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Political-Economic Assessment Jakarta Penjaringan HCC Jakarta Program
Political-Economic Assessment
Jakarta Penjaringan
HCC Jakarta Program
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Table of Contents
1 Executive Summary 4
2 Introduction 1
2.1 Background 1
2.2 Objectives 2
2.3 Research Area 2
2.4 Rationale 7
2.5 Research Methodology 10
3 Problem Driven Analysis of the two selected themes 11
3.1 Affordable Housing and Land Tenure 11
3.2 Access to Clean Water 17
4 City Analysis: North Jakarta / Penjaringan Level Analysis 23
4.1 Plans, Strategies and On-going Programs in North Jakarta / Penjaringan 23
4.2 KOTAKU – Kota Tanpa Kumuh / Cities without Slum Program 32
4.3 Driving Factors of Reform 35
5 Sector Analysis 36
5.1 Affordable Housing and Land Tenure 36
5.2 Access to Clean Water 45
6 Conclusions 56
Annexes: 1
Annex 1: List of Reference Documents 2
Annex 2: Key Informant Interviews (KII) 1
Table of Tables Table 1-1: Hierarchy of Regulations Related to Slum Rehabilitation ............................................................ 8 Table 2-1: Key Stakeholders in Slum Improvement and Housing Provision ............................................... 12 Table 2-2: Jakarta Housing Improvement Programs Funded by Donors..................................................... 16 Table 2-3: Roles of Key Stakeholders in Water Supply................................................................................ 18 Table 2-4: Jakarta Water Supply Improvement Programs Funded by Donors ............................................ 21 Table 3-1: North Jakarta Development Guidelines Based on Jakarta Spatial Plan (RTRW) ........................ 25 Table 3-2: Water Supply Infrastructure Development Direction and Criteria ............................................ 29 Table 3-3: Overview of Water and Housing Policy ...................................................................................... 30 Table 3-4: Action Plan Directions for Housing and Water Sector ............................................................... 34 Table 4-1: History of Slum Area Improvement Programs in DKI Jakarta ..................................................... 36 Table 4-2: Key Stakeholders in Slum Improvement and Housing Provision ............................................... 39 Table 4-3: Multi-Source Funding including Private Sector Financing .......................................................... 42 Table 4-4: Drinking Water Needs Greater Jakarta Area in 2010, 2030 and 2050 ....................................... 46 Table 4-5: Drink Water Source Distribution over Households .................................................................... 46 Table 4-6: History of PD PAM Jaya .............................................................................................................. 48 Table 4-7: Roles of Key Stakeholders in Water Supply................................................................................ 50 Table 4-8: Drinking Water Tariffs PAM Jaya ................................................................................................ 53
Table of Figures Figure 1-1: Map of RW 17 in Penjaringan....................................................................................................... 2 Figure 1-2: Settlement Conditions in RW 17 .................................................................................................. 3 Figure 1-3: Illegal Settlements in RW 17 Penjaringan .................................................................................... 4 Figure 1-4: Muara Baru Flats in Penjaringan .................................................................................................. 5 Figure 1-5 : Penjaringan Residents Buy Water to Meet Daily Needs .............................................................. 6 Figure 1-6: Slum Problem Tree Diagram ........................................................................................................ 7 Figure 1-7: Slum Area Development Graph of DKI Jakarta 2008-2013 .......................................................... 8 Figure 1-8: Map of Jakarta Slum RWs in 2013 ................................................................................................ 9 Figure 1-9: Diagram of Political Economic Assessment Approach ............................................................... 10 Figure 2-1: Housing Development Program in Muara Baru, Penjaringan .................................................... 12 Figure 2-2: Institutional Organizational Structure RW 17 Penjaringan 2014-2017 ...................................... 15 Figure 2-3: Relationship between Water Supply Actors in DKI Jakarta ........................................................ 18 Figure 2-4: Institutional Organizational Structure RW 17 Penjaringan 2014-2017 ...................................... 20 Figure 3-1: Spatial Structure Plan of North Jakarta City ............................................................................... 24 Figure 3-2: Spatial Pattern Plan of North Jakarta City .................................................................................. 24 Figure 3-3: Zoning Map Penjaringan, North Jakarta ..................................................................................... 27 Figure 3-4: Land Use Plan Map of RW 17 Penjaringan ................................................................................. 28 Figure 3-5: Reclamation Concept Plan in Muara Baru ................................................................................. 31 Figure 4-1: Water Supply Coverage Area Map Jakarta 2016 ........................................................................ 47 Figure 4-2: Bulk Water Supply System Jakarta ............................................................................................. 47 Figure 4-3: Deep Groundwater Abstraction 1879-2007 (million m³/year)................................................... 48 Figure 4-4: Relationship between Water Supply Actors in DKI Jakarta ........................................................ 50
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Glossary of Abbreviations
ADB: Asia Development Bank
BAPPEDA: Regional Development Planning agency
BAPPENAS: National Development Planning agency
BoP: Base of economic Pyramid
BPN: National Land Agency
BPS: Indonesia Statistic Agency
CSR: Corporate Social Responsibility
DKI: Special Capital Region
DPRD: Jakarta House of Representatives
HCC: Human Cities Coalition
HDI: Human Development Index
IDB: Islamic Development Bank
IFC: International Finance Corporation
Jabodetabekpunjur: Jakarta, Bogor, Depok, Tangerang, Bekasi, Puncak Cianjur
JCDS: Jakarta Coastal Defense Strategy
JEDI: Jakarta Emergency Dredging Initiative
JICA: Japan International Cooperation Agency
KJP: Jakarta Smart Card
Kotaku: Cities Without Slums
KTP: Identity Card
LBH: Legal Aid Foundation
M4P: Making Markets Work for the Poor
MBR: Low Income Community
MSMEs: Micro Small Medium Enterprises
MURIA: Marunda Urban Farming In Action
NCICD: National Capital Integrated Coastal Development
NSUP: National Slum Upgrading Program
PKL: Street Vendor
PPP: Public Private Partnership
RPJMD: Regional Middle-Term Development Plan
RTRW: Regional Spatial Plan
UMP: Provincial Minimum Wage
UPC: Urban Poor Consortium
WB: World Bank
1 Executive Summary
1. Introduction
Background
The fast growing urban area of Jakarta needs better urban management. To prevent slum development, the city
needs to develop an inclusive urban strategy to improve slums. Slums in the coastal area of Jakarta needs
immediate attention because it is prone to flooding, land subsidence, high poverty, high residential density,
environmental degradation, slums, shortage of water supply, minimal environmental infrastructure, minimal
health and education facilities, and lack of legal certainty on land ownership. HCC intends to contribute to an
inclusive urban development.
Objectives
The objectives of the political-economic assessment are:
1. Provide an overview of the political-economic conditions of the selected two themes affordable housing and
land tenure and access to clean water
2. Provide an understanding of the opportunities and constraints of economic policy as the basis for inclusive
market system solutions, taking into account the views of the government and private sector;
Location coverage
Jakarta in general, with a focus on RW 17 in Kelurahan Penjaringan which has an area of 176 ha, of which 40.7 ha
has been identified as slums. More than 30’000 people live in this area with a high population density, a bad
environmental quality, poor sanitation, bad drainage, a lack of clean water, a lack of wastewater and waste
treatment, under settlement conditions dominated by non-permanent houses build on illegal land. Meanwhile
this area has a high economic potential because it is adjacent to an industrial area, factories, warehouses and
fishing port PPS Nizam Zachman. Most of the people living in this region work in the informal sector (labor,
fishermen, traders, drivers) with low and uncertain incomes. The political situation in the region is influenced by
government policies relating to community services subsidies, policies relating to the eviction and relocation,
policies relating to the land administration, policies relating to right of living for the poor, policies relating to right
of access to clean water and campaign promises of the newly elected Governor of DKI Jakarta.
Research methodology
The political-economic assessment is prepared through a stepped analysis, starting with a problem driven
analysis related to slum development in DKI Jakarta province, followed by a ‘city-level analysis’ zooming in to
policies and plans for North Jakarta municipality and Kelurahan Penjaringan to identify drivers of change, and
ending with a sector analysis particularly for ‘affordable housing and land tenure’ and ‘access to clean water’.
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2. Problem Driven Analysis of the two selected themes
Problem Analyses for Affordable Housing and Land Tenure
Many houses in the densely populated coastal area of North Jakarta are situated in flood-prone locations. The
15’000 slum dwellers in Penjaringan mostly live in makeshift and semi-permanent houses with poor construction
quality, and built without building permits. The living conditions in the slums are affected by inadequate water
supply, sanitation and drainage.
Scarcity of vacant land is the main cause for soaring land prices beyond the affordability of the poor. The pressure
on land comes not only from private business investment, but also from public development schemes. High land
prices are a major bottleneck for low-cost housing schemes.
In most slums occupation of land and use of houses is controlled by informal landlords. In most cases people do
not like to move from locations on which they depend for livelihood and jobs. Forced evacuation and
resettlement are socially, economically and politically sensitive, especially because only people with Jakarta
citizen cards are eligible for resettlement and financial compensation.
Also donors exercise great caution, and avert to become part of conflicts that could tarnish their reputations.
Private real estate developers and commercial banks are reluctant to invest in low-cost housing, although many
apartment units have been built in the middle-class sector. National Government has Poverty Reduction Policies
and Slum Improvement Programs in place, of which Kotaku is the most prominent running program.
Problem Analyses for Access to Clean Water
Access to drinking water is essential for human life and vital for economic productivity. Due to bulk water
shortage the existing piped networks of North Jakarta cannot deliver sufficient water. This condition will continue
for several years before additional bulk water supply from the Jatiluhur and Karian reservoirs will be available.
Even if bulk water would become abundant, according to the regulations only legal land occupants can apply for
house connections.
The piped water tariffs in Jakarta are among the highest of Indonesia. For coastal slum dwellers in locations
without piped water supply, the alternative option is water delivered by jerry can, which is even costlier per cubic
meter than piped water. Poor people are left no choice but spending a large portion of their income on buying
water. Private investors are reluctant, if locations have no access to clean water, or if water is too costly.
Rivers and streams in Jakarta are severely polluted by domestic and industrial waste.
Poor water quality makes river water useless for human consumption or domestic use.
Groundwater over-abstraction has not only caused groundwater tables to drop sharply, but also caused salt
water intrusion and land subsidence that contributes indirectly to flooding.
Access to clean water is a basic human right according to the Indonesian Constitution of 1945, and the UN
Millennium Development Goals. Law No. 7, 2004 on Integrated Water Resource Management which permitted
privatization of water supply, was abolished in February 2015. In 1997 PAM issued 25-year concessions for 2
private water supply companies, which aimed at streamlining the management and accelerating the extension
of water distribution networks, including reduction of water leakage. However, it was financially more attractive
for the private partners to pay sanctions, than to address the water leakage.
3. City Level Analysis: Analysis of North Jakarta / Penjaringan
The following development policies and plans have been used for the North Jakarta city level analysis:
• Spatial Plan (RTRW) of DKI Jakarta 2010-2030
• Detailed Spatial Plan (RDTR) and Zoning Regulations
• Settlement Environment Restructuring Plan (RPLP) Penjaringan (2016-2020)
• Campaign Promises of newly elected Governor of DKI Jakarta
• Low Cost Housing Apartments (Flats) in Muara Baru Reclamation Plan
Table 1-1: Analysis of Slum Development Policies and Plans
Source / Document Housing and Settlements Dev. Directions Water Sector Development Directions
Spatial Plan (RTRW) of DKI
Jakarta 2010-2030
• Slum improvement through Tribina program
• Settlement rehabilitation in heavy slum areas
• Apartment (flat) construction of in slums areas
• Redevelopment of riverbank areas
• Expansion of water supply network
• Restrictions on ground water abstraction
• Development of alternative bulk water sources
Detailed Spatial Plan (RDTR)
and Zoning Regulations
• Low-cost apartment (flat) construction;
• Creation of a secure green residential area with
complete integrated infrastructure
• Establishment of public housing flats.
• Development of alternative bulk water sources
from among others Karian and Ciawi reservoirs,
Ciliwung river, West Flood Canal
• Enhancement and maintenance of reservoir
capacities of Pluit and Muara Baru reservoirs
• Increase the capacity of WTP Muara Karang
• Installation of new primary water supply pipe
Settlement Environment
Restructuring Plan (RPLP)
Penjaringan (2016-2020)
• Area scale housing redevelopment program
(‘Kampung Deret’)
• Vertical housing development
• Healthy lifestyle socialization
• Installation of clean water points (hydrants) in
dense settlement areas;
• Expand water supply network
• Develop bulk water transmission pipeline
• Improvement of primary water supply pipes
• Add drink water tanks in dense settlements
• Create CBO managed water supply distribution
networks with tanks to homes
Campaign Promises of newly
elected Governor of DKI
Jakarta
• Cheap credit and 0% Down Payment housing
program based on community saving
• Kampong improvement
• Rental housing rehabilitation incentives
• Development of application-based rental house
information system
• Easy investment procedures low cost housing
• Land banking
• Speed up water supply connections process
• Expand scope of free residential water supply
connections
• 80% water supply subsidy for the poor
• Increase bulk water production and treatment
• Improve water supply management for residents
Low Cost Housing
Apartments (Flats) in Muara
Baru Reclamation Plan
• New land reclaimed within new sea dikes
• Construction of low cost apartments (flat) for
fishermen affected by dike construction
• Total area of 10-12 ha, consisting green areas,
playgrounds of 12 towers comprising shops and
3’024 apartment units.
Bottlenecks to realize the above plans are, among others:
• Lack of synchronization between the planning documents
• Planning has not been integrated across sectors,
• Inconsistencies between plans and implementation,
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• Lack of coordination and participation between stakeholders in implementing the plans
• Lack of trust among the stakeholders
• Weak law enforcement related to space utilization monitoring
• Potential for social conflicts when plans are implemented.
Drivers of change and incentives for change
1. Grand design preparation for Kelurahan Penjaringan by synchronization of existing plans and programs
through stakeholder participation;
2. Increase the role of the private sector in housing improvement;
3. Monitoring control and law enforcement on land tenure;
4. Capacity building for institutional, finance and human resources;
5. Increased community participation in planning, implementation, monitoring and evaluation;
6. Incentives for the development of innovation for access to clean water and affordable housing for both
private sector and community. Most common incentives are subsidies to implement innovations, but it can
also exist of easy permit procedures, tax reduction, etc.
4. Sector Analysis
4.1 Priorities of Sector Analysis
Based on the outcomes of the preliminary Community Needs Assessment, the following priority themes have
been selected, to be analyzed in the Sector Analyses:
• Affordable Housing and Land Tenure
• Access to Clean Water
4.2 Affordable Housing and Land Tenure
Profile
• History of Settlement Improvement Programs: Settlement improvement programs have changed along with
changes in community conditions and based on learning’s. Undertaken programs include: Kampong
Improvement / Muhammad Husni Thamrin (MTH), P3KT, P2BPK, P2KP, GNPSR, ‘Rusunawa / Rusunami’ Flats,
NUSSP Phase I and II, Sapola, PLP2K-BK, PNPM Mandiri, P2BPK, ‘Kampung Deret’ Program, Million Houses
Program and the Kotaku Program.
• Beneficiaries: The community (increasing access to housing and infrastructure, improved quality of living
environment, decrease in slums, increased self-reliance); government (collaboration between stakeholders
established, clean, healthy and orderly city), private sector (profits from infrastructure provision).
• Improvement concepts: Slum rehabilitation on legal land through environment rehabilitation, and relocation
of residents on illegal land to more decent housing as rental flats.
The main stakeholders
• Main actors. The main actors are:
• The central government (Bappenas, the Ministries of Public Works, Finance, Home Affairs, Land
Administration and Spatial Planning)
• The DKI Jakarta provincial government (Bappeda, Settlement Agency, Spatial Planning, Housing and
Building, Land Administration)
• North Jakarta City Government (Sub-Agencies, Head of Kelurahan Penjaringan, Head of RW 17, Heads of 23
RTs in the area)
• Private sector includes Real Estate Indonesia (REI), National state owned enterprises, Jakarta owned
enterprises, Perumnas, Private Banks.
• Donors include: Islamic Development Bank (IDB), Asian Development Bank (ADB), and World Bank (WB).
• Community includes the Urban Poor Consortium (UPC), the Urban Poor Network (JRMK)
• Cooperation among stakeholders: Participation among stakeholders is low, coordination and synchronization
between sectors is weak, implementation is sectoral, ad-hoc and not integrated.
• Decision-making: Decision-making is still sectoral, the community is not fully involved in the decision making,
decision are not supported by valid data and analysis.
Financing
• Sources of financing, Financing slum rehabilitation, including the provision of affordable housing for low
income people is funded by the government (APBN, APBD), donors (grants / loans), private sector (CSR funds,
PPP, private banks, cooperatives) and community.
• Subsidies: Subsidies for slum improvement are provided by the government in the form of investment funds,
housing credits for low-income groups, housing down payment support, and home improvement grants.
Related to the balanced housing principle, the government provides easy permit services and tax breaks for
developers in the supply of housing for low-income people.
Corruption
• Activities vulnerable to corruption during the implementation stage are: tendering activities, compensation
for residents affected during land acquisition and resettlement and channeling funds / subsidies.
• The following steps can be undertaken to minimize corruption: tender activities must be made transparent,
auditing of procurement procedures, community involvement in the implementation of the program,
reporting acts of corruption to competent agencies (KPK, police, and court).
Bottlenecks
• Main obstacles in the implementation of slum improvement are: (1) No integration and synchronization of
sectors, programs and stakeholders; (2) Limited subsidies; (3) Many land use violations; (4) Land shortage; (5)
Settlement on illegal land; (6) No regulations and guidelines for settlement improvement at by the Jakarta
government; (7) No long-term policy platform for slum improvement available; (8) Lack of institutional
capacity for housing and settlement improvement; (9) No public accessible slum information system available;
(10) Program implementation is still sectoral, ad-hoc, and not integrated across sectors; (11) Limited
government funding and low utilization of multi-source funding.
• Main obstacles in the implementation of affordable housing and land tenure are: (1) Inadequate housing
sector support policies; (2) Sub-optimal housing construction coordination and institutions; (3) Sub-optimal
control by the government on land and housing prices; (4) Sub-optimal process efficiency and high cost of
building permits; (5) Limited land and high land and building material prices for housing construction; (6) Sub-
optimal supervision and control in housing development; (7) High backlog in housing; (8) Outdated housing
construction technology; (9) Limited funds availability; (9) Corruption.
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Potential for Reform (Drivers and Incentives)
• Slum rehabilitation programs can be improved through:
1. Synchronizing existing plans in a participatory manner
2. Preparation of an integrated master plan for slum improvement
3. Law enforcement for illegal housing and illegal land use
4. Implementation of land banking
5. Land consolidation
6. Transparency of slum improvement process.
7. Capacity building of institutions, implementation human resources and settlement managers
(government, NGOs/CBOs, community) through training, mentoring, coaching / technical assistance.
8. Management information system shared by the stakeholders and integrated between national and
regional information systems and regularly updated.
9. Planning control through monitoring of the planning and programming
10. Regular supervision in the implementation of slum improvement
• Potential changes to the provision of housing for low income people and land tenure include:
1. Land banking to keep land prices affordable
2. Support private sector to participate actively in realizing a fair housing distribution
3. Expanding housing support for low income community
4. Land administration reform as solution to the inequality of land
5. Revise laws that hamper the access to land for the poor (BoP).
4.3 Access to Clean Water
Profile
• Drinking water needs: Drinking water needs for DKI Jakarta were 27.6 m³/s in 2010 and will increase to 42.4
m³/s in 2050.
• Water sources: Used water sources are piped water supply by PD PAM Jaya (36.3%), retailed tap water
through water kiosks (2.8%), wells with pumps (57.1%), protected dug wells (3%), unprotected dug wells (0,
7%).
• Coverage area piped water supply: The coastal areas and west and east borders of North Jakarta is not served
yet by the water supply system.
• Groundwater: Over-abstraction of groundwater causes draw-downs of 2.5 m/year in Jakarta. Brackish
groundwater has already intruded up to 5 km from the coastline. The average land subsidence in Jakarta 5
cm/year, while highest subsidence reaches 18 cm/year in the Marina beach. If land subsidence continues, 75%
of North Jakarta would be below sea level in 2025. Effects of land subsidence for slum dwellers are higher and
longer inundations after heavy rains and a higher risk of tidal floods.
• The history of piped water supply: Piped water supply is the responsibility of PD PAM Jaya, who has
subcontracted the service through a Cooperation Agreement of 1998 to Palyja for the western region of DKI
Jakarta and to Aetra for the eastern region. On 18 February 2015, Law No. 7 of 2004 on Water Resources
Management was canceled, which returned the responsibility of drinking water management to the
government. Therefore the cooperation contract with the two operators is currently being re-examined.
Main stakeholders
• Main actors. The main actors involved in water supply are:
• The central government (Directorate General of Water Resources at the Ministry of Public Works, Deputy
of Infrastructure and Regional Development at the Ministry for Economic Coordination, the Research
Center for Natural Resources Development, Perum Jasa Tirta II, Deputy of Infrastructures at Bappenas,
Groundwater and Bulk Water Center at Directorate General of Water Resources, Ministry of Finance,
Ministry of Health, Ministry of Home Affairs, Geological Agency, Ministry of Energy and Mineral
Resources)
• Provincial Government of DKI Jakarta (Water Management Department, Regulator Agency for Water
Supply Services, PD PAM Jaya)
• North Jakarta government (Support Agency of Water Management Department)
• Private sector (PT. Palyja, PT. Aetra, water kiosks, bottled water traders)
• NGOs (Mercy crops, IUWASH, KARINA, Unicef)
• Management of water services: The urban poor in North Jakarta face a water crisis. Only 70% of the residents
in Penjaringan are connected to the water supply network, and the water is often not flowing in the network,
because there is not sufficient bulk water in Jakarta. As a result, people have to buy water from jerry cans at
the water kiosk, which adds to the burden of the poor, who have to buy the water from handcart distributors
for Rp. 3000 per jerry can, if they don’t want to get the water themselves at the water kiosk for Rp. 3000 per
jerry can.
Financing
• Sources of funding: Funding for water supply services is derived from the government budget (APBN and
APBD), operational income of Palyja and Aetra, and loans and grants from donors. To improve the drinking
water supply service quality, the Government provides facilities and incentives to improve performance.
Policies include debt restructuring programs, government guarantees and support for PPP drinking water
projects.
• Subsidy services: The government provides the following subsidies to provide quality drinking water at an
affordable price:
1. Cross-subsidies between different economic level of customers;
2. Financing of water supply infrastructure;
3. Subsidized tariffs for poor households;
Corruption
• One of the characters of privatization is the lack of transparency and accountability. The cooperation contracts
between PAM Jaya and the private water supply operators have never been opened to the public.
Bottlenecks
Factors that cause the water crisis include:
1. Limited availability and supply of bulk water: Limited bulk water supply is one of the main problems
experienced by PAM Jaya. PAM Jaya now supplies only 54% of the total need of about 547.7 million m³/year.
Until now, no additional bulk water source is available yet.
2. Increasing water demand: The water supply provision is not able to follow the fast growing demand caused
by growing population and economy.
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3. Low pipe network coverage: Although PD PAM Jaya cooperates with two private partners, there is still a low
service coverage, high rates of water losses, and low service delivery.
4. Privatization of water services: Privatization of the water supply services has been problematic since the
start of the cooperation agreement between PAM Jaya and the two private operators (Palyja and Aetra).
These problems include: accumulated debt of PAM Jaya, bad water service, high water tariffs, too much
profit oriented, lack of accountability that encourages corruption, private sector unwilling to expand the
water supply network.
5. High water tariffs: During the privatization period the water service tariffs increased by tenfold. Finally the
government forced a policy to discontinue automatic tariff adjustments.
6. Poor performance: Customers often don’t receive water as a result of the lack of bulk water. Water losses
are still as high as 44%. The higher the water losses, the more inefficient the water service performance.
7. Poor bulk water quality: The high water treatment cost contributes to the high production cost.
Potential for Reform (Drivers and Incentives)
Possible improvements to overcome the water crisis are:
1. Build water treatment plants: PAM Jaya aims to build four water treatment plants to meet the water needs
of Jakarta. These treatment plants could be constructed through a PPP arrangement.
2. Return the water supply management from the private sector to PD PAM Jaya: Jakarta now considers
returning the public water supply services in from private hands to PD PAM Jaya. PAM Jaya is a local
government company that has the mandate to provide water services. This ‘remunicipalization’ can be
implemented, by paying compensation for the legal consequences of the private damages, or by use Article
49.3 of the Concession Agreement concerning the termination of cooperation due to changes in legislation.
3. Secure existing bulk water sources and develop new water sources: The Ministry of Public Works and
Housing has started the construction of a transmission pipeline from the Jatiluhur reservoir to Jakarta, while
PAM Jaya prepares water Treatment Facilities. These two measures will increase the bulk water sources and
water supply security. Considering the high investments involved in this infrastructure, the private sector
could participate through a PPP arrangement.
4. Reduce water losses from the piped system: Water losses reduction programs include several steps, such
as replacing the customer's water meters, rehabilitating pipelines and to detect leaks in the primary
distribution pipes, and disconnect not paying customers (bad debts). Currently reduction of water losses is
part of the service contract of Palyja. Renegotiation of incentives/disincentives on water loss reduction with
Palyja could improve the conditions.
5. Replication of the Master-meter program: The Master-meter program is a program in which a CBO is
launched in a slum area for planning, constructing and operation of a water distribution network on illegal
land, which is supplied by a master water meter on legal land. This is a solution to the dilemma that the
water supply companies must supply drinking water to the whole community, but cannot make connections
on illegal land. The Master-meter program has been implemented successfully as pilot project and is ready
for replication, in which the private partners PT Palyja and PT Aetra could participate.
Development of alternative water sources: Innovative alternative water sources with potential to add water
supply to Kelurahan Penjaringan are Reverse Osmosis (RO), Rainwater Harvesting (RH), and Mobile Water
Treatment Plants (MWTP). Both water treatment through Reverse Osmosis (RO), and construction of Rainwater
Harvesting (RH) installations are activities interesting for the private sector.
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2 Introduction
2.1 Background
• The fast growing urban area of Jakarta needs better urban management: The urban area is expanding rapidly,
if properly managed the economic growth will rise sharply and prosperity will occur for all. But if the city is not
managed properly, then a decline in the social, economic and environmental conditions will occur. Rapid
urbanization in urban areas is a major challenge for developing countries. Urban areas are faced with
challenges and obstacles such as the gap between demand and supply in basic infrastructure, poverty, social
inequality, environmental pollution, traffic congestion, unemployment, crime, difficulty to find shelter,
declining trust of community and private sector in the government, insufficiently planned development, and
budget constraints.
• Cities need to develop an inclusive urban strategy: Regardless of the challenges and obstacles, the city is
expected to sustainable development, while fulfilling the needs of better living standards, and optimal health
and education services. Therefore, the city should develop an inclusive urban strategy and provide a platform
to the poor to improve their conditions, not just to survive. The basic principles should be strengthened, while
innovation and entrepreneurship should be developed to support long-term economic progress and
sustainable development.
• HCC intends to contribute to an inclusive urban development: The Human Cities Coalition (HCC), which aims
to build an inclusive urban with a human face, is initiated by the private sector. The approach used is based on
market demand, with the participation of multi-stakeholders (government, private sector, and community),
and the community as beneficiary. The objective of this program is to anticipate the impact of development
effectively, provide social and economic benefits for society and the environment in a sustainable manner.
• Jakarta is the capital city of Indonesia and the engine of national economic growth: The city has grown from
500’000 in 1930 for urban agglomerations Jakarta to 30 million by 2016. The population growth led to the
shortage of space, water and jobs. In addition, more waste is generated, more environmental pollution occurs
and slums are more frequently encountered. Government interventions are reactions on events, rather than
directing development based on a long-term vision. Interventions are more focused on short-term measures,
and less aiming at sustainable solutions that provide long-term benefits.
• Slums in Jakarta coastal areas need improvement: In the flood prone coastal areas of Jakarta, more than 1.2
million people live in urban slum areas with dense housing conditions, lack of water supply and sanitation,
inadequate health and education facilities, and lack of legal certainty and security. Their main concern is
shelter and livelihood. Their numbers are increasing yearly, and as more people migrate to Jakarta, more
people 'illegally' occupy the flood areas and river banks. Slum areas often become an obstacle for the
government in public infrastructure improvement, because related relocation and resettlement are politically
very sensitive issues.
2.2 Objectives
This assessment is part of a series of four separate assessments, which together form the basis for the selection
and development of an inclusive business case for Penjaringan in North Jakarta. The other three assessments are:
(1) a community needs assessment, (2) an innovation assessment, and (3) a finance assessment.
The objectives of the political-economic assessment are:
• Provide an overview of the political-economic conditions of the selected two themes: ‘affordable housing and
land tenure’ and ‘access to clean water’;
• Provide an understanding of the opportunities and constraints of economic policy as the basis for inclusive
market system solutions, taking into account the views of the government and private sector;
2.3 Research Area
Area Boundaries: Through literature study and consultations with development actors, during the first phase,
Kelurahan Penjaringan, RW 017, in the coastal area of northern Jakarta has been selected as potential location
for the development of an inclusive HCC Business Case Scenario. The overall neighborhood (RW 017) measures
176.5 ha, of which 40.7 hectares have been classified as slum area. The location includes the Nizam Zachman fish
harbor, industrial estates, factories, warehouses and sea dike construction of NCICD, and is adjacent to the tourist
area of Sunda Kelapa port.
Figure 2-1: Map of RW 17 in Penjaringan
Pluit Lake
Muara Karang Power
Station
Sunda Kelapa Port
Nizzam Zahman
Fishing Port Muara Angke Fishing Port
3
Environmental conditions and infrastructure services: More than 30’000 people live in this area with a high
population density, a bad environmental quality, poor sanitation, bad drainage, a lack of clean water, a lack of
wastewater treatment and waste management. Housing conditions are poor and dominated by non-permanent
houses, 37% of the community occupy illegal land, and 53% are renting their housing. Access to basic
infrastructure services is limited. For clean water 80% depend on purchased water from private vendors. Not all
toilets are connected to wastewater treatment systems or septic tanks. Not all families have toilets, but in 6 RTs
communal toilet are available. The drainage network is often not covered, draining also grey water and
overflowing frequently on the road. About 18 of the 23 RTs are prone to flooding. Not all solid waste is collected
and piles of uncollected waste make the environment dirty and smelly. The shelters, cramped together in the
small space, are a hazard for fires.
Figure 2-2: Settlement Conditions in RW 17
Economic Conditions: The location of RW 17 adjacent to industrial areas, factories, companies, warehouses, and
fishing port Nizam Zachman, attraction many immigrants to settle in Kelurahan Penjaringan. Most of the
population works in the informal sector, such as factory workers, fishermen, traders, and drivers, with an instable
income or with a minimum wage. Instable incomes, that are often insufficient for daily needs, are a major
challenge for the community.
Political Conditions
Policies related to government services in Jakarta: In Jakarta every citizen must have a Jakarta identity card (KTP)
to prove that they are entitled to government services in health, education, transportation, basic needs. In reality
not all people living in RW 17 have a Jakarta ID card. As a result they have no right to get free basic services, and
have to pay to get health care and education.
Policies related to eviction and relocation: Until today the community lives in fear for eviction and relocation.
Various government programs, such as flood prevention programs and sea wall construction, include community
relocation. People fear the relocation will reduce their livelihood and income. In the relocation process residents
with Jakarta identity cards will get compensation, and the facility of rental flats (Rusunawa).
Policies related to legality of land: In slum improvement, land acquisition for settlement areas is done through:
• Legal land, Improvement of slum settlements on legal land is done through land consolidation, which is
regulated in BPN regulation No. 4 of 1991 on Land Consolidation. This policy provides the following benefits:
optimal land utilization, increased efficiency and productivity of land use, encouragement of community
participation in development, and consolidation of legal security of land ownership.
• Illegal land, Improvement of slum settlements on illegal land is done through:
• House owners on Illegal land: Resolving is done through land granting. Land granting is regulated in Law
No.23 of 2014 on Regional Government, Article 298, paragraph 5, and in Law No. 17 of 2013 on Civil
Society Organizations, Article 12, paragraph 2, and in Government Regulation No.27 of 2014 on
Management of State Assets, Article 68-71. Land grants may be awarded to legal entities (persons,
institutions, and community organizations).
• House renters on illegal land: Resolving is regulated in Law 2 of 2012 on Land Procurement for
Development for Public Interest, Article 10 letter O. The regulation mentions that land for public
purposes can be used for urban slum improvement and land consolidation, and rental housing for low-
income communities.
The government of DKI Jakarta implements the following programs associated with slum settlements on illegal
land: construction of low-cost rental flats (Rusunawa), building control through demolition of illegal buildings and
community relocation (resettlement). For settlement on legal land the following programs are implemented:
construction of owned flats (Rusunami), simple healthy house (RSS) construction, Kampung improvement, land
consolidation, and relocation of residents.
Figure 2-3: Illegal Settlements in RW 17 Penjaringan
5
Policies related to the right of shelter for the urban poor: Development of housing and settlement in particular
for Low Income Communities (BoP) continues to provide optimum services to the people of Jakarta. Rental flats
in Jakarta are, besides provided by the Provincial Government of Jakarta, also provided by the Central
Government, through the Ministry of Community Housing and Real Estates. Strategies conducted for Rusunawa
(rental flats) development are:
• Land allocation for large scale Rusunawa construction in the suburbs, which can be served by infrastructures,
facilities, and utilities;
• Utilize unused land owned by local governments and government enterprises;
• Rehabilitation/redevelopment of mixed use flats (commercial and residential use) in areas that are structurally
unfit for habitation and have high economic value, can improve the welfare and economic activities of the
residents and create employment;
• Construction without evictions
• Involve private sector participation (public Private Partnership / PPP),
• Remind and enforce developers who have the obligation to build Rusunawa in SIPPT
• Stimulate and condition developers and community to actively participate in Rusunawa/Rusunami
development by providing incentives.
• Prospective residents for rental flats (Rusunawa) are DKI Jakarta residents directly affected by the flat
construction, residents affected by the urban infrastructure construction, and residents of heavy slum areas
in the vicinity of the flat construction and the low-income community (BoP) who do not have their own homes
and meet the administrative requirements.
The DKI Jakarta Provincial Government uses the Mohammad Husni Thamrin Plus program (MHT Plus) with Tribina
approach (economy, social, physical infrastructure and facilities) to implement redevelopment of slum
neighborhoods.
Figure 2-4: Muara Baru Flats in Penjaringan
Policy related to the right of access to clean water: Many residents of slum areas, including RW 17- Penjaringan,
are not served by the water supply network. Reasons the region is not served by water supply services are: the
private water supply operators lack of capital to invest in network expansion, the private operators are not
authorized by the Jakarta to expand the network to an area with poor people living on illegal land, many poor
people do not have the compulsory Jakarta ID-card to apply for a new connection, the limited bulk water available
restricts the private operators to provide reliable water services to customers in North Jakarta. To meet the daily
need for clean water, the community in Penjaringan uses a variety of ways: some have connections to the water
supply network (PAM), some buy jerry cans of water every day, some buy (refill) gallons of water, and some use
well water.
Several alternative measures to meet water needs in the coastal area of Jakarta have been implemented,
including through ‘Master-meter’ programs (providing access to piped water for poor communities living on
illegal land), through Reverse Osmosis (transforming seawater into fresh water by forcing water through a semi-
permeable membrane), rain water harvesting, and water kiosks of Palyja (see Innovation Assessment of HCC
Jakarta for detailed explanation of these alternative measures). Although a variety of programs have been
implemented in the region, the water crisis is still going on.
Several industries in RW 17 Penjaringan use deep groundwater to meet their water needs. Groundwater
abstraction needs to be controlled strictly on the principle of sustainable groundwater use. Groundwater over-
abstraction causes land subsidence, which until now ranges between 3-18 cm/year, particularly in the coastal
area of Jakarta. Land subsidence is also caused by heavy building load (settlement), natural consolidation of soil
layers and tectonic forces.
Jakarta elected Governor's campaign promise: The newly elected Governor of DKI Jakarta will begin its term in
October 2017. During the transition period a synchronization team has been established that aims to combine
the program of the old governor with the newly elected governor. Related to the housing provision for the poor
there are some new breakthroughs: Kampung redevelopment, rental house incentives, and cheap loans based
on savings for middle and lower income community.
Figure 2-5 : Penjaringan Residents Buy Water to Meet Daily Needs
7
2.4 Rationale
Slum Characteristics: According to Law No. 1 of 2011, slums are defined as uninhabitable settlements because
of irregularity of buildings, high building density levels, and low quality of buildings and infrastructure. Based on
this definition, slum areas in Jakarta are characterized by lack of access to basic services (roads, clean water,
sanitation, solid waste, electricity, drainage), housing conditions unfit for human habitation (non-permanent, size
smaller than minimum standard), low population density and high settlements, dirty environment,
unhealthy/disease prone, high disaster risks (floods, fires), low income level, social conflict and crime -prone
environment.
Causes of Slums: Some of the causes related to slum development in Jakarta are uncontrolled urban and rapid
urbanization, limited access to employment due to low skills and education, lack of access to land and basic
infrastructure services, and weak institutional capacity (no master plan for housing available, difficulty to obtain
building permits, weak law enforcement, and financial constraints).
Figure 2-6: Slum Problem Tree Diagram
Source: HCC Jakarta
Impacts of slums: The existence of slum areas in Jakarta have an impact on the following aspects: environmental
degradation, disasters (flooding, air pollution, fire), decrease in health and human productivity levels, the
emergence of social issues, security / criminality and deviant behaviors (drugs, prostitution).
Slum Improvement Policies: To prevent slum development, political will of all stakeholders is needed.
Stakeholder participation is the key factor in problem identification and formulation of solutions for slum
improvement. In addition to stakeholder participation, the government improves slum areas through three
models namely rehabilitation, redevelopment and relocation, with due regard to the rights of the affected
community, local ecological conditions location, and social, economic and cultural conditions of affected
communities. Here Rehabiliation is the process of slum rehabilitation on 'legal land', Redevelopment is in the
Slum/Poverty Problem Tree
• Rapid urbanization
• Dense settlements
• Slums at river sides and under bridges
• Lack of open space
• Lack of space for low cost housing
Urban Sprawl
• Low wages (under minimum)
• High unemployment
• Limited skills
• Lack of savings/credit
• Low purchasing power
• Limited public facilities (schools, hospitals)
Limited Livelihood
• Bad road conditions
• Poor drainage system
• Insufficient water supply
• Lacking sanitation
• Piling solid waste
• Backlog in housing
Limited Infrastructure
• No housing master plan available
• Low access to permits
• Low law enforcement
• Low human resources
• Distrust among stakeholders
• Insufficient funding
Weak Instit. Capacity
• Floods
• Fires
• Water pollution
Exposure to Disasters
• Malnutrition / famine
• Water borne diseases
• Low productivity
• Low life expectancy
Health Hazard
• High criminality
• Drug use
• Prostitution
Social Hazard
Slums / Poverty
Ca
us
es
Pro
ble
m
Eff
ects
process of rebuilding a complete neighborhood, and Relocation represents the relocation of Residents from
illegal land to low-cost housing apartments. In Penjaringan, residents are already ‘relocated’ to the Muara Baru
flats. Redevelopment has so far only been a concept for the government, which has yet to be implemented.
Redevelopment (or 'Land consolidation') is an attractive concept for the private sector.
Slum Improvement Regulations: The basic regulations related to slum improvement are:
• Law No. 1 of 2011 on Housing and Resettlements Area
• Law No. 23 of 2014 on Local Government
• Government Regulation (PP) No.14 of 2016 on the Implementation of the Housing and Resettlements Area
Law
• Regulation of the Minister of Public Works No.2 of 2016 on Quality Improvement of Housing and Slum Areas
• Local Regulations on Slum Prevention and Quality Improvement of Housing and Slum Areas
Table 2-1: Hierarchy of Regulations Related to Slum Rehabilitation
Source: Directorate of Settlement Area Development 2016
A Provincial Regulation on Slum Prevention and Housing and Slum Improvement for DKI Jakarta has not yet been
established. Therefore Jakarta does not have a legal basic budgeting and implementation of slum improvement
activities to support national policy on Cities Without Slums 2015-2019 as stated in Presidential Decree No. 2 of
2015 on RPJMN 2015-2019.
Jakarta Slum Area Development
Based on the Jakarta Slum RWs Evaluation of 2013 (BPS), a total slum area of 904.99 ha is ditributed over 223
slum RWs, where 5 slum RWs are classified as heavy, 24 slum RWs are classified as medium, 95 slum RWs are
classified as light and 99 slum RWs are classified as very light. Of the 55 slum RWs in North Jakarta, 2 RWs are
classified as heavy, including RW 17 in Kelurahan Penjaringan.
Figure 2-7: Slum Area Development Graph of DKI Jakarta 2008-2013
9
Source: BPS
Based on the Slum Area Development Graph the total slum area decreased (see Fout! Verwijzingsbron niet
gevonden.). The total slum area of 1’583 ha in 2008, declined to 904 ha in 2013. The decrease is mainly due to
the fact that the slums that once had disappeared due to slum improvement programs, were not surveyed in the
back by BPS.
Figure 2-8: Map of Jakarta Slum RWs in 2013
Source: Jakarta Slum RWs Evaluation, BPS Jakarta 2013
Jakarta slum rehabilitation program: Programs implemented by the government of DKI Jakarta related to slum
improvement are:
• Kampong Improvement Program (KIP),
• Mohammad Husni Thamrin (MHT) Program,
• Low Cost Apartment Flats Program (Rusunawa / Rusunami)
• Kampung Deret Program,
• P2KP-Poverty alleviation Program,
• Million Houses Program,
• Neighborhood Upgrading and Shelter Sector Project (NUSSP),
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2011 2012 2013L
uas K
um
uh
(h
a)
• Slum Alleviation Policy and Action Plan (Sapola),
• Area Based Housing and Slums Environmental Improvement (PLP2K-BK),
• National Program for Urban Community Empowerment (PNPM Mandiri Perkotaan),
• Group Focused Housing Development Program (P2BPK),
• Green City Program.
• Cities Without Slums (Kotaku).
2.5 Research Methodology
The political-economic assessment has been prepared during the fasting month in Indonesia, during a three week
period between 1 June and 22 June 2017, based on a Terms of Reference provided by HCC (see Annex 1). The
political-economic assessment is prepared through a stepped analysis, starting with a problem driven analysis
related to ‘affordable housing and land tenure’ and ‘access to clean water’ in DKI Jakarta province, followed by a
‘city-level analysis’ zooming in to policies and plans for North Jakarta municipality and Kelurahan Penjaringan to
identify drivers of change, and ending with a sector analysis particularly for ‘affordable housing and land tenure’
and ‘access to clean water’.
Figure 2-9: Diagram of Political Economic Assessment Approach
11
3 Problem Driven Analysis of the two selected themes
3.1 Affordable Housing and Land Tenure
3.1.1 Political-Economic Context of Affordable Housing and Land Tenure
Poor Housing Conditions
Many houses in the densely populated coastal area of North Jakarta are situated in flood-prone locations, where
houses are simultaneously exposed to street flooding from local rainfall, flooding from rivers, and flooding from
overtopping sea dikes. The 15’000 slum dwellers in Penjaringan mostly live in makeshift and semi-permanent
houses with poor construction quality, and built without building permits. The living conditions in the slums are
affected by inadequate water supply, sanitation and drainage.
High Land Prices
Scarcity of vacant land is the main cause for soaring land prices beyond the affordability of the poor. The NCICD
plans have triggered land speculation in the coastal area. The pressure on land comes not only from private
business investment, but also from public development schemes of roads, drainage and flood protection
infrastructure. It is financially and economically not feasible to allocate expensive land for low-cost housing.
Eviction and Resettlement
In most slums occupation of land and use of houses is controlled by informal landlords. Most slum dwellers are
skeptical about the motives used for their eviction, and have doubts about the benefits of resettlement. In most
cases people do not like to move from locations on which they depend for livelihood and jobs. Eviction attempts
by Government are often met with strong opposition from slum dwellers. Forced evacuation and resettlement
are socially, economically and politically sensitive, especially because only people with Jakarta citizen cards are
eligible for resettlement and financial compensation.
Slum Improvement and Construction of Low-Cost Housing
Resettlement is a politically sensitive issue for both local and national Government.
Also donors exercise great caution, and avert to become part of conflicts that could tarnish their reputations.
Private real estate developers and commercial banks are reluctant to invest in low-cost housing, although many
apartment units have been built in the middle-class sector. National Government has Poverty Reduction Policies
and Slum Improvement Programs in place, of which Kotaku, which is co-funded by World Bank, ADB and Islam
Development Bank, is the most prominent running program.
Figure 3-1: Housing Development Program in Muara Baru, Penjaringan
3.1.2 Roles and Incentives of Key Actors
Roles of Key Stakeholders: Slum housing improvement on legal and illegal land and the provision of housing for
low income people involves various stakeholders at the level of the central government, provincial government,
municipal government, private sector and the community. The roles of the key stakeholders are presented in
Table 3-1 below.
Table 3-1: Key Stakeholders in Slum Housing Improvement and Housing Provision
Key Stakeholders Roles
Central government
Directorate for Urban, Housing and
Human Settlements, Bappenas • Coordination of policy formulation of urban areas, housing and settlements
• Coordination and synchronization of the implementation of the urban areas, housing and
settlement plans
Directorate General of Human
Settlements, Ministry of Public Works
and Housing (PUPR)
• Formulation of policy recommendations, rules, strategies and programs in housing and
settlement
• Facilitation of housing quality and slum improvement
• Facilitation of infrastructure, facilities and utilities improvement
Ministry of Finance • Preparation of development budget
Ministry of Home Affairs • Participation in planning of slum improvement activities in problem areas related to
national matters
Ministry of Spatial Planning and Land
Administration (ATR/BPN) • Preparation of regulations, policies related to land administration and spatial planning
Central Bureau of Statistics (BPS) • Provision of housing and settlement database
13
Key Stakeholders Roles
Coordinating Ministry for Economic
Affairs (Komenko) • To coordinate the completion of cross-ministerial issues in housing and settlement
improvement
• DKI Jakarta provincial government
Planning Department (Bappeda) • Coordination, control and supervision of housing and settlement development
implementation
Human Settlement, Spatial Planning and
Land Administration Agency • Facilitation of infrastructure, facilities and utilities construction
• Facilitation of spatial development
• Facilitation of land administration
• Coordination of land provision/supply for low-cost housing construction (BoP)
Housing and Local Government Buildings
Agency (DPGP) • Preparation of livable housing and settlement roadmap
• Socialization of policies, strategies and programs on housing and settlement development
Central Bureau of Statistics (BPS) • Development of a housing and settlements database
North Jakarta city government
Sub-Agency of Human Settlements, Spatial
Planning and Land Administration • Assisting the Human Settlements, Spatial Planning and Land Administration Agency of
North Jakarta
Sub-Agency of Housing and Local
Government Buildings (DPGP) • Assisting the Department of Housing and Local Government Buildings Agency of North
Jakarta
Head of Kelurahan Penjaringan • Facilitate implementation of the housing and settlement activities at Kelurahan level
Private Sector
REI, enterprises Jakarta Kadin, Developer,
Perumnas, Bank BTN, Private Bank • Provide infrastructure through PPP mechanism
• Helping slum improvement and construction of flats with CSR funds
• Cooperate with the government in the provision of low-income housing
Community / NGOs / CBOs
UPC, JRMK • Assist and facilitate the process of community empowerment
Central, Provincial and Local Governments
Housing improvement may not be implemented without the integration between the policies of local
governments and the central government. Referring to Law No. 32 of 2004 on Local Government, states that
local/provincial implementation must be executed by the local/provincial governments, including slum problems.
The National government acts as regulation provider and macro scale program designer and funding facilitator,
considering local governments have limited capacity, both in human resources and in financing.
Local governments that are capable to implement the decentralization policies by themselves will execute the
initiation, detailing and implementation of slums improvement programs in its region. In this case the local
government will still coordinate with the central government, but its role remains to be dominated and
independent.
What should be taken seriously during implementation is good governance by maintaining a clear division of
tasks and responsibilities among all participating stakeholders and to keep high levels of transparency,
accountability, responsibility and independence.
Human resources and financial limitations keep local governments dependent on the central government policy.
Support and encouragement of local authorities in addressing slum problems is absolutely necessary, because
slum problems vary locally and are multi-sectoral and therefor need comprehensive/integrated (not only
physical) solutions that cannot be done by one ministry / agency only, but needs coordination and
synchronization strengthening of cross-institutional/ministry programs.
The establishment of government policies, requires the input of the provincial / city government on conditions
in the field. Once a policy is formulated, it is expected that the policy can be implemented in the field. Incentives
for the local government to develop the affordable housing and land tenure are fulfillment of their obligation to
assure the whole community has access to decent housing, improved spatial structure in accordance with the
spatial plan.
Private Sector
The government needs to invite the private sector to participate in housing improvement. The private sector has
the capacity in resources and financing. Land ownership is currently dominated by the private sector, and with
private sector participation, land availability becomes an opportunity instead of an obstacle. The government
only needs to coordinate, to facilitate in licensing issues, bureaucracy and taxation, to enable the private sector
to build low-cost housing for the poor. The private sector can participate in housing improvement through
Corporate Social Responsibility (CSR) programs. Furthermore the private sector has a high level of work efficiency,
which is an opportunity to provide good quality shelter (especially homes of workers). There is no regulation yet
on CSR activities in housing and settlements for the poor.
Private sector participation can be realized through a Public Private Partnership (PPP), as is often used for large-
scale infrastructure implementation, PPP can also be applied for other purposes, which provide a profit margin
for the private sector, such as provision of green open space (RTH), provision of public services for the poor and
local economic development. If PPP is to be used for low cost housing, it would probably involve housing provision
of all levels (luxury houses, medium income housing and low income housing), with a regulated proportion
division to assure a profit margin. Incentives for the private sector include profit generated from housing projects
and an improved relation with the government and the community.
Private sector partners involved in slum prevention and slum improvement are: Jakarta enterprises, state-owned
companies, property developers, Real Estate Indonesia (REI), and the Chamber of Commerce and Industry
(Kadin).
Community (NGOs / CBOs)
Some of the slum housing improvement programs that have been implemented, have engaged the slum dweller
communities. Some of them even put the community as the main actor or organizer. Community participation of
especially the slum dwellers in these slum improvement housing programs ranged from planning,
implementation, financing to monitoring and evaluation.
15
Figure 3-2: Institutional Organizational Structure RW 17 Penjaringan 2014-2017
NGOs support community empowerment n slum housing improvement programs, through its role as facilitator
and catalyst, as coach and educator, and to mobilize community participation. NGOs that provide intensive
community assistance in slum improvement programs are, among others: the Urban Poor Consortium (UPC), the
Urban Poor Network (JRMK), Mercy Corps, Karina.
3.1.3 Roles and Incentives of External Development Partners
Donor Agencies
Roles of donor agencies: Slum housing improvement not only involves central and local governments, private
sector and communities, but also involves international donors. International donors have developed projects to
improve the access of the slum community to housing, infrastructure, and social, health and education services.
Funding from donors may include grants and loans.
Donors involved in slum housing improvement in Jakarta are: the Islamic Development Bank (IDB), the World
Bank and the Asian Development Bank (ADB). Incentives for donors are more loans and grants in accordance
with the banks objectives.
Table 3-2: Jakarta Housing Improvement Programs Funded by Donors
3.1.4 Institutional and Governance Weaknesses
Institutional and good governance is key to the success of the program. Institutional and governance weaknesses
related to affordable housing and land tenure are:
• Weak orchestration, coordination and participation among stakeholders at central and local governments
levels;
• Lack of a housing master plan for Jakarta and North Jakarta;
• Limited government capacity of local governments and communities in planning, implementation and
financing of low-cost housing;
• Weak law enforcement and high corruption on land/space use;
• High land prices and high investments needed for low-cost housing.
3.1.5 Political Economic Driving Factors
The following reforms can be applied to improve slum prevention and slum rehabilitation:
• Strategy and policy development including:
Facilitating housing master plan preparation and ‘grand design’ at City and Kelurahan level for a five year
period based on multi-stakeholder participation.
Integration of housing master plan into urban planning documents
Policy reforms related to land administration and ownership of land / buildings
Preparation of alternative solutions for informal settlement rehabilitation
• Facilitation of local government and community capacity building, including support for integrated slum
improvement planning: Facilitate capacity building for local governments and communities in program
implementation including: preparation, planning, and implementation and facilitate the development of
integrated housing improvement plans at City and Kelurahan level.
• Support the development of new residential areas for low income people (BoP): Construction of new
residential areas based on a partnership between the central / local government with developers and local
financial institutions, for the provision of decent and affordable housing for the poor.
Year Project name Person in charge Information
The Islamic
Development Bank
(IDB)
period 2016-2019 The National Slum Upgrading
Program (NSUP)
Director General of
Human Settlements
Ministry PUPR
Projects to support RPJMN (2015-2019) and to strengthen the role of
local governments in order to accelerate the program '100-0-100'
(100% clean w ater supply, 0% to slum, 100% for sanitation) through
the slum prevention program in the area urban, infrastructure
improvements, the creation of sustainable livelihoods pliers.
The World Bank (The
World Bank / WB)
Period 2016 - 2019 National Affordable Housing
Program (NAHP)
Ministry PUPR,
Bappenas, Ministry of
Finance
NAHP purpose is to improve access to housing for low -income
households. Conducted through three components: a savings-based
housing f inance assistance, self-help housing stimulants help, tehnical
assistance for strengthening the management of housing seltor.
The period October 2016
- March 2022
Indonesian National Slum
Upgrading Project
Director General of
Human Settlements,
Ministry PUPR; Bappenas
The project objective is to improve access to infrastructure and urban
pelayaan for people in slum areas.
Asian Development
Bank
The period July 2012-
June 2018
Neighborhood Upgrading and
Shelter Project (Phase 2)
Director General of
Human Settlements,
Ministry PUPR;
The expected impact of the project is to improve living conditions in
urban areas, particularly improving access to services in a seedy
neighborhood to infrastructure.
DonorProject
17
3.2 Access to Clean Water
3.2.1 Political-Economic Context of Access To Clean Water
Water Scarcity
Access to drinking water is essential for human life and vital for economic productivity.
Due to bulk water shortage the existing piped networks of North Jakarta cannot deliver sufficient water. In
response the National Government of Indonesia has prioritized additional bulk water supply from the Jatiluhur
and Karian reservoirs, but implementation may still take several years. Even if bulk water would become
abundant, according to the regulations only legal land occupants can apply for house connections, which excludes
most slum dwellers, who often are illegal occupants without Jakarta citizen cards. Lack of water to flush toilets
also affects sanitation systems, posing public health risks that may lead to declined productivity, reduced income
and increased medical cost. Access to safe drinking water is important factor for poverty reduction in slum areas.
High Cost of Buying Drinking Water
The piped water tariffs in Jakarta are among the highest of Indonesia. For coastal slum dwellers in locations
without piped water supply, the alternative option is water delivered by jerry can, which is even costlier per cubic
meter than piped water. Poor people are left no choice but spending a large portion of their income on buying
water. This also affects their livelihood and economic activities that depend on water. Private investors are
reluctant, if locations have no access to clean water, or if water is too costly
Polluted Rivers and Dropping Groundwater Table
Rivers and streams in Jakarta are severely polluted by domestic and industrial waste.
Poor water quality makes river water useless for human consumption or domestic use.
Groundwater over-abstraction has not only caused groundwater tables to drop sharply, but also caused land
subsidence that contributes indirectly to flooding. Near the seashore over-abstraction may lead to salt water
intrusion. For all these reasons, National and Local Government have prioritized halting of groundwater over-
abstraction, which makes provision of additional bulk water from other sources even more important.
Legal and Institutional Context
Access to clean water is a basic human right according to the Indonesian Constitution of 1945, and guaranteed
by Government’s subscription to the UN Millennium Development Goals. Law No. 7, 2004 on Integrated Water
Resource Management which permitted privatization of water supply, was abolished in February 2015, hence
Water Law No.11, 1974 was reinstated, which does not permit privatization of water supply. In 1997 PAM issued
25-year concessions for 2 private water supply companies, which aimed at streamlining the management and
accelerating the extension of water distribution networks, including reduction of water leakage. However, it was
financially more attractive for the private partners to pay sanctions, than to address the water leakage. The
concessions allowed the private water supply companies to increase the water tariffs to secure their profits.
However, in 2008 the Governor of Jakarta intervened, and froze the piped water supply tariffs at the high level,
where they still are today.
3.2.2 Roles and Incentives of Key Actors
Key stakeholders involved in the provision of clean water, consists of central and local government, private sector,
NGOs and communities (see Table 3-3).
Figure 3-3: Relationship between Water Supply Actors in DKI Jakarta
Source: Pam Jaya
Table 3-3: Roles of Key Stakeholders in Water Supply
Main actors Role
Central government
Director General of Water
Resources at the Ministry of Pubic
Works and Housing (PUPR)
Formulation of policies related to the quality and quantity of surface water / bulk water
Settlement Department at the
Ministry of Pubic Works and H. Formulation of policies related to water, sanitation, drainage and solid waste
Deputy of Infrastructure and
Regional Development, Ministry for
Economic Affairs
Coordination and synchronization ministerial / agency policies relevant for water resources
infrastructure and drinking water network.
Natural Resources Research and
Development Center Research, development and application of science and technology in the field of water resources
Perum Jasa Tirta II Managing the Jatiluhur Reservoir and Tarum Bulk Water/Irrigation System
Deputy of Bappenas on
Infrastructure and Facilities Policy formulation and drafting of infrastructure and facility development in the field of water
Groundwater and Bulk Water
Center, DGWR -Ministry PUPR Research related to groundwater and bulk water
Ministry of Finance Budgeting for the implementation of the clean water program
Ministry of Health Determining the PDAM water quality standards
19
Main actors Role
MOHA Management of water supply tariffs
Geological Agency, Ministry of
Energy and Mineral Resources Implement policies of groundwater abstraction permits
DKI Jakarta provincial government
Water Planning Office Jakarta Planning, construction, maintenance, control, monitoring, evaluation, research, development and
protection of natural resources
Water Supply Regulatory Body Maintaining a balance between the interests of the community, the Cooperating Parties, and other
agencies / institutions for drinking water service delivery in the Region
PD. PAM Jaya Provide and improve Jakarta water supply services
North Jakarta Government
Dept. of Water Systems Assist the Water Planning Office in carrying out the planning, construction, maintenance, control,
monitoring, evaluation, research, development and protection of natural resources
Private Sector
PT. Palyja Operator for water supply services of the western region of Jakarta (including Penjaringan)
PT. Aetra Operator for water supply services of the eastern region of Jakarta
Water Kiosks Sell ‘recycled’ gallons with refill potable water
Water Traders Sell clean water to consumers in jerry cans
NGOs / Community
Mercy Crops GPOBA Program providing access to clean water for the poor on illegal land (Master-meter)
IUWASH Adopting a program approach Accelerated Urban Sanitation Development (PPSP) and Community
Based Total Sanitation (STBM) and water supply capacity building
KARINA Water harvesting program, urban agriculture program
UNICEF Clean water, sanitation and environmental programs
Central Provincial and Local Governments
Water supply improvement cannot be implemented without the integration between the policies of local
governments and the central government. Referring to Law No. 32 of 2004 on Local Government, states that
local/provincial implementation must be executed by the local/provincial governments, including water supply
problems. The National government acts as regulation provider and macro scale program designer and funding
facilitator, considering local governments have limited capacity, both in human resources and in financing.
DKI Jakarta itself has sufficient financial resources to develop and manage the water supply distribution system.
For its bulk water it is however depending on the central government, because the water sources are located
outside Jakarta’s boundaries. Incentives to develop bulk water sources for Jakarta, is the implementation of a
national project that would support significant economic development. Incentives for the local government to
develop the water supply distribution network are improved service delivery and healthier living conditions for
its inhabitants.
Private Partners: Private sector partners involved in water supply improvement are: the government enterprise
PD PAM Jaya, and Palyja, and Aetra. The private sector has the capacity in resources and financing. The private
sector can participate in water supply improvement through Corporate Social Responsibility (CSR) programs.
Furthermore the private sector has a high level of work efficiency, which is an opportunity to improve water
supply management. Incentives for the private sector include profit generated from water selling and the
availability of sufficient good quality water, and a clean environment.
Roles of the community: Some of the slum improvement programs that have been implemented, have engaged
the slum dweller communities. Some of them even put the community as the main actor or organizer. Community
participation of especially the slum dwellers in these slum improvement programs ranged from planning,
implementation, financing to monitoring and evaluation.
Figure 3-4: Institutional Organizational Structure RW 17 Penjaringan 2014-2017
Roles of NGOs: In water supply programs, NGOs support community empowerment through its role as facilitator
and catalyst, as coach and educator, and to mobilize community participation.
3.2.3 Roles and Incentives of External Development Partners
Donor Agencies
Roles of donor agencies: Water supply improvement not only involves central and local governments, private
sector and communities, but also involves international donors. International donors have developed several
projects to improve water supply of Jakarta. Funding from donors may include grants and loans. Donors involved
in water supply improvement in Jakarta are: the Islamic Development Bank (IDB), the World Bank and the Asian
Development Bank (ADB) and USAid. Incentives for donors are more loans and grants in accordance with the
banks objectives.
21
Table 3-4: Jakarta Water Supply Improvement Programs Funded by Donors
3.2.4 Institutional and Governance Weaknesses
Institutional and good governance is key to the success of the program. Institutional and governance weaknesses
related to slum prevention and slum improvement are:
• Weak orchestration, coordination and participation among stakeholders at central and local governments
levels;
• Lack of a water supply master plan for Jakarta;
• Too diverse distribution of roles and responsibilities, where different institutions are responsible for surface
water and groundwater, operation, monitoring permit provision and law enforcement;
• The current concession agreements have a paralyzing effect on the development of the drink water
distribution of DKI Jakarta. The targets on water distribution network expansion and on water losses reduction
have been lowered, and are not supported with effective sanctions. Hence a situation exists, where the
government does not have sufficient control (sanctions) on the water supply development for the period of
the concession (from 1998 till 2023).
• Hierarchical government system, where the province of Jakarta has little power to request additional bulk
water from the central government. Many plans have been made a national level, but none has resulted in
additional bulk water for Jakarta.
• Limited human resources capacity: Regular government shifts often cause a ‘drain of knowledge and skills
within the government.
3.2.5 Political Economic Driving Factors
The following reforms can be applied to overcome the institutional weaknesses and to supporting progressive
change in access to clean water:
Year Project name Counterpart Information
The Islamic
Development Bank
(IDB)
2013 - 2019
SANIMAS-Community Based
Sanitation Project
Director General of
Human Settlements
Ministry PUPR
The project aims to provide basic sanitation services to improve public
health, and public aw areness about clean w ater and sanitation.
The World Bank (The
World Bank / WB)
September 2009 -
September 2017
PAMSIMAS Support Trust Fund Director General of
Human Settlements
Ministry PUPR; The
Ministry of Health,
Ministry of Internal
Affairs
The project objective is to increase the number of population in rural
areas and suburbs can access clean w ater facilities, sanitation and
health behavior.
June 2008 - December
2020
Thrid Water Supply and
sanitation for Low Income
Communities Project
The Ministry of Health,
Ministry PUPR Cipta
Karya, Ministry of
Internal Affairs
The increasing number of people in rural and urban areas that have
access to w ater and sanitation facilities as w ell as improvement in
health behavior in the community through community-based programs.
Asian Development
Bank2009-2023
Citarum Water Resources
Management Investment Program
(ICWRMIP)
Director General of
Water Resources,
Ministry PUPR;
Investment Program to improve the Water Resources management of
the Citarum River Basin, w ith focus of its f irst phase to the
rehabilitation of the w est tarum canal, to increase the bulk w ater
availability for Jakarta
2007 - 2012
West Jakarta Water Supply
Development Project
PAM Lyonnaise Jaya
(PALYJA)
Direct local currency loan from PSOD to PALYJA of up to Rp. 455
billion (approximately US$50 million). Target project outputs involved
improving service delivery and expanding service coverage by
decreasing NRW, increasing customer w ater usage, increasing the
number of new connections, and expanding the netw ork.
2013–2017
East Jakarta Water Supply
Development Project
Aetra Direct local currency loan from PSOD to Aetra of up to Rp430 billion
(approximately $44.7 million). The outcome w ill be improved w ater
provision in East Jakarta by a more f inancially viable Aetra
USAid
2016-2021
Indonesia Urban Water,
Sanitation and Hygiene
(IUWASH PLUS)
Bappenas, PU,
BPPSPAM
Assist the Government of Indonesia in increasing access to w ater
supply and sanitation services as w ell as improving key hygiene
behaviors among urban poor and vulnerable populations. The project
is implemented in 9 provinces in Indonesia including in Jakarta.
DonorProject
• Renegotiation of the private sector concessions in water supply including:
Clear targets and effective sanctions on water distribution network expansion;
Clear targets and effective sanctions on water losses reduction;
Incentives (subsidies) for connection of low-cost housing.
• Presidential instruction on additional bulk water resources for Jakarta: Water sources within the boundaries
of DKI Jakarta are not sufficient in quantity and quality to serve the population of Jakarta. Jakarta therefor
depends on the national government for additional bulk water supply, specifically from the water resources
department of the ministry of public works. Only a special instruction of the president can assure that plans
for additional bulk water for Jakarta are also implemented,
• Increase funding for investment in infrastructure and urban services: Infrastructure investment support for
rehabilitation and expansion of water supply and sanitation with related distribution/collection networks and
household connections, through multi-source funding (government and non-government).
23
4 City Analysis: North Jakarta / Penjaringan Level Analysis
4.1 Plans, Strategies and On-going Programs in North Jakarta / Penjaringan
An extensive overview of plans, strategies and on-going programs in Jakarta relevant for slum improvement has
already been provided in the ‘Rapid Scan of Policies, Plans and On-going Programs’ of the first phase of HCC
Jakarta. In this sub-chapter development policies and plans are summarized specifically relevant for North Jakarta
/ Penjaringan City Analyses: Spatial Plan (RTRW) of DKI Jakarta 2010-2030, Detailed Spatial Plan (RDTR) and
Zoning Regulations for Kecamatan Penjaringan, Settlement Environment Restructuring Plan (RPLP) Penjaringan
(2016-2020), Campaign Promises of newly elected Governor of DKI Jakarta, and Low Cost Housing Apartments
(Flats) in Muara Baru Reclamation Plan.
4.1.1 Spatial Plan (RTRW) of North Jakarta 2012-2030
Status: The Spatial Plan (RTRW) for North Jakarta is a supplement of the RTRW for DKI Jakarta, which has been
legalized through a local regulation in 2012. Spatial plan are normally revised every five years.
Vision, Mission and Strategy: In the Spatial Plan (RTRW) of DKI Jakarta 2012-2030, the vision of North Jakarta is
described as ‘Prosperous and Sustainable Trade City’. While the missions and strategies to achieve the vision of
North Jakarta are:
1. Develop North Jakarta as coastal city and marine tourism area by improving the environmental quality and sustainability;
• Redevelop existing coastal area integrated with the development of reclamation to improve the quality of the environment.
• Preserve and rehabilitate the Angke Kapuk protected forest, Muara Angke natural reserves and Kamal recreation forest.
• Control land use in downstream river areas and canals for developed regions and preserve and expand green open space along river banks;
• Build East Flood Canal and develop and construction of new retention ponds in flood-prone areas. • Use surface water bodies for tourism activities.
2. Develop the port area, selective industries and Special Economic Zone in the eastern coastal area and an international integrated commercial center in the middle of the coast area:
• Develop a land and sea transportation system for passenger and freight transport integrated with the macro transportation system;
• Develop a reclamation area for the construction of an international trade center, housing and tourism. 3. Realize a historical and cultural center from the old city by improving the pedestrian system, developing
modes of transport and increase the economic value of the buildings and accommodate the interests of education:
• Encourage the revitalization of the old town and historic buildings as a tourist attraction by improving infrastructure and supporting facilities.
Figure 4-1: Spatial Structure Plan of North Jakarta City
Figure 4-2: Spatial Pattern Plan of North Jakarta City
25
Based on the above vision, Table 3.1 shows the development directions of North Jakarta related to water services
and settlements in accordance with the Jakarta Spatial Plan (RTRW) 2010-2030
Table 4-1: North Jakarta Development Guidelines Based on Jakarta Spatial Plan (RTRW)
SECTOR RELATED POLICIES
Center for tertiary activities • North Jakarta City office as government center
• Pluit Market area as center of trade, services and offices
Water resources infrastructure
development plan • Water infrastructure system development through piped network expansion
• Wastewater network development and wastewater treatment plant (WWTP) construction in regions
around reservoirs and in reclamation areas
• Communal septic tank construction in dense residential areas, mainly in slums
• Gradual limitation of ground water abstraction
• Green open space development, including surrounding water body areas
• Pluit reservoir rehabilitation for water retention
• Development of new alternative water sources
• Sanitation facilities and infrastructure development, including sewerage network and sewage
treatment installation
Flood control infrastructure
development plan • River normalization
• Implement the East Flood Canal as flood control infrastructure
• Development and improvement of drainage capacity to overcome inundation in Pluit
• Rehabilitate riverbanks through demolition of illegal constructions
• Physical development is directed facing the river (water front)
• Development of new polder systems and rehabilitation of existing polder systems
• Prohibition of waste disposal into rivers and canals by community involvement
Regional settlement
development plan • Environmental improvements in mild and medium slum areas through TRIBINA program (human
development, business coaching, community development)
• Housing redeveloping in heavy slum areas
• Develop middle and upper-income housing in the Pantura reclamation area
• Develop new residential areas, especially in Penjaringan sub-district
• Limit the functional changes in the settlement area of the Old City area and Sunda Kelapa harbor
while preserving the environment;
• Developing a fishing settlement combined with tourism environmental preservation in the coastal
area;
• Complementing public facilities in horizontal residential areas
• Develop a residential area in the Old Coastal Area
• Control new housing development in Penjaringan to ensure preservation of environmental
functions
• Vertical housing development of simple apartments in heavy slum area around Penjaringan and
complete with open green space with ecological and social functions. Source: DKI Jakarta Spatial Plan (RTRW) 2010-2030
Obstacles for implementation: Obstacles for realization of the Jakarta Spatial Plan are:
• Consist implementation of existing regulations is weak, still many functional land changes occur that are not
in accordance with the spatial plan
• Spatial planning is often not integrated with the planning of other sectors, which leads to various urban
problems
• An immature spatial plan and the government's inconsistencies have resulted in uncontrolled urban
development, illegal occupation of lands owned by the government, traffic congestion, slums, and flood
disasters.
• There is no participation between the government, private sector and community in implementing the urban
development in accordance with the directions of the spatial plan.
27
4.1.2 Detailed Spatial Plan (RDTR) and Zoning Regulations for Kecamatan Penjaringan
Purpose of detailed spatial plan: The objectives of the Detailed Spatial Plan (RDTR) and Zoning Regulation for
Penjaringan are:
• Implementation of vertical housing development or simple apartment flats for low-income people in the heavy
slum areas including green space for ecological and social purposes
• Development of comfortable and environmentally sound settlements including complete, adequate and
integrated infrastructure and facilities through environmental rehabilitation and redevelopment;
• Restrictions on industrial activities in existing regions;
• Provision of warehousing facilities to support trade and services activities;
• Flood control infrastructure development through rehabilitation and expansion of the drainage system, and /
or retention ponds and cope with stagnant water;
• Establishment of public housing flats accompanied by the provision of adequate infrastructure and facilities
integrated with mass public transport.
Status: The Detailed Spatial Plan (RDTR) for Kecamatan Penjaringan has been legalized through a local regulation
in 2014. Spatial plan are normally revised every five years.
Figure 4-3: Zoning Map Penjaringan, North Jakarta
Figure 4-4: Land Use Plan Map of RW 17 Penjaringan
29
Guidelines for water infrastructure development: Development of water infrastructure in Penjaringan sub-
district is directed to:
Table 4-2: Water Supply Infrastructure Development Direction and Criteria
Development Direction Criteria
a. Bulk water coming from Jatiluhur;
b. Alternative bulk water from the Karian Dam, Ciawi Reservoir,
Multifunction Retention Reservoir and Sea Dike, Ciliwung,
Pesanggrahan, Krukut Rivers, West Flood Canal and other
water sources;
c. Bulk water flow through transmission pipelines in
Kelurahans Penjaringan, Penjagalan and Kamal Muara;
d. Rehabilitation and improvement of reservoir capacities of
Pluit and Kamal Muara Reservoirs;
e. Increased capacity and new construction of the Water
Treatment Plants (WTP) in Muara Karang, Kelurahan
Penjaringan;
f. Extension water distribution network through Kelurahans
Kamal Muara Kapuk Muara, Pluit, Penjagalan, and
Penjaringan.
a. Improvement of water supply system as a whole to achieve a
served population coverage level of 100%;
b. New construction of water treatment plants to
accommodate additional bulk water from reservoirs, or
alternative bulk water sources;
c. Construction of reservoirs equipped with pressure pumps to
strengthen and improve the water distribution;
d. Bulk water transmission systems with a diameter of more
than 1.6 m
e. Construction of water recycling systems in multi-functional,
neighborhood renewal, and large scale new development
areas.
Obstacles for implementation are:
• The large amount of slum areas to be dealt with need considerable financial resources and time
• Public awareness on the importance of a healthy environment is still low
• Low availability of land in Jakarta
• Low public awareness on the importance of urban spatial planning
• Law enforcement related to land use is still weak.
• The government’s disability to anticipate future problems, leads to inconsistent government spatial planning.
• Distrust between the involved stakeholders, complicates cooperation.
4.1.3 Campaign Promises of Jakarta’s Elected Governor
Status: The Governor’s campaign promises have been published on the Internet, but has no legal status.
Vision, Mission, Strategy
The elected Governor’s vision is to make Jakarta advanced and civilized where all residents feel the justice and
welfare.
His missions are to make Jakarta a safe, healthy, intelligent and cultured city, build public welfare, develop the
community, and build a sustainable urban environment.
The vision and mission will be implemented with excellent work program that focuses on six main issues, namely:
• Maintain stable prices of basic commodities
• Job creation
• Establish a monitoring and priority system for more effective local government expenditure management
• Comprehensive development of human resources as well as physical infrastructure
• Conducting good governance based on transparency, accountability and efficiency
• Combating the Jakarta problems of water (flooding and clean water supply), mobility (congestion), and waste
management
Guidelines for drinking water and housing sectors
The elected Governor’s campaign promises consist of 154 programs, which are further divided into 473
activities that are already integrated in the 2017 budget. The policies related to the development of
drinking water and housing are:
Table 4-3: Overview of Water and Housing Policy
Overview of Drinking Water Program Overview of Housing Program
Policies related to drinking water:
• Increase the number of piped drink water supply
customers with 200% of the number of customers in
2015, with a phased implementation starting from the
area with the worst access and water quality
• Stop production water losses
1.
2.
3. Steps to be taken:
• Speed up the water supply connection process. Aiming to
reduce the demand for ground water extraction.
• Extending the free water supply connection criteria for
residents
• Provide 80% subsidy on the water subscription payments
for resident homes under 70 m2 and residents living in
low-cost apartment flats of the government
• Increasing bulk water treatment production capacity, in
addition to the production of water from outside Jakarta
with a target increase water production of 30% from 2015
production data (now only 5%).
• Improving clean water management for residents:
• Expand the role of the Provincial Water Resources
Council (Dewan SDA) of DKI Jakarta in terms of
audit and enforcement activities related to the
disruption of water resources conservation,
commercial groundwater use and technological
development and research for the increased
production of Water Resources.
• Conduct comprehensive performance and services
audit of PAM Jaya and review cooperation with Aetra
and Palyja.
Housing-related policies:
• 0% Down Payment Housing Program and Savings -Based
Credit Offers for Medium-Low Income Communities:
Mortgages through savings-based home loans, where the
Bank DKI will be asked to replace the DP payment term
which is currently at 30% of the house price, with the amount
in the savings of potential consumers. Another scheme is a
long-term lease, where a person/family must live somewhere
for a fairly long time, for example for a generation for 25
years.
• Kampung redevelopment through Urban Renewal: The
Kampung Redevelopment concept resumes the MH Thamrin
Plus program which integrates improvement of basic
infrastructure, and promotes "Kampung Deret" with active
community involvement from planning to management.
• Rental home improvement incentives: Aid program for
rental homes quality improvement, especially those in slum
areas; tax relief for homes that are in the surrounding of office
areas to transform buildings into a rental houses;
• Make an application based rental house information
system to provide easy access to information on availability
and prices of rental housing, and management control.
• Facilitate flats investment: The program deregulates capital
investment in flats, to facilitate investment in low-cost
apartment towers; The government is actively building flats,
especially for the low-income communities
• Land Banking: Land Banking is a program in which the
government, through enterprises, controls the land price
through land purchase by logging an accountable
administration.
• Justice for Residents of affordable apartments (Flats)
about the legality and burdensome tower regulations.
Obstacles for implementation are:
• It is very costly to guaranty bails for housing credit advances to banks
• Many banks do not support mortgages with and advance of 0%
31
• Kampung improvement in slum areas conflict with land legality
4.1.4 Low Cost Housing Apartments (Flats) in Reclamation Plan of Muara Baru
Objectives
The objectives of the Muara Baru reclamation plan are:
• Revitalization of Muara Baru area, to reform a useless flood prone area into a safe and useful area
• Control of tidal floods
• Eradicate slums from Muara Baru
• To support the Ocean Fishery Port Nizam Zachman, where five to six thousand fishermen drop their fish
production every day.
• The low-cost apartment tower construction is integrated with sea dike construction. The flats are intended for
fishermen affected by the sea dike construction. The new area in Muara Baru will be 10-12 ha
Status: The Muara Baru Reclamation Plan is still in concept phase and has no legal status.
Figure 4-5: Reclamation Concept Plan in Muara Baru
Source: Department of Housing and Buildings Jakarta
Obstacles for implementation are:
• Towers will be constructed after the sea dikes in Muara Baru are completed in 2018
• Difficult access to clean water in the region
• The PT Palyja production capacity cannot fulfill the clean water needs
• According to the Presidential Decree 54 of 2009, new land reclamation must have a distance of at least 200 m
from the coast, and may not connect with the existing coast
4.2 KOTAKU – Kota Tanpa Kumuh / Cities without Slum Program
Program KOTAKU is a strategic effort of the Directorate General of Human Settlements, Ministry of Public Works
to accelerate slum rehabilitation to support the "100-0-100 Movement", which stands for 100% access to drinking
water, 0% slums, and 100% access to sanitation. The program deals with slums by building a collaborative
platform to increase the participation of local governments and communities.1
KOTAKU implementation starts with baseline data collection by a Community Based Organization (BKM / LKM),
of 7 slum indicators per kelurahan. These indicators are:
1. Housing conditions 2. Access to road network 3. Local drainage 4. Access to drinking water. 5. Access to sanitation 6. Solid waste management 7. Fire prevention
After that integrating plans are produced at community level (RPLP) and local government level (RP2KPKP), in a
parallel way. This plan determines the priority activities to reduce existing slums and prevent new slums, which
will either be implemented by the public or by other parties with expertise in infrastructure development in the
region and city entities.
The KOTAKU funding sources originate from foreign donor agencies, including the World Bank (World Bank),
Islamic Development Bank, and the Asian Infrastructure Investment Bank, complemented by local government
budgets and community participation to achieve the slum quality improvement targets.
The implementation of the Kotaku program in Jakarta will only start next year. It is not yet clear when the
Penjaringan program will be implemented, and what the focus will be.
1 See Annex 3.2 and 3.5
33
Figure 4.1. Kotaku Implementation Process at City and Community Level
4.2.1 Settlement Area Housing Development Plan (RP2KPKP) DKI Jakarta
The Settlement Area Housing Development Plan (RP2KPKP) for Jakarta is currently being prepared. Preparation
of this report should have been finalized last year, but has been delayed because of differences in concept
between the national Kotaku program, and the on-going slum improvement programs in DKI Jakarta.2 The goals
and objectives of the RP2KPKP report are:
Goals
• Optimal utilization of settlement areas to fulfil the need for decent, safe and sustainable housing;
• Provision of quality utilities infrastructure, facilities and services, in sufficient and sustainable quantity, and accessible to all citizens of Jakarta.
Objectives
• The gradual realization of the norm of one decent house for each family;
• Settlements served by environmental facilities and infrastructure in accordance with the ‘Minimum Standard Services (SPM)’ for housing and residential areas;
• The achievement of ‘cities without slums’ by 2019 in accordance with the Government's target (100% sanitation - 0% slums - 100% water supply);
• The increasing role of all stakeholders, especially the private sector in the development and provision of housing and settlement to reduce the backlog
• The availability of good quality facilities - infrastructure and utilities for housing and residential areas
4.2.2 Settlement Environment Restructuring Plan (RPLP) Penjaringan
Status: The Settlement Environment Restructuring Plan (RPLP) for Penjaringan is a plan at Kelurahan level,
established through community participation under the Kotaku Program. It has no legal status but provides a
long-list for further Kotaku related program implementation. The current version is still draft.
2 See Annex 3.5
Vision, Mission, Strategy
The Kelurahan Penjaringan vision is to realize a harmonious community with a healthy, productive, and
sustainable living environment. The missions to achieve the vision are:
• Build humane infrastructure and facilities for the region;
• Create prosperous and dynamic settlements,
• Harmonize regional settlement life with the environment,
• Prioritize disaster mitigation based development,
• Urban culture development.
The pursued strategies are:
• Slum settlement reduction and support the 100-0-100 movement in 2019: 100% access to drinking water, 0%
slum areas and 100% access to sanitation.
• The central, city and Kelurahan governments together with Community Base Organizations (CBOs) to synergize
and collaborate to formulate slum prevention and settlement quality improvement programs the in the area.
The strategic measures for slum prevention and settlement quality improvement are:
• Improving the quality of residential buildings (tidiness, density and physical conditions)
• Increasing the environment accessibility
• Improve local drainage system
• Increase access to clean water and drinking water
• Improve wastewater disposal
• Improve waste management
• Safety fire hazard
Action plan directions: Action plan guidelines for the housing and drinking water sectors are:
Table 4-4: Action Plan Directions for Housing and Water Sector
Housing Sector Plan Directions Water Sector Plan Directions
Prevention and improvement of shelter quality
• Improve building space use intensity in accordance with
applicable regulations
• House renovation program at regional level (‘Kampung Deret’)
• Vertical housing development
• Socialization of Healthy Living Behavior
Improvement of access to drinking water
• Create new clean water points (hydrants) in dense settlements
• Expand water supply network
• Expand bulk water through new transmission pipelines
• Add new primary pipelines through each Kelurahan
• Add new drink water tanks in dense settlements
• Create communal water tank networks which distributes to
houses, managed through profit based organization.
Obstacles for implementation are:
• Low-income population is still high
• High land prices and many land disputes
• Very dense residential areas
• High conflict potential
• It is not allowed to invest in infrastructure on illegal land’
• Flood prone areas
35
• Unclear sources of funding for implementation
Five Year Priority Investment Program for RW 17 Penjaringan
Activity Volume Cost Estimate (million Rp.)
1. Improvement uninhabitable houses 57 units 1’425.0
2. Road improvement (concrete) 104.872 m 36’705.5
3. Open drainage channel 35.249 m 17’624.5
4. Drink water treatment 2 points 360.0
5. Water supply house connections 208 units 312.0
6. Communal septic tanks 5 units 900.0
7. Individual treatment units 89 units 4’450.0
8. Waste collection equipment (motor cart, handcarts, bins) LS 259.0
9. Fire safety equipment LS 245.0
TOTAL 62’281.0
Source: RPLP Penjaringan 2017
4.3 Driving Factors of Reform
Factors with potential to drive reform are:
1. Community participation: Increased community participation in planning and land use in accordance with the
legislation
2. Capacity building for technical, institutional, human resources and financial aspects
3. Law enforcement to control land use
4. Synchronization of plans through participation
5. Integrated master plan preparation for Kelurahan Penjaringan through synchronization of existing plans and
programs with multi-stakeholder participation;
6. Clarity is needed on the plan to build low-cost apartment towers on reclaimed land in Muara Baru.
7. Incentives for the development of innovation for access to clean water and low-cost housing
5 Sector Analysis
5.1 Affordable Housing and Land Tenure
5.1.1 History
Program development: Settlement improvement programs have changed along with changes in community
conditions and based on lessons learned. Slum improvement programs implemented by the government have
undergone transformations relating the goals, such as physical infrastructure and settlements improvements,
economic improvement and enhancement programs, community development program to improve and enhance
the socio-economic conditions of community. Below an historical overview of slum improvement programs is
provided, including provision of low-cost housing:
Table 5-1: History of Slum Area Improvement Programs in DKI Jakarta
Program Year Description of Program
Kampong Improvement
Program (KIP) / Muhammad
Husni Thamrin (MTH)
1969 -1979 • The Kampong Improvement Program (KIP) in Jakarta was named Muhammad Husni
Thamrin Project (MTH). This innovative program focused on the improvement of
urban settlements where the majority is poor.
• The basic aim of the KIP implementation is the physical condition improvement of
Kampung environments through the development and improvement of footpaths,
drainage, water supply, sanitation infrastructure and health and education facilities.
• The KIP was successful because it used appropriate technology, was low cost, took
advantage of the social, economic and cultural diversity, encouraged residents to be
independent and innovative, and was easily replicated.
Integrated Urban
Infrastructure Development
Program / P3KT
1984 -1989 • Law 16 of 1985 on low-cost apartment flats was published.
• P3KT was an urban development program which used an urban development
strategy as basis for the formulation of an urban infrastructure investment program.
Group Housing Development
(P2BPK) 1994-1998 • ‘Very Simple House’ (RSS) and ‘Simple House’ (RS) development, slum improvement,
slum rehabilitation, construction of wastewater infrastructure.
• Community self-reliance housing as one of the government priorities.
• Poor community group housing fostered and directed by the government.
Urban Poverty Program (P2KP) 1999 • P2KP is a slum community empowerment program
Development of the National
1 Million Houses Movement
(GNPSR)
1998 -2004 • In 2002 RSS and RS was changed in ‘Simple Healthy House’.
Low-cost apartment flats
(Rusunami, Rusunawa) 2004 • The Ministry of Housing issued Regulation 15 of 2004 on the National Housing
Development General Company. (PT. Sarana Multigriya Finance - SMF), which
targets the development of healthy simple housing.
• In December 2006 the Presidential Decree No.22 of 2006 on the Coordination Team
of Urban Flats Construction was issued.
• In 2007 PP No.31 of 2007 on the Owned Flats (Rusunami) was published
• Publishing of Pergub 136 of 2007 on Accelerating of Flat Construction (Rusunawa) in
Jakarta which essentially provides incentives for developers and community to build
flats.
Neighborhood Upgrading and
Shelter Sector Project (NUSSP)
Phase I
2005-2010
• Programs geared to the rehabilitation or enhancement of urban slum environments
implemented through partnerships between government, private sector and
37
Program Year Description of Program
community and institutional strengthening efforts at the community level to ensure
the sustainable development.
Slum Alleviation Policy and
Action Plan (Sapola) 2013 • National policy and action plan developed by Bappenas on solving the problems of
poor community living in urban slums.
Area Based Slum Housing &
Settlement Improvement
Program (PLP2K-BK)
2010 • Realizing suitable housing and settlement environment through the effective and
efficient planning and synchronize actions of the central government, local
governments, communities and other stakeholders.
National Urban Community
Empowerment Program
(PNPM)
2013 -2015 • PNPM Mandiri is a program to reduce poverty in the field of housing and
settlements.
• Poverty reduction acceleration by fulfilling the need of affordable habitable housing
and a healthy and safe environment
Group Focused Housing
Development Program
(P2BPK)
1989 - 2000 • This program targets 10% of the low income community to be able to build homes
through the provision of group self-help or stimulants.
‘Kampung Deret’ Program 2013 • Includes interventions on land settlement, rebuilding complete housing and
infrastructure, legality of land ownership.
• Implemented using private sector CSR funds
Neighborhood Upgrading and
Shelter Sector Project (NUSSP)
Phase II
2016 - 2019 • Supports the National Development Plan 2015-2019 (RPJMN) and strengthens the
role of local governments in accelerating the '100-0-100’ program (100% clean water
supply, 0% slums, and 100% sanitation) through slum prevention and improvement
programs in urban slum areas, infrastructure improvements, and the creation of
sustainable livelihoods.
One Million Houses for the
Community Program 2015 • Purpose is to provide houses for low income community (BoP)
• Implemented through a mortgage with a down payment of 1% of the selling price of
the home and provision of direct subsidies to the low income community, stimulants
for infrastructure and utilities.
• Housing provision is not only based on house ownership, but also on rental housing,
special housing and community-build housing.
Kotaku program (Cities
Without Slums) 2015-2019 • National slum prevention and quality improvement program implemented based on
the Strategic Plan of the Directorate of Human Settlements.
According to the above table, the transformation of slum improvement programs includes changes in goals,
objectives, involved stakeholders and activities undertaken to improve the slums. Transformation programs are
influenced by population growth, changes in neighborhood conditions, and socio-economic conditions of
community.
Program beneficiaries: Implementation of slum area improvement programs will benefit:
• Community: Community benefits are measured by:
Increased public access to housing, infrastructure and urban services in slums (drainage, clean water),
waste management, wastewater treatment, fire safety, availability of green/ public open space)
Healthy and clean residential neighborhoods and increased community productivity
Reduced slum areas
Increased self-reliance in environmental improvement of slum areas
Healthy and clean living behavior
Development of decent and affordable housing provision service systems for the poor community,
supported by a strong and stable financial institution.
Increased earnings of low-income groups (BoP)
• Government: Program benefits received by the government as driver include: establishment of government,
community and private sector cooperation in slum improvement and housing provision for low-income
communities, cities become cleaner, healthier and tidier.
• Private sector: Benefits received by the private sector include: increased company image, strengthened
company's brand, improved infrastructure services, and better relations with other stakeholders.
Slum Improvement Policies: Slum improvement on legal land through environmental quality improvements such
as improved housing, drainage, clean water, sanitation, and local roads, while the communities living in slum
settlements on illegal land will be moved to more viable housing such as rental flats.
Subsidies for slum housing rehabilitation and low-cost housing:
• Subsidies for slum housing rehabilitation: Slum prevention and settlement quality improvement activities
are supported with stimulant funds from the Investment Help Fund (BDI). BDI funds are directly disbursed to
Kelurahans through local governments, to build environmental infrastructure, and support social activities
and community productive economic activities. In the P2KP, PNPM Mandiri and P2BPK programs, grants
from local governments are channeled to community groups in Kelurahans to build or renovate houses
independently.
• Subsidies for low-cost housing: Associated with easy housing finance for low-income communities (BoP), the
government provides assistance through: Community Housing Credit (KPR), Housing Finance Liquidity Facility
(FLPP), Interest Difference Subsidy (SSB) with affordable interest rates, and Down Payment Assistance
Subsidy ( SBUM) for low-income groups.
To support the housing construction for the low-income community, the government issued Presidential
Instruction No. 5/2016 on the granting of tax reduction or exemption on land and building acquisition
(BPHATB), building permit retribution (IMB) and public houses for low-income communities (BoP).
5.1.2 Key stakeholders
Roles of Key Stakeholders: Slum housing improvement on legal and illegal land and the provision of housing for
low income people involves various stakeholders at the level of the central government, provincial government,
municipal government, private sector, donors and the community.
39
Table 5-2: Key Stakeholders in Slum Improvement and Housing Provision
Key Stakeholders Roles
Central government
Directorate for Urban, Housing and
Human Settlements, Bappenas • Coordination of policy formulation of urban areas, housing and settlements
• Coordination and synchronization of the implementation of the urban areas, housing and
settlement plans
Directorate General of Human
Settlements, Ministry of Public Works
and Housing (PUPR)
• Formulation of policy recommendations, rules, strategies and programs in housing and
settlement
• Facilitation of housing quality and slum improvement
• Facilitation of infrastructure, facilities and utilities improvement
Ministry of Finance • Preparation of development budget
Ministry of Home Affairs • Participation in planning of slum improvement activities in problem areas related to
national matters
Ministry of Spatial Planning and Land
Administration (ATR/BPN) • Preparation of regulations, policies related to land administration and spatial planning
Central Bureau of Statistics (BPS) • Provision of housing and settlement database
Ministry of Health • Improvement of environmental health
Coordinating Ministry for Economic
Affairs (Komenko) • To coordinate the completion of cross-ministerial issues in housing and settlement
improvement
Coordinating Ministry of Human
Development and Culture • Facilitation of improved livelihoods and skills of the poor
• DKI Jakarta provincial government
Planning Department (Bappeda) • Coordination, control and supervision of housing and settlement development
implementation
Human Settlement, Spatial Planning and
Land Administration Agency • Facilitation of infrastructure, facilities and utilities construction
• Facilitation of spatial development
• Facilitation of land administration
• Coordination of land provision/supply for low-cost housing construction (BoP)
Housing and Local Government Buildings
Agency (DPGP) • Preparation of livable housing and settlement roadmap
• Socialization of policies, strategies and programs on housing and settlement development
Central Bureau of Statistics (BPS) • Development of a housing and settlements database
Waterworks Agency • Preparation of policies and strategies related to water resources
Highways Agency • Preparation of policies and strategies related to the environment
Food Security, Marine and Agriculture
Agency • Preparation of policies and strategies related to livelihoods improvement of poor
community in agriculture, marine and fisheries
Cooperatives, Small Business and
Commerce Agency • Preparation of policies and strategies related to livelihoods improvement in SMEs, trade
and services
Labor Agency • Preparation of policies and strategies related to improvement of labor skills
Industry Agency • Preparation of policies and strategies related to livelihoods improvement in industry
Environmental Agency (BPLHD) • Facilitation of increase in residential neighborhood
Social Services Agency • Preparation of policies and strategies related to guarantee social services for the poor
Public Health Agency • Facilitation of improvement of environmental health including health insurance for the
poor
Agency of Education • Facilitation of improvement of education quality, including assurance of education for the
poor
North Jakarta city government
Key Stakeholders Roles
Sub-Agency of Human Settlements, Spatial
Planning and Land Administration • Assisting the Human Settlements, Spatial Planning and Land Administration Agency of
North Jakarta
Sub-Agency of Housing and Local
Government Buildings (DPGP) • Assisting the Department of Housing and Local Government Buildings Agency of North
Jakarta
Sub-Agency of Waterworks • Assisting the Waterworks Agency for North Jakarta
Sub-Agency of Highways • Assisting the Highways Agency for North Jakarta
Sub-Agency of Food Security, Marine and
Agriculture • Assisting the Food Security, Marine and Agriculture Agency for North Jakarta
Sub-Agency for Cooperatives, Small
Business and Commerce • Assisting the Department of Cooperatives, Small Business and Commerce for North
Jakarta
Sub-Agency of Labor • Assisting the Labor Agency for North Jakarta
Sub-Department of Industries • Assisting the Industry Agency of North Jakarta
Sub-Agency of Social Services • Assisting the Social Services Agency for North Jakarta
Sub-Agency of Public Health • Assisting the Public Health Agency for North Jakarta
Sub-Agency of Education • Assisting the Education Agency for North Jakarta
Head of Kelurahan Penjaringan • Facilitate implementation of the housing and settlement activities at Kelurahan level
Private Sector
REI, enterprises Jakarta Kadin, Developer,
Perumnas, Bank BTN, Private Bank • Provide infrastructure through PPP mechanism
• Helping slum improvement and construction of flats with CSR funds
• Cooperate with the government in the provision of low-income housing
Donors
IDB, ADB, World Bank • Provide loans or grants for slum prevention programs and the implementation of housing
for low-income community (BoP)
Community / NGOs / CBOs
UPC, JRMK • Assist and facilitate the process of community empowerment
Cooperation among stakeholders: In slum improvement the central government acts as regulator, designer of
macro scale programs and as funding facilitator, while the local government based on the decentralization policy
will be active in initiating, detailing and implementing the slum improvement programs in the region. The
coordination between the central government and the local government is in practice often not well established,
and local governments often have their own priorities, which leads to incomplete implementation by the local
government.
NGO/CBOs, private sector and donors should participate in slum improvement, given the limited government
capacity. Community involvement in planning, implementation and supervision is not yet optimal. Private sector
and donor participation in the funding of slums and housing improvement is not optimal, so the government has
limited funding for implementation.
Decision-making: The decision making process for slum improvement is normally neither based on accountable
analysis supported by valid data, nor based on the principle of participation. This means that not all parties have
an equal opportunity to express their opinions, and decide on matters which directly concerns their fate.
41
5.1.3 Financing
Funding sources for slum housing improvement: Slum improvement involves various financing sources, both
governmental and non-governmental (private sector, donors, community). Sources of government funding
include the national budget (APBN), provincial budget (APBD), the city budget (APBD), grants and loans (to
facilitate infrastructure), while non-government funding comes from the community (community-based
infrastructure development), CSR, PPP, national/local state enterprises and donors (grants / loans).
Funding sources for low-cost housing: Opportunities for housing finance include: (1) Integrated housing
institution (Housing Finance Liquidity Facility, Housing Savings, and Long Term Fund); (2) Bank BTN as a bank for
housing finance; (3) Bank and Non-Bank Financial Institutions (Cooperative/Multi-finance); (4) PT. SMF as a
secondary mortgage institution; (5) Non-government funding sources.
There are however several issues: limited financial support for low-income housing, limited availability housing
finance schemes for low income community; still low affordability of low income community for housing, limited
accessibility of low income community to financial institutions to obtain mortgages.
Private sector financing schemes
• Private financing schemes for low cost housing: According to Law 1 of 2011 on Housing and Settlements, the
real estate developers must realize balanced residential housing. This is further elaborated in Ministerial
Regulation (Permenpera) No. 10 of 2012, which describes the concept of balanced residential housing
footprint with ratio 1: 2: 3, meaning that each luxury house, must be balanced with two intermediate houses
and 3 simple houses, in one plot, or at least in the same Regency / City. Furthermore Law No.20 of 2011 on
Flats stipulated that for commercial buildings, developers are required to provide public low-cost apartments
(for BoP) of at least 20% of the total floor area of commercial flats.
• These policies are felt heavily by the developers, because the land prices are very high, making them
unable to build a simple house. In Ministerial Regulation (Permenpera) No. 07 of 2013, stipulates that
developers who do not implement the balanced residential concept are subject to criminal and civil
offense. The hardiest sanction in this Regulation is the revoke of the business license of the company.
Nonetheless still many developers do not notice/obey these rules.3
• Private financing schemes for slum rehabilitation: Private financing can be done through the mechanisms of
CSR, PPP, and inclusive business development based on market-driven, supply / demand (see Table 5-3 below).
3 See Annex 3.7
Table 5-3: Multi-Source Funding including Private Sector Financing
Source; Triple-A
Program implementation: The stages of program implementation are:
• Planning: The planning phase includes: synchronization of existing plans, identification of problems,
formulation of solutions; commitment building of all stakeholders involved in the slum improvement, action
plan preparation, and design of detailed/technical plans.
• Implementation: During the implementation phase, activities listed in the annual plan and priority activities
that have been coordinated in advance are implemented. Implementation includes: budgeting, DED
preparation, tendering, construction, and supervision of activities, and may include socialization, education,
training, formulation of design standards for slum prevention and planning of operations and maintenance.
• Sustainability support: Sustainability support includes: regulatory framework establishing, institutional
strengthening, database management, monitoring and evaluation and operation and maintenance of assets
that have been built or rehabilitated.
Corruption: Activities vulnerable to corruption during the implementation stage are: tendering activities,
compensation for residents affected during land acquisition and resettlement and channeling funds / subsidies.
The following precautions can be taken to minimize corruption:
• Transparent advertising of procurement / tenders
• Additional auditing of procurement procedures including: supervision for procurement (land, construction),
provision of experts, and supervision of financial management
• Community involvement in implementation and monitoring of the program
COMMUNITY
• NGO’s
• CBO’s
• Universities
GOVERNMENT
• Bilateral Donors
• Lending Banks
PRIVATE SECTOR
• Commercial Banks
• Multi-national Firms
POVERTY
• jobless
• homeless,
• pennyless
SURVIVAL
• self-help
• survival
• solidarity
BASIC NEEDS
• citizen cards
• education cards
• health cards
CSR
• humanitarian aid
• charity
• incentives
EFFECTIVENESS
• relief
• visible
• measurable
EXPOSURE
• pollution
• disaster
• diseases
EMPOWERMENT
• living conditions
• education
• health care
FACILITIES
• infrastructure
• housing
• schools, clinics
PPP
• joint investment
• micro-finance
• ‘blended’ finance
FEASIBILITY
• bankable
• low risk
• high return
OBSTACLES
• no income
• no capital
• high costs
POTENTIAL
• livelihood
• SME
• affordability
SERVICES
• land rights
• permits
• cross-subsidies
HCC
• inclusive business
• market-driven
• supply / demand
SUSTAINABILITY
• viable
• replicable,
• up-scalable
HUMAN CITIES
• human scale
• safety,
• security
RESILIENCE
• efficient delivery
• EIRR and FIRR
• public support
BUSINESS CLIMATE
• purchasing power
• market share
• profitability
CH
AL
LE
NG
ES
STAKEHOLDERS
OBJECTIVES
AIM
S
43
• Periodic program evaluation by an independent consultant and dissemination of evaluation results to the
relevant parties
• Reporting acts of corruption to competent agencies (KPK, police, and court).
5.1.4 Bottlenecks
Main obstacles in the implementation of slum improvement are:
• No integration and synchronization of sectors, programs and stakeholders;
• Limited subsidies;
• Many land use violations4
• Land shortage 5
• Settlement on illegal land
• No regulations and guidelines are available as reference for settlement improvement by the Jakarta
government
• The absence of a long-term policy platform as basis for quality improvement of slums areas (Housing and
Settlement Development Plan (RP3KP), Settlement Region Plan (RKP)).
• Lack the institutional capacity for housing and settlement improvement
• Slum information system accessible by all the relevant stakeholders is still not available
• Program implementation is still sectoral, ad-hoc, not integrated across sectors
• Limited government funding for the utilization of multi-source funding do not optimal
Main obstacles in the implementation of low-cost housing and land tenure are:
• Housing sector support policies have been inadequate
• Housing construction coordination and institutions have not been optimal.
• Controlling role of the government on land and housing prices has not been optimal.
• Process efficiency and high cost of building permits is not optimal.6
• Limited land and high land and building material prices for housing construction. 7
• Supervision and control in the development of housing is not optimal. 8
• Still high backlog in housing ownership.9
• Development and utilization of housing construction technology needs improvement.
• Limited availability of funds 10
• Corruption
4 See Annex 3.10 5 See Annex 3.4 6 See Annex 3.3 7 See Annex 3.3, 3.4 and 3.7 8 See Annex 3.7 9 See Annex 3.4 10 See Annex 3.3, 3.4
5.1.5 Potential for Reform
Slum housing rehabilitation programs can be improved through:
• Synchronizing existing plans in a participatory manner
• Preparation of an integrated master plan for slum improvement
• Law enforcement for illegal housing and illegal land use
• Implementation of land banking
• Land consolidation
• Transparency of slum improvement process.
• Capacity building of institutions, implementation human resources and settlement managers (government,
NGOs/CBOs, community) through training, mentoring, coaching / technical assistance. 11
• Management information system shared by the stakeholders and integrated between national and regional
information systems and regularly updated.
• Planning control through monitoring of the planning and programming
• Regular supervision in the implementation of slum improvement
Potential changes to the provision of housing for low income people and land tenure include:
• Application of the land banking concept to acquire land at a relatively cheap price for the public interest. With
this conception land is acquired and reserved until the time is right to use it, for example for housing
construction.
• Support private sector to participate actively in realizing a fair distribution between low-, middle- and high
income housing, though regulations and supervision;12
• Expanding housing support to not only financial aid and credits, but also to other forms such as infrastructure
/ utilities development in housing and residential neighborhood, community capacity building through training
programs, or institutional capacity building programs.
• Land administration reform as solution to the inequality of land. Inequality of land tenure is one of the factors
that hamper the right of the poor (BoP) on decent housing.
• Revise laws that hamper the access to land for the poor (BoP).
Beneficiaries: The beneficiaries of the reform would be:
The government will meet its obligations to provide decent housing for the poor.
The poor community will receive access the healthy and livable housing.
The Private sector will enjoy easier licensing and tax relief.
11 See Annex 3.10 12 See Annex 3.3 and 3.7
45
5.2 Access to Clean Water
5.2.1 Political-Economic Context
Water Scarcity
Access to drinking water is essential for human life and vital for economic productivity.
Due to bulk water shortage the existing piped networks of North Jakarta cannot deliver sufficient water. In
response the National Government of Indonesia has prioritized additional bulk water supply from the Jatiluhur
and Karian reservoirs, but implementation may still take several years. Even if bulk water would become
abundant, according to the regulations only legal land occupants can apply for house connections, which excludes
most slum dwellers, who often are illegal occupants without Jakarta citizen cards. Lack of water to flush toilets
also affects sanitation systems, posing public health risks that may lead to declined productivity, reduced income
and increased medical cost. Access to safe drinking water is important factor for poverty reduction in slum areas.
High Cost of Buying Drinking Water
The piped water tariffs in Jakarta are among the highest of Indonesia. For coastal slum dwellers in locations
without piped water supply, the alternative option is water delivered by jerry can, which is even costlier per cubic
meter than piped water. Poor people are left no choice but spending a large portion of their income on buying
water. This also affects their livelihood and economic activities that depend on water. Private investors are
reluctant, if locations have no access to clean water, or if water is too costly
Polluted Rivers and Dropping Groundwater Table
Rivers and streams in Jakarta are severely polluted by domestic and industrial waste.
Poor water quality makes river water useless for human consumption or domestic use.
Groundwater over-abstraction has not only caused groundwater tables to drop sharply, but also caused land
subsidence that contributes indirectly to flooding. Near the seashore over-abstraction may lead to salt water
intrusion. For all these reasons, National and Local Government have prioritized halting of groundwater over-
abstraction, which makes provision of additional bulk water from other sources even more important.
Legal and Institutional Context
Access to clean water is a basic human right according to the Indonesian Constitution of 1945, and guaranteed
by Government’s subscription to the UN Millennium Development Goals. Law No. 7, 2004 on Integrated Water
Resource Management which permitted privatization of water supply, was abolished in February 2015, hence
Water Law No.11, 1974 was reinstated, which does not permit privatization of water supply. In 1997 PAM issued
25-year concessions for 2 private water supply companies, which aimed at streamlining the management and
accelerating the extension of water distribution networks, including reduction of water leakage. However, it was
financially more attractive for the private partners to pay sanctions, than to address the water leakage. The
concessions allowed the private water supply companies to increase the water tariffs to secure their profits.
However, in 2008 the Governor of Jakarta intervened, and froze the piped water supply tariffs at the high level,
where they still are today.
5.2.2 History
Drinking water needs: Total drinking water needs for the Greater Jakarta in 2010 is 70 m³/s. This water need will
continue to increase to 115 m³/s in 2050. For the Jakarta area alone drinking water needs are 27.6 m³/s in 2010
and will become 42.4 m³/s in 2050.
Table 5-4: Drinking Water Needs Greater Jakarta Area in 2010, 2030 and 2050
Source: Water Resources Management Plan (‘Rencana’) BBWS Cilcis
Water sources: For their daily water needs, the people of Jakarta use the water supply network (PD PAM Jaya)
of 36.3%, water retail (water kiosk) of 2.8%, drilled wells with pumps of 57.1%, 3% protected dug wells of 16.8%,
and unprotected dug wells 0.7%.
Table 5-5: Drink Water Source Distribution over Households
Source: Plan BBWS Cilcis
Coverage area of drinking water network: In North Jakarta in the border area east and west and along the coast
are not covered by the water supply system. Of the total bulk water capacity of 18.0 m³/s, 14.5 m³/s is derived
from the Jatiluhur dam.
District/Municipality Tap water Bought water Drilled wells Dug wellsUnprotected
dug well
Protected
spring
Unprotecte
d spring
Rain water
reservoir
Irrigation or
river waterKep. Seribu 3,2 8,2 0,7 81,6 2,3 0,0 0,0 4,0 0,0
Jakarta Selatan 12,4 1,5 80,7 3,7 1,7 0,0 0,0 0,0 0,0
Jakarta Timur 21,5 1,6 76,0 0,7 0,0 0,0 0,0 0,0 0,0
Jakarta Pusat 48,4 3,6 45,1 2,0 0,6 0,0 0,0 0,0 0,0
Jakarta Barat 47,5 3,3 44,4 4,4 0,4 0,0 0,0 0,0 0,0
Jakarta Utara 77,8 5,7 11,7 3,8 1,0 0,0 0,0 0,0 0,0
DKI Jakarta 36,3 2,8 57,1 3,0 0,7 0,0 0,0 0,0 0,0
Kab. Bekasi 16,0 3,4 70,0 6,3 3,6 0,1 0,1 0,0 0,5
Kota Bekasi 13,9 2,5 82,1 1,5 0,0 0,0 0,0 0,0 0,0
Kab. Bogor 4,1 1,0 21,1 37,9 11,8 7,2 11,2 0,3 5,2
Kota Bogor 42,0 1,1 25,3 24,0 1,3 6,3 0,0 0,0 0,0
Kota Depok 11,3 1,1 68,0 18,2 1,4 0,0 0,0 0,0 0,0
Kab.Cianjur 4,5 0,6 9,5 39,9 9,2 6,1 23,0 0,3 6,9
Jawa Barat dalam Jabo 15,3 1,6 46,0 21,3 4,6 3,3 5,7 0,1 2,1
Kab. Tangerang 12,4 1,1 69,5 14,3 1,4 0,0 0,0 0,0 0,0
Kota Tangerang Selatan 7,7 2,1 77,6 9,9 2,4 0,0 0,0 0,3 0,0
Kota Tangerang 21,4 1,9 72,5 4,0 0,2 0,0 0,0 0,3 0,0
Banten in Jabodetabek 13,8 1,7 73,2 9,4 1,3 0,0 0,0 0,2 0,0
Average Jabodetabek 22,9 2,6 50,3 16,8 2,5 1,3 2,3 0,3 0,8
2010 2030 2050 2010 2030 2050 2010 2030 2050 Jakarta Selatan 4,5 6,6 7,7 1,4 2,0 2,3 5,9 8,6 10,0 Jakarta Timur 5,9 7,9 8,6 1,8 2,4 2,6 7,7 10,3 11,2 Jakarta Pusat 2,0 3,0 3,4 0,6 0,9 1,0 2,6 3,9 4,4 Jakarta Barat 5,0 6,4 6,9 1,5 1,9 2,1 6,5 8,3 8,9 Jakarta Utara 3,6 5,2 6,0 1,2 1,6 1,8 4,8 6,8 7,8 Kluster Jakarta 21,1 29,1 32,6 6,5 8,8 9,8 27,6 37,8 42,4 Bogor 6,3 9,9 11,8 2,2 3,4 4,0 8,5 13,3 15,8 Kota Bogor 2,0 2,9 3,2 0,6 0,9 1,0 2,6 3,7 4,1 Kluster Bogor 8,2 12,8 15,0 2,8 4,3 5,0 11,1 17,1 19,9 Kota Depok 3,8 5,0 5,4 1,1 1,5 1,6 5,0 6,6 7,0 Kluster Depok 3,8 5,0 5,4 1,1 1,5 1,6 5,0 6,6 7,0 Bekasi 4,0 7,6 10,8 1,7 2,8 3,7 5,7 10,3 14,5 Kota Bekasi 5,1 6,9 6,9 1,6 2,1 2,1 6,7 9,0 8,9 Kluster Bekasi 9,1 14,5 17,7 3,2 4,8 5,7 12,4 19,3 23,4 Tangerang 3,8 6,6 7,9 1,3 2,1 2,6 5,1 8,7 10,4 Kota Tangerang 4,0 4,7 4,5 1,2 1,5 1,4 5,2 6,2 5,9 Kota Tangsel 2,8 4,1 4,5 0,9 1,2 1,3 3,7 5,3 5,8 Kluster Tangerang 10,6 15,4 16,9 3,4 4,8 5,3 14,0 20,2 22,2 Total Jabodetabek 52,9 76,7 87,4 17,1 24,2 27,4 70,0 101,0 114,9
Region Domestic Water Need (m 3 /s) Non Domestic Water Need (m 3 /s) Total Water Need (m 3 /s)
47
Figure 5-1: Water Supply Coverage Area Map Jakarta 2016
Source: PAM Jaya, 2016
Figure 5-2: Bulk Water Supply System Jakarta
Groundwater: The registered amount of deep groundwater abstracted in 2007 was about 21 million m³/year
(0.67 m³/s) of the 3’800 deep wells registered at the Ministry of Energy and Mineral Resources. Based on the
assumption that 2/3 of the deep groundwater abstraction is illegal, the total groundwater abstraction becomes
2 m³/year, which is higher than the total capacity of 1.65 m³/s.
Figure 5-3: Deep Groundwater Abstraction 1879-2007 (million m³/year)
What
This groundwater over-abstraction causes reduced pressure levels of groundwater (drawdown) at a rate of 2.5
m / year in Jakarta, brackish groundwater penetration up to 5 km from the coastline, and an average land
subsidence in Jakarta of 5 cm / year. The highest land subsidence reaches 18 cm / year at Marina beach. If the
land subsidence continues then 75% of North Jakarta will be below mean sea level in 2025. Effects of land
subsidence for slum dwellers are higher and longer inundations after heavy rains and a higher risk of tidal floods.
Water supply network: Piped water supply in Jakarta is the responsibility of PAM Jaya as local government-
owned enterprises engaged in production, transmission and distribution of drinking water and other activities
related to drinking water. In reality the operation of water supply services is carried out by two operators, namely
PT. PAM Lyonnaise Jaya (Palyja) for the western half of DKI Jakarta (including Penjaringan) and PT. Aetra for the
eastern half, in accordance with an Cooperation Agreement signed in February 1998. To facilitate the distribution
system, PAM Jaya service is divided into six zones. This is to facilitate the distribution of clean water in Jakarta
and reduce water losses.13
History of PD PAM Jaya:, The history of PD PAM Jaya is summarized in the following table:
Table 5-6: History of PD PAM Jaya
Year History
1843 To meet the water needs of the city of Batavia (Jakarta), the Dutch government implemented a water supply
system with bulk water from drilled (artesian) wells
13 See Annex 3.8 and Annex 3.9
49
Year History
1918 -1920 The Ciburial springs were found in the Ciomas area (Bogor) by the Dutch government with a capacity of 484 l / s,
and the Gementeestaat-waterleidengen van Batavia was established
1922 On December 23, for the first time water from Bogor Ciburial flowed into the city of Batavia (Jakarta). This date
is used as the establishment date of PD PAM Jaya
1945 -1963 Water services implemented by the Dinas Saluran Air Minum Kota Praja under the Municipal Public Works Unit
1977 • On 30 April 1977 PD PAM Jaya was legally established by Perda DKI Jakarta No. 3/1977
• On 2 November 1977 the establishment of PAM Jaya was confirmed by Ministeral decree: PEM /
10/53/13350, which was promulgated in the Official Jakarta Gazette No. 74 1977
1997 On 6 June 1997, the Cooperation Agreement for 25 years was signed between PAM Jaya and two Private Partners,
PT. Garuda Dipta Semesta (currently PT. PAM Lyonnaise Jaya or PT. Palyja) and PT. Stump Airindo Structure
(currently PT. Thames PAM Jaya or PT. TPJ)
1998 On 1 February 1998, full operation of water supply services by 2 Private Partners started
2001 After negotiations the Cooperation Agreement was revised (Amended & Restated) into a new Cooperation
Agreement of 22 October 2001
2004-2005
• On 24 December 2004 an Addendum of the 2001 Cooperation Agreement was signing for the Western
Region (PT. Palyja)
• On 7 October 2005 an Addendum of the 2001 Cooperation Agreement was signing for the Eastern Region (PT.
TPJ)
2008-2009
• On 20 October 2008 an Addendum of the 2001 Cooperation Agreement was signing for the Western Region
(PT. Palyja)
• On 8 January 2009 an Addendum of the 2001 Cooperation Agreement was signing for the Eastern Region (PT.
Aetra)
Cooperation history of PAM Jaya: Since 1998 the water supply management in Jakarta is handed over from PD
PAM Jaya to two private parties (PT Palyja and Thames Pam Jaya/now PT Aetra) for 25 years through a concession
agreement.14 Both companies have changed ownership. The concession agreement provides exclusivity in water
services in the cooperation areas, including some additional authorities, such as on disconnecting customers.
Through this exclusivity, the government of Jakarta / PAM Jaya cannot intervene in the area to which the operator
has a monopoly. The expansion of the network must be approved by both parties of the agreement (PAM Jaya
and Palyja / Aetra) in batches of 5 year programs.
On 18 February 2015, Law No. 7 of 2004 on Water Resources Management was canceled, which returned the
responsibility of drinking water management to the government. Therefore the cooperation contracts between
PAM Jaya and Palyja and Aetra is currently being re-examined. RW 17 Penjaringan is part of the service area of
PT. Palyja.
Subsidy services: One of problems faced by PAM Jaya is the lack of good quality bulk water. To solve this, the
Government issued decree No. 70 of 2016 from the Ministry of Home Affairs on Subsidy Granting. These subsidies
are aimed to reduce water production costs and achieve good quality drinking water at affordable prices. This
law is a result of the cancellation of Law 7 of 2004 on Water Resources Management.
To support the poor community, both central and local government should allocation subsidy budget for drinking
water purposes. These drinking water subsidies for the poor include: (1) Cross-subsidies between different
economic level of customers; (2) Infrastructure subsidies for the development of production facilities, distribution
facilities and household connections, (3) Subsidized tariffs for poor households; (4) The provision of grants in the
form of cash-rebates which is given directly to the poor households for payment of water consumed; (5) Direct
subsidies in the form of cash transfer or direct cash subsidies to poor households.
14 See Annex 3.8, 3.9
5.2.3 Key stakeholders
Roles of Key Stakeholders: Actors involved in the provision of clean water, consists of central and local
government, private sector, NGOs and communities (see Table 5-7).
Figure 5-4: Relationship between Water Supply Actors in DKI Jakarta
Source: Pam Jaya
Table 5-7: Roles of Key Stakeholders in Water Supply
Main actors Role
Central government
Director General of Water
Resources at the Ministry of Pubic
Works and Housing (PUPR)
Formulation of policies related to the quality and quantity of surface water / bulk water
Settlement Department at the
Ministry of Pubic Works and H. Formulation of policies related to water, sanitation, drainage and solid waste
Deputy of Infrastructure and
Regional Development, Ministry for
Economic Affairs
Coordination and synchronization ministerial / agency policies relevant for water resources
infrastructure and drinking water network.
Natural Resources Research and
Development Center Research, development and application of science and technology in the field of water resources
Perum Jasa Tirta II Managing the Jatiluhur Reservoir and Tarum Bulk Water/Irrigation System
Deputy of Bappenas on
Infrastructure and Facilities Policy formulation and drafting of infrastructure and facility development in the field of water
Groundwater and Bulk Water
Center, DGWR -Ministry PUPR Research related to groundwater and bulk water
51
Main actors Role
Ministry of Finance Budgeting for the implementation of the clean water program
Ministry of Health Determining the PDAM water quality standards
MOHA Management of water supply tariffs
Geological Agency, Ministry of
Energy and Mineral Resources Implement policies of groundwater abstraction permits
DKI Jakarta provincial government
Water Planning Office Jakarta Planning, construction, maintenance, control, monitoring, evaluation, research, development and
protection of natural resources
Water Supply Regulatory Body Maintaining a balance between the interests of the community, the Cooperating Parties, and other
agencies / institutions for drinking water service delivery in the Region
PD. PAM Jaya Provide and improve Jakarta water supply services
North Jakarta Government
Dept. of Water Systems Assist the Water Planning Office in carrying out the planning, construction, maintenance, control,
monitoring, evaluation, research, development and protection of natural resources
Private Sector
PT. Palyja Operator for water supply services of the western region of Jakarta (including Penjaringan)
PT. Aetra Operator for water supply services of the eastern region of Jakarta
Water Kiosks Sell ‘recycled’ gallons with refill potable water
Water Traders Sell clean water to consumers in jerry cans
NGOs / Community
Mercy Crops GPOBA Program providing access to clean water for the poor on illegal land (Master-meter)
IUWASH Adopting a program approach Accelerated Urban Sanitation Development (PPSP) and Community
Based Total Sanitation (STBM) and water supply capacity building
KARINA Water harvesting program, urban agriculture program
UNICEF Clean water, sanitation and environmental programs
Management of Piped Water Supply Services: Most residents of Penjaringan rely on piped water for daily needs,
which is provided by PT Palyja. The vision of Palyja is: 'To be a socially responsible water service provider in
Indonesia by contributing to environmental conservation and community development through good corporate
governance'. Only about 70% of households in Kelurahan Penjaringan have water supply connections. The water
supply is not continuous and the water quality is poor, while water tariffs are quite high. The water crisis is a
result of lack of bulk water services and high water losses and lack of operation and maintenance of the
network.15
Non-Piped Water Supply Services: Some residents are able to use ground water for daily purposes, in locations
where groundwater is still quite suitable for consumption. At other locations, people are looking for other
alternative sources like gallons of bottled water or buy water from the street vendors/kiosks. Palyja has opened
water kiosks at densely populated areas (including in Penjaringan), without a water supply network, where it sells
water for Rp. 300 per jerry can (about 20 l). House to house distribution of these jerry cans is done by handcart
operators who sell the water for about Rp. 3000 per jerry can (for the delivery service). Main bottlenecks are the
high price of the water at the household, and inconvenience of the system.
15 See Annex 3.6
5.2.4 Financing
Funding sources: Management of drinking water is a government obligation undertaken by the Municipal
Company PD PAM Jaya. Logically, the water business should be a profitable and prospective business, since all
human beings need water. But in reality the performance of PAM Jaya in partnership with Palyja and Aetra,
cannot be categorized as good and satisfactory, both in terms of customer service and in terms of financial
performance. Funding for water supply services is derived from the government budget (APBN and APBD),
operational income of Palyja and Aetra, and loans and grants from donors. To improve the drinking water supply
service quality, the Government provides facilities and incentives to improve performance. Policies include debt
restructuring programs, government guarantees and support for PPP drinking water projects.16
Water service performance: Performance of water service is as follows:
• Customers often don’t receive water as a result of the lack of bulk water. Water losses are still as high as 44%,
which is higher than the average national rate of water losses, which is 31 %. The higher the water losses, the
more inefficient the water service performance.
• Customers receive bad water supply services. The most common case is no water for hours, which occurs
almost daily. Especially in areas with a majority of low-income people in North Jakarta, residents must buy
jerry cans of water at a price much higher than the water supply tariffs. For buying jerry cans of water, residents
have to spend around Rp. 15’000 / day17, which is very expensive for people who have a daily income of less
than Rp. 30’000,-
• The performance of private operators is poor, because they try to maximize profits without investing these
gains to increase water service.
• High water tariffs, but service quality and water quality are poor.
Corruption: One of the characters of privatization is the lack of transparency and accountability. The cooperation
contracts between PAM Jaya and the private water supply operators have never been opened to the public until
2013 when the provincial government of DKI Jakarta began to consider ending the cooperation with private
operators. Though this contract affect the water supply of millions of people in Jakarta. In January 2012 the
‘Community Coalition Rejecting the Privatization of Water Services Jakarta’ (KMMSAJ) reported alleged cases of
corruption involving PAM Jaya and the two private operators to the Corruption eradication Commission (KPK).
The corruption case is currently being investigated by the Commission, and the loss to the state is estimated at
IDR 561 billion. The Jakarta water service privatization process started during the corruption, collusion and
nepotism period at the end of the ‘Orde Baru’.
16 See Annex 3.8 17 See Annex 3.1
53
Table 5-8: Drinking Water Tariffs PAM Jaya
GROUP CHECK
CODE DESCRIPTION / TYPES OF CUSTOMERS
Water Usage Rates (Progressive)
0-10 m³ 11-20 m³ > 20m³
KI
1A Social House - Dormitory
1,050 1,050 1,050 1B Orphanage - Dormitory
1C Religious Place
5A Hydrant and Public Tap
K II
1D Government Hospital
1,050 1,050 1,575 2A1 Very Low Household
5F1 Very Simple Apartment
K III A
2A2 Low Level Household
3,550 4,700 5,500 5B Water Station and Car Tank
5F2 Simple Apartment
K III B
2O Non Commercial Private Institution
4,900 6,000 7,450
2A3 Middle Level Household
3A Small Shop / Kiosk
3B1 Small Service Station
3C1 Small Enterprise
3D1 Household Enterprise
5F3 Medium Apartment
K IV A
2A4 Above Middle Class Household
6825 8,150 9,800
2B Embassy / Consulate
2C Government Institution Office
2D Foreign Representative Office
2E Commercial Private Institution
2F Education Institution / Course
2G Army Institution
3B Middle Service Station
3C Middle Commercial
3D Middle Commercial in House
3E Barber Shop
3F Tailor
3G Restaurant
3H Private Hospital / Policlinic / Laboratory
3I Doctor Clinic
3J Lawyer Office
3K Hotel (Non Star)
4A Small Industry
5FA Above Middle Class / Apartment
K IV B
3L Hotels (1,2,3 Star) / Motel / Cottage
12,550 12,550 12,550
3M Steam bath / Beauty Salon
3N Night Club / Café
3O Bank
3P Services Station, Big Workshop
3Q Trading / Commercial Company / Shop
3R Hotel (4, 5 Star)
3S High Rise Building / Apartment / Condominium
4B Ice Factory
4C Food / Beverage Factory
4D Chemical / Pharmacy / Cosmetic Factory
4E Industrial Factory / Warehouse
4F Textile Factory
4G Warehouse / Other Commercial
GROUP CHECK
CODE DESCRIPTION / TYPES OF CUSTOMERS
Water Usage Rates (Progressive)
0-10 m³ 11-20 m³ > 20m³
5C Water Barge
5E Ancol Harbor
KW 6D Tanjung Priok Harbor 14,660 14,660 14,660
Source: PAM Jaya
5.2.5 Bottlenecks
Bottlenecks to drinking water services are:
• Limited availability and supply of bulk water: Limited bulk water supply is one of the main problems
experienced by PAM Jaya. Of the current bulk water supply of PAM Jaya 80% comes from the Jatiluhur
reservoir, 15% from PDAM Tangerang (Cisadane treated water) and 4% of Krukut, and Pesanggrahan rivers,
and Ciburial spring. PAM Jaya now supplies only 54% of the total need of about 547.7 million m³/year. Until
now, no additional bulk water source is available yet18.
• Increasing water demand: The water supply provision is not able to follow the fast growing demand caused by
growing population and economy.
• Low pipe network coverage: Although PD PAM Jaya cooperates with two private partners, there is still a low
service coverage, high rates of water losses, and low service delivery.
• Privatization of water services: Privatization of the water supply services has been problematic since the start
of the cooperation agreement between PAM Jaya and the two private operators. These problems included:
accumulated debt PAM Jaya, bad water service, high water tariffs, no attention for poor people to get access
to clean water, too much profit oriented, lack of accountability that encourages corruption, private sector
unwilling to add to expand water supply network. All problems are basically due to the concession agreement,
where the private parties are ensured of businesses benefits, and PAM Jaya and customers bear the losses
and costs.19
• High water tariffs: During the privatization period the water service tariffs increased by tenfold. Finally the
government forced a policy to discontinue automatic tariff adjustments, because the private sector
continuously increased the water tariffs, while private performance was much below target.
• Poor performance: Customers often don’t receive water as a result of the lack of bulk water. Water losses are
still as high as 44%, which is higher than the average national rate of water losses, which is 31 %. The higher
the water losses, the more inefficient the water service performance.
• Poor bulk water quality: The high water treatment cost contributes to the high production cost.20
5.2.6 Potential for Reform
18 See Annex 3.8 19 See Annex 3.8 20 See Annex 3.8
55
Possible improvements to overcome the water crisis are:
• Build water treatment plants: PAM Jaya aim to build four water treatment plants to meet the water needs of
Jakarta. The water treatment plants are located in ‘Hutan Kota’ in West Jakarta, Pesanggrahan in South Jakarta,
the Ciliwung River in South Jakarta and in Buaran East Jakarta. These treatment plants could be constructed
through a PPP arrangement, but according to PD PAM Jaya, the government has sufficient financing capacity
to fund this activity by itself.
• Return the water supply management from the private sector to PD PAM Jaya: Remunicipalization is the
process of returning a public service from private hands to a government-owned agency. This is now being
considered for water supply services in Jakarta, to be restored to PD PAM Jaya. PAM Jaya is a local government
company that has the mandate to provide water services. This remunicipalization can be implemented, by
paying compensation for the legal consequences of the private damages, or by use Article 49.3 of the
Concession Agreement concerning the termination of cooperation due to changes in legislation (refer to the
cancellation of the law on water resources).
• Secure existing bulk water sources and develop new water sources: The Ministry of Public Works and Housing
has started the construction of a transmission pipeline from the Jatiluhur reservoir to Jakarta, while PAM Jaya
prepares water Treatment Facilities. These two measures will increase the bulk water sources and water
supply security. Considering the high investments involved in this infrastructure, the private sector could
participate through a PPP arrangement.
• Reduce water losses from the piped system: Water losses reduction programs include several steps, such as
replacing the customer's water meters, rehabilitating pipelines and to detect leaks in the primary distribution
pipes, and disconnect not paying customers (bad debts). Currently reduction of water losses is part of the
service contract of Palyja. Renegotiation of incentives/disincentives on water loss reduction with Palyja could
improve the conditions.
• Replication of the Master-meter program: The Master-meter program is a pilot project by USAid and the ADB
in collaboration with PD PAM Jaya, PT Palyja and PT Aetra, in which a CBO is launched in a slum area for
planning, constructing and operation of a water distribution network on illegal land, which is supplied by a
master water meter on legal land. This is a solution to the dilemma that the water supply companies must
supply drinking water to the whole community, but cannot make connections on illegal land. Until now the
Master-meter program has been implemented successfully as pilot project in three locations in Jakarta, and is
ready for replication (See 'Rapid Scan of Policies, Plans and On-going Programs' and in the 'Innovation
Assessment' for further details).21 The private partners PT Palyja and PT Aetra could participate again in the
replication, because it helps reducing the illegal connections.
• Development of alternative water sources: Innovative alternative water sources with potential to add water
supply to Kelurahan Penjaringan are Reverse Osmosis (RO), Rainwater Harvesting (RH)22, and Mobile Water
Treatment Plants (MWTP).23 Both water treatment through Reverse Osmosis (RO), and construction of
Rainwater Harvesting (RH) installations are activities interesting for the private sector.
21 See Annex 3.8, 3.9 22 See Annex 3.10 23 See Annex 3.8
6 Conclusions
Provision of Affordable Housing and Land Administration
Many poor households require more attention from the government, particularly in the fulfillment of a decent
shelter. Government interventions to overcome the housing backlog have been implemented, including
through construction of public rental housing, improving the quality of homes and the construction of new
homes specifically for low-income communities, subsidy / help financing for home purchases, tax incentives,
licensing facilities, provision of land, infrastructure and public utilities, and encouragement of private
participation to realize balanced residential areas.
In spite of all the programs, the backlog in housing is still high. This is because:
1. Inadequate housing sector support policies
2. Sub-optimal housing construction coordination and institutions
3. Sub-optimal control by the government on land and housing prices
4. Sub-optimal process efficiency and high cost of building permits
5. Limited land and high land and building material prices for housing construction
6. Sub-optimal supervision and control in housing development
7. High backlog in housing
8. Outdated housing construction technology
9. Limited funds availability
10. Corruption
To overcome the obstacles, housing programs can be improved through:
1. Application of the land banking,
2. Support private sector to participate actively in realizing a fair housing distribution
3. Expanding housing support for low income community
4. Land administration reform as solution to the inequality of land
5. Revise laws that hamper the access to land for the poor (BoP).
Improvement of Access to Clean Water
The urban poor in North Jakarta face a water crisis. Not all residents are connected to the water supply
network, and the water is often not flowing in the network. As a result, people have to buy water from jerry
cans at the water kiosk, which adds to the burden of the poor.
Factors that cause the water crisis include
1. Limited availability and supply of bulk water,
2. Increasing water demand,
3. Low pipe network coverage,
4. A high water loss rate,
5. Privatization of water services,
6. High water tariffs,
57
7. Poor performance,
8. Poor bulk water quality
Possible improvements to overcome the water crisis are:
1. Build water treatment plants;
2. Return the water supply management from the private sector to PD PAM Jaya;
3. Secure existing bulk water sources and develop new water sources;
4. Reduce water losses from piped system;
5. Replication of Master-meter program;
6. Development of alternative water sources (rainwater harvesting, reverse osmosis)
Human Cities Coalition Political-Economic Assessment
Annexes:
1. List of reference documents
2. Key Informant Interviews (KII)
Annex 1: List of Reference Documents
• International documents:
• The Operational Guide For The Making Markets Work For The Poor (M4P) Approach
• Harnessing Private-Sector Capabilities to Realize the New Urban Agenda
• Country scan CSR in Indonesia
• NCICD Roadmap (Updated NCICD Master Plan)
• Social justice at bay. The Dutch role in the NCICD project. - SOMO
• Indications of policies and programs of the next Governor of DKI Jakarta
• Current plans, strategies and programs in North Jakarta / Penjaringan:
• Spatial plan of DKI Jakarta 2012-2030 (RTRW) and Zoning Regulation (RDTR)
• Medium Term Investment Plan of DKI Jakarta (RPJM)
• Settlement Environmental Settlement Plan Kelurahan Penjaringan 2016-2020 (RPLP from Kotaku)
• Plans, strategies, programs related to housing and residential development:
• Kampung Improvement Program (KIP, MHT, kampong deret)
• Urban Poverty Alleviation Program (P2KP)
• National Slum Upgrading Project (NSUP)
• Neighborhood Upgrading and Shelter Sector Project (NUSSP)
• Slum Alleviation Policy and Action plan (SPOLA),
• Environmental Housing Management and Slum Based Settlement (PLP2K- BK)
• National Urban Community Empowerment Program (PNPM Mandiri),
• Housing Group Building Program (P2BPK),
• Slum settlement program by building rental and ownership apartments
• Kotaku program.
• Plans, strategies, programs related to water supply for poor people:
• Global Partnership on Output Based Aid (GPOBA), master meters
• Regulations related to slum handling:
• Law No.1 of 2011 on Housing and Settlement Areas
• Government Regulation (PP) No. 14/2010 on the Implementation of Housing and Settlement Areas
• Ministerial Regulation (Permen) of Public Works and Housing No.2 Year 2016 on Improving Quality of
Housing and Slums
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 1
Annex 2: Key Informant Interviews (KII)
Inaccorddance with the ToR, the Political Economic Assessment (PEA) is prepared based on information gathered
through:
• Key Informant Interview (KII) of major stakeholders
• Collection and review of national and local policy documents and reports from the identified stakeholders
The list of policy documents and reports used is presented in Annex 2. In this annex the Key Informant Interviews (KII)
are provided that were especially conducted for the Political Economic Assessment of HCC Jakarta. Throughout the
report inputs from these interviews have been used in conjunction with policy reportsand other secondairy
information, and with results of meetings and other consultations held for the HCC Jakarta activity.
Key informants interviewed for the Political Economic Assessment
Category PEA Questions
10. Ministry of Planning-Bappenas (for national coordination)
• Pak Dimas Kurnia Aditiawan • Ibu Nina Silvia
11. Settlements Department, Ministry of Public Works (PUPR Cipta Karya)
• Mrs. Anita Listyarini - PPK Region 2 (Kotaku Program),
12. DKI Planning Bureau (Bappeda) • Mr. Cipta Aditya, ST - Head of Roads, Housing and Government Buildings Sub-section
13. Department of Housing and Buildings Jakarta, DKI Jakarta
• Sapta - Head of Technical Planning Section
14. Area Management Consultant (KMW) Kotaku for DKI Jakarta
• Rosly - Kotaku Spatial Expert • Arief - Kotaku Government Relations Expert
15. RW 17 - Kelurahan Penjaringan • Konedy - Secretary of RW 17
16. Real Estate Indonesia (DPD REI DKI Jakarta)
• Mr. Anum
17. PT PAM Jaya (Government enterprise) • Mr. Erlan Hidayat – Director PT PAM Jaya • Mr. Hydayat – Head of Distribution Section • Mrs. Hastuti • Mrs. Swasti Subarani
18. PT Palyja and PT Aetra (private sector responsible for operation water supply network)
• Mrs. Irma Darmayanti – CSR Manager/Public Relations Palyja
19. Karina (Caritas Indonesia-NGO with slum improvement concept in Jakarta)
• Yohan Rahmat Santosa – Area Manager Karina
During the Key Informant Interviews the structure was followed as displayed in the Table below. Depending on the
Key Informant a set of relevant PEA questions was selected, and the focus of the questions was made in general for
slum improvement, or specifically for ‘affordable house and land tenure’ or ‘access to clean water’.
Key Informant Interview Structure with PEA questions
Category PEA Questions Conditions What is the past history of the sector, including previous reform initiatives?
Who benefits most from this?
How is patronage used?
Service Delivery Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
Are subsidies provided and which groups benefit most?
Policies What are the dominant ideologies or identities and values which shape views concerning the
sector? To what extent do these serve to constrain change?
Roles and
responsibilities
Who are the key stakeholders in the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
Power relations To what extent is power vested in the hands of specific individuals or groups?
How do different interest groups outside government such as the private sector, NGOs, citizen
groups, the media) look to influence policy?
Corruption and
rent-seeking
Is there significant corruption and rent-seeking in the sector?
Where is this most prevalent (at the point of delivery; procurement; allocation of jobs)?
Who benefits most from this arrangement?
How is corruption being used? Decision-making How are decisions made within the sector?
Who is party to these decision making processes?
Implementation
Issues
Once made, are decisions implemented?
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Opportunities
(drivers and
incentives
Who are likely to be the “winners” and “losers” from particular reforms? Are there any key reform champions within the sector?
Who is likely to resist reforms and why?
Are there “second best” or best fit reforms which might overcome this opposition?
Financing How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 3
3.1 Key Informant Interview BAPPENAS
Date: Friday, 4 August, 2017
Location: Bappenas Office Jakarta, 3rd Floor
Time: 9:30 until 11:00
Agenda: Key Informant Interview - BAPPENAS, Directorate for Water Management and Irrigation
Participants:
1. Pak Dimas Kurnia Aditiawan 2. Ibu Nina Silvia 3. Rik Frenkel - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives?
Who benefits most from this?
How is patronage used?
• Jakarta is a rapidly growing mega-city of 30 million people that continues to attract people from elsewhere in Indonesia who are attracted by the expectations of finding jobs and income. Since many of these people have no place to live, they become illegal settlers living in substandard shelter without infrastructure facilities and services, often exposed to environmental threats, and without legal source of income. They have no money to invest in housing, or they do not invest because they do not own the land. They fear eviction by government, often under pressure of private developers.
• People used to depend on ground water which used to be plentiful and of good quality until the 1970’s. Rapid economic growth, population growth and industrialization have depleted the groundwater tables, and affected the water quality of rivers and ground water. Meanwhile the demand for water increased, while the coverage of the piped water supply network is limited, and there is no incentive for PAM to extend because of lack of bulk water, it is difficult to make house connections, and most people in slums cannot afford to pay their water bills.
Service Delivery
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
Are subsidies provided and which groups benefit most?
• Low-cost housing should obviously target the poor, but it is often the middle class that can afford and therefore benefit. As said earlier, only Jakarta KTP holders are eligible for government-subsidized low cost housing.
• Water supply directly benefits all households, as water is a basic commodity. However, it seems that the poor often pay less than the rich. The health risk of not having access to clean water has a much bigger impact on the poor, than on the rich.
Ideologies and Values
What are the dominant ideologies or identities and values which shape views concerning the sector?
To what extent do these serve to constrain change?
• The National Government has Poverty Reduction Policies and Slum Improvement policies in place, but these are often not translated into strategies and plans, while these plans are often not implemented or legally enforced.
Roles and Responsibilities
Who are the key stakeholders in the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
• At national level the Directorate for Housing and Sanitation of Bappenas has a coordinating role in the housing sector including low-cost housing, whereas the Directorate of Cipta Karya of the Ministry of PUPR has an implementing function.
• At national level the Directorate for Water Management and Irrigation of Bappenas has a coordinating role in the water sector including water quality, water quantity and water flow based on an integrated concept, whereas the Directorate of Water Resources (SDA) of the Ministry of PUPR has an implementing function.
Power relations
To what extent is power vested in the hands of specific individuals or groups?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• The main obstacles are the fear by slum dwellers that they may be evicted or forced to resettle without compensation, their illegal status by not possessing a Jakarta Citizen Card (KTP), poverty and lack of income, and the non-formal leadership structure to manage the use of land and houses in the slums. Private developers prioritize their own profits and do not know the ways to use CSR money effectively to support slum improvement.
• The main obstacles are non-formal selling of expensive water distributed in drums, water leakage including illegal tapping from the main pipes of PAM, regulation that only legal plots can have house connections. The abolishment of the Law on Integrated Water Management implied that water is a public resource and therefore many restrictions apply to the involvement of the private sector.
Corruption and rent-seeking
Is there significant corruption and rent-seeking in the sector?
Where is this most prevalent (at the point of delivery; procurement; allocation of jobs)?
Who benefits most from this arrangement?
How is corruption being used?
• In the housing sector corruption is sometimes applied to illegal land reclamation and bypassing land use plans, to accelerate building licenses and evading building taxes mostly by passing bribe money under the table. In actual implementation, corruption is applied to physical construction, procurement of land and materials, and sales of houses mostly by taking percentages. In slums ‘non-formal’ leaders often manage the use of land and houses based on their own rules and for their own benefits
• Drum water sellers and their ‘non-formal’ leaders control the water distribution business in which the poor often pay up to 15’000 Rp per cubic meter, which is three times the highest standard tariff.
Decision- making
How are decisions made within the sector?
Who is party to these decision making processes?
• The composite housing sector has many ‘decision-makers’ in both the Government and in the Private Sector. Decision-making in land use planning is the responsibility of the Ministry of Agraria at National level and Bappeda at Provincial and Local level. The private sector (REI) is involved in low cost-housing financing, funding, implementation and distribution.
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 5
• Bulk water supply decisions are made at the national level, often involving the Ministry of Forestry and Environment, the Ministry of Natural Resources and Mining, and the Ministry of Public Works. Piped water distribution and house connections are decided by PAM.
Implementation Issues
Once made, are decisions implemented?
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
• The main challenges related to low-cost housing in slum areas are settlement in flood-prone areas, settlement that violates the existing land use plans, and illegal occupation of private-owned or government-owned land.
• The main challenges related to urban water supply are groundwater over-abstraction and bulk water shortages.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
Who is likely to resist reforms and why?
Are there “second best” or best fit reforms which might overcome this opposition?
• The coastal development of Jakarta is on the one hand threatened by flooding, pollution and slums, and on the other hand target by land reclamation investors and real estate developers. The losers are the fishermen living on the coast whose livelihood depend on the sea. Bappenas has developed an inclusive integrated roadmap for the coastal development of Jakarta based on extended polder systems. This plan opens opportunities for low-cost housing development as part of redevelopment schemes, as well as prioritizing piped water supply.
Financing
What is the balance between public and private ownership?
How is the sector financed? (User fees, taxes, donor support, PPPs?)
• Their main program related to slum improvement is Kotaku, co-funded by the Islam Development Bank and the World Bank. The Kotaku program in Jakarta is implemented in coordination with the Provincial Government of DKI Jakarta. Private developers and banks are ready to participate in PPP arrangements, as long as they are sure that their vested interests are secured.
• Urban Water Supply in Jakarta is implemented by PD PAM Jaya that has given concessions to two PT Palyja (responsible for water treatment and distribution in west part of Jakarta, including Penjaringan) and PT Aetra (focused on east part of Jakarta). For investment PAM depends mainly on income from water consumers, which is complicated by social and political limitations on water tariffs.
3.2 Key Informant Interview KOTAKU - Ministry of Public Works
Date: Friday, 4 August, 2017
Location: Rg. PPK Region 2 (KOTAKU Program), Satker PKPBM, Directorate of Human Settlement
Development, Directorate General of Human Settlements, Ministry of Public Works
Time: 9:00 until 10:00
Agenda: Key Informant Interview - KOTAKU PROGRAM, Directorate General of Human Settlements,
Ministry of Public Works
Participants:
• Mrs. Anita Listyarini - PPK Region 2 (Kotaku Program), Satker PKPBM, Directorate of Development of Settlement Area, Directorate General of Human Settlements
• Shinta Dewi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• KOTAKU program is a nationwide program of prevention and improvement of slum quality which is the elaboration of the implementation of Strategic Plan of Directorate General Cipta Karya 2015-2019.
• At present Indonesia's slum area measures 38,431 ha, of which 23,473 ha is located in urban areas and 11,957 ha in rural areas. KOTAKU is implemented in 11 thousand urban kelurahans in Indonesia through the PLPBK policy (Community-Based Settlement Environment Rehabilitation). The PLPBK activities are focused on the urban poor settlement rehabilitation activities through infrastructure services quality improvement that support development as a medium of learning between the community, local government and other concerned stakeholders in neighborhood settlement management at kelurahan level.
• The Kotaku program also conducts planning at Kelurahan level, including in Kelurahan Penjaringan as outlined in the Penjaringan RPLP document. This year, the RPLP for DKI Jakarta should have been completed, but since there are several administrative obstacles, not all RPLPs have been finalized.
• Determination of slum areas for the DKI Jakarta area is still different between BPS and the Kotaku program.
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• The KOTAKU program is a policy directive for the acceleration of slum rehabilitation conducted through the drafting of a local regulation on slum prevention and slum quality improvement, assisting the preparation of RP2KP-KP, integrated slum improvement across departments of the Ministry of Public Works, and community-based slum management programs.
• The KOTAKU program uses a multi-stakeholder approach through participation among the stakeholders.
• The program uses 7 slum physical indicators based on the work scope of Cipta Karya.
Implementation Issues
Once made, are decisions implemented?
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 7
• The KOTAKU program is conducted through several stages at city and kelurahan level. At city level the program is carried out through program socialization, formulation of legal basis based on 100-0-100 baseline data, preparation of a city level roadmap, drafting of legal basis on RP2KPKP based on RPLP and RTPLP, DED preparation, establishment of a legal basis for working groups, multi-source funding allocation. While at kelurahan level the program is carried out through program socialization, 100-0-100 baseline delineation, preparation of kelurahan level roadmap (RPLP and RTPLP), DED preparation and funding planning, implementation of activities based on RPLP and RTPLP. The Penjaringan roadmap (RPLP) is to date still under preparation.
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• The implementation of the KOTAKU program in DKI Jakarta has been postponed till next year because of various sectoral reasons, a lack of attention from Jakarta government to implement the KOTAKU program, and the minimum available funding per kelurahan (approximately 50 million per kelurahan / year).
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• The KOTAKU programs has some limitations in that can be fulfilled by the private sector entrants, such as improving community’s livelihoods and economy, infrastructure development such as water supply connections to homes, waste recycling, and drinking water treatment.
Innovations
• There are no innovations, since the ministry only plans the program at regional scale.
Financing
How is the sector financed? (User fees, taxes, donor support,
PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Kotaku financing is sourced from the World Bank, Islamic Development Bank, central, regional and private governments. Until now, funds from the private sector have not been mobilized optimally.
3.3 Key Informant Interview Bappeda DKI Jakarta
Date: Thursday, 3 August, 2017
Location: Sub-section Roads, Housing and Government Buildings Bappeda, DKI Jakarta
Time: 13:00 until 15:00
Agenda: Key Informant Interview Bappeda DKI Jakarta
Participants:
1. Mr. Cipta Aditya, ST - Head of Roads, Housing and Government Buildings Sub-section 2. Shinta Dewi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• Causes of slum area growth in Jakarta are: urbanization, limited livelihoods, limited access to infrastructure, poverty, limited skills. Therefore, to improve slums a comprehensive integrated approach is needed including physical and non-physical components.
• Differences between slum indicators of BPS and Kotaku are still under discussion in DKI Jakarta.
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• Slum improvement cannot be done sectorally, but must be integrated/multi-sectoral. Other themes need to be added such as sanitation, solid waste and improving incomes of the community, to realize the national 100-0-100 policy. The numbers symbolizes: 100% of citizens having access to clean drinking water, 0% living in slums, and 100% having access to good sanitation by 2019.
• In principle, the slum improvement of DKI Jakarta is conducted through three ways, namely rehabilitation, redevelopment, and resettlement. Rehabilitation and redevelopment can only be implemented on legal land, while resettlement is implemented on illegal land through relocation based on land allocation of the spatial plan (RTRW).
• The focus of Jakarta's slum improvement is still on legal land. DKI government does not deal with slums in illegal land due to obstacles in rules and regulations.
• The new Governor's policy concerning the provision of housing includes the provision of rental housing, kampung improvement, land consolidation, and land banking.
• DKI Jakarta focuses more on providing low-cost rental housing (instead of house ownership), because it is easier to manage by the government.
Implementation Issues
Once made, are decisions implemented?
• Implementation of programs like ‘kampung deret’ are halted due to land legality, and licensing regulations obstacles.
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 9
• The ‘house surgery’ program is only implemented in certain locations, but cannot be implemented for whole regions.
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• Implementation of low-cost housing is hampered by land availability, financing constraints, and licensing.
• Land consolidation can only be done on legal land.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• There is an opportunity for the private sector to build rental houses.
Innovations
• Preparation of settlement plans involving community participation, such as ‘kampung aquarium’ and housing micro-credit plans, and the Kotaku community action plan to improve the quality of residential areas in Kelurahan Penjaringan at a cost of 350 million.
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Financing for housing development is still sourced from central (APBN) and regional (APBD) budgets. These funds are primarily allocated for rental flat construction.
• Private sector financing is conducted through CSR, specifically for green open space development, RPTRA (Child-friendly integrated public spaces), and public / social facilities.
• Until now private sector involvement in the provision of low-cost housing is very low, although there are some regulations that encourage private sector involvement in the provision of low-cost housing.
3.4 Key Informant Interview Housing and Local Government Buildings Department DKI
Jakarta
Date: Thursday, 3 August, 2017
Location: Housing and Local Government Buildings Department, Jalan Taman Jatibaru 1, Tanah
Abang, RT.17 / RW.1, Cideng, Central Jakarta, DKI Jakarta
Time: 12:00 until 13:00
Agenda: Key Informant Interview - Housing and Local Government Buildings Department DKI Jakarta
(DPGP)
Participants:
1. Sapta - Head of Technical Planning Section of the Housing and Local Government Buildings Department DKI Jakarta
2. Slamet Mulyadi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• The Housing and Local Government Buildings Department DKI Jakarta (DPGP) administration has the task to manage the housing and settlement development in Jakarta.
• Slum improvement programs in the city have existed since 1963. The first program was known as the Kampung Improvement Program or the Muhammad Husni Thamrin project (MHT)
• Jakarta constructs low-cost apartment flats because of the lack of land in Jakarta
• In 2017 the government of Jakarta expects to build 24 towers with 6,120 apartment units, ready for use in 2018
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• One of the missions of the DPGP is the organizing of housing construction and settlements, the maintenance of flats and suitable, safe, affordable land procurement, all environmentally sustainable
Implementation issues
Once made, are decisions implemented?
• Implementation by DPGP includes low-cost apartment development (Rusunawa and Rusunami), ‘Kampung Deret’ development, and relocation of residents living on illegal land
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 11
Is there significant corruption and rent-seeking in the sector?
• Land for the apartment construction is very limited, and the government budget for apartment construction is also limited. The backlog of houses is currently 70,000 units
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Implementation of Presidential Decree 56/2017 on social community impact management in the provision of land for national strategic projects.
• Utilization of the unused land for apartment construction
Innovations
• ‘Kampung Deret’ implementation which is a home improvement activity where the slums will be outlined and rebuilt into multi-story residential complexes. The program was launched by Governor Jokowi in 2013. The implementation was based on an interaction between the government and communities to achieve a common solution for the Kampung layout.
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Construction of 24 apartment tower in 2017 from the municipality budget
3.5 Key Informant Interview Area Management Consultant (KMW) Kotaku DKI Jakarta
Date: Friday, 4 August, 2017
Location: Kotaku KMW office Jl. Duren Tiga Selatan, Pancoran, South Jakarta
Time: 10:00 until 11:30
Agenda: Key Informant Interview – Area Management Consultant (KMW) Kotaku
Participants:
1. Rosly - Kotaku Spatial Expert 2. Arief - Kotaku Government Relations Expert 3. Slamet Mulyadi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• The determination of slum areas in Jakarta is currently still based on the slum evaluation of 2013 by the National Statistical Bureau (BPS) of DKI Jakarta, which identified 1000 ha of slum areas spread over 223 slum RWs.
• The BPS of Jakarta is currently updating the slum data, funded by a grant from Bappeda Jakarta.
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• The KOTAKU program in DKI Jakarta is aimed at slum prevention and slum quality improvement in accordance with the mandate of Law no 1 of 2011 with a target of 0 Ha of slum settlements by 2019 and increasing access to infrastructure and basic services in urban slum areas to support the realization of livable, productive and sustainable urban settlements.
Implementation issues
Once made, are decisions implemented?
• First a baseline data for all kelurahans in Jakarta is prepared, based on 15 indicators
• Then Neighborhood Settlement Plans (RPLP) will be developed per kelurahan, which are comprehensive action plans for slum area quality improvement based on a participatory planning process
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 13
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• The program is delayed, because no funds are available for the implementation of the RPLP programs in 2017.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• This year is focused on the preparation of the Slum Prevention and Urban Slum Quality Improvement Plan (RP2KPKP), which is an action plan for urban slum settlement prevention and improvement prepared by Pokjanis DKI Jakarta which contains strategy formulation, required programs and investment to realize slum free settlements.
Innovations
• The RPLP programs are still limited to basic infrastructure improvement programs, which do not yet involve the private sector
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Funding for KOTAKU programs comes from World Bank and Islamic Development Bank loans. In addition, funding for the RPLP action plan is expected to come from multiple sources.
Interview with Pak Rosly and Pak Arief (KOTAKU)
3.6 Key Informant Interview RW 17 Kelurahan Penjaringan
Date: Thursday, 3 August, 2017
Location: RW 17 Office Kelurahan Penjaringan, North Jakarta
Time: 14:30 until 15:30
Agenda: Key Informant Interview - RW 17 Kelurahan Penjaringan
Participants:
1. Konedy - Secretary of RW 17 Kelurahan Penjaringan 2. Slamet Mulyadi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• RW 17 in Kelurahan Penjaringan consists of 23 RTs (neighborhoods) with a population of more than 25,000 people. Most of the people living in RW 17 work in the informal sector, and live in very high population density areas. Around 40 hectares of slums have been identified there in RW 17. Many areas are under sea level and salt water intrusion has already resulted in brackish groundwater.
• Since 2009 12 apartment blocks have already been built with a capacity of 1200 families.
• Many RT 17 residents occupy illegal land, about 500 family heads have been moved to the apartment blocks in Muara Baru
• There is a Mobile Water Treatment Plant that processes water from the Pluit Reservoir to serve the residents who live in apartment blocks
• The Palyja piped water supply network already serves the area, but the water pressure is not sufficient to reach certain parts of the RW 17 Penjaringan settlements. In RT 15 a master meter installation is already available for some low-income communities.
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• Policies at the RW level will follow policies at the Kelurahan Penjaringan level. Related to the relocation of people affected the normalization of Pluit reservoir, RW 17 will follow the applicable rules.
Implementation Issues
Once made, are decisions implemented?
• Programs that have been implemented related to the improvement of the settlement environment in RW 17 Penjaringan sub-district are: public toilets, water supply connections (Master Meter), drainage construction and others. These programs still do not reach all areas of RW 17.
• Programs for the poor such as: Jakarta Smart Card, Jakarta Healthy Card, and Jakarta Welfare Card are also implemented in RW 17 Penjaringan
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 15
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• Public awareness regarding environmental cleanliness is low.
• The level of skills and public education is low.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Pluit water treatment as bulk water source can be replicated to serve the low income community
• Water treatment with Reverse Osmosis (RO).
• Creation of employment by educating citizens to become MSMEs
3.7 Key Informant Interview DPD REI DKI Jakarta
Date: Thursday, 3 August, 2017
Location: DPD REI DKI Jakarta
Time: 13:00 until 15:00
Agenda: Key Informant Interview DPD REI DKI Jakarta
Participants:
1. Mr. Anum - Member of DPD REI DKI Jakarta 2. Shinta Dewi - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• Governing Council (DPD) Real Estate Indonesia (REI) is the forum for housing and property developers in Indonesia.
• 450 Developers located in DKI Jakarta are members of REI.
• REI has a focus on building low-income community houses, but this is still considered to be too difficult for most developers, because it is considered unprofitable especially for small developers with limited capital.
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• Several regulations have been prepared by the government related to low cost housing development, among others: Law No. 1 Year 2011, Public Works Ministry Regulation No.10 2012 on balanced housing, Act No.20 of 2011, Public Works Ministry Regulation No.7 Year 2013. The balanced housing concept is based on a 1:2:3 distribution, where in one project 1 luxury house, is balanced with 2 middle income housing units and 3 low-cost housing units. For high rise buildings the balanced housing concept prescribes at least 20% of low-cost housing ‘building area’ as part of the whole construction.
• REI itself is not involved in policy making, but only conveys information related to government-defined policies to its members. REI cannot force its members to oblige/implement the policies set by the government.
• One government policy is the acceleration of low-income housing development through the ‘one million houses’ program. This acceleration is done through acceleration of land acquisition and reducing licenses requirements and bureaucracy.
Implementation Issues
Once made, are decisions implemented?
• The balanced housing concept is often not implemented by the developer because they have difficulty to prepare feasible projects based on this concept.
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 17
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• Developers are not interested in the provision of low-cost housing due to high land prices, high material prices and low profits compared to building luxury and intermediate houses, even though several licensing conveniences have been granted by the Government.
• Law enforcement on the implementation of compulsory housing obligations (Law No. 1 Year 2011, Regulation 10/2012 on 1:2:3 balanced housing, Act No.20 of 2011, Regulation 7/2013) is weak. Consequently still many developers violate the regulations without getting legal sanctions.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Accelerated low-cost housing provision with law enforcement on rules / regulations that support in the implementation of low-cost housing.
Innovations
• One of the innovations from REI members did to provide low-cost housing is the Conwood’s housing construction implemented in Serang, Banten. There are 2 types of Conwood’s houses, namely type 25 m² with a unit price of Rp 60 million / unit and type 36 m² with a unit price of about Rp 86 million / unit. The Conwood’s house innovation has been developed to support government’s 1 million houses program. For DKI Jakarta, this innovation is not feasible because of the high land prices.
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Financing of low-cost housing and low-cost apartment construction is sourced from developers who implement balanced housing development policies and CSR of large developers.
• In accordance with Regional Regulation No. 7/2012 on Infrastructure, Facilities and Public Utilities and Ministry of Home Affairs Decree No. 1/1981 and Decree of the Governor of DKI Jakarta No. 540/1990, real estate developers are required to build public and social infrastructure.
3.8 Key Informant Interview PD PAM Jaya
Date: Thursday, 3 August, 2017
Location: PD PAM Jaya Office, Jl. Penjernihan II, Pejompongan, Kota Jakarta Selatan,
Time: 13:00 until 15:00
Agenda: Key Informant Interview PD PAM Jaya
Participants:
1. Mr. Erlan Hidayat – Director PT PAM Jaya 2. Mr. Hydayat 3. Mrs. Hastuti 4. Mrs. Swasti Subarani 5. Frank van Paassen - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• PD PAM Jaya is the government water supply enterprise of DKI Jakarta.
• Already for the last 20 years, no additional bulk water has become available for the water supply of Jakarta. The supply has been stable around 18 m³/s. The main water source from Jatiluhur was built in the 1960’s is actually meant for irrigation water, not for drink water. This bulk water supply system is operated by Perum Jasa Tirta II (PJT II).
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• Based on the Indonesian constitution, the whole community has the right of access to the clean water (not the private sector). It is therefore the duty of PAM Jaya to provide this water. Laws on spatial plans forbid the expansion of water supply service networks in areas planned for settlements and commercial zones. As a result PAM Jaya faces the dilemma that it must supply water to the community in illegal slum areas, but may not expand its network there.
• PD PAM Jaya is in the process of a merger with PD PAL Jaya (government enterprise on wastewater) mainly to extend the coverage of the wastewater collection system.
Implementation Issues
Once made, are decisions implemented?
• PAM Jaya has already added 200 l/s on water supply to Penjaringan last year
• In 2018 another 500 l/s will become available for the coastal area (Penjaringan and Kamal) from a new water treatment plant at Hutan Kota (taken from the West Banjir Kanal)
• Further on PAM Jaya is planning a large Water Treatment Plant Buaran III, with a capacity of 3000 l/s, to be taken from the West Tarum Kanal (Kali Malang).
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 19
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• For significant bulk water provision DKI Jakarta depends on sources from outside the province of DKI Jakarta, and even from outside the Ciliwung Cisadane River Basin. Therefore it depends on national programs for additional bulk water. The last 20 years the central government has prepared many plans to increase the bulk water supply to Jakarta, but none of them have finalized implementation. There is too much talk and too little commitment/action.
• The bad surface water quality of Jakarta makes surface water a less attractive bulk water alternative.
• High leakage losses due to the old water distribution network and a high amount of illegal connections
• Privatization of the water supply sector only adds another step in the ‘profit seeking chain’. Benefits of the concessions to PT Palyja and PT Aetra are not clear.
• Too many institutions are involved in water management. In former times water meters of commercial deep wells were monitored daily by PAM Jaya. Since then the responsibility of groundwater monitoring has changed about five times. Most of the organizations are not prepared to monitor and keep an archive on groundwater.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Private sector opportunities exist in bulk water supply and large capacity bulk water treatment, but such investments are not that high that the government cannot afford it
Innovations
• Master Meter program: The master-meter program is a solution to provide access to clean water to the community on illegal land. The initial master-meter program was implemented in cooperation with IUWASH (USAid). In this program a master water meter is installed on illegal land, connected to a community distribution network constructed on illegal land, including house connections with water meters. The problem with this ‘innovation’ was, that the water supply company did have no control over the management of the local system, which was supposed to be done by the community, but was ‘taken over’ by a local mafia which imposed high water tariffs to the community (while PAM Jaya applied a low social tariff). Later PD PAM Jaya has implemented the master meter program by itself in other areas, in locations where strong CBOs/corporations were available, or set-up for the management of the community distribution system.
• Water-kiosk program: The water-kiosk program, as implemented in Penjaringan, is program of Palyja. PAM Jaya itself also has plans for a water-kiosk program where drink water will be sold (like a mineral water refill depot). In the water kiosk program, water kiosks are established by Palyja or PAM Jaya, to be operated by a local entrepreneur. Water is brought to the water kiosk by water tank car, and sold against low tariffs. The water kiosk to be implemented by PAM Jaya will include on-site small treatment facilities, which will produce the drinkable water.
• Mobile WTP: The mobile water treatment plant (MWTP) is a pilot project of PD PAM Jaya itself, to provide clean water to the low-cost housing complex Muara Baru in Penjaringan, by treating water from Pluit lake.
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Construction of water treatment plants is only around 15% of total infrastructure investment. This can be paid from the government budget and does not need donor support.
• Although the water supply companies are state owned companies, almost none of them is able operate solely from its own revenue. This includes PD PAM Jaya. This is because the water supply companies also have a social mission, and tariff adjustments are always a political issue, hence tariff raises always lag behind.
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 21
3.9 Key Informant Interview PT Palyja
Date: Thursday, 3 August, 2017
Location: Palyja Office, Dipo Tower 16th Floor, Jalan Jenderal Gatot Subroto Kav. 51-52, Tanah Abang,
Kota Jakarta Pusat,
Time: 15:15 until 16:00
Agenda: Key Informant Interview Palyja
Participants:
1. Mrs. Irma Darmayanti – CSR Manager/Public Relations Palyja 2. Frank van Paassen - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• PT PAM Lyonnaise Jaya (PALYJA) has been present in Jakarta to improve clean water provision and services to the people in the western part of Jakarta since 1 February 1998 for 25 years of Cooperation Agreement with PAM Jaya. Palyja is responsible for the operation and maintenance of the water supply network in the western part of Jakarta, including Penjaringan
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• PALYJA’s vision is to be the preferred water service provider in Indonesia by satisfying its customers and adding value to its stakeholders.
• The Indonesian law on water resources was revoked by Indonesia's Constitutional Court on February 18 2015. One of the main reasons was the private sector concessions on water supply delivery in DKI Jakarta, where the private sector had too much influence on the water tariffs. Palyja is currently renegotiating its contract with DKI Jakarta.
Implementation Issues
Once made, are decisions implemented?
• In former years through the GPOBA program, PT Palyja has implemented around 5000 water supply house connections in five areas, including Penjaringan, in an effort to reduce ‘leakage’ (illegal tapping).
• PT Palyja has also implemented 3 master-meters, of which one in Rawa Bebek Penjaringan, in cooperation with the Mercy Corps and EPU-USAID. It did not continue the program because of issues with legality.
• Water Kiosks have been implemented at areas not served by the water supply network, including in slums.
• Through its CSR program Palyja has provided three schools with rainwater harvesting installations.
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• Water resources have never been added since the Palyja cooperation agreement started. Current water resource system is not appropriate for delivering sustainable and reliable water to Western Jakarta fast growing 5 million population; mostly because current water resource and supply transmission main features are sensitive in terms of quality and quantity.
• Implementation of both house-connections in illegal housing areas as well as the master-meter program has caused legal issues.
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Programs with opportunities for the private sector include the water kiosks which are managed by local entrepreneurs, and rainwater harvesting.
Innovations
• Water-kiosk program: The water-kiosk program, as implemented in Penjaringan, is program of Palyja to provide drink water to the community far from the distribution network. Water is brought to the water kiosk by water tank cars of Palyja, and sold against low tariffs of 3550 Rp/m³. Until now Palyja has constructed more than 50 water kiosks distributed over the western half of Jakarta.
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• Palyja suggests that funding sources for major investments to increase of water resource and implementation of transmission lines must be mobilized either via co-financing through regional budget, central budget or IFIs (International Financial Institutions) and donors contributions. (Water resources are outside of the scope of the cooperation agreement.)
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 23
3.10 Key Informant Interview NGO Karina
Date: Friday, 4 August, 2017
Location: Karina Office, Jl. Matraman No. 31, Kelurahan Kebon Manggis, Kecamatan Matraman,
Jakarta Timur
Time: 10:45 until 12:15
Agenda: Key Informant Interview Karina (Caritas/Cordaid Indonesia)
Participants:
1. Yohan Rahmat Santosa – Area Manager Karina 2. Frank van Paassen - HCC Jakarta
Conditions
What is the past history of the sector, including previous reform initiatives? Who benefits most from this?
Who are the primary beneficiaries of service delivery?
Are particular social, regional, or ethnic groups included or excluded?
• Cordaid was founded in 1999 in The Hague, with the aim of helping people in distress and fighting structural poverty. It is a merge of three Dutch Catholic development organizations: Memisa Medicus Mundi (created in 1925), ‘Mensen in Nood’ (People in Need, created in 1914) and Lenten Campaign/Bilance.
• Cordaid has provided significant disaster reduction assistance at the Aceh Tsunami and Yogyakarta earthquake, but has retreated from Indonesia after their MoU expired in 2010. It is still active as main sponsor of Karina (Caritas Indonesia).
• Karina is active in integrated slum improvement in Jakarta through the ‘Marunda Urban Resilience in Action’ (MURIA) Program, which it implements in cooperation with other NGOs. Focus of the program is resilience and livelihood improvement of the ‘grey area’ slums in Marunda. ‘Grey Area’ here stands for settlements/slums on illegal land.
• Related to ‘affordable housing and land tenure’: Karina is not active in housing improvement. Related to land tenure is their effort to prepare the community living in the ‘grey area’ to be better prepared in case of resettlement. NGOs are not allowed to implement (permanent) physical (infra-)structures in slum areas.
• Related to ‘access to clean water’: To improve the availability of drinking water, Karina implements a rainwater harvesting program in Marunda (See Innovations below for more details).
Policies
What are the dominant ideologies or identities and values which shape views concerning the sector?
What are the formal and informal roles and mandates of the different players?
What is the balance between central and local authorities for providing services?
How do different interest groups outside government such as the private sector, NGOs, citizen groups and media
look to influence policy?
• In order to helping people in distress and fighting structural poverty, Cordaid is divided the following four units:
o Health and livelihood development o Security and justice management o Urban and rural resilience o Humanitarian aid (on disasters)
Implementation Issues
Once made, are decisions implemented?
• The slum improvement program MURIA is currently implemented in Marunda. Karina is working on a replication in the Ciliwung river area.
• The implementation of MURIA is done under the coalition of Partners for Resilience, which includes Cordaid, Wetlands International, CARE International, and the Dutch Red Cross.
Bottlenecks
Where are the key bottlenecks in the system?
Is failure to implement due to lack of capacity or other political economy reasons?
Is there significant corruption and rent-seeking in the sector?
• Related to ‘affordable housing and land tenure’: o The community in the ‘grey area’ (occupying illegal land) is excluded from public services like
road, drainage water supply and sanitation infrastructure. Neither government, nor private sector and NGOs are allowed to construct (permanent) infrastructure in these regions.
• Related to ‘access to clean water’: o The water quality of ground water in the coastal area of Marunda is so bad (and brackish) that
it cannot be used as water source, without high-tech water treatment. o There is still no simple/appropriate water treatment technique available for community water
treatment (only high-tech).
Opportunities (drivers and incentives)
Who are likely to be the “winners” and “losers” from particular reforms?
Are there any key reform champions within the sector?
• Related to ‘affordable housing and land tenure’: o Improvement of the capability of the community in the ‘grey area’ to be prepared in case a
resettlement program is executed in their area would include capacity improvement to adapt to new living conditions (from horizontal housing to vertical housing) and livelihood improvement. Livelihood improvement itself may even lead to a capacity level where the community itself is able to move out of the grey area.
• Related to ‘access to clean water’: o Rainfall figures are high in Jakarta (around 2 m/year), and the quality of rainwater collected
from roofs is directly potable.
Innovations
• Karina is implementing trials with rainwater harvesting on household scale. Its main focus is for drinking, cooking and urban farming. Quality investigation of the collected water shows that it is a little acid (pH around 6.5) but still between the limits (pH 6 to pH 8). Simple electrolysis techniques have been developed to improve the pH. Based on a water consumption of 2 l/person/day (drinking and cooking only) and a household size of 4 people, a storage tank of 3 m³ would already be sufficient to store water for one year. A tank of 1 m³ would be sufficient for 95% of the time, where the remaining 5% could be filled by water tank car (during long dry seasons).
Human Cities Coalition Political-Economic Assessment Annex 3 – Page 25
Financing
How is the sector financed? (User fees, taxes, donor support, PPPs?)
What is the balance between public and private ownership?
Are subsidies provided and which groups benefit most?
• The main donors of Karina are Cordaid, who has a large network of private charity donors and the Ford Foundation.
• Livelihood programs, which include the urban farming program and SME support, are initially funded through the donor budget, but need to be self-reliant in the end. For this, program proposals need clear identification of business models including incentives like packing services, and retailing.
