jakarta water stories

7/29/2019 Jakarta Water Stories

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JAKARTACONCESSION CONTRACT

WATER STORIES


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WATER STORIES

JAKARTA

Philippe FOLLIASSON

PRESIDENT DIRECTOR

Herawati PRASETYO

VICE PRESIDENT DIRECTOR

This brochure takes a closer look at

the services and benets obtained throughPALYJAs activity at mid-term contract.

PALYJA has been providing water services

to the population of Western Jakarta sinceearly 1998 through a 25 years partnership withPAM Jaya, the public water utility of the city ofJakarta. After 13 years of operation,PALYJAs involvement went far beyond thesimple provision of water services :

To support local development, PALYJA

got involved with local businesses, workingwith local suppliers and contractors andcontributing to foster local economy whileproviding much needed water supply to keyaccounts such as ofces, condominium, malls,hotels and small & medium enterprises.

On the domestic customers side, PALYJA has

been putting in place a universal servicefor the full benet of the entire populationand has doubled the service coverage(from 1/3 in 1998 to 2/3 of the population in2010) giving access to piped water throughdistribution network extension to anadditional 1.3 million inhabitants contributingsignicantly to Jakarta citizens social welfare.

In this brochure, we also take the opportunity oflooking at the challenges of providing sustainablewater supply to the city of Jakarta while keepimproving and expanding the service over thenext decade.

Moreover, to deal with growing environmentaland social issues, PALYJA developed stronginitiatives :

Towards the communities with innovativeWater for Allapproach to foster accessto piped water to low income families,Corporate Social Responsibility (CSR)program, and humanitarian interventionsfollowing natural disaster.

Towards its employees through technicalassistance, training and people development.

Towards the environment while beingresponsible and helping the city of Jakartato mitigate the city subsidence linked tothe groundwater over-exploitation with thedeep well conversion program under theleadership of the Jakarta Environmental

Board (BPHLD).

We would like to pay a tribute to the 1,400employees of PALYJA for their dedication

to the social and economical welfare of theCapital City of the Republic of Indonesia withthe support of the local authorities, PAM

Jaya and the Regulatory Body; and we arelooking forward to keep contributing, as longterm partner, to the prosperity of Jakarta.

EDITORIAL


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BACKGROUND

JAKARTA, THE LARGEST CITY

OF THE SOUTH EAST ASIA

Jakarta the capital of Indonesia is amongthe 25 largest cities in the World (2009United Nations survey*). The cityspopulation is forecasted to increased from9.6 million in 2010 to 10.3 million by 2020.

Moreover Jakarta is expected to develop

itself from a Capital city into the 6th worldlargest metropolitan area (Jakarta - Bogor- Depok - Tangerang - Bekasi) with a totalpopulation close to 19 million inhabitants.

In 1998 key issues were poor waterservice performance, limitation of nancialresources, low service coverage ratio(33.8%), very high losses (57%) for thearea trusted to PALYJA, and in additionthe problem of water accessibility for theurban poor. Moreover, about 30% of thecustomers connected received water lessthan 24hour a day**.

In 1997, the city of Jakarta decided to enterinto a partnership with two private operatorswith international reputation, under aPPP scheme; with the aim to improve theexisting service and extend access to pipedwater to the overall population, in line with

international standards.

Suez Environnement was choosen to operatethe Western part of Jakarta, whereas ThamesWater was choosen for the Eastern part.

Jakarta has many challenges to facein order to accomplish its urban development.

Residing population and commuters aregrowing faster than anticipated, putting thecity planning at stress and causing urbancomplexity. This leads to transportationcongestion, massive ood threat due to citysubsidence and general challenges withrespect to quality of urban life.

The challenges of PALYJA (the companyoperating Western part of the city) are tosupport the latest development of the city

and manage to give access to water toall. Increasing the service coverage whileimproving the quality of service are PALYJAsmajor priorities.

(*)http://esa.un.org/unpd/wup/index.htm(**)Jakarta Water Service Regulatory Body - JWSRB

-The First 10 years of Implementation of the JakartaWater Supply 25-year Concession Agreement.


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WATER STORIES

JAKARTA

Jakartas decision to delegate the management of the citys water services came in responseto the local authoritys requirement to improve the water supply and to meet the growing needsarising from Jakartas demographic boom.

PAM Jaya, the Jakarta Public Water Authority, delegated to PALYJA by way of a cooperationcontract the management and the extension of the western part of the citys water service.The utilities asset will be returned back to PAM Jaya at the end of the cooperation period.

OPTING FOR A CONCESSION SCHEME

PALYJA SHAREHOLDING

SUEZ ENVIRONNEMENT and itssubsidiaries are committed tothe daily

challenge of protectingresources andecosystems.The group providesinnovativesolutions to millions ofpeople and industries

in the drinkingwater, wastewater treatment

andwaste management elds.

PT ASTRATEL NUSANTARAis part of ASTRA Infrastructure Company.

The Company is actively developingbusiness in various infrastructure investment

projects such as toll road, power plants,telecommunications and media, ports and

logistic, clean water and others.

51% 49%

5,300 kmWATER NETWORK 420,000CONNECTIONS

THE CONTRACT

DKI JAKARTA

ADMINISTRATION

COOPERATION AGREEMENT

CUSTOMERS

CITY COUNCIL REGULATORY BODY


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THE CONTRACT

147 MILLION MOF WATER BILLED (2010)

1,400 EMPLOYEES

TERM OF THE CONTRACT

25-years contract from February 1, 1998 forwater service;

Concession area: the Western part of Jakarta(West of Ciliwung River);

Population served: 2.9 million inhabitants,about 420,000 customers (2010);

Water service based on full cost recovery

scheme (Water pays for water)

Contract supervision: the public authority(PAM Jaya) monitors the management ofservices; tariffs setting and regulation are thecompetence of the Jakarta Water Service

Regulatory Body (JWSRB).

Tariffs: affordable for low-income householdaccording to an independent study performed in2007/2008 following international standard.

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JAKARTA

WESTSERVICES AREA

SOUTH

SERVICES AREA

CENTRAL

SERVICESAREA

Population 240 million inhabitants (4th largest country)Jakarta ~ 10 million inhabitantsLargest Moslem population in the worldGDP : 670 Billion USDGDP / Capita : 4,300 USD (PPP)Resources : Natural Gas, Petrol, Palm Oil, Minerals

(Coopers, Alumunium, Gold, Coal, etc)

JAKARTA

PALYJA is responsible for the operation and maintenance of the whole infrastructure,as well as customer services (meter reading, billing, and collection). PALYJA is alsoresponsible for establishing every 5 years and investment plan and related feasibilitystudy for developing new infrastructures that need to be mutually agreed upon withthe local authorities for the following period.


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INFRASTRUCTURE FINANCING

PALYJA managed to eliminate currency risk bysuccessfully renancing its debt in local currency(IDR - Indonesian Rupiah). In July 2005, PALYJA

issued bondsin the amount of 650 billion IDR

(around 67 million USD)with maturity of up to7 years, a premiere in the water sector.

Facility agreement of 455 billion IDR (around50 million USD) was signed with the AsianDevelopment Bank(ADB) in March 2008,that helps nance the investment program.

Global Partnership Output Based Aid (GPOBA)agreement was signed in November 2007, with the

World Bank with a grant of approximately

2.5 million USD to connect 50,000 inhabitantsin low-income and deprived area.

WATER STORIES

JAKARTASERVICES

CERTIFICATION &

ACCREDITATION

ISO 17025: 2005ISO 9001: 2008OHSAS 18001: 2007

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SERVICES

CONTRACT PERFORMANCE

With the investments of more than 163 millionUS$, the network length has extended by 1,278km and company has rehabilitated 935 kmofprimary, secondary and tertiary networkwhichcorresponds to approximately 50% of the entirenetwork.

Nearly 220,000 new connections have beenlaid, which allowed to more than doubled thenumber of customers with access to the water

distribution network.The number of low income domestic customersconnected to the network rose by more than 8times whereasthe number of middle class andupper class clientshas almost doubled.

Service coverage has risen from 32% in 1998to 65% in 2010, connecting over 1,3 millionadditionalpopulation to the water network.

Water sales in volume has risen by 51% since

1998, with the same quantity of raw water; thishas been done, thanks to reducing NRW by 29%.

Customer services directorate has been set upand is continuously improving its services with anew call centre operating since early 2010.

Overall customer satisfaction toward PALYJAhas showed a positive trend over the last 3years: an independent survey in 2009 revealedthat 73% of customers were satised, whereas

only 1% of customers were dissatised.

WATER FOR ALLPALYJA is dedicated to deliver water toeveryone. To do so PALYJA put in place

many programs. Major ones are WaterKiosk, Master Meter and GPOBA.

Those allow low-income population andpeople living in deprived areas to have

access to clean water.

47 Water Kiosks are providing cleanwater to around 20,000 inhabitants.

3 Master Meters, providing clean wateraccess to around 576 inhabitants.

GPOBA (Global Partnership on Output

Based Aid), 5,042 connections providingclean water access to approximately

30,000 inhabitants (phase I).

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WATER STORIES

JAKARTAKNOW-HOW TRANSFER

EFFICIENCY IMPROVEMENT

PALYJA is continuously striving to improve the qualityof service, efciency and productivity. To achieve suchimprovement PALYJA fully benets from the researchand development network of SUEZ ENVIRONNEMENT

and ASTRA. Their extensive experience and resourcesallow effective transfer of knowledge and value toPALYJA, such as : Water treatment improvement/ optimization; Rehabilitation of water treatmentplant; Long Term Data Base (LTDB) improvementand optimization; Central Monitoring System (CMS)enhancement; Customer Information System Support;Network Operation & Modelization, etc.

EFFECTIVE LEAK REDUCTIONThanks to a state of art Helium detection

system, PALYJA managed to repairalmost 42,000 visible leaks and more than1,600 invisible ones in 2010. This helps

signicantly reduce the water losses.

Centralized Monitoring (DMCC)

Production

Leak Detection

PERMANENT AREAS

Denition: Permanent areas (PA) are hydraulicallyisolated areas along transfer mains. Flow in andout of each area are measured by ow meters, andmanaged by Pressure Reducing Valves if necessary.The ow meters are tted with GSM data loggersand record ow rate is transmitted regularly toDistribution Monitoring Control Centre (DMCC).

Concept: Well dened, hydraulically isolated networkareas with one or several inlets that are measuredon real time (DMCC). Most inlets are equipped with

pressure reducing valves (PRV) enabling the controlof the water ow and pressure entering PA.

WEST

SERVICES AREA

CENTRAL

SERVICES AREA

45 PERMANENT AREA

SOUTH

SERVICES AREA


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CUSTOMER CARE

CUSTOMER COMES FIRST

Many efforts have been made in order to improve the customers care and therefore enhancethe relationship with the customers. PALYJA put in place a call centre and developed severalactions in order to facilitate the life of our customers; for instance PALING (PALYJA LayananKeliling/PALYJA Mobile Payment Service), but also all the different payment facilities that have

been created. A new Call Centre is in place since 2010. It has a user-friendly phone number,available 24h/7: 2997 9999. The Average Call Served Ratio achieved 98%, and the averagecalls served is 18.000 per month.

PALYJA ensures to respond timely and efciently to its customers requests and complainswith respect to service constraints, quality of water, request for connections, as well asassisting customers on their invoice queries.

PALYJA developed many services like: PALYJA Mobile Service or mobile cashier points;PALYJAs SMS Service to provide quick information to the customers (0816 725 952),Customers data is maintained by online system network. Customers can also easily proceedwith bill payments through PALYJAs Customer Relation Ofce (KHP), PALING, numerousbanks branches and post ofces. To keep in touch with customers and public, PALYJAdeveloped customer corner in PALYJA website (www.palyja.co.id) which is easy to accessand well informed with customer oriented applications, such as: new connection request, online messenger and bill calculator.

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WATER STORIES

JAKARTAHUMAN RESOURCES

CAREER DEVELOPMENTFOR EMPLOYEESSince the beginning of the contract, PALYJAfocused on developing its employees skills aswell as optimizing the working conditions, andcontributing at keeping its employees safetywhile working.

The progress and achievements made by thecompany are closely linked to the roles of its

human resources. An integrated competency-based human resource development is

therefore conducted continuously, both

internally and externally.

The company applies internal fairness and

external competitiveness principles in order toobtain and maintain the best human resources

through routine performance appraisalconducted annually. The biggest challenge isto optimize the organization efciency. In orderto improve the relations within the company,many periodical employee-related events areput in place, involving top management andemployees to help the good communication.PALYJAs employee development programsare among others through training, coursesand career developments. Those are

conducted through work rotation or eldassignments. The company has alsodeveloped a knowledge management throughan internet system that can be easily accessed

by employees.

TRAINING EMPLOYEES

PALYJA guarantees the good training of itsemployees so that they will keep on beingenthusiastic and productive over the years.

Thanks to its willingness to haveprofessional and multi-tasked employees,

PALYJA ensures them personaldevelopment by offering training inEuropean countries and throughout theworld. Each year, 15 to 20 PALYJA stafffollow international seminars.

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HUMAN RESOURCES

PALYJA ensured 48,693hours of training for2010, equals to 36 hoursper employees per year

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WATER STORIES

JAKARTACORPORATE SOCIAL

RESPONSIBILITY

PALYJA FRIENDLY COMPANYPALYJA considers Corporate Social Responsibility (CSR) is inline with its business strategy.PALYJAs vision on CSR is to be a socially responsible water provider in Indonesia bycontributing to the environment preservation and community development through goodcorporate governance.

All CSR activities are coordinated under the umbrella of PALYJA Friendly Company (PFC).There is a real commitment to meet the expectations of our stakeholders (customers,employees, suppliers, governmental institutions and communities). The four major axisin which PALYJA invested in CSR are its core business activities, the philanthropy, theenvironment and emergency issues. PALYJA therefore focus its CSR activities on water forall, health & education, environment and humanitarian. Concerning the education, PALYJAhas been developing many activities like children and students visit to the water facilities,writing contest, etc.

A water education exhibition has also been created. Mass medication and blood donationare several examples of PALYJAs actions for the health area. Throughout PALYJA Green

Community, PALYJA support community to manage domestic waste and garbage byimplementing 3R concept (Reduction, Recycle & Reuse). Other actions for the environmentlike dredging Krukut River and vehicle pollution emission tests have been taken. Moreover,trees plantation action named One Employee Equals One Treehas been established.

PALYJA also actively took part in humanitarian relief in several areas in Indonesia that

suffered from natural disasters like Aceh in December 2005, Yogyakarta in 2006 or Padangin September 2009 with coordination of Aquassistance, an NGOs specialized in wateremergency relief using Suez Environnement volunteers. Whenever PALYJA does thiskind of actions, it is always in collaboration with the local water company (PDAM) and thehumanitarian organization in charge (UNICEF), etc.


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THE FUTURE

WATER RESOURCECHALLENGESWestern Jakarta water service relies on thesame water resources like at beginning ofthe cooperation agreement, 13 years ago.

Globally current water resource system andsupply transmission main features are notappropriate for delivering sustainable andreliable water to Western Jakarta 4.5 million

population, mostly because vulnerablein term of:

Quality (subject to pollution and highturbidity during heavy rain events);

Quantity (subject to external naturalevents: high water, ood, drought,silting and unforeseen circumstanceslike electricity outage, and potentialrisks of disruption at both Curug andCawang pumping stations).

NEED FOR ALTERNATIVE

FINANCING

Funding sources for major investmentsrelating to enhancement and increaseof water resource and implementation oftransmission lines to the area with unmetdemand; and co-nancing through regionalbudget, central budget or IFIs and donors

contributions, have to be mobilized.


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THE FUTURE

LOOKING AHEAD / PLANNING

FOR THE FUTURE

At contract mid-term, PALYJA, the public water authorityPAM Jaya and the DKI Regional Government of Jakartastill have major challenges for the remaining period2011-2023; which will require goodwill and efforts fromboth side.

MAJOR OUTSTANDING ISSUES ANDCHALLENGES

Investments nanced through the tariff (full cost

recoveryscheme) are much too low tocope withproper management of existing andageing assetsreplacement and extension, service improvement whilefacing a growing water demand and enlarging servicecoverage. Alternative nancings should bemobilized;

Fight against illegal connections and illegal uses(relying on public authority support andactions) areat stake to signicantly improveNon Revenue Water(NRW) to reach less than30% target at contract term.

MEETING WATER DEMAND

Deep well (ground water use) conversion to pipedwater as promoted by DKI through the new Water TaxPolicy for Deep Well users, is key to mitigate citysubsidence;

Mobilizing new water resources in the near future withthe assistance of the regional and central governmentsis key to keep improving andextending the service.

WATER STORIES

JAKARTA

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SINCE 1998, WITH ITS 1,400 EMPLOYEES, PALYJA HAS INCREASED ACCESS TO

CLEAN WATER, REACHING 65% SERVICE COVERAGE AREA IN WESTERN PART

OF DKI JAKARTA, AND SERVING NEARLY 420,000 CONNECTIONS.

PALYJA VISION IS TO BECOME PREFERRED WATER SERVICE PROVIDER IN

INDONESIA BY SATISFYING ITS CUSTOMERS AND ADDING VALUE

TO ALL ITS STAKEHOLDERS.


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end of 2010

PT PAM LYONNAISE JAYA (PALYJA)

SENTRAL SENAYAN I, 7FL

JL. ASIA AFRIKA NO. 8

JAKARTA PUSAT

INDONESIA

WWW.PALYJA.CO.ID

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