Ten Years of Public Private Partnership in Jakarta Drinking Water Service (1998-2007): Eastern Jakarta Drinking Water Service by Thames PAM Jaya
Authors:   , Iwan Renalia 
Published: November 2021

<p>Clean water is crucial for survival and economic development. Everyday, people need a sufficient amount and a suitable quality of water for drinking, cleaning and sanitation. However, rapid population growth, pollution and climate change have made water a scarce resource, which everyone competed. The United Nations Development Program's recent report stated that more than 1 billion people, up to this day, are without access to safe drinking water and sanitation. Lack of access to clean water can cause social, economic and health problems. Therefore, there is an urgent need to find solutions to this problem. To solve the problem of water scarcity, International Financial Institutions introduced Public Private Partnership (PPP) in the management of water sector. PPP is a concept which involves private sector participation in the management of drinking water service. In PPP, water is recognized as an economic good which is recognised under the 1992 Dublin Principles. It was hoped that by placing an economic value on water, efficient and equitable use of water can be achieved. It was also hoped that it would encourage conservation and protection of water resources. However, studies show opposite results from the Principle. Jakarta drinking water service is one example of a failed PPP. Jakarta, the Capital City of Indonesia, adopted Public Private Partnership (PPP) in the management of its drinking water service in 1998. The twenty five years concession contract was granted to Thames Water International (TWI) and its local partner, Kekarpola Airindo (KATI), now known as Thames PAM Jaya (TPJ). This company is responsible for the management of Eastern Jakarta drinking water service. This research was aimed to evaluate Thames PAM Jaya (TPJ) performance on water provision in Eastern Jakarta, ten years into the twenty five years concession by undergoing a qualitative research method. A range of semi-structured interviews were used to: gain perceptions and opinions of each stakeholder on the Public Private Partnership (PPP), identify the advantages and/or disadvantages of the water privatization in the capital city and to identify the constraints and limitations facing the private sector. Participants involved in this research include Government officials, Thames PAM Jaya, Jakarta Water Supply Regulatory Body (JWSRB), non governmental organizations (NGOs), and TPJ customers. The analysis concludes that Public Private Partnership (PPP) in Eastern Jakarta does not bring improvement to the region's drinking water service. Thames PAM Jaya (TPJ) had failed in fulfilling targets set in the Cooperation Agreement. Lack of transparency and public tendering in the process of forming the public private partnership may have contributed to this poor performance because the proper search for a competent partner was short circuited. Political interference in the bidding process is a form of corruption in which the company granted the contract was clearly complicit. The water tariff in Jakarta is not only the highest in Indonesia, but it is also the highest in the Southeast Asia region. The quality of its service, however, is still of poor quality. Limited access to water due to its high price and low service has resulted in water hacking and the on-going use of groundwater. The Cooperation Agreement, on the other hand, has locked the Government of Indonesia into a long term partnership which is very disadvantageous for the government and the residents. Private sector involvement should be the last alternative to improve the management of the water supply service in Indonesia.</p>