THE WORLD BANK

SEPTEMBER 2013

DisclaimerThe views expressed in this publication are those of the authors and not necessarily those of the Australian Agency for International Development (AusAID)

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Table of Contents

Acknowledgments ............................................................................................................................................................................ iiiAbbreviations and Acronyms ........................................................................................................................................................... vExecutive Summary ........................................................................................................................................................................... vii

1 Overview of the Urban Wastewater Management Sector in Indonesia ........................................................................ 11.1 Background .................................................................................................................................................................................................................................. 11.2 Sanitation Policy ........................................................................................................................................................................................................................ 31.3 Wastewater Management Technology ....................................................................................................................................................................... 51.4 Social Considerations ............................................................................................................................................................................................................. 71.5 Financing........................................................................................................................................................................................................................................ 8 1.6 Institutional Arrangements for Sanitation ................................................................................................................................................................. 9

2 Sector Performance Issues Analysis ..................................................................................................................................... 132.1 Drivers and Barriers to Sanitation in Indonesia ...................................................................................................................................................... 13

2.1.1 Current Drivers to Sanitation Development in Indonesia ................................................................................................................. 132.1.2 Current Barriers to Sanitation Development in Indonesia ................................................................................................................ 14

2.2 Key Issues Impacting on Sanitation Provision in Indonesia ........................................................................................................................... 162.2.1 Political Economy ........................................................................................................................................................................................................ 172.2.2 Financing .......................................................................................................................................................................................................................... 192.2.3 Implementation Capacity ...................................................................................................................................................................................... 202.2.4 Management and Regulation of Sanitation Systems ........................................................................................................................... 212.2.5 The Interface between Community-managed and Institutionally-managed Services .................................................. 232.2.6 Septage Management ............................................................................................................................................................................................. 24

3 Recommendations ................................................................................................................................................................... 293.1 Policy Recommendations .................................................................................................................................................................................................... 303.2 Institutional Recommendations ...................................................................................................................................................................................... 313.3 Technology Recommendations ...................................................................................................................................................................................... 323.4 People Recommendations ................................................................................................................................................................................................. 343.5 Financing Recommendations ........................................................................................................................................................................................... 35

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URBAN SANITATION REVIEW: INDONESIA COUNTRY STUDY

ANNEXES .............................................................................................................................................................................................. 37Annex 1: Sector Performance in Indonesia ............................................................................................................................................................................ 39Annex 2 City Case Studies ............................................................................................................................................................................................................. 41

Annex 2.1 -- Case Study: Banjarmasin Municipality ............................................................................................................................................ 43Annex 2.2 -- Case Study: Medan Municipality ........................................................................................................................................................ 45Annex 2.3 -- Case Study: Surakarta Municipality ................................................................................................................................................... 47Annex 2.4 -- Case Study: Palembang Municipality .............................................................................................................................................. 50

REFERENCES ........................................................................................................................................................................................ 51

BOXESBox 2.1 Comparison of Indonesian Experience with that of Selected Latin American Countries ............................................ 16Box 2.2 Political Economy of Sanitation in Indonesia ........................................................................................................................................... 18Box 2.3 Investment in Indonesias Water Sector ....................................................................................................................................................... 19Box 2.4 Decentralized Sewerage Systems in Malang ........................................................................................................................................... 25

FIGURESFigure 1: Wastewater and Septage Flow in Urban Indonesia ............................................................................................................................. viiiFigure 1.1: History of Sanitation Development in Indonesia .................................................................................................................................. 2Figure 1.2: Individual, Community and Institutional-based Sanitation Approaches ............................................................................... 4Figure 1.3: Wastewater and Septage Flow in Urban Indonesia ............................................................................................................................. 6Figure 1.4: Total National Government Sanitation Budget (2006-2012) .......................................................................................................... 8Figure 2.1: Weaknesses in Local Government Sanitation Service Delivery .................................................................................................... 17Figure 2.2: Proposed Arrangements for Local Governance of Sanitation Systems ................................................................................... 22

TABLESTable 1.1: Sewerage Systems in Indonesia ....................................................................................................................................................................... 2Table 1.2: Sewerage Coverage in Asia ................................................................................................................................................................................. 3Ta