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PPP OPPORTUNITIES OF WATER SUPPLY PROJECTS IN INDONESIA

Presented by:Tamin M. Zakaria AminChairman of BPPSPAM

National Supporting Agency for Water Supply System Development Ministry of Public Works and Housing

Republic of Indonesia

Singapore, October 2015

OUTLINE

• Preface

• Water Supply Services In Indonesia

• National Access to Safe Water

• 6 Basic Principles for Water Resource Management Restriction

• Water Supply Investment Plan Through PPP Scheme:• On Going Projects

• Tender Process

• Ready to Offer

• Potential

2

3

INDONESIA AT A GLANCE

According to World Bank (2010), the annual growth rate of Indonesia is 1,21%. In 2019, the

population of Indonesia is estimated to be 268.074.600. Assuming each household consists of 4

people (BPS, 2013). Government of Indonesia is expected to provide 100% access to safe water

by the end of 2019.

WATER SUPPLY SERVICES IN INDONESIA

4

Served by Local Water Supply Companies called Perusahaan Daerah Air Minum (PDAM) (safe access, piped)

There are total 387 PDAMs in Indonesia and 39 operators are from private sectors.

Existing house connection provided by PDAM is about 11 million HC in 2015.

67.78% is served by safe water access (2013)

Average NRW level is 32,79%

74% of the PDAMs operate below production cost (non FCR tariff)

2012 (328PDAM)

2013 (350PDAM)

2014 (359PDAM)

2015 (369PDAM)

171 176182

196

101 104 10396

5670 74 78

PERFORMANCE OF PDAM 2012 - 2015

SEHAT KURANG SEHAT SAKIT

52%

31%

17%

50%

30%

20%

51%

29%

20%

53%

26%

21%

HEALTHY LESS HEALTHY SICK

(370

Sources: BPPSPAM, 2015

NATIONAL ACCESS TO SAFE WATER

5

As stipulated in National Medium Term Dev. Plan 2015-2019, safe access to drinking water in 2019 is targeted to be 100% (60 % by pipeline, 40 % by non pipeline )

22.4

25.3

59.7

47.9 48.4

41.4 29.7

26

0

70.3 73.7

78.8 85.1

92.6

100

0

20

40

60

80

100

2014 2015 2016 2017 2018 2019

Wat

er

Sup

ply

co

vera

ge (

%) Aman - Perpipaan

Aman - BukanPerpipaan

Tidak Aman

Aman

Safe access, piped

Safe access, non piped

Unsafe access

Safe access to drinking water

13%

6%

8%

4%

7%47%

7%6%

NationalBudget

Raw WaterBudget

PPP

Bank Loan

CSR

Local Budget

Sources: Directorate General of Human Settlements, Ministry of Public Works and Housing, 2015

6

FUNDING NEEDEDTO REACH NATIONAL TARGET

IDR 204.93 Trillion

IDR 48.07 Trillion

Other Source ofFunding

National Budget

Total Funding Required (2015 – 2019) = IDR 253 Trillion

Sources: Directorate General of Human Settlements, Ministry of Public Works and Housing, 2015

6 BASIC PRINCIPLES FOR WATER RESOURCE MANAGEMENT RESTRICTION

1. Water resource provision could not disrupt human right to get water resource access;

2. Human right for water resource should be fulfilled by government;

3. Environmental Sustainability;

4. Government has responsibility to monitor and control water resource;

5. Main priority of water resource provision is delegated to SOE/ROE; and

6. Government has a possibility to give license for business entity to conduct water resource provision based on tight requirement.

*AS STATED IN CONSTITUTIONAL COURT DECISION No. 85/PUU-XI/2013

SUBJECT ON PPP

Contracting Agency

•Minister/ Head of Institution/ Head of Region or

any other party that has been delegated to act

on behalf of the Ministry/Institution/Region

• Board of Director of SOE / ROE could act as CA

in accordance with the existing law and

regulation

• Project bundling is allowed, in which the

Minister/ Head of Institution/ Head of Region

will act together as the CA by signing a MoU and

agreed on who will act as the CA Coordinator.

Private Sector

• State Owned Enterprise (SOE),

• Regional Owned Enterprise (ROE),

• Business entity in the form of Indonesian Limited Liability Company (PT)

• Foreign business entity

• Cooperatives

Slide - 8

Based on Presidential Regulation No.38 /2015 on PPP

GOVERNMENT SUPPORT

• Land Acquisition

• Viability Gap Fund (VGF)

• Guarantee• Raw Water

Facilities

PPP STRUCTURE FOR INDONESIAN WATER SUPPLY PROJECT

10

Government Contracting

Agency

Special Purpose Vehicle (SPV)

IIGF (Govt.Guarantee)

O&M Co, EPC Co, Third parties

Sponsors/ Investors

Cooperation Agreement

Contract

Recourse Agreement

Guarantee Agreement

Banks

End User/Customer

Service

Tariff

Equity

Debt

Board of Director of SOE / ROE

11

PPP PROJECT CYCLE

Tender document process and bidding

team

Identification

PPP business

case

Pre FS

Project Preparation Transaction Process and Management

Tender document

Pre Qualification

Shortlisted

Bidding process

WinningBidder

Contract

Financial Close & Contract

implementation

End of Contract

Bidder invitation &Tender Doc

Aanwizjing &One on One Meeting

PPP nodes

12

WATER SUPPLY INVESTMENT PLAN

THROUGH PPP SCHEME

N

o

Amount of

Project

Location

Capacity (l/s)Population served

(persons)

Total Investment

(Billion Rupiah)

1 ON GOING PROJECT

4 2.600 1.040.000 895

2 TENDER PROCESS

2 4.500 1.510.000 2.830

3 READY TO OFFER

2 2.300 920.000 1.649,5

4 POTENTIAL

5 12.648 5.160.000 7.401,3

TOTAL

13 22.048 8.630.000 12.775,8

13

PPP Cooperation Between Local Government of Tangerang Regency and PT. Aetra Air Tangerang

Contract Signing: 4 August 2008

Scope of Works

• Construction of WTP 900 l/s• Construction of transmission networks• Construction of reservoir• Distribution networks for 70.000 HC• Pipe networks± 180 km

TANGERANG REGENCYPT AETRA AIR TANGERANG

Service Area

Pasar Kemis, Sepatan, Cikupa, Balaraja, Jayanti, Total of Domestic Customers 60.000 HC and Industries 278 HC

NRW Level 4%

ON GOING PPP PROJECT

Technical and Investment Data

1. Capacity 900 l/s

2. Investment Rp 503 Billion

Investment today Rp 589 Billion

3. Operational 2010

4. Concession period 25 years

5. Domestic Water Tariff (2007)

Rp 3.400,-

6. Non Domestic water tariff (2007)

Rp 10.000,-

7. Tariff escalation (2008-2009)

7,20%

BEKASI REGENCY PT MOYA BEKASI JAYA

Progress of the ProjectStage I of WTP Uprating has been constructed and ultrafiltration unit of 200 l/s has been commercially

operated with tariff Rp 2.150,-

Service Area

Cikarang Utara sub-district, Cikarang Selatan sub district and Lemah Abang sub district

14


B to B Cooperation Agreement between

PDAM Bekasi Regency with

PT. Moya Bekasi Jaya

Contract signing: 18 August 2011

Scope of Works

• Stage 1 : Uprating: 2x 20 l/s uprated to be

1x120 l/s 2x20 l/s uprated to be

1x120 l/s Ultrafiltration (UF) 200 l/s

• Stage II WTP construction of500 l/s

• Stage III Rehabilitation andOperating existing WTP:WTP 2X 60 l/sWTP 1x 200 l/s


Capacity : 1.000 l/s

Total Investment : Rp 187 Billion

Cooperation Period : 25 Years

Initial tariff: Rp. 2.150

15

GRESIK REGENCYPT. DEWATA BANGUN TIRTA


Capacity : 200 l/s

Total Investment :Rp 47,5 Billion

Cooperation period : 25 years

Tariff escalation : 7% annually

Bulk water price year 1 :Rp. 2.400

Bulk water price year 2 :Rp. 2.568

PPP Cooperation Agreement between

PDAM Gresik Regency and

PT. Dewata Bangun Tirta

Contract Signing : 25 May 2012

Progress of the Project

Physical construction has been 100% finished and has been commercially operated in 2014 with tariff Rp 2400,-/m³

Scope of Works

Intake construction 200 l/s WTP Construction 200 l/s Resevoir 1.000 m³ Transmission pipeline with diameter of

500mm – 5500 m and Booster pump 700 l/s


16


B to B Cooperation Agreement between

PDAM Intan Banjar with PT. Drupadi Agung Lestari

Contract Signing : 4 October 2012

BANJAR REGENCY AND BANJARBARU MUNICIPALITY

(PDAM INTAN BANJAR)

PT. DRUPADI AGUNG LESTARI

Scope of Works• WTP Construction 2 x 250 l/s

• Reservoir 4.000 m³ and Distribution pump chamber

• Supplementary building

Service AreaLandasan Ulin, Liang Anggang, Gambut, Kertak Hanyar, Tatah Makmur,

Aluh-aluh, Beruntung Baru, Sungai Tabuk

Progress of the Project

• WTP Construction of 2 x 250 l/s, supplementarybuilding

• WTP has been commercially operated for 150 l/s• Tariff: Rp 2.098,- /m3


Capacity : 500 l/s

Total Investment : Rp 71,501 billion

Cooperation period : 25 Years

Bulk water priceRp. 2.098,-

17

PPP PROJECTS IN TENDER PROCESS

No ProjectCapacity

(l/s)

House

Connection

Population

served

(persons)

Total

Investment

(Billion

Rupiah)

1 PPP Project –

Umbulan East

Java

4.000 320.000 1.300.000 2.112

2 PPP Project –Bandar Lampung

500 42.000 210.000 718

TOTAL 4.500 362.000 1.510.000 2.830

18


PPP Scheme: BOT (Built Operate Transfer)Capacity:4.000 liter/detikInvestment Estimate:Rp 2.112.090.210.000Utilization:1,3 million population or 320.000 HCScope of Works:Construction of Intake 4.000 l/sProcurement and raw water transmission installation ND 1000-1800mm for 97 kmConstruction of 2 Pump houses 4000 L/s with its supplementary equipmentOfftake system : 16 offtake units and reservoir in 5 Cities/Regencies

5 Shortlisted Bidders:

1. Consortium of Marubeni Corp., Nippon Koei Co. Ltd., PT Perkom Indah Murni2. Consortium of China Harbour ENG. Co. Ltd., Sound Global Ltd., & PT Manggala Purnama Sakti3. Consortium of Kukdong Eng. & Const. Co. Ltd., PT Brantas Abipraya, PT Grundfos Pompa, PT Pralon4. Consortium of PT Amerta Bumi Capital, PT Bakrieland Development Tbk., Beijing Enterprise Water Group5. Consortium of PT Medco – PT Bangun Cipta Kontraktor

PPP Cooperation

SPAM Umbulan 4000 L/s- GCA : Governor of East Java- Offtaker:1. PDAB Jawa Timur: 100 L/s2. PDAM Kab. Pasuruan: 420 L/s3. PDAM Kota Pasuruan: 110 L/s4. PDAM Kab. Sidoarjo: 1370 L/s5. PDAM Kota Surabaya: 1000 L/s6. PDAM Kab. Gresik: 1000 L/s

Tender Process

Project Location

Kab. Pasuruan, Kota Pasuruan, Kab. Sidoarjo, Kota Surabaya, Kab. Gresik

UMBULAN WATER SUPPLY PROJECTEAST JAVA

19

Tender Stages Date

(A) Publication of Final Request of Proposal (RFP) 30 September 2015

(B) Deadline of Proposal submission 13 November 2015

(C) Confirmation of Bidder Winner 31 December 2015

(D) Signing of Contract Agreement February 2016

(E) Financial Close December 2016

(F) Construction Period December 2016 – December 2018

(G) Commercial Operation December 2018

(H) Concession Period 25 years commenced from

commercial operation

Schedule of Tender Process

UMBULAN WATER SUPPLY PROJECTEAST JAVA

20

Tender Process

BANDAR LAMPUNG WATER SUPPLY PROJECT


PPP Modality:BOT + (Built Operate Transfer +)

Capacity:500 l/s-Investment Estimate: Rp 718 Billion- Cooperation Period : 25 years- Bulk water tariff : Rp 3.000 (2015)

Utilization :42.000 HC

Scope of Works:• Construction of intake 500 L/s• Procurement and Installation of raw water transmission pipe ND 800 mm for 27 km• Construction of 2 WTPs @ 250 L/s with its supplementary equipment

Short Listed Bidders:

1. Abeima and PT Wijaya Karya Persero Tbk2. Acuatico and Mitsubishi Corporation 3. Hyundai Engineering and Construction, Itochu Corporation and PT Potum Mundi Infranusantara4. Manila Water and Great Giant Pineapple

PPP Cooperation

SPAM Bandar Lampung 500 l/s- GCA : Mayor of Bandar Lampung

Project Status:

• Announcement of shortlisted bidders: 31 May 2012• Submission of Guarantee Application Document (GAP): 16 Agustus 2012• VGF Approval by Ministry of Finance has been issued on 7 May 2015• One on one meeting conducted on 1 September 2015• Final RFP issued on 15 September 2015

21

Tender Stages Date

(A) Publication of Final RFP 15 September 2015

(B) Aanwijzing 15 October 2015

(C) Preliminary Process : Room Data Opening 15 September 2015 – 31 October 2015

(D) Last date to submit the date to form initialconsortium

23 November 2015

(E) Closing of proposal document 22 December 2015

(F) Opening of Proposal documents (Envelope I)and commencement of preliminary study ofEnvelope I as stipulated on article 3.16 and 7.3

23 December 2015

(G) Opening of Proposal Documents (Envelope II)and commencement of proposal documentevaluation (technical and financial evaluation)

1 February 2016

(H) Announcement of Preferred Bidders 12 February 2016

Schedule of Tender Process

BANDAR LAMPUNG WATER SUPPLY PROJECT

22

STATUS UPDATE

• VGF Approval for PPP Project of SPAM Umbulan has been granted by the Ministry of Finance by letter of Minister of Finance number S-759/MK.08/2015 dated 29 September 2015 concerning Approval of Viability Gap Fund

• Tender process has been commenced for PPP Project of SPAM Umbulan through the issuance of Final Request for Proposal (RFP) on 30 September 2015

• VGF Approval for PPP Project of SPAM Bandar Lampung has been granted by the Ministry of Finance by letter of Minister of Finance number S-362/MK.08/2015 dated 7 May 2015 concerning Approval of Viability Gap Fund

• Tender process has been also commenced for PPP Project of SPAM Bandar Lampung through the issuance of Final Request for Proposal (RFP) on 15 September 2015

TENDER PROCESS UPDATE

23

READY TO OFFER PPP WATER SUPPLY PROJECTS

No ProjectCapacity

(l/s)

House

Connection

Population

served

(persons)

Total

Investment

(Billion

Rupiah)

Land

Acquisition

1 Pondok Gede,Bekasi City, West Java

300 24.000 120.000 285,5 100%

2 Gresik Regency 2.000 160.000 800.000 1.364,0 Under Process

TOTAL 2.300 184.000 920.000 1.649,5

24

Medan Satria

BekasiUtara

BekasiTimur

BekasiBarat

BekasiSelatan

Rawa Lumbu

Mustikajaya

BantarGebang

Jati Asih

PondokGede

PondokMelati

JatiSampurna

PONDOK GEDE WATER SUPPLY PROJECT BEKASI CITY, WEST JAVA

Background of the Project:1. High population growth

of Bekasi city ( 3% per year). Bekasi city is a prominent satellite city of Jakarta.

2. Service coverage is only 21% in 2013

3. Rapid growth of housings, apartment, and commercial businesses

4. High commitment from the Central Government

Project Location

Service Area

Pondok Gede, Jati Asih of Bekasi City

25


Project Scope

- WTP, capacity: 300 L/s- Reservoir: 3000 m3

- Distribution pipeline 40 km- Estimated Investment IDR 285,5 billion

26


No Document Preparation Progress

1 Readiness Report Completed

2 Pre FS review Ongoing

a. Legal Study Ongoing

b. Technical Study Raw water study has not finished

c. Market Study Pre-Survey RDS

d. Economical Study Ongoing

e. Financial Study Ongoing

f. Risk Study Ongoing

g. PPP Scheme recommendation Completed

h. Environmental and Social Studies Completed

i. Government Support Study Ongoing

3 ENVIRONMENTAL IMPACT ASSESSMENT

Completed

4 PQ Document Completed

Type of modality : Build Operate Transfer

(BOT)

IRR : 15%

Bulk water tariff : Rp 4.800

GCA : Mayor of Bekasi City

Timeline Schedule:Tender: 2016

Contract Signed: 2016Construction: 2017

Operation: 2018

27

PDAM GRESIK REGENCY

Scope of Works1. Construction of intake 2200 L/s2. Construction of WTP 2 x 1000 l/s with its supplementary

building3. Procurement and installation of ME4. Procurement and installation of primary, secondary, and

tertiary distribution pipelines


Capacity : 2000 l/s

Total Investment : Rp 1.364 Billion

Tariff adjustment : 6% annually

Cooperation period : 25 Years

Schedule :Tender: December 2015Financial Close : 2016

Construction : 2017

Service Area :Gresik Kota and Gresik

Utara (Bungah Sub-district)

Status Update

Completion of Feasibility StudyCompletion of PQ and RFP Document Capacity Building on November 2015Completion of tender documents

Gerak Sembayat Dam

28

POTENTIAL PPP PROJECTS IN WATER SECTOR

No ProjectCapacity

(l/s)

House

Connection

Population

served

(persons)

Total

Investment

(Billion

Rupiah)

1 West Semarang 1.050 84.000 420.000 824,0

2 Serang Regency 280 22.400 112.000 103,3

3 Pekanbaru City 2.070 165.600 828.000 1.950,0

4 SPAM Jatigede 3.500 280.000 1.400.000 1.504,0

5 SPAM Karian 6.000 480.000 2.400.000 3.020,0

TOTAL 12.648 1.032.000 5.160.000 7.401,3

29

WEST SEMARANG MUNICIPALITY WATER PROJECT, CENTRAL JAVA

Background of the Project:1. As the capital city of Central Java, Semarang city

has high population growth (3% in 2012)2. Existing service coverage is 61%3. High demand of clean water

Service Area

West Part of Semarang City, CentralJava

Type of modality : Build Operate Transfer (BOT)

Project Type : Solicited

Capacity :1.050 l/s

IRR : 15%

Estimated Investment: Rp 824 billion

Utilization:420.000 population (84.000 HC)

Tariff:Rp 4.000,-

30


Component Proposed design capacity

Intake1,050 L/sec, Jatibarang Dam

(on going project)

Raw water pipeline

2.2 km (dia. 900mm x 2 line)

WTP 1,050 L/sec, Rapid sand filter

Transmission pipeline

WTP – Reservoir 5: 3.1 km (dia. 700mm)



31


Status Update

• Jatibarang Dam is ready to operate;• Raw Water Exploitation License has been issued;• The progress of Land Acquisition is 5%; the rest of the acquisition plan has been

alocated in Local Government Budget;• VGF has been approved principally by the Minister of Finance; hence waiting for the

VGF recommendation letter and the issuance of VGF approval from the Minister of Finance;

• Umbrella agreement of the Availability payment in Local Government Budget has not been strongly stated in the Regulation of the Ministry of Home Affairs No.37/2014

32

SPAM CIBAJA IN SERANG REGENCY

Raw Water Source

Ciujung River

Scope of Works

- WTP of 280 L/s- Construction of Reservoir- Distribution pipelines- Investment: Rp 103,3 Billion- PPP modality : BOT

Service Area

Serang Timur Subdistrict: Cikande, Kibin, Bandung, and Jawilan (CIBAJA).

Status

- Completion of Feasibility Study- Preparation for tender process

33

PEKANBARU WATER SUPPLY

Status Update- Land acquisition will be completed in 2015- GCA will be Government of Pekanbaru Municipal - EIRR of the project : 19,32%

Scope of Works

- WTP: 700 L/s (first stage)- WTP 1370 L/s (second stage)- Intake unit- Raw water Transmission pipeline- Treated water transmission pump and pipeline- Distribution reservoirs (towers)

Timeline Schedule

- Pre Qualification : 2016- Tender process : 2016- Evaluation and award : 2017- Contract signing : 2017

34

JATIGEDE WATER SUPPLY PROJECT

Status Update- Jatigede dam has been completed, water filling is being done and targeted to be finished

on mid 2015- DED of the intake and raw water transmission are being done by West Java Province- Pre FS completion will be done in 2016

Scope of Works

- WTP: 3.500 L/s- Reservoir: 5.000 m3

- Transmission pipeline : 1.600 mm, 7.150 m.

- Investment Rp 1.504 billion

Service Area

- Sumedang Regency- Majalengka Regency- Indramayu Regency- Cirebon Regency- Cirebon Municipality

35

KARIAN WATER SUPPLY PROJECT

Status Update

- Waiting for the dam construction to be finished, construction is planned to be completed in 2019

Scope of Works

- WTP: 6.000 L/s Transmission pipeline : 90 km

IMPLEMENTATION PLAN

Tender Process : 2016 Construction : 2016-2019 Operation : 2020

Service Area

Serang, Maja, Rangkasbitung,Tigaraksa, Kab. Tangerang,

Serpong, Parung, dan Jakarta

SERANG & CILEGON

KARIAN (14.6)

Tigaraksa

P. PANJANG

SERPONG

TANGERANG

6.0

2.5

0.2

Ciu

yah

Tun

nel

9.1

Ciu

jung

Riv

er

(Unit : ㎥/s)

4.0

6.2

R.bitung

Maja 0.1

0.3

1.5

Petir

Pamarayan

Water Treatment Plant

Intake or Tapping Point5.5

1.5

3.2

1.3

Kata Tangeran

g

Kota Tangesel

W. Jakarta

36

TERIMA KASIHTHANK YOU

FOR FURTHER INFORMATION, PLEASE CONTACT:

Mr. Tamin M. Zakaria Amin, MSc, MBAChairman of BPPSPAMJl. Wijaya I No.68 Kebayoran Baru, Jakarta Selatan, Indonesia

Phone : +6221 72789126Fax : +6221 7260520Email : [email protected]