on an initiative or project basis. These are
ad hoc teams comprising representatives from different local government agencies that
work together on specific projects or targets. For example, infiltration wells are being
constructed in upstream areas of Greater Jakarta to reduce flood impacts and replenish
groundwater supplies; the project is jointly financed by two local governments (Kota Bogor
and Kabupaten Bogor), with support from a donor program (USAID IUWASH PLUS) and the
central government. Further examples of existing initiatives are given in Section 5.
River cleanup initiatives, such as Gerakan Ciliwung Bersih and Citarum Harum, are long-
standing multi-stakeholder efforts involving national and local governments, civil society,
and private parties, for the Ciliwung and Citarum river respectively. Citarum Harum, for
example, is a collaborative effort between cities, led by the West Java provincial governor,
with participation from the army. Although it has not yet generated substantial water quality
improvements, it is a positive IUWM-type initiative that can be expanded and replicated for
other rivers.
Other opportunities for coordinated initiatives involve Payment for Ecosystem Services (PES)
arrangements, which can be used as a financing mechanism in catchment management
schemes. In a PES system, downstream water users make payments to upstream
communities to conserve their land or develop it sustainably. In Indonesia, PES is not yet
widely implemented. However, an example of a successful and sustained PES arrangement
is the Cidanau watershed, where the downstream water supply company makes payments to
farmers to maintain tree cover (see Annex 1.2). Stakeholders involved in PES are typically the
government (local, regional, and/or national), non-governmental organizations (NGOs), RBOs,
local communities such as farmers’ groups, private entities that benefit from ecosystem
38 a national framework for integrated urban water management in indonesia
services, and donor organizations. PES mechanisms involve sellers, buyers, and usually also
an intermediary organization who negotiates the agreement between the seller and buyer
and implements the PES mechanism, among other tasks.
5.2 Private Sector Partnerships
Private sector engagement in IUWM-related projects generally comprises large firms’
Corporate Social Responsibility (CSR) activities and real estate developers’ initiatives.
Formal PPP contracts hold potential as a route for IUWM but have not yet been tried in
Indonesia. Existing private-led IUWM initiatives in Indonesia may be small in scale, but they
demonstrate that cooperation and coordination is possible within the existing legal and
regulatory framework, and they provide valuable examples for local governments interested
in IUWM. Supportive regulatory reforms and incentive schemes will help to expand the
scale and number of these projects. In Japan, for example, private property developers are
mandated to construct retention basins for flood mitigation in large-scale developments.
Currently, in the CSR category, the Coca-Cola Foundation Indonesia (CCFI) has been active in
water-related projects throughout the country (Coca-Cola 2017). In particular, under the CCFI
“Lumbung Air” Infiltration Well program, which received support from the US Agency for
International Development (USAID), more than 4,000 infiltration wells have been constructed
to restore aquifers nationwide.
Some private real estate developers have adopted IUWM approaches voluntarily, while
others have done so to comply with conditions of their business licenses. For example, one of
Indonesia’s major developers, PT Lippo Karawaci Tbk (LPKR), has incorporated small-scale
IUWM schemes such as retention ponds within its townships. In Kemang Village, a LPKR
development, a rainwater retention pond collects and treats rainwater, which is recycled for
non-potable purposes. Partnership arrangements between local governments and private
developers remains an area for further exploration, as we were not able to identify any
current examples.
In relation to formal PPP arrangements, water treatment plants (WTP), wastewater treatment
plants (WWTP), and bulk water supply and transmission projects under BOT and BOT+ models
are regularly included in the PPP Book, but only a small number have reached award and
commissioning. Concession-type contracts awarded before regulatory changes, including
the two large concessions in Jakarta, continue to operate, but will need to be restructured
to exclude customer service. Several water projects are in the construction phase, including
Umbulan Spring, a bulk water supply project, and the Bandar Lampung water supply project,
which incorporates viability gap funding from the central government and a guarantee
from the Indonesia Infrastructure Guarantee Fund (IIGF). PPPs have also been awarded for
sanitation, including a WWTP BOT project for the city of Makassar in 2020.
a national framework for integrated urban water management in indonesia 39
There is potential to develop management and service contracts to address access and
service quality for water services and sanitation, small-scale water recycling, installation
and maintenance of septic tanks, treatment and disposal of septage, and stormwater
management. However, this potential has not yet been realized.
40 a national framework for integrated urban water management in indonesia
National
Framework
Recommendations
6.
6. NATIONAL FRAMEWORK RECOMMENDATIONS
6.1 Recommendations
This section develops a set of policy recommendations based on the above review of urban
water governance and policy in Indonesia and on international experience with IUWM.
In recent years, many new policies and processes relating to different aspects of water
management have been implemented in Indonesia. These efforts are starting to show positive
results and should continue to be supported. Concurrently, the ongoing process of drafting
implementing regulations for recent laws provides numerous windows of opportunity to
promote and facilitate the adoption of IUWM. The set of recommendations proposed here
therefore includes actions that can be taken immediately by sector stakeholders, as well
as actions that require regulatory changes or additional resources and should therefore be
adopted in the medium and longer term.
The recommended actions are categorized into the five IUWM pillars, as show in table 4,
and into two types of actions: those relating to the enabling framework, which should be led
primarily by the central government, and those relating to practical interventions, on which
local governments should take the lead.
The central government’s core role lies in establishing a legal and regulatory framework
consistent with IUWM, and putting in place regulations, mechanisms, and incentives to support
and incentivize coordination across policy areas and cooperation between administrative
jurisdictions. This will involve several different ministries – in particular, MPWH, historically
the leading central government agency for urban water management, and MOHA, which has
a critical role to play in setting and monitoring standards and codes for local governments
and in overseeing cooperation between lower tiers of government.
As the key actors in planning and policy implementation in Indonesia, local governments need
to play a leading role in mainstreaming IUWM through their ongoing investment planning,
service delivery, and licensing functions. They will also take the lead in coordinating with
other stakeholders, communicating with the public, and establishing partnerships with local
private sector actors, educational and training institutions, and civil society organizations.
Development partners can also play a crucial part. They can provide guidance to government
on the development of the legal and regulatory frameworks for urban governance and IUWM;
develop suitable indicators and procedures to monitor and evaluate progress toward IUWM
42 a national framework for integrated urban water management in indonesia
across the country; build and make accessible a body of knowledge on IUWM appropriate
to local conditions through practical guides, case studies, and continued engagement with
stakeholders at all levels; provide technical and financial support for demonstration projects
with local champions; and develop financing mechanisms to support IUWM projects led by
subnational governments.
Several of the recommendations relate to strengthening implementation and enforcement of
plans, policies, and regulations that are already in place, like the minimum service standards
for water supply and sanitation, Citywide Inclusive Sanitation, and MOHA regulations on
tariffs and subsidies. As noted in previous chapters, the institutional and regulatory context
in Indonesia is very fluid, and changes are often introduced before previous rounds of reforms
have been able to gain traction. The recommendations therefore emphasize the need for
continuity in areas of water policy that have undergone recent reforms consistent with the
principles of IUWM.
In the short term, the priority is to ensure that IUWM principles are integrated into the
implementing regulations and regulatory guidelines currently under development and review.
In particular, the draft regulations on urban governance, guidelines on interjurisdictional
cooperation, and implementing regulations of the new Water Law relating to groundwater
must be consistent with the IUWM approach.
Immediate actions to drive forward IUWM can also be taken within the context of existing
policies and programs. In water supply, IUWM can be promoted through the NUWAS
Framework, which links access to finance with performance indicators, and through Citywide
Inclusive Sanitation initiatives. Existing requirements for data sharing by local governments
can be developed into effective mechanisms for performance tracking and incentivization
through the adoption of clear and consistent reporting protocols and transparent data
management.
In the medium term, integrated water-cycle projects similar to those identified in the case
studies can be scaled up and replicated. These include blue-green infrastructure projects to
address stormwater management while improving the quality of the urban environment and
recharging groundwater; combined stormwater, wastewater, and water reuse projects to
tackle localized pollution and water availability issues; and catchment management projects
incorporating PES mechanisms to simultaneously tackle upstream and downstream water
and urban development challenges.
On the same timescale, IUWM principles need to be integrated into mandated planning
processes for spatial planning and other urban sectors. As plans for sectors such as urban
development, solid waste, disaster management, or climate adaptation and mitigation come
up for revision, water impacts should be incorporated into the planning process.
a national framework for integrated urban water management in indonesia 43
Over a longer timeframe, blue-green infrastructure projects can be designed and piloted, and
dedicated financing mechanisms can be developed for integrated water cycle interventions.
Different ministries and agencies in the national and local governments can take the lead on
aspects of the IUWM program, allowing the recommendations to be pursued concurrently
and collaboratively.
44 a national framework for integrated urban water management in indonesia
Table 4: IUWM Recommendations
a national framework for integrated urban water management in indonesia 45
46 a national framework for integrated urban water management in indonesia
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48 a national framework for integrated urban water management in indonesia
a national framework for integrated urban water management in indonesia 49
Table 5 lays out a proposed timeline of the recommendations. Immediate priority actions
(highlighted in boxes 2 and 3 below) can be implemented in the near term in the context
of ongoing policies and regulations, while phased actions may entail lengthier preliminary
actions (such as data collection, consultations, and the development of new regulations)
and can be implemented in the short, medium, or long term. The suggested phases for
implementation are as follows:
• Immediate: within one year
• Short-term: one to five years
• Medium-term: five to 10 years
• Long-term: 10 years and beyond
Some recommendations are conditional upon others, and this is implicit in the phasing of
recommendations. For example, clarifications to the legal framework on groundwater
management, improving water efficiency, and implementing fit-for-purpose water for
non-potable uses are immediate actions, while halting groundwater abstraction can
only be realistically and effectively enforced in the medium term. This underscores the
necessity of implementing both immediate and medium-to-long-term actions. Some of
the recommendations – such as the maintenance of infrastructure and Water Information
Management Systems (WIMS) – require sustained, adaptive, and iterative effort; these are
indicated in the roadmap.
Box 2: Implementing Framework: Immediate Priority Actions
1. Incorporate the following into ongoing development of implementing
regulations:
a) Interjurisdictional cooperation
b) Groundwater management
c) Urban regional governance
2. Build on existing frameworks:
a) Incentivize better enforcement of discharge permits
b) Establish water information sharing protocols
c) Incorporate IUWM indicators in performance measures for access to finance
under NUWAS
50 a national framework for integrated urban water management in indonesia
Box 3: Interventions: Immediate Priority Actions
1. Drive progress towards IUWM objectives at the local level:
a) Implement minimum service standards for water and sanitation services
b) Support uptake of Citywide Inclusive Sanitation
c) Align incentives through water tariff and subsidy calibration
2. Share information and build capacity:
a) Deploy the IUWM Practical Guide for Cities
b) Catalogue local IUWM initiatives
c) Set up a water information management system
3. Track progress:
a) Develop urban water security indicators and conduct city assessments
b) Incorporate IUWM indicators in performance measures under NUWAS
a national framework for integrated urban water management in indonesia 51
Table 5: Roadmap of Recommendations
52 a national framework for integrated urban water management in indonesia
a national framework for integrated urban water management in indonesia 53
54 a national framework for integrated urban water management in indonesia
a national framework for integrated urban water management in indonesia 55
56 a national framework for integrated urban water management in indonesia
6.2 Concluding Remarks
IUWM has great potential to address interlocking water risks and build resilience in
Indonesia’s urban regions, from metropolitan areas spread over multiple jurisdictions to
small but fast-growing cities across the archipelago. While IUWM is not yet well known among
local governments in Indonesia, there are excellent examples of cities integrating elements
of water policy with other urban sectors, a track record of interjurisdictional cooperation
on water, and examples of partnerships with non-government actors. These initiatives
embody the principles of IUWM, and many are well suited to scaling up and replication if the
appropriate enabling framework can be put in place.
The IUWM approach is also gaining traction at the central government level, where, with the
support of the World Bank and other development partners, policymakers are seeking to
promote greater cooperation between neighboring local governments, to integrate spatial
planning, and to incentivize investment and operating efficiency in the water sector. The
Government of Indonesia is in the process of drafting the implementing regulations for the
2019 Water Law, and regulations regarding governance of metropolitan regions is under
review by MOHA, creating a window of opportunity to embed IUWM in the institutional and
regulatory framework.
Moving the IUWM agenda forward will require continued engagement with stakeholders to
maintain the momentum created by the workshops conducted during this project. The Greater
Jakarta region is among the most challenging urban areas in Indonesia in which to design
and implement water-related policies, but it is also among the places facing the most severe
and urgent water security challenges, with the most to gain from IUWM. The data collection,
analysis, visualization, and sustained stakeholder engagement undertaken in Jakarta for this
study needs to be translated to other urban regions and priority cities. The IUWM Practical
Guide for Cities is a first step in this process.
The IUWM approach has evolved since its original conception to incorporate sustainability,
circular economy, and resilience. As it is applied in the Indonesian context, it will evolve
further to deal with the dramatic interlinked challenges faced by the country’s urban areas,
and to incorporate innovations that build on the local culture, indigenous knowledge, and
unique resources and skills found across the nation. Further work is now needed to design
incentives for policymakers at all levels to adopt IUWM in Indonesia. The knowledge and
commitment of development partners will be vital to realize this vision.
a national framework for integrated urban water management in indonesia 57
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64 a national framework for integrated urban water management in indonesia
Annexes
7.
ANNEX 1: CASE EXAMPLES
This annex presents case studies from all around the world (three from Indonesia) that were
selected and summarized as a source of inspiration and applicable lessons for IUWM in Indonesia
(table 3 in the report). This annex provides additional information on implementation and costs
(where available) of IUWM examples. Sources are also referenced for further information and
exploration.
Some of these efforts might already have been launched in Indonesia to varying extents and with
varying success. These case studies originate from different institutional, political, and economic
contexts – some may be similar to Indonesia, and others less so. Actions adapted from other
countries may be implemented and financed differently in Indonesia. In some cases, institutional
bottlenecks need to be resolved before actions can be implemented, (e.g., PPP for sponge city
projects). In these cases, policymakers may reflect on the institutional changes needed and pursue
them, particularly via the recommendations put forth in Chapter 6, while simultaneously putting
actions drawn from other countries into the pipeline, where they can serve as motivation to drive
institutional shifts.
These case studies show that IUWM takes time to conceptualize, implement, and demonstrate
results. Many of these cases, such as land subsidence management in Tokyo, do not show
instantaneous results but rather consist of months to years of discussion and implementation
culminating in deliberate actions, with ongoing monitoring and enforcement to this day. This time
gap also offers an opportunity, as it illustrates that planning for IUWM can begin immediately.
Annex 1.1: International Examples
a national framework
1) Multi-agency urban river cleanup: Singapore10 for integrated urban
Singapore’s strategy, which combines urban planning, pollution
water control, and water and
management
solid waste management around the Singapore River, is a leading example of an integrated
in indonesia
approach that preceded the “IUWM” label. The cleanup took place over a decade, from
1977 to 1986. Prior to the cleanup, the Singapore River was a locus of commercial activity,
bordered by pig and duck farms, hawkers and vegetable merchants, and boat construction
and restoration services. Heavy boat and human traffic along the river coincided with the
presence of squatters (informal housing), disposal of garbage and sewage into the river,
and oil spills. The Singapore government at the time recognized the social, economic, and
environmental costs, as well as the potential of the river to contribute to broader goals of
10
Source: Tortajada, Joshi, and Biswas 2013.
66 a national framework for integrated urban water management in indonesia
urban development. Plans were developed to relocate residents to public housing in other
areas, to phase out some polluting activities, and to redevelop the riverbanks for recreational
and office use. When the river quality had improved sufficiently, the mouth of the river was
dammed, and Marina Bay was developed as a recreational area and freshwater reservoir.
Apart from political will, data collection and analysis were crucial in the planning and
implementation of the cleanup. The government’s first step was to collect data on pollution
sources in and around the river. This revealed that the main polluters were riverbank
residents in the catchment area, who were disposing solid and liquid organic waste into the
river and environment without treatment.
With the involvement of multiple government agencies and stakeholders, five priorities were
identified: i) resettlement of residents and removal or relocation of industrial polluters; ii)
construction of housing and commercial premises with proper water and sanitation facilities
for resettled residents; iii) public engagement on the project; iv) stringent enforcement
of discharge regulations; and v) cleaning and dredging of the riverbed and banks and the
relocation of the port within the national land-use plan. Relocation of businesses, industries,
and settlements was conducted gradually, with compensation, with time built in to overcome
resistance and construct alternative housing. The Ministry of Environment was tasked to lead
the cleanup, but other government agencies involved included the Drainage Department,
the Housing Development Board, the Port of Singapore Authority, the Ministry of National
Development, and the Ministry of Finance.
Legal and regulatory reforms supported the river cleanup, and water management in general.
The Housing and Development Act of 1960 enabled the removal of informal settlements and
the provision of affordable housing. In 1968, Singapore passed the Environmental Health Act,
which enabled prosecution of persons found to be polluting rivers and water bodies.
Estimated expenditure: S$200–300 million (Joshi, Tortajada, and Biswas 2012).
2) Driving efficiency through non-revenue water reduction targets: Denmark11
Denmark’s approach to NRW reduction illustrates how the central government can use
financial and regulatory tools to incentivize local actors. Over the period of the initiative,
water utility companies in Denmark achieved substantial reductions in NRW to less than 10
percent in most Danish cities.
In 1994, the government introduced an NRW target of 10 percent (Danish EPA, n.d.). Water
utilities that exceed this level are subject to additional taxes on water consumed and water
lost. National regulations also require that certified meters be installed for all consumers.
11
Source: State of Green, n.d.
a national framework for integrated urban water management in indonesia 67
These incentives have led water utilities to be innovative in their strategies to increase
distribution efficiency.
Clear and accurate performance indicators are needed for the incentive scheme to be effective.
The government considered ways to improve on the standard calculation of NRW, which is the
volume of water not billed as a percentage of water supplied
to the network. This measurement is influenced by various
MAINTENANCE
local factors and may not accurately reflect losses in water OPERATIONAL COST
COST
distribution. The recommended indicator for NRW in Denmark
is cubic meters per kilometer of pipe per day, which can be PURCHASE
COST
complemented with losses per connection in liters per day.
At the local level, utilities adopt NRW programs or masterplans
to entrench the understanding and importance of NRW
Total Cost of Ownership
reduction at all levels of the organization, from upper
management to procurement teams and technicians.
Technicians are trained in tools such as Geographic Information Systems (GIS), Supervisory
Control and Data Acquisition (SCADA), hydraulic modelling, noise loggers, smart meters, and
online leakage monitoring platforms.
High-quality components are found to be more cost-effective, since repairs and replacements
tend to be more costly than the upfront cost of the component itself, especially for underground
pipes. Utilities in Denmark are required to use “total cost of ownership” and “lifetime cost” as
the basis for procurement and product selection, a requirement that is designed to increase
the sustainability and reliability of investments on equipment such as pipes, joints, and valves.
3) Planning for blue-green infrastructure: Australia12
Australian cities have been at the forefront of blue-green infrastructure development,
supported by a clear process for spatial planning that enables the costs and benefits of
innovative projects to be fully assessed with extensive participation of community members.
Extreme weather conditions, such as the protracted Millennium Drought and repeated flood
and wildfire events, have driven greater attention to water issues in Australia. In parallel
to climate drivers, city residents increasingly demand green spaces and urban livability
features. These factors have stimulated the adoption of blue-green infrastructure solutions
at various scales, not only for their aesthetic value, but as a necessity in urban management.
Within the context of a national vision for water-sensitive cities, therefore, many municipal
governments in Australia have developed projects to address localized water challenges such
as surface flooding, water resource availability, and degraded ecology in urban water bodies.
12
Source: DELWP 2017a.
68 a national framework for integrated urban water management in indonesia
Municipalities in Australia follow a detailed planning process for blue-green infrastructure
that links water investment planning to the spatial planning process. This requires input
from various local government departments, such as spatial planning, water, and parks and
recreation, which share data, prepare reports, and engage stakeholders in the community.
An example of the outcome of this process is shown in the opportunity map for the Maroondah
district of Melbourne, which is used as a reference for future blue-green projects. The
opportunity map shows point locations throughout the district that have potential for various
IUWM-type projects, such as blue-green infrastructure and alternative water sources.
Another spatial-based approach is the urban forest strategy for the City of Melbourne. The
city conducted a comprehensive tree audit to obtain information on tree age, placement,
and condition. This dataset was mapped out, uploaded online, and made open-source. The
tree audit map served as the basis for a heat map that illustrated the vulnerability of the
community to extreme heat. This analysis in turn provided an evidence base that could be
used to prioritize urban forest investments.
4) Halting land subsidence in a coastal mega-city: Tokyo
Beginning in the early 1900s, Tokyo start experiencing severe land subsidence due to
industrialization and urban development, which relied on untrammeled groundwater
abstraction to meet the surge in demand. Subsidence exacerbated flood risks, particularly
in the lowland area or “Tokyo Zero Meter Area,” where ground level is below the average
high tide sea level. Earthquakes pose an additional threat, with the potential to damage flood
protection infrastructure such as coastal dikes and thus exacerbate coastal flooding.
To address these acute risks, a two-pronged approach was adopted: the Industrial Water
Law (1956) was enacted to limit and ultimately halt groundwater abstraction, and surface
water sources outside the metropolitan area were developed to ensure reliable supply.
Within the scope of the Industrial Water Law, the national government demarcated zones for
groundwater abstraction limits, and some industries were mandated to move to a different
location. At the local government level, enforcement was carried out to prohibit new pumping
wells and phase out existing wells that did not meet the requirements or limits set out by the
law. Beginning in the 1970s, the groundwater levels started to rise again and subsidence was
stabilized.
Estimated expenditure: approximately ¥30 billion (approximately ¥7.7 billion at 1960
currency rates and ¥22 billion at 1963 rates) for wastewater treatment plants for
industrial reuse (Aihara et al. 1969).
a national framework for integrated urban water management in indonesia 69
5) Integrated policies to reduce water consumption: Zaragoza, Spain13
The city of Zaragoza, Spain, with a population of 700,000, illustrates a multi-faceted approach
to reducing water demand in response to increased water scarcity. In 1997, the local
government launched the Water-Saving City campaign in partnership with a local civil society
organization, the Fundación Ecologica y Desarollo (FED). This initiative aimed to decrease
water consumption by 1 billion14 liters in one year as a way to kickstart the entrenchment of
water conservation habits and technology in the community. The project took an integrated
approach involving various stakeholders: the general public, mass media, and water-saving
product manufacturers. The Zaragoza Water Commission was set up to coordinate the effort
and provide guidance. The initial campaign was a clear success: 1.176 billion liters of water
were saved in 1998, and further phases were launched and sustained over the next decade.
By 2010, water consumption per capita stood at 100 liters per day, up from 136 in 2000.
The campaign comprised a mass awareness-raising component to stimulate the community
to adopt water-saving habits and technologies. Promotional content was disseminated in the
print media and on TV, and through posters on public transportation, on stickers, and via
other media. Content was tailored to particular groups of water users. For households, part
of the outreach message encouraged people to switch to water-saving versions of domestic
appliances such as taps and washing machines. An online portal and telephone hotline was
set up to field enquiries from the public about water-saving technologies and how to purchase
them. Large consumers such as hotels and industries were educated on the environmental
and fiscal benefits of water conservation. An initiative for students included a “Water Savings
Book” for students to note, track, and compare monthly water bills.
A market for water-saving technology, sanitary hardware, and domestic appliances was
also created in the city. In collaboration with manufacturers, the city promoted a kit of
water-efficient appliances to households at a subsidized cost, with additional discounts on
installation prices. These efforts, among others, resulted in a 15 percent rise in sales of
household appliances with water-saving features. Two-thirds of households in Zaragoza city
adopted water-saving measures after the campaign, compared to one-third before it.
Additional economic incentives were provided through the tariff structure. The city introduced
volumetric tariffs, with subsidies for low-income households. Domestic consumers who
decreased their yearly water consumption by at least 10 were also eligible for discounts on
their water bill, and penalties were issued for excessive water use. Although an evaluation
found that these adjustments did not significantly reduce water consumption, they increased
the utility’s revenues, enabling further improvements in water infrastructure.
13
Sources: Kayaga, Smout, and Bueno 2007; Climate-ADAPT 2021.
14
Note: American billion, i.e., 1,000 million.
70 a national framework for integrated urban water management in indonesia
Infrastructural improvements were also made in the form of pipe rehabilitation and pressure
controls, and the water utility repaired leakages in apartment building storage tanks. This
required substantial investment and consistent effort over many years, and was pursued
not only to reduce water and financial losses, but also in an effort to gain consumer support
and confidence by proving that the water service providers were committed to continuous
improvement.
Support from city leaders and regulatory mechanisms was a key factor in sustaining water
conservation efforts. Water-saving policies and plans were included in the city’s strategic plan
and Agenda 21 directives, which enabled regulatory commitments and access to funding, and
also fostered citizen identity and pride. To trigger and sustain political commitment to water
conservation, in 2011, the Municipal Bylaw for Water Saving and Efficiency was passed. This
bylaw commits to specific targets for total water consumption in the city, total consumption
per capita, and domestic consumption, and includes efforts to increase efficiency in municipal
water use.
Estimated expenditure: 483,000 at 1997 currency rates (European Commission, n.d.)
6) Public-private partnership for sustainable drainage: Zhenjiang Sponge City, China15
The Zhenjiang Project was one of 16 “sponge city” pilot projects in China selected to receive
central government financial support and designated as a PPP demonstration project by the
Ministry of Finance. The project involves construction, renovation, and operation of water
management infrastructure on a site comprising 22 square kilometers of land and 11.5 square
kilometers of water bodies in Zhenjiang city, in the province of Jiangsu in eastern China.
Under the 23-year contract, the private-sector party is responsible for investment and
financing, construction, and operation of the following new infrastructure:
• a 200,000 m3/day reuse-grade WWTP and a 75,000 m3/day wastewater treatment
expansion project (discharge standard 1B) and pipe network
• green stormwater capture, diversion, and reuse infrastructure
After a process of competitive negotiation involving both local firms and state-owned
enterprises (SOEs), the contract was awarded in 2016 to China Everbright Water (CEW).
CEW is an environmental services company under the ultimate ownership of the Everbright
Group, a large SOE under the central government. The project company has a joint venture
structure, with 70 percent owned by CEW and 30 percent by the Zhenjiang City Water Industry
Corporation, a SOE under the municipal government.
15
Sources: InfraPPP 2016; China Everbright 2016; Zhang 2016.
a national framework for integrated urban water management in indonesia 71
Total investment value is expected to be ¥2.585 billion (US$405 million), of which ¥1.2 billion
is covered by a central government grant and ¥1.385 billion by the project company. The
central government grant specifically covers the ecological and non-revenue generating
elements of the project: low-impact development and transformation, ecological restoration,
pipe network engineering, and drainage (“waterlogging”) management. The revenues of the
project company will come from a wastewater treatment fee paid by government. The fee is
based on 75,000 cubic meters per day of wastewater treatment at 1B standard and 150,000
cubic meters per day treatment at 1A standard.
In addition to the wastewater treatment plants, the project company investment also includes
drainage pipes, rainwater storage tanks, and river renovation works. CEW estimates the
project will capture over 16 million cubic meters per year of rainwater for reuse, leaving just
30 percent to be drained to the river. This goal is in line with the national targets outlined in
sponge city guidelines from the State Council in October 2015, whereby 20 percent of urban
areas in China would collect and reuse 70 percent of their rainwater by 2020, and 80 percent
of cities would do so by 2030.
As a pilot sponge city project, the Zhenjiang PPP has faced numerous challenges, both during
construction and as it continues to operate. Firstly, since the area is a brownfield site, the
project had the potential to inconvenience residents during the construction period. Channels
of coordination with residents were established, and clear communication is seen as an
important aspect of successful implementation. Secondly, the construction work involved
the use of materials and equipment (such as permeable surfaces, pipeline materials, and
backfill materials) that had not been used in Chinese cities before, raising technical risk.
Finally, the project includes multiple different components, many of which are non-revenue
generating. This complexity called for a robust financial structure that incorporates both
service fees and a government subsidy. Since its commissioning, the Zhenjiang sponge city
PPP has generated amenity benefits in addition to reducing inconvenience and damage from
floods. The project will help the city achieve its goal of being fully compliant with national
Sponge City standards by 2025.
7) National Sanitation Information System: Brazil16
In Brazil, the Ministry of Regional Development, via the National Sanitation Secretariat
(SNS), manages the National Sanitation Information System (SNIS) under Law 11.445/2007.
Every year, municipalities and utilities collect data on: i) water and wastewater services;
ii) management of solid waste; and iii) drainage and stormwater management. This data is
submitted to SNIS, which organizes, analyzes, and publishes the data and diagnostics on its
website.
16
Source: SNIS, n.d.
17
Source: PUB 2018.
72 a national framework for integrated urban water management in indonesia
SNIS sets standards on the data to be collected (indicators), terminologies, definitions,
calculations, and units of measurements. Additionally, based on assessments made from the
data, SNIS provides advice on public policies and consultations with the water and sanitation
sector. Although the participation of municipalities and water and sanitation service providers
in the system is voluntary, it is incentivized by access to investment plans by the Ministry
of Regional Development. Data must be provided to SNIS regularly as a pre-requisite for
selection, rating, and funding.
8) Building certification in Singapore17
In 2010, Singapore’s national water agency, PUB, launched a certification program under the
Active, Beautiful, Clean (ABC) Waters Programme. Private developers and public agencies
can apply for certification for developments that incorporate ABC Waters Design Features.
The scheme provides recognition for developers embracing sustainable water management
and ensures that the design features incorporated within developments achieve a minimum
design standard. Design features aim to increase detention and retention of stormwater
onside and include features such as rain gardens, swales, sedimentation basins, constructed
wetlands, and cleansing biotopes. To further incentivize IUWM, developers of projects or
buildings which are “ABC-certified” may gain subsidized access to international expos,
conferences, and seminars to deepen their expertise. Singapore’s Building Construction
Agency (BCA) also runs a Green Mark certification scheme to recognize projects and buildings
with other environmentally sustainable features.
Annex 1.2: National Examples
1) Interjurisdictional cooperation in Kartamantul, Indonesia18
The Joint Secretariat of Kartamantul in Yogyakarta is an example of transboundary cooperation
on water issues. The Kartamantul Metropolitan Region consists of Kota Yogyakarta,
Kabupaten Sleman, and Kabupaten Bantul, three municipalities in the Special Region of
Yogyakarta (DIY), of which Kota Yogyakarta is the economic centre. In 2001, the Kartamantul
Joint Secretariat was formed to manage and coordinate transboundary development in the
three municipalities. This was a bottom-up initiative on the part of the local governments
(Firman 2014).
The leaders of Kartamantul recognized that urban expansion in the region was occurring
across administrative boundaries, and that urban infrastructure, such as drinking water and
transportation, should therefore be coordinated. The urban areas in Kartamantul are part
of a single hydrological system and face similar issues – namely, providing housing for a
growing urban population, an increase in demand for clean water and difficulty in sourcing
18
Source: Stakeholder presentation.
a national framework for integrated urban water management in indonesia 73
new raw water sources, environmental degradation, an increase in urban burdens, and high
demand from the public for basic services. The leaders also recognized that the areas around
administrative borders are “grey areas” that receive less attention from policymakers, as it
is unclear which municipality they belong to.
These issues motivated the creation of a transboundary institution to address shared
concerns collectively and develop urban infrastructure for the Kartamantul urban region in
an integrated and seamless manner. By having a joint secretariat and an integrated urban
management system, the resources of each municipality can be optimized and their limitations
minimized, and the region can engage in functional, coordinated land-use management.
The Kartamantul Joint Secretariat creates opportunities for IUWM by enabling transboundary
management of water services. The integrated approach involves stakeholders from different
municipalities and government levels (regional and local), who manage different parts of
water services.
This is exemplified by a project for a regional wastewater treatment plant (IPAL) at Sewon.
This project was driven by domestic and industrial pollution in water bodies, limited coverage
of the centralized WTP, poorly optimized WTP services, and low community awareness of
basic sanitation practices. IPAL Sewon brought about an increase in household connections,
from 10,800 to 24,171 connections, with an extended pipe network. There are plans for further
expansion to achieve a target of 25,000 connections. The three municipalities also collaborate
on solid waste management, with an integrated regional solid waste management facility
(Tempat Pengelolaan Sampah Terpadu, TPST) at Piyungan.
These initiatives were supported by the regional government of DIY (PEMDA DIY), which
manages WTP installation, primary and secondary pipes, and disposal of waste, while
municipal governments oversee service network expansion, connections, and environmental
monitoring. Costs are shared between the governments: PEMDA DIY bears 70 percent of the
cost, while the municipal governments of Kartamantul bear the remaining 30 percent, based
on number of household connections.
2) Private developer–led sustainable water practices: Greater Jakarta
Private developers are taking the lead on introducing sustainable water management
approaches in some of the integrated property developments in the Greater Jakarta region.
These developments comprise residential and non-residential properties, and water,
wastewater, and waste facilities and operations, as well as transportation. Town management
companies play an ongoing role in managing and operating water and wastewater services,
billing, collection, infrastructure, and utilities.
74 a national framework for integrated urban water management in indonesia
PT Lippo Karawaci (LPKR) is one of the prominent developers in the region. It owns and
manages Lippo Village in Kabupaten Tangerang (60,000 residents) and Lippo Cikarang in
Kabupaten Bekasi (55,000 residents). LPKR purchases bulk water from government agencies,
treats it, and distributes it, and also collects and treats wastewater. At Lippo Village, water
resources come from the Cisadane River; at Lippo Cikarang, water is sourced from the
Citarum River and is allocated by the irrigation authority.
Environmental sustainability is a key pillar in LPKR’s developments, and the company aims to
integrate developments with the surrounding environment, pursue environmentally friendly
practices, and ensure community engagement. Its developments incorporate stormwater
retention and use for non-potable purposes and public information campaigns to encourage
water conservation. In 2019, LPKR received nine awards for its Corporate Social Responsibility
(CSR) activities. This included the Indonesia Green Award 2019, awarded to Lippo Cikarang
for saving water resources through its WWTP, its WTP, and pond retention.
3) Payment for Ecosystem Services in the Cidanau watershed19
The Cidanau watershed in West Java has a long-standing catchment management scheme
that incorporates payments for ecosystems services. Upstream areas in the Cidanau
watershed are occupied by smallholder farmers’ groups, who converted land from forests
to agricultural paddy fields and residential plots. This land conversion led to bank erosion
and sedimentation downstream, increasing flow variability and blocking and damaging water
supply infrastructure.
The catchment management scheme was initiated by the Coordination Forum for Cidanau
Watershed (FKDC), an NGO-led multi-stakeholder body. FKDC acts as an intermediary
between farmers’ groups and state-owned water service provider Krakatau Tirta Industri
(KTI). A PES agreement was negotiated, under which KTI pays farmers a fee per hectare per
year for sustainable land management, to maintain a certain number of trees on the land and
to replant any trees removed. The initial PES agreement covered a five-year period, from
2005 and 2010, and has since been renewed and expanded to include erosion prevention and
livestock management.
The Cidanau watershed scheme was the first formal PES arrangement in Indonesia. At
that time, there were no laws and regulations governing PES. Over time, several laws have
incorporated PES – namely, Law 32/2009 on Environmental Management, Law 37/2014 on Soil
and Water Conservation, and Government Regulation 37/2012 on Watershed Management.
While the Cidanau watershed case demonstrates the applicability of PES in catchment
management in Indonesia, it remains one of the few long-standing schemes in the country
(Amaruzaman, Rahadian, and Leimona 2017; Suich et al. 2016).
19
Amaruzaman, Rahadian, and Leimona 2017; Suich et al. 2017.
a national framework for integrated urban water management in indonesia 75
76
ANNEX 2: SELECTED EXAMPLES OF IUWM BENEFITS AND RELEVANCE TO INDONESIA
a national framework for integrated urban water management in indonesia
20
Sources: Wishart et al. 2021a; Wishart et al. 2021b.
21
DELWP 2017b.
a national framework for integrated urban water management in indonesia
22
World Bank 2020.
23
77
California State Environmental Protection Agency State Water Resources Control Board 2019
ANNEX 3: WATER-RELATED TARGETS IN RPJMN 2020–2024
78 a national framework for integrated urban water management in indonesia
ANNEX 4: PLANS RELEVANT TO IUWM
The following plans, at varying levels of government, have a bearing on the adoption of IUWM in
Indonesia:
• National medium-term development plan: RPJMN (5 years)
• Regional/Local medium-term development plan: RPJMD (5 years)
• National long-term development plan: RPJPN (Rencana Pembangunan Jangka Panjang
Nasional) (20 years)
• Regional/Local long-term development plan: RPJPD (Rencana Pembangunan Jangka Panjang
Daerah) (20 years)
• Spatial plan: RTRW (Rencana Tata Ruang Wilayah) (local, regional, national)
• Detailed spatial plan: RDTR (Rencana Detil Tata Ruang)
• Public works and housing plan: Renstra PUPR (Rencana Strategis Kementerian Pekerjaan
Umum dan Perumahan)
• Water supply plan (local): RISPAM (5 years)
• Sanitation plan (local): SSK (Strategi Sanitasi Kota), which covers wastewater, micro-drainage,
and solid waste management (5 years)
• Environmental plan: Renstra KLHK (Rencana Strategis Kementerian Lingkungan Hidup dan
Kehutanan), which covers forests, water bodies, and biodiversity
• Health plan: Renstra Kemenkes (Rencana Strategis Kementerian Kesehatan) (5 years)
• Disaster management plan: Renstra BNPB (Rencana Strategis Badan Nasional Penanggulan
Bencana)
• Transport plan: Renstra Kemenhub (Rencana Strategis Kementerian Perhubungan)
The national medium-term development plan, RPJMN, is translated into provincial and district or
municipality development plans (RPJMD, Rencana Pembangunan Jangka Menengah Daerah), which
are then broken down into annual work and budgeting plans. RPJMD are prepared by subnational
governments in consultation with MOHA. Sector plans are prepared by relevant ministries. Each
national ministry prepares a Strategic Plan (Rencana Strategis – Renstra) to set out how they will
achieve the RPJMN targets. These five-year plans are also then broken down into annual work
plans.
At the local government level, in addition to the RPJMD, RISPAM, and RTRW, the municipalities or
districts usually also prepare the SSK or City Sanitation Strategy. The SSK includes wastewater,
micro-drainage, and solid waste management. In general, most cities already have a SSK, although
the quality varies. Many contain information on the existing situation, identification of hotspot
areas, and “wish-lists” of what programs or activities the city will use to achieve the universal-
access-to-sanitation target, but do not provide specific targets and plans for implementation.
a national framework for integrated urban water management in indonesia 79
In most cities, plans for water supply, sanitation, and stormwater management and flooding
are prepared by different municipal departments. In the standard approach, plans are based on
projections of population and economic growth, which are used to forecast demand or exposure
based on a standardized per-capita consumption estimate of 60 liters per day. Plans are then
prepared to meet demand, focusing by default on expanding supply (i.e., through the construction
of a new water treatment plant or the uprating or rehabilitation of existing treatment plants),
with some attention to NRW reduction. Almost no local governments or PDAMs include demand
management in their plans or consider utilizing alternative modes of delivery, such as bulk
services to private developers of commercial, industrial, or residential zones, or collaborations
with community-based or small-scale service providers for off-grid services. Nor do they consider
potential alternative water sources within their city boundaries, such as water recycling or reuse
from wastewater management or stormwater management, or large-scale rainwater harvesting.
Furthermore, there is still very little awareness about the importance and the utility of having
good infrastructure asset management.
80 a national framework for integrated urban water management in indonesia
ANNEX 5: WATER SUPPLY PERFORMANCE INDICATORS
The IUMW column indicates parameters that are relevant to IUWM and could be included in a future
IUWM performance index.
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82 a national framework for integrated urban water management in indonesia
ANNEX 6: USEFUL IUWM REFERENCES: WORLD BANK
a national framework for integrated urban water management in indonesia 83
ANNEX 7: USEFUL IUWM REFERENCES: EXTERNAL RESOURCES
84 a national framework for integrated urban water management in indonesia
a national framework for integrated urban water management in indonesia 85