Survey of Private-Sector Participation in Selected Cities in Indonesia (WASH Field Report No.387, October 1997)

This report surveys of eight cities in Indonesia to ascertain the level of private-sector participation with local governments in water supply, sanitation, solid waste, and several commercial activities, such as market place construction and renovation, slaughterhouses, and parking facilities. Private-sector participation includes long-term investments in infrastructure and services delivered for immediate payment under contract. The cities surveyed were Bekasi, Surabaya, Semarang, Yogyakarta, Ujung Pandang, Bandung, Medan, and Pontianak. The tem interviewed scores of local officials, entrepreneurs, investors, and business association representatives over a six-week period. The intent was to take a “snap shot” of private-sector participation at the local-government level as it existed in late 1992.

This survey supported two efforts to assess and promote private-sector investment in Indonesia; the USAID/ Government of Indonesia Municipal Finance Project’s attempt to determine the extent of private-sector participation in the provision of urban services controlled by local governments and, the PURSE (Private Participation in Urban Services) Project’s goal of increasing private-sector investment in large capital-intensive infrastructure projects.

The report recommends physical and financial indicators that the Government of Indonesia may use to monitor changes over time in the levels of private-sector participation, and includes estimates of the current (“baseline”) values of indicators in the water supply, sanitation, and solid waste sectors.

Appendices to the report include a detailed profile of current private-sector participation in each of the eight cities and the full report from the supplementary survey, which collected data for estimating the baseline indicators.

Contents:

Executive Summary

Acronyms

1. Background
1.1 Origin of the Assignment
1.2 Purpose of the Survey
1.3 Definitions
1.4 Data Collection Methodology
1.5 Organization of the Report

2. Indonesia’s Experience with Private-Sector Participation
2.1 Overview of Private Sector Activities
2.2 Basic Findings of the Survey
2.3 Water Supply
2.4 Wastewater and Sanitation
2.5 Solid Waste
2.6 Integrated Area Development
2.7 Single Function Commercial

3. Opportunities
3.1 General Opportunities
3.2 Potential Pilot Project and Investment Areas
3.3 Opportunities in Water-Related Sectors
3.4 Opportunities for Single-Function Commercial Activities
3.5 Opportunities in Integrated Area Development

4. Constraints
4.1 The Need for Risk Sharing Arrangements
4.2 Guarantees
4.3 Financing
4.4 Setting Tariffs
4.5 Institutional Arrangements
4.6 Legal Constraints
4.7 Lack of Openness to Private-Sector Participation
4.8 Competition from Multilateral Funds
4.9 Lack of Strong Local Institutions
4.10 Conclusion

5. Indicators for Monitoring Private-Sector Participation
5.1 Monitoring Indicators
5.2 Baseline Data

6. Conclusions and Recommendations
6.1 Conclusions
6.2 Recommendations

Appendix

Tables
 

Post Date : 10 Juli 2009