DEPUTY General Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin) in the field of public works infrastructure and public housing (PUPR) Insannul Kamil encouraged the private sector to be more massively involved in drinking water supply projects. His party noted that the project still lacked funding of up to IDR 150 trillion.
He said that drinking water funding needs have so far been supported by state money. Of the total fund allocation of IDR 130 trillion for the provision of drinking water for the 2020-2024 period, 42% was contributed from the APBN or the equivalent of IDR 54.2 trillion.
Meanwhile, investment from government and business entity cooperation (KPBU) is only 24%. The rest comes from the regional income and expenditure budget (APBD) and others.
“There is IDR 130 trillion allocated for clean water, the APBN can only cover 42%. Cooperation with the private sector is needed because there is a funding shortfall of more than IDR 150 trillion for the provision of drinking water,” he said in the Singapore International Water Week 2024 (SIWWWZ024) series at Menara Kadin , Jakarta, Tuesday (7/5).
Insannul is of the view that the central government’s funding capacity is still limited in facilitating the provision of drinking water. The role of PPP is really needed as an alternative form of financing to meet the drinking water needs of the community.
“The government cannot do it alone, it needs collaboration. We want to see the government’s courage in encouraging the private sector to invest,” he explained.
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On the same occasion, Deputy General Chairperson for Industry at the Indonesian Chamber of Commerce and Industry (Kadin) Bobby Gafur Umar explained that in the last 10 years, the government has relied on funding for clean water and sanitation infrastructure development projects, including the provision of drinking water from the APBN and state-owned enterprises ( BUMN). According to him, the portion of funding that should be spent by the APBN is no more than 20%. The remaining 80% comes from the private sector.
“However, so far the portion has been reversed. The government relies on funding from the APBN and BUMN,” he said.
According to him, the main cause of the minimal involvement of private investors in drinking water supply projects is licensing issues which are still complicated and returns or returns on investment which are considered unattractive. This, said Bobby, must be addressed by the government in the future to attract more investors.
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“Indonesians really like to change the rules. This is a problem and there must be adequate returns,” he added.
He hopes that the future government will make many breakthroughs to bring in large investments in fulfilling clean water accessibility. “Therefore, (a portion of) 80% of funding from the private sector can be achieved,” he concluded.
Director of SDA Technical Development at the PUPR Ministry, Muhammad Rizal, said that his party is wide open to collaborating with the private sector regarding drinking water supply projects, such as building new dams to increase raw water capacity. “If the private sector wants to build a dam for raw water, the government is welcome. Later there will be cooperation with the government,” he said.
He explained that the total number of dams that have been built currently reaches 229 dams. In detail, 187 dams were built by the Ministry of PUPR and 42 dams were from PPP or the private sector. (Z-2)
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