Technical Assistance Consultant’s Report

Project Number: 46380-005 October 2016

Indonesia: Green Cities: A Sustainable Urban Future in Indonesia (Financed by the Government of Australia) (Part 1 of 2)

Prepared by Robert van der Hoff, John Sutton, and Niels van Dijk Urban Solutions BV in association with PT Ciriajasa Rancangbangun Mandiri (CRM) Indonesia)

Indonesia

For Asian Development Bank

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical

assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

CURRENCY EQUIVALENTS (as of 20 October 2016)

Currency Unit – Indonesian rupiah (IDR)

IDR1.00 = $ 0.0000766 $1.00 = IDR13050

ABBREVIATIONS ADB – Asian Development Bank AfD – Agence Française de Développement AFM – Alternative Financing Mechanisms APBD – Anggaran Pendapatan dan Belanja Daerah (regional/municipal

budget) APBN – Anggaran Pendapatan dan Belanja Nasional (national budget) APEKSI – Asosiasi Pemerintah Kota Seluruh Indonesia (association of

Indonesian municipalities) ASEAN – Association of South East Asian Nations AusAID – Australian Government Overseas Aid Program BAPPENAS – Badan Perencanaan Pembangunan Nasional (national

development planning BDA – Batam Development Authority BIFZA – Batam Indonesia Free Zone Authority BLU – Badan Layanan Umum (public service agency) BLUD – Badan Layanan Umum Daerah (regional public service

agency) BOT – Build Operate Transfer BRT – Bus Rapid Transit BUMN – Badan Usaha Milik Negara (state owned enterprise – SOE) CAPEX – Capital Expenditure CBO – Community Based Organization CDIA – Cities Development Initiative for Asia CDTA – Capacity Development Technical Assistance CIIPP – City Infrastructure Investment Programming and Prioritization CPS – Country Partnership Strategy CSR – Corporate Social Responsibility DAK – Dana Alokasi Khusus (special allocation fund) DAU – Dana Alokasi Umum (general allocation fund) DBH – Dana Bagi Hasil (revenue sharing fund) DED – Detailed Engineering Design DGHS – Directorate General of Human Settlements, Ministry of Public

Works DMF – Development Monitoring Framework DKP – Dinas Kebersihan dan Pertanaman (city sanitation and

landscaping agency) DPR – Dewan Pewakilan Rakyat (national parliament) DPRD – Dewan Perwakilan Rakyat Daerah (regional parliament) DSCR – Debt Service Coverage Ratio 3E – Environmental, Economic, Equitable

EA – Executing Agency ESCO – Energy Savings/Service Company FAR – Financial Analysis Report FS – Feasibility Study GCAP – Green City Action Plan (see also RAKH) GCP – Green Cities Program (also: Green City Profile) GIS – Geographic Information System GOI – Government of the Republic of Indonesia GT – Green Team IA – Implementing Agency IIF – Indonesia Infrastructure Fund IIGF – Indonesia Infrastructure Guarantee Fund IMT-GT – Indonesia Malaysia Thailand Growth Triangle IndII – Indonesia Infrastructure Initiative IPAL – Instalasi Pengolaan Air Limbah (see also WWTP) IPP – Independent Power Producer IUWASH – Indonesia Urban Water, Sanitation, and Hygiene JICA – Japan International Cooperation Agency KfW – Kreditanstalt für Wiederaufbau (German Development Bank) FGD – Focus Group Discussion KSPPN – Kebijakan dan Strategi Pembangunan Perkotaan Nasional

(National Urban LCF – Livable City Framework LGE – Local Government Enterprise LGOE – Local Government Owned Enterprise MDG – Millennium Development Goals SPV – Special Purpose Vehicle SWM – Solid Waste Management TA – Technical Assistance TOR – Terms of Reference UNDP – United Nations Development Programme WSS – Water Supply and Sanitation WTE – Waste to Energy

NOTE

In this report, "$" refers to US dollars.

TA-8518 INO: Green Cities:

A Sustainable Urban Future in Indonesia

FINAL REPORT

TA-8518 INO: Green Cities

A Sustainable Urban Future in Indonesia 2 - Capacity

Development

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DOCUMENT SIGN OFF

Report Title: Final Report

Client Name: Asian Development Bank (ADB)

Project Name: TA-8518 INO: Green Cities: A Sustainable Urban Future in Indonesia

Document Number: US2016/INO8518/FR

Client Contract Number: 112365-S52413

This Consultant’s report has been prepared by Urban Solutions BV in association with PT Ciriajasa

Rancangbangun Mandiri (CRM) Indonesia. The report does not necessarily reflect the views of ADB,

Australian Aid, or the Government concerned, and ADB, Australian Aid, and the Government cannot

be held liable for its contents.

File No: US2016/INO8518/FR

Issue No: A Date: 20/10/16

Sign Off Originator Checker Approver Client Approval (if

required)

Print Name: Robert van der Hoff John Sutton Niels van Dijk

Signature:

Date:

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Contents

Executive Summary .......................................................................................................... 10

1 Introduction ................................................................................................................ 14

Background to the CDTA ............................................................................................ 14 1.1

Structure of the Report ................................................................................................ 15 1.2

2 Preliminary Work to Define the Approach to Green City Action Planning ............. 16

Regulatory Framework for Action Planning ................................................................. 16 2.1

City Readiness and Capacity Assessment .................................................................. 17 2.2

A Need for Result-Oriented Action Planning ............................................................... 18 2.3

Literature Review ........................................................................................................ 18 2.4

Summary: What is a GCAP? ....................................................................................... 19 2.5

2.5.1 Core Principles of Green City Action Plans .......................................................... 19

3 Approach and Methodology ...................................................................................... 20

GCAP facilitation ......................................................................................................... 20 3.1

Finance Methodology .................................................................................................. 29 3.2

3.2.1 Financial Assessment Report (FAR) .................................................................... 29

3.2.2 Alternative Financing Mechanisms (AFM) ........................................................... 31

4 Process and issues faced in capacity development ................................................ 34

Methodology Development and application ................................................................. 34 4.1

4.1.1 Purpose ............................................................................................................... 34

4.1.2 Development ....................................................................................................... 34

4.1.3 Practice ............................................................................................................... 34

4.1.4 Summary of Methodology Development and Application ..................................... 35

Facilitation of the TA ................................................................................................... 36 4.2

4.2.1 Language ............................................................................................................ 36

4.2.2 Schedule ............................................................................................................. 36

4.2.3 Management of the TA ........................................................................................ 37

Capacity Development ................................................................................................ 37 4.3

4.3.1 Institutional Capacity Development, Urban Management Partnerships ................ 38

4.3.2 Issues faced ........................................................................................................ 40

4.3.3 Planning Capacity Development .......................................................................... 41

Brief Summary of the process and issues by City ....................................................... 42 4.4

4.4.1 Batam .................................................................................................................. 42

4.4.2 Kendari ................................................................................................................ 43

4.4.3 Malang ................................................................................................................ 43

4.4.4 Medan ................................................................................................................. 43

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Developing financing capacity ..................................................................................... 43 4.5

5 Outputs ....................................................................................................................... 46

Intermediate outputs ................................................................................................... 46 5.1

The Green City Action Plans (GCAP) .......................................................................... 48 5.2

5.2.1 Action Plans ........................................................................................................ 50

5.2.2 Generic actions ................................................................................................... 53

5.2.3 GCAP implementation ......................................................................................... 54

5.2.4 Financing options & mechanisms ........................................................................ 55

Public Finance Outputs per City .................................................................................. 57 5.3

5.3.1 Issues and outputs .............................................................................................. 57

5.3.2 Malang ................................................................................................................ 59

5.3.3 Medan ................................................................................................................. 60

5.3.4 Batam .................................................................................................................. 61

5.3.5 Kendari ................................................................................................................ 61

6 Current Status of TA .................................................................................................. 63

Evaluation of the TA in the National Green Cities Roundtable in Surabaya ................. 63 6.1

6.1.1 Malang ................................................................................................................ 64

6.1.2 Batam .................................................................................................................. 64

6.1.3 Medan ................................................................................................................. 64

6.1.4 Kendari ................................................................................................................ 64

7 Lessons Learnt and Recommendations ................................................................... 66

Policy & Practice ......................................................................................................... 66 7.1

Planning ...................................................................................................................... 66 7.2

Finance ....................................................................................................................... 66 7.3

The fate of the GCAPs ................................................................................................ 68 7.4

8 Conclusions and Next steps ...................................................................................... 69

National Policies on Urban Infrastructure Development .............................................. 69 8.1

GCAP Methodology Development ............................................................................... 69 8.2

Future TA Delivery ...................................................................................................... 72 8.3

Next Steps .................................................................................................................. 72 8.4

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Figures

Figure 2.1: Cyclical Process of the GCAP ............................................................................ 17

Figure 3.1: 10 Step Methodology for GCAP Development .................................................... 21

Figure 3.2: Toolbox for Green City Action Planning .............................................................. 22

Figure 3.3: Project Finance/Funding Flowchart .................................................................... 33

Figure 4.1: Organization Chart of Green Team .................................................................... 39

Figure 5.1: Overall Implementation ...................................................................................... 54

Tables

Table 3.1: Contents of the Green City Profile........................................................................ 24

Table 3.2: Checklist for Assessing ‘Ease of Implementation’ of Proposed Green Programs . 26

Table 4.1: Capacity Development ......................................................................................... 38

Table 5.1: Overview of Intermediate Outputs and Prioritized Programs ................................ 47

Table 5.2: Status of GCAPs by end of TA ............................................................................. 48

Table 5.3: The GCAP in Brief ............................................................................................... 49

Table 5.4: GCAP Responsibilities ......................................................................................... 55

Table 5.5: MEDAN: Funding & Financing Options, Implementing Mechanisms for Sanitation

Program ............................................................................................................................... 55

Table 5.6: Options for Alternative Modes of Financing .......................................................... 56

Table 5.7: Financial/Budget Ratios ....................................................................................... 58

Table 5.8: Potential Borrowing Capacity ............................................................................... 59

Table 5.9: Investment in Green Attributes ............................................................................ 59

Table 8.1: Initial Suggestions for Consolidating the GCAP Methodology .............................. 70

Table 8.2: Outstanding Issues .............................................................................................. 73

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Appendices (on CD-ROM)

A.1 Green City Action Plan Medan

A.2 Green City Action Plan Batam

A.3 Green City Action Plan Kendari

A.4 Green City Action Plan Malang

B.1 Financial Assessment Report Medan

B.2 Financial Assessment Report Batam

B.3 Financial Assessment Report Kendari

B.4 Financial Assessment Report Malang

C Methodology on Alternative Financing Mechanisms

D International Green Cities Literature Review

E Livable Cities Framework (LCF)

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Glossary of Acronyms and Abbreviations

ADB Asian Development Bank

AfD Agence Française de Développement

AFM Alternative Financing Mechanisms

APBD Anggaran Pendapatan dan Belanja Daerah (regional/municipal budget)

APBN Anggaran Pendapatan dan Belanja Nasional (national budget)

APEKSI Asosiasi Pemerintah Kota Seluruh Indonesia (association of Indonesian municipalities)

ASEAN Association of South East Asian Nations

AusAID Australian Government Overseas Aid Program

BAPPENAS Badan Perencanaan Pembangunan Nasional (national development planning agency)

Bappeda Badan Perencanaan Pembangunan Daerah (regional development planning agency)

BDA Batam Development Authority

BIFZA Batam Indonesia Free Zone Authority

BLU Badan Layanan Umum (public service agency)

BLUD Badan Layanan Umum Daerah (regional public service agency)

BOT Build Operate Transfer

BRT Bus Rapid Transit

BUMD Badan Usaha Milik Daerah (regional government enterprise - RGE)

BUMN Badan Usaha Milik Negara (state owned enterprise – SOE)

CAPEX Capital Expenditure

CBO Community Based Organization

CDIA Cities Development Initiative for Asia

CDTA Capacity Development Technical Assistance

CIIPP City Infrastructure Investment Programming and Prioritization

CPS Country Partnership Strategy

CSR Corporate Social Responsibility

DAK Dana Alokasi Khusus (special allocation fund)

DAU Dana Alokasi Umum (general allocation fund)

DBH Dana Bagi Hasil (revenue sharing fund)

DED Detailed Engineering Design

DGHS Directorate General of Human Settlements, Ministry of Public Works

DMF Development Monitoring Framework

DKP Dinas Kebersihan dan Pertanaman (city sanitation and landscaping agency)

DPR Dewan Pewakilan Rakyat (national parliament)

DPRD Dewan Perwakilan Rakyat Daerah (regional parliament)

DSCR Debt Service Coverage Ratio

3E Environmental, Economic, Equitable

EA Executing Agency

ESCO Energy Savings/Service Company

FAR Financial Analysis Report

FS Feasibility Study

GCAP Green City Action Plan (see also RAKH)

GCP Green Cities Program (also: Green City Profile)

GIS Geographic Information System

GOI Government of the Republic of Indonesia

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GT Green Team

IA Implementing Agency

IIF Indonesia Infrastructure Fund

IIGF Indonesia Infrastructure Guarantee Fund

IMT-GT Indonesia Malaysia Thailand Growth Triangle

IndII Indonesia Infrastructure Initiative

IPAL Instalasi Pengolaan Air Limbah (see also WWTP)

IPP Independent Power Producer

IRM ADB Indonesia Resident Mission

IUWASH Indonesia Urban Water, Sanitation, and Hygiene

JICA Japan International Cooperation Agency

KfW Kreditanstalt für Wiederaufbau (German Development Bank)

FGD Focus Group Discussion

FS Feasibility Study

KSPPN Kebijakan dan Strategi Pembangunan Perkotaan Nasional (National Urban Development Policy and Strategy – NUDPS)

LCF Livable City Framework

LG Local Government

LGE Local Government Enterprise

LGOE Local Government Owned Enterprise

LLTT Layanan Lumpur Tinja Terjadwal (scheduled human waste desludging service)

LPPI Lembaga Pendanaan Pembangunan Infrastruktur (infrastructure development finance institute)

LGR Local Government Regulation or Bylaw (see Perda)

MCA Multi Criteria Analysis

MDB Multilateral Development Bank

MDF Municipal Development Fund

MDG Millennium Development Goals

M&E Monitoring and Evaluation

MOE Ministry of Environment

MOF Ministry of Finance

MOH Ministry of Housing

MOHA Ministry of Home Affairs

MOU Memorandum of Understanding

MPWH Ministry of Public Works and Housing

MSS Minimum Service Standard (SPM – Standar Pelayanan Minimum)

NLDTP Long Term National Development Plan

NMT Non-motorized transportation

NUDP National Urban Development Program (see P3N)

NUPS National Urban Policy and Strategy

NUDPS National Urban Development Policy and Strategy

OBA Output Based Aid

OBC Outline Business Case

ODA Official Development Assistance

O&M Operation & Maintenance

OPEX Operational Expenditure

OSS On/Off Site Sanitation

PAD Pendapatan Asli Daerah (regional own revenue)

PAKLIM Policy Advice for Environment and Climate Change

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PDAM Perusahaan Daerah Air Minum (regional/municipal water enterprise)

PEFINDO PT Pemeringkat Efek Indonesia (Indonesian credit rating agency)

Perda Peraturan Dearah (regional/municipal government regulation)

PFS Pre Feasibility Study

PIP Project Implementation Plan

PIP Pusat Investasi Pemerintah (Indonesia Investment Agency – IIA)

P2KH Program Pengembangan Kota Hijau (see also GCP)

P3N Program Pembangunan Perkotaan Nasional (national urban development program)

PLN Perusahaan Listrik Negara (national electric company)

PMU Project Management Unit

PPP Public-Private Partnership

PSP Private Sector Participation

PT SMI PT Sarana Multi-Infrastruktur (Persero)

3R Reduce, Reuse, Recycle

RAKH Rencana Aksi Kota Hijau (see also GCAP)

RIAP Revenue Improvement Action Plan

RIDF Regional Infrastructure Development Fund

RPIJM Rencana Program Investasi Jangka Menengah (plan for medium term investment program)

RPJMD Rencana Pembangunan Jangka Menengah Daerah (regional medium term development plan)

RPJMN Rencana Pembangunan Jangka Menengah Nasional (national medium term development plan)

RTRW Rencana Tata Ruang Wilayah (regional spatial development plan)

RTRWN Rencana Tata Ruang Wilayah Nasional (national spatial development plan)

SC Steering Committee

SDG Sustainable Development Goals

SKW Surat Keputusan Walikota (Mayoral Decision)

SMART Specific, Measurable, Achievable, Realistic, Timebound

SOAR Strengths, Opportunities, Aspirations, Results

SOE State Owned Enterprise (see BUMN)

SOP Standing Operating Procedure(s)

SOW Scope of Work

SPAM Sistem Penyediaan Air Minum (water supply system)

SPM Standar Pelayanan Minimum (see MSS)

SPPIP Strategi Pembangunan Permukiman dan Infrastruktur Perkotaan (urban infrastructure andsettlement development strategy)

SPV Special Purpose Vehicle

SWM Solid Waste Management

TA Technical Assistance

TKPPN Tim Koordinasi Pembangunan Perkotaan Nasional (national urban development coordination team)

TOR Terms of Reference

UMKM Usaha Mikro, Kecil, dan Menengah (MSME)

UMP Urban Management Partnership

UNDP United Nations Development Programme

UNESCO-IHE Institute for Water Education

UOP ADB Urban Operational Plan 2012-2020

UPP Urban Poverty Program

UU Undang-Undang (law of the government of Indonesia)

9

WB The World Bank

WB Waste bank

WS Water supply

WSS Water Supply and Sanitation

WTE Waste To Energy

WWTP Waste Water Treatment Plant (see also IPAL)

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EXECUTIVE SUMMARY

Introduction

The green cities concept is an emerging approach and rapidly developing both internationally

and nationally. This CDTA was meant to apply the concept to selected cities in Indonesia.

Considering the novelty of the concept in Indonesia, capacity development was a key

component, and it was designed to be flexible and receptive to lessons learnt throughout the

duration of the Services. The green cities concept was adapted to suit the local context and,

importantly, local capacity for management and governance. Information on existing green

cities development policies in the context of urban development in Indonesia, as well as

stakeholder mapping and institutional analysis, can be found in the Consultant’s Interim

Report.

Background to the CDTA

The Government of the Republic of Indonesia (GOI), through its National Development

Planning Agency (Bappenas) has started implementing a National Urban Development

Policy and Strategy 2015-2025 that aims at having urban areas meet national service

standards by 2025, achieve smart, green and livable cities by 2035, and attaining sustainable

urban development by 2045. The Government supports green cities initiatives that gradually

will become a part of urban development policy and practice. One of these is the Green

Cities Program (GCP)1 implemented by the Directorate General of Human Settlements2 in

the Ministry of Public Works (MPW), now renamed the Ministry of Public Works and Housing

(MPWH).

The ADB‘s Strategy 2020 emphasizes the need for an integrated approach when planning to

provide environmental infrastructure, services, and other public goods. The Urban

Operational Plan 2012–2020 provides direction and is the ADB’s response to addressing the

urban challenge. The plan presents an integrated approach that is green, competitive, and

inclusive in order to achieve sustainable and livable cities that balance the environment,

economy and equity.

This capacity development technical assistance (CDTA) is putting the ADB Urban

Operational Plan into action by (i) bridging the gap between urban planning and

environmental management in developing investments plans; (ii) reviewing innovative

financing mechanism, and (iii) establishing close coordination among multiple sectors

involved in urban development planning.

The CDTA is embedded into ADB’s Green Cities Initiative focusing on developing green

cities in all of Southeast Asia. The Green Cities Initiative was initiated through the regional

capacity development technical assistance for green cities.

The outcome of the CDTA will be enhanced city management’s capacity in integrated

planning and management of urban infrastructure in the cities that participate in the CDTA.

1 Program Pengembangan Kota Hijau (P2KH)

2 Previously the GCP was implemented by the now defunct Directorate General of Spatial Planning (DGSP)

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Structure of the Report

The report is structured around the following parts: First, the preliminary work undertaken by

the Consultant to establish the approach to green cities action planning, including an

assessment of city readiness to undertake the work and the resulting need for an innovative

approach; second, development of an appropriate and replicable methodology for preparing

a Green City Action Plan (GCAP); third, facilitation of the cities’ planning process to create

local capacity and ownership for green action planning; fourth, creation of a project pipeline,

and investigation of alternative modes of financing; fifth, process and issues in capacity

development; sixth, outputs per city; seventh, achievements by the end of the TA; eighth;

lessons learnt and recommendations; and finally, suggested next steps for future green city

action planning in other cities in Indonesia.

Technical Assistance for Capacity Development (CDTA)

The ADB supported GoI’s Green Development policy by helping it select four cities with

different characteristics: Batam, Kendari, Malang and Medan. After Bappenas and the ADB

introduced the initiative to the cities to garner support, the CDTA was launched in August

2014.

The CDTA was to develop GCAPs in each of the participating cities, including an investment

program outlining short-, medium- and long-term investments for green infrastructure for

climate change adaptation. The CDTA would be the basis for developing an investment

pipeline in the urban sector that supports the ADB's strategic approach to provide

governments with ‘Finance ++’ building on knowledge and leveraging co-financing. The

CDTA was to pilot test innovative approaches for urban management for green cities.

The GCAP

The Consultant has defined the GCAP as a prioritized, time scaled (mainly short to medium)

green development and investment plan, combined with an urban management and

implementation plan, a financing plan, and performance monitoring indicators. This

integrated action plan is prepared by and for the city to realize its green vision (guided by the

ADB’s evolving green city concept using as its motto “The Green City is the City of the

Future”).

Process

Once the cities of Batam, Kendari, Malang and Medan had established a municipal multi-

year, multi-stakeholder “Green Team”3 by Mayoral Decision as a counterpart working group,

the Consultant was able to deliver the TA to the four cities over a period of two years on an

intermittent basis. This started with visioning a green urban future, and concluded with the

formulation of an action plan based on agreed priorities. The Consultant developed a

methodology for action planning while the TA was in progress. As each city had different

characteristics, as well as a different starting date and work schedule that the Consultant had

to accommodate, by the end of the CDTA the four cities had drafted their first GCAP, with the

3 The term ‘Green Team’ was coined by the Consultant for ease of use; the GCP in the MPWH calls it the Green City

Communication Forum (Forum Komunikasi Kota Hijau), UNESCO-IHE/MARE used the term City Level Working Group (CLWG) developed through a Learning and Action Alliance (LAA), the cities may refer to them as Green City Working Groups (Pokja Kota Hijau), or in the case of Malang, Green City Board (Dewan Kota Hijau). In essence they all refer to roughly the same group of people tasked with or contributing to preparing a Green City Action Plan.

12

understanding that it is a rolling plan that should be updated each year. By the end of the TA

in mid-2016, the Green Teams had not equally progressed in capacity development, but the

Consultant accepted this as a consequence of the process of achieving local ‘buy-in’. The

Green Team is meant to be a sustained entity that is the core for developing specific urban

management partnerships for project implementation, and a replicable action planning

methodology.

Main Outputs

The main outputs produced by the CDTA are four Green City Action Plans (GCAP) based on

the action planning methodology developed by the Consultant. A GCAP comprises a

method for improving integrated urban planning through profiling, baselining, and

performance indexing, a project pipeline, an assessment of the city’s fiscal capacity,

consideration of alternative modes of financing for the proposed project pipeline, and a plan

for implementing the project pipeline.

Lessons Learnt and Recommendations

Towards completion of the CDTA, Bappenas hosted a “Green Cities Roundtable” evaluation

workshop in Surabaya for the participating cities. The overarching lesson learnt by the

participants was that in general, politicians lack incentives to pursue agendas for long-term

green development, resilience and climate change mitigation that require high levels of

planning and investment in the short and medium term while the potential concrete rewards

will become visible only long after their tour of duty.

The participants also concluded that current national policies on green and sustainable

development to create livable cities need to be made more concrete, and need to sufficiently

incentivize local decision makers. Hence, Green Teams will continue to face difficulties in

persuading decision makers to adopt far-reaching strategies. The participating cities did,

however, conclude that the TA had been successful in developing capacities and setting a

green infrastructure development agenda, but they would welcome continued specialist

inputs to strengthen their GCAPs in the future.

The Consultant has learned that for TA to be effective, a differential approach has to be

applied in which each city receives tailor-made (flexible, intermittent) support, including

engagement of a legitimate local counterpart (the Green Team) and local champions in each

city. In addition, the TA needs to be delivered by city facilitators who have been trained to

use the methodology (now in Version 1.0). The Roundtable recommended the continuation

of a Green Cities TA based on requests from cities, on condition that cities issue a Mayoral

Decision to establish a Green Team as a prerequisite for eligibility for TA support, and

receive prior training in applying the methodology.

The Consultant believes that a consolidated and published methodology (Version 2.0) can

enable a city to produce a viable GCAP within one budget year if facilitation is provided to the

Green Teams. Bappenas agreed that the GCAP methodology can become a useful

knowledge product to help guide Indonesian cities.

Next Steps

Following the Roundtable workshop in Surabaya, a final wrap-up meeting was held in

Bappenas with the Consultants (see Appendix X for the presentation used by the Consultant

for reporting to Bappenas). A number of next steps were discussed and in principle agreed

upon:

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1. As a first activity, Bappenas is willing to convene a meeting of the Mayors of Batam, Kendari, Malang and Medan in Jakarta to jointly sign their GCAPs once finalized.

2. As a second activity, Bappenas is willing to convene an inter-agency workshop to discuss and agree on the GCAP Methodology Version 2.0 before disseminating it as a knowledge product The approved and signed GCAPs can be used as examples for other cities.

3. As GoI is currently preparing a new framework for urban infrastructure development financing that is expected to start functioning in 2017, the GCAP can be used as a tool for mainstreaming the preparation and pipelining of bankable investment proposals based on integrated local development planning with increased focus on green and resilient development and climate change mitigation. As such, GoI has an interest in consolidating the GCAP as a knowledge product, print it as a guideline, and disseminate it.

4. Bappenas is willing to consider establishing a national inter-agency standing committee of selected experts (“Green Cities Forum”) that can screen applications and select interested cities based on pre-qualification, provide training on GCAP, periodically visit cities to assist them with green performance appraisal, and liaise with support facilities such as the CDIA; it can act as a clearinghouse for the production and exchange of knowledge products and information, as well as the processing of requests for support in preparing masterplans, feasibility studies, local regulations, or the creation of a task force to move priority project proposals forward. This will ensure that sustained political will and momentum will push the GCAP methodology to the forefront of green and resilient urban planning in Indonesia.

5. In the absence of guaranteed sources of infrastructure project financing, the proposed Green Cities Forum should monitor GCAP implementation in active cities, especially for actions that do not require external support, as that was one of the main purposes of the GCAPs.

Several issues as shown in the table below were left further consideration.

Issues & Risks Proposed Solutions

1 During the CDTA, the 4 participating cities had different levels of readiness, and therefore required tailor-made facilitation.

GoI needs to apply a differential approach for TA and training in which each city receives tailor-made (flexible, intermittent) support, including engagement of local champions in each city.

2 There is need for a paradigm shift that provides concrete incentives to city governments for turning action plans into action, local knowledge into practice, and local resources into investments.

GoI needs to formulate incentives that can persuade city governments to voluntarily improve urban management effectiveness, efficiency, and equity. It is therefore suggested that Bappenas establish a National Green City Forum to address such issues and formulate appropriate incentives.

3 There is need for more hard evidence that sustainable green city development brings real benefits; at present, some cities will still be reluctant although the MoU for the CDTA assumed that the cities did not need to be convinced.

GoI needs to provide more concrete evidence of the benefits of sustainable green city development. A National Green City Forum would be well placed to undertake basic research to collect and disseminate such evidence based on reliable facts and figures.

4 There is a risk that no suitable innovative financing mechanisms are available that city governments are able to manage.

In order to boost infrastructure investment, GoI needs to promote efficiency gains in city financial management and public service delivery, while at the same time promoting alternative financing mechanisms. This is probably best achieved through regulatory framework development, followed by regular training programs combined with incentives.

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Introduction 1

Background to the CDTA 1.1

The green cities concept is an emerging approach and rapidly developing both internationally

and nationally. This TA therefore was designed to be flexible and receptive to lessons learnt

throughout the duration of the Services, and build capacity for ‘green’ planning in the

recipient cities. The green cities concept has been adapted to suit the local context and,

importantly, local capacity for management and governance. Additional information on

existing green cities development policies in the context of urban development in Indonesia,

as well as stakeholder mapping and institutional analysis, can be found in the Consultant’s

Interim Report.

The Government of the Republic of Indonesia (GOI) has started implementing a National

Urban Development Policy and Strategy 2015-2025 that aims at having urban areas meet

national service standards by 2025, and attaining sustainable urban development by 2045.

The Government also supports green cities initiatives that gradually will become a part of

urban development policy and practice. One of these is the Green Cities Program (GCP)4

implemented by the Directorate General of Human Settlements5 in the Ministry of Public

Works (MPW), now renamed the Ministry of Public Works and Housing (MPWH).

GoI, together with the ADB, selected the cities of Batam, Kendari, Malang and Medan that

had already participated in the GCP managed by the MPWH since 2010. In the MPWH’s

first appraisal in 20136, city performance was judged primarily on implementation of three

‘attributes’7 (Green Planning and Design, Green Open Space and Green Community) that fell

under the purview of the now defunct DGSP.8, The MPWH’s appraisal underscored that with

the new National Development Plan period starting in 2015, the participating cities should

scale up their GCP by promoting the ‘heavier’ infrastructure attributes including Green Water,

Green Waste, etc. Some attributes such as Green Transportation and Green Energy are

outside the purview of the MPWH. Under this TA, the cities were under no obligation to apply

all of the MPWH’s eight GCP attributes, but should at least help identify their top green

investment priorities, particularly with respect to the heavier, infrastructure attributes. This will

also help to align the outputs with ADB’s (and other donors) approach to Country support, in

terms of planning/preparing infrastructure investments.

The MPWH’s report explained the ideals of Zero Waste, Zero Run-off, Green Transportation,

and the other ‘big attributes’. However, those principles were applied only as ‘supporting

attributes’ within the three ‘starter kit’ attributes of Green Open Space, Green Planning &

Design, and Green Community. This was pre-determined by the fact that the then

Directorate General of Spatial Planning had no authority beyond its spatial planning

mandate. In other words, cities built public parks and kampungs that incorporated bicycle

4 Program Pengembangan Kota Hijau (P2KH)

5 Previously the GCP was implemented by the now defunct Directorate General of Spatial Planning (DGSP)

6 The 2013 MPWH GCP performance appraisal report with the title “Buku Peningkatan Kinerja P2KH 2013” is based on

batch appraisals (IA, IB, etc.) of groups of local governments

7 The 8 GCP-MPWH attributes are green planning and design, green open space, green community, green waste, green

building, green energy, green water and green transportation. The term ‘attribute’ coined by the MPW GCP has been maintained by the Consultant, but further specified to avoid confusion (see Table 1).

8 In the appraisal of Batch 1A, Malang, Kendari, Batam and Medan came out 8

th, 9

th, 16

th and 22

nd respectively. Medan

subsequently disengaged itself from the GCP, purportedly because it didn’t see sufficient return on investment.

15

paths and LED lighting and similar facilities as supporting attributes because it could still be

considered spatial planning. Outside those areas there was nothing until the TA expanded

the scope, helped by the fact that the DG of Spatial Planning ceased to exist in 2016, and the

GCP moved to the DG of Human Settlements which has infrastructure development as its

mandate.

In the MPWH report, city performance was based on three criteria: City Response to P2KH

(commitment), Technical Performance, and Administrative Performance. They only applied

to the ‘starter kit’ attributes. The fourth criterion used by the MPWH was ‘perception value’,

the evaluation team’s opinion about city performance. The evaluation team consisted of

national and provincial government staff. Malang ranking 8th, Kendari 9th, Medan, Batam

16th, and Medan 22nd.

The MPWH report also explained the ‘implementation profile’, but by that time Medan had

already disengaged from the GCP, so there was no implementation profile for Medan. As the

‘big’ green attributes were meant only to support the creation and embellishment of public

parks and green spaces within communities, no city-wide profiles were prepared.

To further green city initiatives, this TA has facilitated the preparation of Green City Action

Plans9 for the four selected cities. It should be noted that the TA was meant to promote an

integrated ‘rolling plan’ process embedded in the local government statutory planning

process, but ‘greened them up’ by making cross-sectorial linkages, introducing initiatives to

make cities more resilient and able to counter climate change, and to measure their own

performance. In addition, it was meant to explore alternative modes of finance for proposed

projects, consider implementation mechanisms through ‘Urban Management Partnerships’.

The GCAPs were expected to provide an important reference for drafting the cities’ next

Medium-term Local Development Plans10, and provide a means for preparing and ‘selling’

projects, thus accessing finance – this is an important part of the capacity development

process.

Structure of the Report 1.2

The report is structured around the following parts:

1. Executive Summary 2. Introduction 3. Preliminary Work 4. Approach and Methodology 5. Process 6. Outputs 7. Status of TA 8. Lessons Learnt and Recommendations 9. Next Steps

There is some repetition between methodology and process and outputs as they are

intrinsically linked but the sections were necessary to enable discussion of the different

aspects of the TA and the approach, which was developed as the project progresses.

9 Rencana Aksi Kota Hijau (RAKH)

10 Rencana Pembangunan Jangka Menengah Daerah (RPJMD)

16

Preliminary Work to Define the Approach to Green City Action 2

Planning

Regulatory Framework for Action Planning 2.1

From the outset of the TA it became clear that, in the absence of sufficiently strong GoI

green urban development regulatory framework and practical policy implementation support

mechanisms, existing municipal planning approaches and procedures in Indonesia did not

favor green city planning. If green city action planning were to succeed, it needed to be

owned and undertaken by the cities themselves, be simple and transparent, and based on

existing data.

Green city development is not enshrined in the current statutory municipal development

planning system including the Medium-term Development Plan (RPJMD). A green city action

plan could therefore only succeed if it was linked to, or embedded in, the local plans by

adding green content through ‘green lensing’ , in other words, by ‘greening them up’.

To generate ownership, the green city action planning process would require some form of

legitimacy, hence the cities were encouraged to (and all did) issue a Mayoral Decision to

create a multi-year, multi-stakeholder ‘Green Team’ that would receive an operational

budget, be in charge of green city action planning, oversee implementation and monitoring –

at least in coordinating any necessary partnerships where integrated projects require multi-

stakeholder inputs – and report to the Mayor, to ensure local political support. As GoI

provided no support, this initiative had to be undertaken by the Consultant at the outset of the

TA.

One of the ‘missing links’ in the municipal planning process it the bridge that leads to project

proposals and sources of finance. Without establishing such a link, the Green Teams would

not be able to formulate meaningful action plans. It was therefore important that specific

actions relating to financing, including institutional set up of projects is included in the

GCAPs.

Also missing was a ‘rolling’ urban development process based on benchmarks and

performance indicators that would show whether a city was making progress towards green

development goals. The Consultant was not in the position to change the current regulatory

framework for municipal development planning, but it could introduce new ways of planning

that would be helpful without infringing on established standard operating procedures.

Figure 2.1 shows the concept of a ‘rolling plan’ in which a baseline is prepared that measures

and indexes current city green development performance, sets targets for the short-to-

medium term in a GCAP, and indicates longer-term initiatives on the basis of a “Roadmap”

that sets goals for green performance in the long term. Each year, performance is

measured, plans are rolled over until the next year, and new initiatives can be introduced. It

emphasizes the importance of specific short-term actionable actions. While medium and

long-term plans are also covered, these should be taken as indicative and intend to show the

general direction the city wants to take. As a result, the methodology should be seen as a

cyclical process that results in a GCAP being reviewed or ‘rolled over’ periodically.

17

Figure 2.1: Cyclical Process of the GCAP

City readiness for untertaking green city action planning is low (see Section 3.2), so having

an official Green Team as the locus for green development planning, combined with more

performance-based planning tools, provided the fourfold benefit of having a single local entry

point and working group for continuous learning, a sounding board for the introduction of new

planning methods, an effective way of building capacity, and a locally endorsed action plan

that could be signed by the Mayor, annually updated, and rolled over.

This more integrated approach to planning was expected to achieve better coordination, a

way to more green and integrated urban planning, and locally supported action plans that

could be updated periodically.

City Readiness and Capacity Assessment 2.2

A needs and capacity assessment was undertaken during the last quarter of 2014. The

capacity in all Cities was perceived as low, which reinforces the conclusion drawn from the

international literature review in that a new approach is needed to facilitate local GCAPs in a

low capacity environment.

Each city was given a readiness score between 1 and 5, one being the lowest, and five being

the highest. The score being based on information gathered by the Consultants through

meetings, workshops, and desk studies, it was somewhat subjective, and did not necessarily

reflect the opinion of Bappenas, the ADB, the GCP in the MPWH, or that of the cities

themselves.

18

The main readiness factors are a city’s willingness to accept the GCAP TA that is on offer,

issue a Mayoral Decision, allocate a budget, establish a ‘Green Team’, and task it with

preparing a Green City Action Plan before the end of 2016. In addition, it should be ready to

engage a local champion, strive for more effective and efficient financial management, and

prepare to prioritize investment proposals. The below table shows the overall scores

attributed to the cities as part of the readiness assessment:

Table 2.1 - City Readiness for undertaking a GCAP

City Readiness Score (1-5)

Medan 2.2

Malang 2.2

Kendari 3.2

Batam 2.2

A Need for Result-Oriented Action Planning 2.3

Action planning has been around for some time. With a view to developing local initiative,

local governments have often engaged in some form of action planning, mostly initiated by

donor-driven technical assistance projects which were few and far between. Such one-off

action plans are rarely acted upon because once completed, local governments fail to give

them official status, put somebody in charge of their implementation, and mobilize the

necessary resources (including qualified personnel and stakeholders) for implementation.

Thus, a new design for action planning was called for.

Action plans need (where possible) to be developed locally, they need to be simple and

clear, so that they can be implemented, and very much focused on ‘actions’ which are

necessary for implementing projects. Actions should each be a specific step towards

implementing a project, they should be feasible and time bound, they should always have a

responsible agency/party. Actions are therefore not projects (action plans are often written

as a list of projects). Actions are steps for implementing projects: they can be related to

institutional set up, technical studies, obtaining finance, project preparation,

coordination or communication, project management etc. This was a very important

focus of the consultants during the TA.

Literature Review 2.4

The Consultant undertook a literature review to identify green city action plans that had been

developed and implemented successfully, few were found in developing countries – such as

Indonesia. Many such plans in developing countries relied (understandably) on consultants

or external experts to develop the plans, but the use of such experts inherently creates a

process which is neither simple to repeat when the plan needs updating, nor simple to

implement without further assistance.

There is no methodological guide for this TA to follow in terms of developing GCAPs,

particularly as a focus of this TA is to facilitate the cities to develop their own plans which can

be owned and implemented locally.

Furthermore, during this review, no practical and simple performance measurements we’re

found which could be utilized directly by the Cities to measure their current (baseline)

performance, based on existing data. The review did, however, allow creation of a tool for

green planning that was termed a ‘green lensing framework’ which was subsequently applied

as part of the GCAP methodology it developed.

19

Significantly, ADB supported GCAPs to date have been consultant driven and project

focused. As described above, rather than listing projects, it is important that actions are

developed which are realistic (and logical and sequential), specific, and focused on delivering

projects or initiatives that bring about green results.

Furthermore, tools for profiling/baselining identified in the wider literature not applicable due

to lack of capacity and resources (again, this process was to be undertaken by the cities).

Monitoring, and planning should be based on available data. In the next iterations of GCAPs

the complexity can be increased and there may be some appropriate tools for this including

possibly the rapid assessment of city emissions and transport emissions evaluation models

for project cities (Clean Air Initiative for Asian Cities).

Summary: What is a GCAP? 2.5

Based on the above, the Consultant has defined a GCAP as a time-scaled green investment

plan for a city. It includes specific actions for implementating prioritised investments

(programs or projects) over the short to medium term, covering urban management,

institutional aspects, and financing. Where possible and appropriate, performance indicators

are provided to enable monitoring and updating. This integrated action plan complements a

city’s statutory planning process (notably its Medium Term Development Plan – RPJMD),

and has been prepared by, and for, the city to realize its green vision.

The Consultant field-tested this GCAP model with the Green Teams, who concluded it was

the only model considered supportive to the local planning system that currently has no

formal mechanism for linking a development plan to project proposals and finance.

Core Principles of Green City Action Plans 2.5.1

With Green Teams established, the Consultant was ready to introduce a new method for

action planning based on principles that became the core of the GCAP:

Links planning to project proposals, project development, financing, and

implementation;

Provides a marketing document to sell project components to central gov, the private

sector, and other donors;

Simple to prepare, roll out, and roll over for a Green Team based on local know-how;

Linked to the RPJMD by enhancing green components;

Focus on relatively short term actions within a longer term strategy; 11

Focus on 4-5 manageable green programs or initiatives, prioritised by the city, and

formulated into project briefs, from which realistic actions can be developed;

Result-oriented; the actions are not projects, they are actions designed for

preparation and implementation, related to technical studies, partnerships, financing,

capacity development, social marketing, project risk mitigation etc.

11

There is not much point in defining actions past 5 years or the duration of the municipal medium-term development plan because when Mayors are replaced, his/her successor is legally required to prepare a new plan.

20

Approach and Methodology 3

As no suitable tools for City-led result-oriented technical assistance facilitated action planning

were available, the Consultant had to develop an appropriate and replicable methodology

over the course of this TA, and test it out in the field with the municipal Green Teams while

they were preparing their GCAP.

There is therefore a significant element of trial and error involved in developing this

methodology and aspects of the same approach weren’t consistently effective in each city.

The final approach has however now been fully road tested, has been well documented, and

it is expected it could be developed into an ADB endorsed knowledge product (which could

be applicable to other countries) with a number tools (a toolkit) for facilitation12.

The approach uses a series of intensive workshops and training sessions with ‘homework’

for the Green Teams (with some facilitation by national consultants) to complete (as best as

possible) before moving on to the next phase. The results (if available) were then collated,

and the methodology adjusted for the next City or next phase.

This approach required significant planning and flexibility in implementation from the

consultant team.

The overriding aim of the TA was focused on developing GCAPs, and through this process

actions related to capacity development, partnerships and project financing were developed

(the methodology integrates all of these aspects). The approach is outlined below (section

4.1), and recommendations for further consolidating the GCAP methodology are presented in

chapter 9. As the financing aspect of the TA was a crucial output and critical to successful

implementation of the GCAPs this has been described in further detail in a separate section,

4.2.

GCAP facilitation 3.1

The two figures below show the final methodology: the “10 Step Approach” (Figure 3.1) and

the “Toolbox” (Figure 3.2) that enable Green Teams – assisted by their facilitators and local

champions – to systematically prepare a GCAP. This section serves to briefly explain the

steps and products that lead to GCAP formulation.

12

This will require further work beyond the scope of this TA

21

Figure 3.1: 10 Step Methodology for GCAP Development

22

Figure 3.2: Toolbox for Green City Action Planning

Step 1 - Issue a Mayoral Decision to set up a Green Team for GCAP.

The first (administrative) step is to establish a multi-stakeholer Green Team by Mayoral

Decision. Although not included in the MoU and Technical Proposal, the Consultant

considered a Mayoral Decision13 as a prerequisite for having a mandate and budget for

operating the ‘Green Team’ as the local partner (and core of the future Urban Management

Partnership – ‘UMP’ in the TA and ADB’s Green Cities literature), and to get ‘ buy-in’ from

city government, to ultimately own the process and output. Therefore, the Consultant had to

invest considerable time in facilitating the drafting and enactment of these documents. For

that reason, the Decision together with the establishment of the Green Teams were included

in the GCAP as Step 1, and also in the Toolbox as the first tool to be applied. Without the

Mayoral Decision, there would be no constituency for the GCAP process. At the same time,

the Consultant identified local ‘champions’ who were most likely to advocate and support the

GCAP process to its constituency. The structure of the Green Team according to the

Mayoral Decision is shown in Figure 5.1.

Step 2 – Use SOAR to analyse Strengths, Opportunities, Aspirations and Results

Once the Green Team is in place, it undertakes the ‘SOAR’ exercsie from the Toolbox to

envision a green future as part of the GCAP process. The SOAR exercise is based on the

older SWOT, but with the advantage that it is much more positive, forward-looking, and

result-oriented. It functions as a ‘scene-setter’ for a broad group of local stakeholders, and

13

Surat Keputusan Walikota - SKW

23

allows them to align views. This is necessary to focus the discussion on green development

so they stay on track during the rest of the process. The SOAR tool is publicly available on

the internet in several versions.

Step 3 - Apply ‘green lens’ to formulate framework for liveable and sustainable city

development

Once the result of the SOAR analysis has been agreed upon (the result of which can cover

between 1 and 10 ‘green attributes’), the Green Team proceeds to ‘greening up’ the city’s

existing Medium Term Development Plan (RPJMD) by applying a ‘green lens’ using the

Livable Cities Framework (LCF) (Appendix E) developed by the Consultant. The Consultant

also prepared a spreadsheet with a list of criteria to rate the items in the LCF using the Multi

Criteria Analysis (MCA) method. As a first action, the Green Team has to agree on the

criteria to be used. The second and third actions are described in Step 6.

Note: The MCA spreadsheet is in theory vulnerable to manipulation if so desired by the green

teams. This was controlled through the application of the MCA in collective mode (weights

and scores were set and agreed by the Green Team), so that if any manipulation of weights

and scores was done, it was "transparent" so that the Green Team was aware of what it was

doing and could justify its reasons. Some Green Teams attempted to boost the ranking of

some selected program but could not rationally change the weights and score enough to

make it come out as priority. It makes it easy for the Green Team to test/simulate various

combinations of weights and scores and review the resulting rankings through a “What if”

iteration. This has the value of educating the team on the pros of cons of each proposal,

specifically on the tradeoffs among the criteria being "weighed" as to their respective

importance to the city and stakeholders. Strengths of the MCA include:

Learning process that stimulates discussion and facilitates a common understanding

of the decision problem

Openness to divergent values and opinions

Capability to tackle qualitative and intangible factors

Accountability (systematic, transparent)

Capability to support conflict resolution and to help reaching a political compromise

Support a broad stakeholder participation

Preferences are revealed in a more explicit and more direct way

Step 4A – Prepare a Green City Environmental Profile (GCP) with thematic GIS maps

On a parallel track, the Green Team prepares a Green City Environmental Profile (GCEP)

that will be appended to the GCAP, but in fact is meant to guide it when the planning process

is already ‘rolling’. It was developed and tested by the Consultant to become a tool for more

integrated planning. It contains basic planning data, a series of thematic maps on all

infrastructure ‘attributes’ in GIS format combined with an environmental narrative, an

inventory of current and green initiatives, resource use, and climate vulnerability, all compiled

by the Green Teams. It also comprises a fiscal capacity analysis (to be found in Appendix B)

and a ‘Roadmap’ spreadsheet developed by the Consultant (see below) that allows Green

Teams to rate their city’s green performance based on indicators for all green ‘attributes’,

both on governance indicators and technical indicators.

The purpose of this exercise is to identify where existing and planned infrastructure

developments fall short of achieving green objectives, and can be improved by adding

initiatives that will increase their green development content (value). This process can be

repeated to inform the next RPJMDs, and will hopefully sensitize decision makers to

24

gradually strengthen the green value or ‘greenness’ of development plans to match the

Roadmap. Table 3.1 below shows the content of the GCP.

Table 3.1: Contents of the Green City Profile

ITEM REMARKS

1 Introduction Explains purpose of the GCP

2 The City in Brief

Introduction with basic economic,

environ-mental and social development

data

3 Collection of GIS Green Development maps with

narrative environmental profile

The overlay maps show available

networks and systems in A3 format; maps

can be added, updated, or replaced as

required

3a City Administrative map

3b Geography and Land Use map

3c Green Open Space Map Shows areas and their use

3d Green Transport and Urban Mobility map

(both motorized and non-motorized) Shows areas, networks and systems

3e Green Water 1: Water Supply map Shows areas, networks and systems

3f Green Water 2: Drainage and Flood Control map Shows areas, networks and systems

3g Green Waste 1: Sanitation map Shows areas, networks and systems

3h Green Waste 2:Solid Waste map Shows areas, networks and systems

3i Green Industry and Commerce map Shows areas, networks and systems

3j Green Community map

(including health and education)

Shows communities at urban village level

that qualify/do not qualify as green

3k Green Building map

Because green buildings are not being

certified yet in Indonesian cities, none of

the cities was able to prepare this map

3l Green Energy map

Because power supply is outside

municipal authority, local green energy is

not yet a familiar concept, so cities limited

themselves to a power distribution map

3m Climate Vulnerability map Mostly based on the World Bank Group

Climate Wizard mapping facility

4 Current and planned green initiatives Inventory of what the city is already doing

and planning to do

5 Priority green development programs The agreed program & project pipeline

6 Roadmap to green development in 2035

A spreadsheet that allows the Green

Team to rate its green performance

based on a 2015 baseline, and predict

performance until the year 20135; it can

be red, yellow or green.

7 Result of Analysis of Strengths, Opportunities,

Aspirations and Results (SOAR)

8 Result of Multi-Criteria Analysis (MCA) for selecting

long list of green programs and projects

9 Result of city fiscal profile analysis and revenue

improvement options

25

In the future, if a City already has an approved GCAP that needs to be updated, it would be

preferable to move Step 4 up to Step 2 in order to connect to the previous version of the

GCAP.

Step 4B– As part of the GCP, prepare a Roadmap with baseline performance indicators

A basic requirement was that green performance indexing would be relatively simple so that

Green Teams themselves would be able to appraise their city’s performance. The approach

was to design a dual set of indicators to show governance performance (planning,

institutional, and financial), as well as technical performance in all of the technical green

attributes. Through conditional formatting, the spreadsheet is able to automatically show

poor, medium or high performance, indicated by the colors red, yellow and green

respectively. When scored, the Excel spreadsheet will instantly show the corresponding

performance color.

The cross-sectorial nature of the Profile connects a number of issues, and is expected to

contribute to greener and more integrated planning and performance appraisal that can be

updated annually. The year 2015 was selected as the baseline year for this TA, and data

and maps have as far as possible been updated to 2015. The GCP would normally provide

the baseline for measuring the city’s green ‘status’, and for updating and rolling over an

existing GCAP, but during this TA there was no such sequence yet because all tools were

developed for the first time.

The roadmap also serves to provide a longer term view for the City (which can be updated)

beyond the realistic actions developed for priority programs and projects.

Step 5 – Prepare Long List of Program Proposals (existing, planned, and new)

Based on Step 3 and 4, the Green Team discusses and assembles a long list of Programs

and/or Projects that will contribute to the City achieving its vision for green development.

Facilitated by the TA team, the Green Team prepares a brief description of preferred

Programs.

Step 6 – Using MCA, prioritize Programs and Prepare Program Briefs

The second action of the MCA covers the discussion and consensus/agreement on the

weights and scores to be applied to the provisional long list of Programs and/or Projects from

the Step 5. As a third action, the Green Teams refines the scores and ranking of the MCA to

adjust the results to the context of the city, such as unavoidable adjustments to

accommodate the mayor's preferences, emerging opportunities, and other considerations. It

should be noted that the process has to be iterative in order to be completed, but that the

Consultant has to agree with the Green Team on a cutoff point beyond which the choice has

to be fixed for the GCAP.

As a last action in the prioritization process, the Green Team does a first assessment of the

selected Programs’ relative ease of implementation based on a checklist provided by the TA

Team (see table 3.2). This Step can already be combined with a fiscal capacity analysis and

the scoping of options for alternative modes of financing, and will result in a list of priority

Programs with summary descriptions.

26

Table 3.2: Checklist for Assessing ‘Ease of Implementation’ of Proposed Green Programs

ITEM ASSESSMENT EXPLANATION

1 KNOWLEDGE / CAPACITY

1.a Experience of city with implementing comparable programs (sector, scope, technologies, size)

(1= poor ; 5 = excellent)

Explain the answer including mention of specific relevant experience

1.b Performance of previous comparable programs (sector, scope (technologies), size)

(1= very unsuccessful ; 5 = very successful)

Explain the answer including mention why something is considered successful or unsuccessful

1.c Current knowledge and experience within the city administration with comparable programs (sector, scope (technologies), size)

(1= poor ; 5 = excellent) Explain the answer including mention specific sources of knowledge (persons/ institutes)

2 BUDGETS & FINANCE

2.a Likeliness that public budget will be made available for this kind of program? (here, Green Teams can already use lessons learned from Fiscal Capacity Analysis)

(1= very unlikely ; 5 = very likely)

Explain the answer including why this is very unlikely or likely

2.b Experience of city with attracting alternative sources of finance (CSR, private investors, user charges, NGOs) for this kind of program

(1= poor ; 5 = excellent) Explain the answer including mention of specific relevant experience

2.c Performance of this experience (1= very unsuccessful ; 5 = very successful)

Explain the answer including mention why something is considered successful or unsuccessful

2.d Likeliness of attracting alternative sources of finance for this program

(1= very unlikely ; 5 = very likely)

Explain the answer including shy this is very unlikely or likely

2.e Likeliness that funding or finance will be available for this program, either from public budgets, other sources or a combination. Answer should be based on the previous questions

(1= very unlikely ; 5 = very likely)

Explain the answer including why this is very unlikely or likely

3 LEGAL & REGULATIONS

3.a Will the program be easy or difficult to implement given current legal and regulatory framework

(1 = very difficult; 5 = very easy)

Explain the answer including why this is very difficult or easy

4 POLITICAL/ SUPPORT

4.a Will there be sufficient support from relevant stakeholders to implement the program

(1 = no support; 5 = full support)

Explain the answer

It should be noted that often there is no clear distinction between Programs and Projects, and

no agreement on official nomenclature. A Program is normally seen as a declaration of

intent, whereas a Project normally specifies a product, location, duration, and budget. Quite

often, however, a Program is called a Project and contains Sub-Projects. To circumvent this

problem, the Consultant decided to use the term Program Brief , and to formulate Actions as

27

requirements for implementing Projects and Sub-Projects as part of the Program. The

Consultants used the following definitions to create a clear understanding in the Green

Teams when drafting a GCAP:

Program

An initiative for promoting green development having stated goals that match the city’s vision

and mission. A program normally comprises a number of projects and sub-projects that have

clear interfaces, and is formulated in a Program Brief.

Project

An investment in a physical infrastructure project, or the creation of a new organization, or a

policy revision, or a local regulation, as part of a Program Brief. If the Project (such as

establishing a new body or policy) is subsidiary to another Project, it is understood to be a

Sub-project or action.

Action

Actions comprise one or more activities required to meet the conditions for (sub)project

implementation, such as setting up a Project Management Unit (PMU), preparing a project

implementation plan (PIP), preparing Terms of Reference (ToR) for a study, identifying

sources of financing, acquiring land, undertaking a technical study etc.

The TA team developed a Program brief template, which went through a number of iterations

but includes (where possible):

Program title

(Sub)project names

Summary

Legal and policy context

Current conditions

Indicators and targets

Project owner/implementer

Partnerships and stakeholders

Beneficiaries

SMART objectives

Capex / Opex and financial model

Estimated revenues

(Sub)project duration

Ease of implementation

Potential risks

Step 7 – Based on the Program Briefs (including Projects and Sub-Projects), prepare

Financing Options

The Green Team prepares a Program Brief describing the policy and regulatory framework,

as well as the technical, institutional, and financial aspects of a proposed Program (Project).

The Briefs are critical to the overall methodology, and significant time was spent with the

cities developing them. This is a new template for Indonesia and can now be applied in other

cities as well.

As part of Step 7 also, Green Teams have to assess options (both traditional and alternative)

for financing their programs and projects. Here the financial assessment report (FAR, result

of fiscal capacity analysis, step 3) is useful to estimate if and how much public funding is

available and if additional sources can become available. This methodology and the

28

methodology to identify possible alternative mechanisms and sources of funding/ finance are

further explained in Section 5.5.

This exercise turned out to be quite a challenge for the Green Teams, and had to be

intensively facilitated. This is discussed further in Section 4.2.

Step 8 – Prioritize Programs (Projects) based on moderated Focus Group Discussions

using MCA criteria

The Green Team holds a Focus Group Discussion (FGD) with a selected and representative

group of stakeholders to achieve consensus on planning decisions. This will result in the

reduction of the long list to a shortlist that will normally not contain more than five Programs

so that the action plan remains focused and achievable.

Note: As by the completion of the TA none of the cities had yet applied for technical

assistance by the CDIA for preparing a PFS, its CIIPP methodology for prioritizing projects

was not used during the TA. Instead, the Green Teams undertook a FGD as part of their

regular on-the-job workshops. Also, at that stage of GCAP preparation, the CIIPP was not

required anymore because the Green Teams and Steering Committees considered all

selected Programs as priority Programs, and in some cases the data requirements for CIIPP

were not met.

At this stage, prioritized program briefs were worked up in greater detail to enable an action

plan to be developed.

Step 9 – Prepare the GCAP based on the Shortlist

Once Program Briefs (including one or more Projects) are clearly formulated and agreed

upon by the Green Teams, it can derive the necessary Actions from them fairly easily and

directly, such as implementation mechanisms, risk mitigation measures, financing options,

partnerships feasibility assessments etc. These Actions become the core of the GCAP,

whereas the Program Briefs are appended to it. The format for the GCAP, including a

summary GCEP, was developed by the Consultant. The four GCAPs prepared under this TA

can be found in Appendix A.

Step 10 – Apply the SMART Logframe method to evaluate results

The SMART Logframe tool, also know as the Development Monitoring Framework (DMF), is

an established method for appraising projects, and will not be further discussed here. This

step was not done during the TA because the GCAPs were new, and there was nothing to

evaluate, review or update yet. It is expected that after the first year, the Green Teams will

update their GCAP using this method.

The actions have been developed in a SMART way, they are:

Specific

Measurable (where possible)

Achievable

Realistic, and

Time-bound.

It should be noted that the methodology is not rigid. Green Teams or consultants can agree

to do it differently, for example in a slightly different order, or skip steps deemed

unnecessary, especially when similar work has already been done.

29

Finance Methodology 3.2

The Consultant developed two capacity development processes to help the Green Teams

analyze how to improve a city’s financial situation as part of the Green City Profile (GCP),

and consider different ways to finance selected priority projects. The Consultant facilitated

the Green Teams in using them:

1) Financial Assessment Report (FAR) to improve municipal financial

management

2) Alternative Financing Mechanisms (AFM) for prospective project proposals

The financial aspects of the Methodology are mostly linked to step 7 of the GCAP. It allows

Green Teams to determine how sufficient funds can be mobilized for prioritized programs,

particularly with respect to attracting finance alternate to ‘normal’ public budgets. Also, Green

Teams were encouraged to formulate actions which could improve or increase city budgets

(public finance).

Below is a summary of both tools, and the full description can be found in Appendix B.

Financial Assessment Report (FAR) 3.2.1

The FAR focuses on analyzing cities’ expenditures and budgets as laid down in the RPJMD

(5-year plan), APBD (municipal annual budget) and Renstra (sector budgets), and focuses

on 3 key questions:

1) Can cities increase their budgets available for capital expenditures (CAPEX) by being

more efficient and/or implementing new (green) taxes?

2) Can cities borrow money to increase future budgets available for capital expenditures

in green sectors?

3) Can cities allocate more available budgets to different sectors to fund prioritized

green programs?

To consider opportunities related to question 1, actual revenues and expenditures of the

cities in past years were analyzed using a number of ratios. The ratios provide insight in the

way the cities gathered revenues over the past years, how these revenues were used and

how much is available for capital investments to improve the city’s (green) infrastructure.

These numbers provided a good starting point to discuss how future budgets can be

increased and how more budgets can be allocated for capital expenditures, especially in

green sectors.

Ratios

Average of actual numbers realized for years data is available

Malang Medan Batam Kendari

Independency

Local income / Transfer

Fiscal decentralization

Local income / Total revenues

Effectiveness for Infra Assets (lifetime > 12 months)

Capital Expenditures / Total Expenditures

Effectiveness for Goods & Services (lifetime < 12 months)

30

Ratios

Average of actual numbers realized for years data is available

Malang Medan Batam Kendari

Non personnel expenses / Total Expenditures

Own Revenue vs Personnel Ratio

Own revenue/ Personnel Expenditures

Personnel Expenses Ratio

Personnel Expenditures / Total Expenditures

Operating Expenses Ratio

Operating Expenditures / Total Expenditures

Question 2 (borrowing capacity) considers the income available for debt repayment and uses

a formula (based on Indonesian regulations14) to calculate the potential borrowing capacity in

the coming 5 years. This analysis can serve as a starting point for cities, to further explore

with lending agencies if they are eligible for lending and what procedures they should follow

to get loans from institutes as LPPI (Lembaga Pendanaan Pembangunan Infrastruktur /

Infrastructure Development Funding Institution) or the Ministry of Finance.

Question 3 can be answered once cities have an overview of what they are spending on

Green Attributes. The table below shows the information that Green Teams should gather to

be able to have this discussion. Variations on these figures are possible such as green

expenditures as % of CAPEX expenditures. On top of this, it would help to have benchmarks

on what successful green Indonesian and foreign cities have spent to realize and expand

green infrastructure and perform well on various green attributes. An attempt has been made

to collect such figures from existing research but regrettably numbers are not available. Also,

while it is useful for cities to have insight in the way they spend their budgets, it would help to

have a well-defined framework of when expenses qualify as a green attribute. For example,

is BRT only green when it uses mainly green buses (gas or electric driven)? In its current

form, the below overview is useful to see if cities’ expenditures match their green ambitions.

For example, if green open space is a priority, but only a small part of budgets is used for

this, this is something for the Green Team to look into and discuss with decision makers.

Ratios

% of total expenditures (actual numbers realized

in years data is available)

Malang Medan Batam Kendari

Green Community

Green Planning and Design

Green Open Space

Green Waste

Green Transportation & Urban Mobility

Green Water

14

Government Regulation no. 30/2011

31

Ratios

% of total expenditures (actual numbers realized

in years data is available)

Malang Medan Batam Kendari

Green Energy

Green Industry

Green Building

Total

Alternative Financing Mechanisms (AFM) 3.2.2

Programs that fail to receive funding from central government are often shelved by local

governments. Therefore, in accordance with the TOR, the Consultant sought to push the

cities to consider alternative implementing mechanisms for selected projects. Alternative

mechanisms in many cases have the ability to attract alternative financing from the private

sector. The AFM tool allows cities and Green Teams to consider the possibility of applying

alternative mechanisms already in the green action planning stage. This will allow cities to

consider including further research into this options in the next stages of developing the

projects, such as in the pre-feasibility stage. The goal of the methodology is:

1. To identify options to apply alternative implementing mechanisms to realize projects

(project briefs are a starting point of this analysis)

2. To identify possible sources of finance and funding that match the mechanisms and

projects

3. To determine next steps towards implementation

Implementing mechanisms reflect the way stakeholders co-operate to implement a project

and the way risks and responsibilities are allocated. Alternative implementing mechanisms

are for example BOT, joint ventures and cooperatives (of communities, of service providers

such as bus operators).

Different sources of finance and funding are available, depending on the applicable

implementing mechanism such as financing from commercial banks, development banks

(such as ADB, KfW, IFC but also Indonesian Institutes like IIF and the newly formed LPPI

(Infrastructure Development Funding Institution)), community cooperatives and funding from

NGOs and private sector CSR programs.

The methodology developed is simple because for most city planners this is a new concept

they had to be familiarized with. As part of these outputs, a flowchart (see Figure 4.2) was

created highlighting different ways for the Green Teams to consider alternative implementing

mechanisms. While the flowchart is simple in nature and it can be argued that it

oversimplifies financial project evaluations, this is done deliberately to encourage the Green

Teams to think about the various options available to them. It should be taken as a guide and

in no way should be thought of as exhaustive. The flowchart also shows the importance of

taking into account the capacity of cities to apply possible implementing mechanisms.

The main purpose of the flowchart (figure 3.3) is to provide guidance in determining whether

financing mechanisms or funding mechanisms apply. Funding and financing are different

concepts.

32

Funding: a project is paid for without the expectations of financial returns (grants or

Corporate Social Responsibility (CSR)).

Financing: a project is paid for with the expectation of financial returns. This means

the project needs to generate revenues for the investor.

33

Figure 3.3: Project Finance/Funding Flowchart

34

Process and issues faced in capacity development 4

This section provides some descriptions of key parts of the capacity development process

and outlines issues faced by the consultant team.

Methodology Development and application 4.1

Purpose 4.1.1

The intention of developing a methodology for green development action planning was to

provide a consistent approach for all cities, so that by the end of the TA the GCAPs could be

compared in terms of quality, and provide a comparable set of project proposals for

evaluation by financing agencies. The Consultant also hoped that the GoI would eventually

endorse the methodology for replication in other cities. The methodology was developed

throughout the capacity development TA process, and many issues were encountered during

this process.

Development 4.1.2

Action planning already existed in various forms, but generally was not part of the municipal

statutory planning process, and didn’t measure performance, with the result that local action

plans were rarely budgeted and implemented as intended. In addition, green development

required planning to be cross-sectorial and inclusive. The Consultant tried to overcome

these obstacles by embedding action planning in municipal medium-term development plans

(RPJMD) to ‘green up’ existing plans by adding a pipeline of green project proposals to

implement them. Ideally this should be done around the time city governments had to draft a

new RPJMD, but this didn’t match the timeframe of the TA.

Practice 4.1.3

The methodology had a number of components that were developed more or less separately

and field-tested at different stages in the course of the TA with Green Teams of different

calibre, so by the end of the TA the Consultant could only reasonably establish that the

methodology was in principle practical, applicable, and robust, but lacked the time to shape it

into a mature knowledge product ready for dissemination. The Consultant’s product is still (in

some respects) a work in progress, but it is hoped that future technical assistance for green

cities development will enable it to further evolve and become institutionalized. In this

regard, two components of the methodology deserve special mention:

The Green City Profile (GCP)

The Consultant introduced the Green City Profile (see Methodology) as an innovative

planning tool, in the expectation that it would enable the Green Teams to practice a more

integrated and result-oriented green infrastructure development planning process. At the

completion of the TA however, the GCP was still a work in progress for the following reasons:

It consisted of separately developed, mutually related tools (SOAR, MCA, Roadmap,

GIS maps, Fiscal Profile etc.) that were deemed innovative but not yet fully

integrated, so their potential as an integrated planning tool could not yet be

demonstrated;

The Consultant introduced the GCP as a planning during implementation of the TA,

and the Green Teams prepared it as well as they were able to do so at that stage,

based on data available to them, but had not been able to apply it yet as an

35

integrated planning tool, it will not be fully utilized until it is fully adopted into a ‘rolling’

planning process;

The Green Teams were under no obligation to apply the GCP because it was not part

of the statutory planning process;

It turned out to be difficult to obtain recent and reliable baseline municipal planning

data, maps, etc.; and

No vetting or guidance was provided by the GoI Executing Agency and Implementing

Agency which both were in the throes of reorganization, with the result that its entire

Green Cities Program escaped attention.

The GCP would have been better able to prove its worth if prepared as the first step in the

GCAP preparation process, prior to doing a SOAR analysis (see methodology) when

preparing or updating a GCAP as part of the RPJMD. This is discussed further in the

Recommendations section of this report.

The Green City Profile was developed in Bahasa, the working language of the Green Teams,

and useful and relevant information was summarized into the GCAP to provide a basis, and a

form of baseline, for implementing the action plans.

The Roadmap

The ‘Roadmap’ embedded in the GCP (see Methodology) was jointly developed by the TA

Team before being field-tested with the Green Teams. The main difficulty in designing the

Roadmap was to agree on criteria and their scores in a progression of green development

with reasonable cutoff scores between red, yellow, and green over a period of 30 years.

Another difficulty was to explain it to the Green Teams, and ask them to try it out as a model

for measuring green performance. Maybe not surprisingly, most cities viewed themselves as

green already, and were disappointed when their baseline score for 2015 turned out to be in

the red zone. By completion of the TA, the usefulness of the Roadmap was still unproven for

the following reasons:

As was the case with the GCP, Green Teams had prepared the Roadmap once the

Consultant had developed the tool, but were under no obligation to make it part of the

statutory development planning process;

It turned out to be difficult to set a baseline and map out future green development

based on reasonable assumptions; and

No vetting or guidance was provided by the GoI Executing Agency and Implementing

Agency which both were in the throes of reorganization, with the result that its entire

Green Cities Program escaped attention.

The ‘Roadmap’ turned out to be a challenge mainly because Green Teams were not in the

habit of rating current performance and projecting future performance. They completed the

exercise with the help of the city facilitators, but the Consultant was not convinced the Green

Teams would continue to use the tool by annually reviewing performance and updating their

Roadmap once the TA was completed. The paragraph below concludes this sub-section,

while the section on Next Steps recommends the way forward.

Summary of Methodology Development and Application 4.1.4

The Consultant is of the opinion that to produce a finalised and integrated Green City Profile

(GCP), it would have been necessary to undertake this methodological development and

facilitation, fully tried and tested, as a first output in the sequence leading to a GCAP -

considering the initial absence of an official counterpart planning team in the Cities, and

limited national support, this was not possible, and it would have difficult to determine when

36

the time was ripe to proceed with GCAP preparation. Furthermore developing a new profiling

tool for green cities in Indonesia (that can be produced by the cities, based on existing data)

could have been a full TA in itself. The time and resources available meant, that at a certain

point, the team had to move on to project development, prioritisation, and action planning.

It can be concluded that Version 1.0 of the methodology (especially the GCP and the

Roadmap) was not conclusively finished because of its unconventional approach (City led

results orientated integrated action planning in Indonesia), and when applied, it will take

considerable time to become internalized. It did, however, make some significant

contributions: first, it forced Green Teams to get used to the notion of measuring

performance, something they had previously been quite unaware of and/or reluctant to do;

secondly, it brought to the fore that data, information and knowledge management in

municipal government is still weak and uncoordinated, which adversely affects the quality of

the planning process. The Consultant, however, did not have the resources to significantly

improve integrated knowledge management as part of the planning process.

As a result, the Consultant decided to include only a summarized data set from the GCP in

the GCAP, and to append the GCP (the working document), in Bahasa, as a reference for

the Cities15. This is considered sufficient, as green development planning tools will continue

to develop to inform future versions of the GCAP. The profile still provides a useful data set

to inform planning, but it should be simplified to ensure its success. As future technical

assistance will be based on Version 1.1 of the methodology, the expectation is that it can be

delivered in the proper sequence with tools that are ready for use.

Facilitation of the TA 4.2

Language 4.2.1

Even though the TA was an international consultancy, the ADB granted permission to

facilitate workshops and on-the-job training entirely in Indonesian language (Bahasa

Indonesia). As a consequence, the outputs of the Green Team during the 10-Step processs

were also produced in Indonesian language. This was crucial because it increased local

understanding, and greatly enhanced buy-in. The Green City Action Plans would be

translated into English for international consumption, particularly as some projects and

actions could be picked up by development partners, including ADB.

Schedule 4.2.2

The original plan for the TA was to undertake an inception mission to agree on the TA

schedule, followed by a national visioning workshop for all cities together, then two major

workshops for each city separated by three-month working periods, to be concluded by a

final ‘Roundtable’ evaluation workshop that would bring the cities together again to present

their GCAPs and evaluate the TA. Initially, total time allocated was 18 months. This had to

be extended to 24 months in order to accommodate a schedule of more but shorter

facilitation sessions (see next item).

During the initial stages of the TA, it turned out that the Green Teams could not be left to their

own devices for long periods of time to do their ‘homework’, and needed regular on-the-job

facilitation to prevent them from losing momentum. The Consultant adjusted its TA delivery

schedule accordingly by scrapping the two originally planned large intermediate workshops

and replacing them with a series of shorter facilitation periods. This was more difficult to

organize. The Consultant had to persuade its city facilitators and specialists to adjust their

15

It is assumed that GCAP appendices can be attached in a CD wallet rather than printed to keep the GCAP concise.

37

planning accordingly while running the risk of losing specialists as a result of conflicting

assignments. Because of the intermittent and somewhat unpredictable nature of their

assignments, some of the national consultants experienced scheduling conflicts, leading to

the termination of their contracts. This is not uncommon in Indonesia, and to the extent

possible was anticipated by the Consultant. To minimize dependence on national

consultants, the Consultant underscored local initiative, with the national consultants acting

as facilitators rather than driving forces. This concept aligns with the idea of local ownership.

In establishing TA schedules, the Consultant was at the mercy of city governments because

the Green Teams could only be summoned with an official letter by the Mayor or the head of

Bappeda, and this was too cumbersome to be practical. The more informal approach

practiced by the Consultant resulted in regular re-scheduling of TA activities, as the City’s

routine activities took priority, but the Consultant applied the utmost flexibility. This is the

drawback of putting a local team in the driving seat, but it was the only way to make the

approach work, and deliver an action plan which has a better chance of future

implementation.

The approach resulted in significant delays to the TA, however, it is the first step towards

creating a paradigm shift in urban planning in Indonesia.

Management of the TA 4.2.3

The way the TA was organized, the Team Leader was responsible for developing the

methodology with contributions from the various specialists, chairing management meetings,

as well as scheduling periodical city workshops to complete intermediate outputs. The city

facilitators were responsible for on-the-job training by introducing each of the 10 Steps and

facilitating their completion, given Green Team and data availability. With periodic intervals,

the entire TA team would conduct city workshops to help the Green Teams complete

intermediate outputs. The TA Team (or parts of the Team) also held periodical management

workshops in Jakarta to agree on methodology, operational issues, and to report progress to

the ADB and Bappenas.

Capacity Development 4.3

The 10-step methodology required a sequence of capacity development activities starting

with the creation of a municipal green planning team, and ending with approval of the GCAP

document by the Mayor as shown in Table 4.1 below.

38

Table 4.1: Capacity Development

Capacity Development

How it works Remarks

A. InstitutionalCapacity

Development

- City Mayor issues a Decision (SKW)establishing the ‘Green Team’ (GT or basicUMP) with a mandate to prepare and update aGCAP- SKW and GT are multi-year, multi-stakeholder- SKW allocates annual operational budget- GT is chaired by Bappeda and has aSecretariat- GT consists of LG staff in charge of theattributes selected for the GCAP- GT can invite members from outsidegovernment as needed- GT has one or more ‘green champions’ and‘finance champions’TA Team facilitates GT with periodical on-the-job training workshops and remote inputsthrough email and Whatsapp City Groups- GT periodically reports on GCAP progress toSteering Committee chaired by Mayor- Mayor approves the GCAP

- SKW is prerequisite forestablishing legitimacy of the GTand the GCAP process (notincluded in the MoU/ToR)- Difficult to find champions, or tokeep them because TA provided noincentives for this purpose- Quality of TA city facilitatorscontributes to quality of GT andGCAP- In the absence of a readymethodology, facilitators had noprior know-how on the GCAPapproach- In the absence of a readymethodology, the Mayor has noadvance knowledge of the producthe/she is going to approve

B. FinancialCapacity

Development

- GT has working session(s) to assess the city’s‘green’ fiscal profile in support of GCAPpreparation- GT analyses current development plan(RPJMD) to assess current and planned levelsof green investments

- GT and ‘finance champion’ are notforthcoming in analyzing fiscalcapacity and identifying ways touse the local budget moreeffectively and efficiently, in partdue to lack of expertise- Ideally, a GCAP is drafted orupdated around the time the nextmedium term development plan(RPJMD) is drafted in order toinform it

C. PlanningCapacity

Development

- GT selects attributes to be included in the firstGCAP based on SOAR analysis, GreenLensing with Green Framework, and applying anagreed MCA- GT rates its current baseline performancebased on a “Road Map” for green developmentfor the short, medium and long term- GT drafts a Green City Profile with GIS maps- GT drafts briefs for selected priority programsand projects- GT drafts action plan for implementingproposed priority programs and projects

- Quality of TA city facilitatorscontributes to quality of GT andGCAP- In the absence of a readymethodology, facilitators had noprior know-how on the GCAPapproach- The generic Road Map providedby the TA allows the GT to seewhere it is and where it has to go interms of greening the cityNote: Results are recorded in theGCAP appended to the DFR

Financial capacity development is discussed further in a separate section, 5.5.

Institutional Capacity Development, Urban Management Partnerships 4.3.1

From ADB’s definition, a UMP is essentially a broad group of actors or “committee” dedicated

to achieving a citywide green development outcome, and in the process will share knowledge

with one another. While this provides flexibility, it also provides insufficient focus and

specificity.

39

The Consultant undertook a study on UMPs that was turned into a knowledge product and

submitted to ADB headquarters for publication as part of a report on Green Cities16.

The conclusion of the study was that UMPs are useful and that there was certainly a need to

bring different stakeholders together to be part of the decision making process. However, any

partnership between different government agencies should be created in order to resolve a

specific issue over a defined period of time and be led by a ‘core group’ of stakeholders who

will contribute to implementation of a project. In other words, partnerships are made at the

project level, a City wide Urban Management partnership in Indonesia will be too

cumbersome, and partnerships should be designed to bring the appropriate skills,

knowledge, political drive, and regulatory authority together to facilitate implementation of a

project to solve a specific problem.

Thus, the Consultant resolved to create a Green City Team as an embryonic UMP in each of

the four cities, bringing together different government agencies who have a direct stake in

city planning and would act as the core group of stakeholders on agreed program and project

proposals. The Green Teams were created by Mayoral Decision, and led by a Steering

Committee chaired by the Mayor who had the final say in approving the Green City Action

Plan. Figure 4.1 below shows the typical organizational structure of the Green Team as

applied in each city.

Figure 4.1: Organization Chart of Green Team

16

GREEN Solutions For Livable Cities, 2016, ADB, P121-138.

40

After considerable delays, all cities issued a Mayoral Decisions during the first quarter of

2015, articulating the composition (membership) of the Green Team and Steering

Committee, operating procedures, and budget allocations for 2015, with optional extension

for the following years. In most cases, civil servants from relevant local government

agencies were appointed by position, while members outside government were to be

selected and invited as needed depending on the green attributes to be dealt with.

The Green Team, chaired by the Head of the city’s development planning agency (Bappeda)

with its secretariat in the Bappeda office, was the port of entry for the TA consultants. The

consultants planned the schedule for workshops and on-the-job training sessions in

consultation with the Green Team’s daily manager, usually the Head of Physical

Infrastructure Development in Bappeda. The daily manager was in charge of deciding who

should attend the working sessions depending on the proposed agenda.

The Green Team reported to the Steering Committee each time a milestone in the GCAP

process had been reached, first of all to explain and justify the selection of the long list of

programs and projects, and then to explain and justify the agreed short list (pipeline) of

programs and projects, and the draft action plan.

The Green Teams who prepared the pipeline also identified the partners (UMPs) that would

be responsible for preparing and implementing the projects and action plans. Often these

resulted in specific actions. The final milestone was to present the draft GCAP and submit it

to the Mayor for approval. Based on the recommendations of the GCAP, the Mayor and

his/her Steering Committee (the actual decision-makers) are to determine what actions are

going to be implemented, which partners are to be engaged for each action, and under what

conditions. The Chapter on Outputs will clarify how UMPs were included in this TA and the

GCAPs.

Issues faced 4.3.2

As the ADB MoU and ToR for the TA made no mention of the need for a Mayoral Decision or

Green Team, and the GoI offered no support, the Consultant had to request the Mayors to do

it. This resulted in a delay of several months during which the Consultant had no official

counterpart. Having said that, the Consultant already held informal discussions during

inception missions with ‘prospective’ counterparts to introduce the TA. However, if the

Consultant had attempted to implement the TA without the Mayoral Decision and a Green

Team, in the end there would have been no allocation from the local budget, and nobody

would have taken responsibility for the results.

The ToR promoted the concept of ‘green champions’, but it turned out to be difficult to find

and keep one or more ‘champions’ for the Green Team. In theory the Mayor and Head of

Bappeda should act as the primary ‘champions’, but in reality most of them were not very

pro-active. One main reason for this is that no incentives could be provided to shoulder this

responsibility and rally everybody around the cause.

As the four cities assumed that the GCAPs would be completed before the end of 2015, and

had not understood that the process didn’t stop there, the Heads of Bappeda did not request

extension of the Mayoral Decisions for 2016 with a corresponding budget allocation. To

correct the situation they did, however, request a mid-year budget revision for 2016.

The Green Teams were of the opinion that the interest shown by the Mayor and Steering

Committee in GCAP progress was not always sufficient to move the process forward

expediently. In the same vein, they felt that the National Executing Agency and Implementing

Agency were not demonstrating much concrete support for their efforts.

41

As all four cities have created a viable pipeline of programs and projects, the Green Team

has demonstrated its credibility and usefulness, and is expected to continue to function in its

capacity of integrated planning coordination team. It remains to be seen, however, to what

extent the Green Teams will be able to make their mark in creating and sustaining

partnerships for GCAP implementation, as this takes place at the level of the Steering

Committee which is composed of the decision makers. UMPs under each project will

develop if the Mayors actively promote green city development, continue to endorse the

Green Teams, extend the Mayoral Decision each year to promote partnerships in

accordance with the projects that have been prioritized for action, and allocate annual

operational budgets to implement the actions.

Planning Capacity Development 4.3.3

This section relates to the ability of the Green Teams to prepare an actionable and integrated

GCAP supported by a project pipeline.

The GCAP approach was not easily understood or accepted, and several cities expressed

the opinion that they didn’t need capacity development and action planning – again –

because they had done it before without tangible results. All they needed was feasibility

studies for getting bankable projects into the project pipeline of the Ministry of Finance.

Because of the current restrictive regulatory framework, however, local governments often do

not have the means to tender feasibility studies by themselves. Some local government

officials challenge the view that action planning has to be funded from the local budget

because there is no guaranteed downstream result in terms of bankable project proposals,

so there appears to be no rationale for applying local funds to invest in uncertain outcomes.

Such perceptions can in part be attributed to the still prevailing passive mind-set from the

pre-decentralization era when infrastructure projects were supplied by central government,

whereas now autonomous cities are expected to mobilize local resources to the extent

possible to manage their own affairs. There are no quick fixes for such obstacles to green

development, but the work undertaken throughout this TA has sought to create and facilitate

a paradigm shift in integrated urban infrastructure planning that aims to mobilize local

resources to a larger extent than has been the case so far. This concept has gained

momentum throughout the TA and the benefits of the GCAP are generally understood.

When it was time for the Green Teams to prepare project proposals, the Consultant found

that they were not accustomed to that task. The Consultant tried to find existing templates for

preparing Project Briefs as well as an agreed nomenclature that could be used, but found

nothing practical and suitable. Hence, the Consultant had to design a template that would

enable the Green Teams to work out proposals that outline the type of information necessary

for an initial funding proposal. Introduction of this new tool (the Project Brief) required

significant preparation time and intensive facilitation by the Consultant.

After developing a template, the Consultant assisted the Green Teams in preparing a

pipeline of proposals based on their agreed priorities. As mentioned before, facilitation of this

process was intensive as the Green Teams were not familiar with preparing project proposals

(even 15 years after the nation was decentralized by law). On average, it took Green Teams

a full day to put one proposal together, or an entire week for a city project pipeline. This was

done in the last series of integrated “Roadshow” workshops. A second round of workshops

was needed to follow up with FAR and and AFM for financing potential projects in the

pipeline, to ensure their feasibility.

One serious drawback of the current green cities development concept is that some green

issues such as forest protection, bulk water supply, river pollution, and power supply fall

42

outside a city’s administrative boundaries and jurisdiction, limiting the Green Teams to plan

for local green development only. This will continue to be a setback for the Green City

concept unless cities, provinces, national agencies, and private corporations seriously

cooperate in developing green cities across boundaries and jurisdictions. This can only be

achieved by a strong national regulatory framework that is enforced with effective incentives

and disincentives, while an attempt was made to broaden the green teams (for example to

include provincial water supply companies), this framework was not fully available during this

TA.

The TA was able to get ‘everybody’ at city level around the table for planning purposes

occasionally albeit not always simultaneously, but little attempt was made to invite provincial

authorities and national policy makers to discuss coordination and cooperation on action

plans. The regulatory framework for coordinating development planning is too rigid for that

purpose. Bappenas occasionally paid a visit to one or other workshop, mainly to explain

Bappenas policies on sustainable urban development.

During this TA, no GCAP was conclusively finished by the Green Teams, the main reasons

being that they were not held accountable for the result: The Mayoral Decision imposed no

deadlines or deliverables, and provided no clear incentives for good performance. Having

said that, the GCAP is not supposed to be a finished product: it has to evolve and improve

continuously, and be updated periodically.

The consultant team therefore has assisted in taking drafted action plans and assisting the

Cities to finalize their GCAPs.

Brief Summary of the process and issues by City 4.4

Batam 4.4.1

The Green Cities TA in Batam has been problematic from the beginning. The institutional

challenges that limit capacity for green city planning in Batam are mainly related to

weaknesses in coordinating sector plans and institutions, notably among the national Batam

Development Authority (BDA or BP Batam)17, the city government, and the Ministry of

Forestry, particularly on the issue of land allocation.

As the TA aimed to develop capacities at municipal level rather than the entire Batam

industrial development zone that was originally created as a greenfield development in a

practically uninhabited group of little islands, the Mayoral Decision on establishing a Green

Team for GCAP development only included membership at municipal level, as in the other

three cities participating in the TA. The BDA was invited to GCAP sessions only as a token

representative, and usually it was a different person each time.

With the consent of the ADB, the Consultants met with the BDA several times in an effort to

develop modes of cooperation and create synergies. However, despite obvious common

interests in greening Batam, the respective authorities appeared not inclined to pursue a

more integrated approach. As the Consultants were not in a position to overcome this

obstacle, it had the effect of stunting the Green Team and GCAP development. Towards the

end of the TA, however, Batam changed its stance, and during the final “Green Cities

Roundtable” evaluation workshop in Surabaya, Batam specifically requested Bappenas to

help end this dichotomy so that Batam could work with whatever authority was in charge on

green development in a more integrated manner.

17

Also known as the Batam Indonesia Free Zone Authority (BIFZA)

43

Interestingly, the President of the Republic of Indonesia recently indicated his intent to

abolish the BDA citing as reason that its dualistic management role had been overtaken by

recent developments. According to an article in the Jakarta Post dated 30 December 2015

titled, ‘Govt to disband Batam Free Trade Authority’, stated, ‘Home Minister Tjahjo Kumolo

has said the government will close down the Batam Free Trade Zone Management Agency

(BPK FTZ) next year in an effort to eliminate the overlapping of authority in Batam.’18

Kendari 4.4.2

At the outset of the TA, Kendari was the apparent frontrunner, not only because the Mayor

had already embraced the Green City concept, but also because there was a strong Green

City Champion (who subsequently left to study overseas) and it was being assisted by the

UNESCO-IHE/MARE project aiming at improving water resource management.

Kendari was the first city to issue a Mayoral Decision on the Green Team, and the first to

complete Steps 1-6 of the GCAP process and report to the Steering Committee chaired by

the Mayor. After that, however, momentum started to wane, maybe because the Green

Team had insufficient incentives to want to stay ahead, but more likely because this small

city lacked the human resources – especially a strong champion - to push important policy

and technical decisions. The city struggled to put together a pipeline of project briefs. As a

result, contrary to the guiding principles of the process, the Consultant had to take a more

leading role in Kendari than in the other TA cities.

Malang 4.4.3

Despite its commitment, the city of Malang during 2015 has experienced several setbacks as

the result of a reshuffle of positions in the key agencies involved in green development, and

preoccupation with the hosting of the annual national convention of the National Association

of Mayors (APEKSI). In addition, the City Facilitator appointed by the Consultant had to be

replaced twice for various reasons. The most recent facilitator, with full support from the ADB

and the Consultants, decided to reboot the GCAP process. The Green Team was able to

catch up with the other cities by the end of 2015 thanks to its continued commitment.

Medan 4.4.4

Medan had initially disconnected itself from the GCP as implemented by the MPWH in 2013

citing dissatisfaction with the results, and was therefore not interested in joining the TA. After

Medan participated in the National Visioning Workshop in Jakarta in November 2014

however, it agreed to join, subsequently to be disqualified by the Coordinating Minister for

Economic Affairs from participation in the ASEAN Regional Cooperation on the Indonesia-

Malaysia-Thailand Growth Triangle (IMT-GT), and implicitly the GCP. This decision was

eventually overturned so that by April 2015 Medan was ready to start the TA, and had a

Mayoral Decision in hand to prove its commitment. The Green Team, with the help of the

CDTA City Facilitator who could be appointed once the Mayoral Decision was issued,

managed to catch up with the other cities by the first quarter of 2016.

Developing financing capacity 4.5

Initially, the Consultant conducted a number of interviews with relevant stakeholders to

explore possible alternative mechanisms in urban projects, possible financing sources and

best practices.

18

http://www.thejakartapost.com/news/2015/12/30/govt-disband-batam-free-trade-zone-authority.html

44

Interviews were conducted with public financial institutions, bi- and multilateral development

banks (MDBs) and Indonesian banks: Pusat Investasi Pemerintah (Indonesian Investment

Agency), PT SMI (Sarana Multi Infrastruktur (Persero)), Indonesian Infrastructure Fund (IIF),

Indonesian Infrastructure Guarantee Fund (IIGF), PEFINDO – credit rating agency, Asian

Development Bank, KfW, Agence Française de Développement (AfD), Dutch Development

Bank (FMO), Mandiri Sekuritas.

Interviews were also conducted with private companies: Synergy Efficiency Solutions (energy

savings), Harsari (street lighting) and WMD (water). The interviews and additional desk

research were used to further develop the methodology (Appendix F) for green teams to

explore alternative mechanisms. The Consultant developed a model for municipal fiscal

capacity analysis (FAR) as part of the Green City Profile (GCP) as well as a guide to

alternative modes of financing (AMF) as part of the Green City Action Plan (GCAP). Their

intent was to help the Green Teams make municipal financial management for green

infrastructure development more effective and efficient, and also assist them in considering

options for alternative modes of finance for selected programs and projects. This succeeded

to some extent, but the tool was introduced to the Green Teams at a time when the local

budget (APBD) for 2015 had already been fixed, and the input was concluded too late to

influence the 2016 budget.

The TA attempted to make Indonesian municipalities more capable and responsive to

independent urban planning after decentralization in the year 2000. A large part of that effort,

falls into enabling the cities to address their finance needs – not just from a project

perspective, but also more generally as part of their city budgets.

With the goal of addressing the importance of considering finance in the GCAP process,

cities have appointed a Green Finance Champion acting as the key person in the Green

Team to deal with the financial aspects of the GCAP and coordinate with other Green Team

members to consider financing of projects related to different Green Attributes. Facilitation

covered two major areas: one, an assessment of the city’s fiscal profile and capacity to

allocate budgets for green infrastructure more effectively and efficiently (Fiscal Assessment

Report or FAR); and two, an assessment of a city’s options for exploring and applying modes

of financing other than public funding (Alternative Modes of Financing or AFM). While the

FAR was mostly used as part of the Green City Profile (GCP) to ‘green up’ a city’s medium-

term development plan (RPJMD), the AFM was introduced once a pipeline of priority

programs and project was developed, to help develop project specific actions.

Several missions were undertaken to all cities over the course of 2014, 2015 and 2016. The

aim of these missions was:

To familiarize Green Teams with the financial part of this TA, both the FAR (Fiscal

Capacity Analysis) and the Alternative Financing Mechanisms (AFM).

To explain the methodology for the FAR and the AFM, and to make clear what

information Green Teams needed to gather and analyze to carry out the analysis.

To assist the Green Team in carrying out the analysis. For the Fiscal Capacity

Analysis, this was done by discussing the draft Financial Assessment Reports (FAR),

prepared by the Consultant based on the input received from the city. For the

Alternative Modes of Financing this was done by applying the methodology

developed to project briefs, thus consider appropriate implementing and financing

mechanisms (and develop them into actions).

To overcome limited know-how in financial management in the Green Teams, the Consultant

decided to simplify the methodology, mainly by focusing on analyzing the actual revenues

45

and expenditures of cities in the past years - and not so much the budgeting as laid down in

the local budget (APBD) and sectorial agency plans (Renstra).

The Consultant faced difficulties to engage with all cities on the topic of their budgeting and

the way they gather and spend available budgets. Cities were reluctant to share information

and to openly discuss their budgets and possible opportunities to improve it. In addition,

implementation of the local medium-term development plan (RPJMD) was on-going in all

cities, so that there was limited opportunity to financially update green infrastructure

investment along the way.

Issues faced

Several missions have been devoted to activating the green teams in undertaking financial

analyses, using different approaches. Early in the project the international financing expert

requested a green finance champ to be appointed in each green team. The idea was that a

clear counterpart would make it easier to gather information and to create an active attitude

towards the financing topics of the TA. While the green financing champ was appointed by all

cities, his/her participation was in all cases passive. Cities’ GCAP champions also did not

seem to want to actively engage the finance champions.

The FAR and AMF were useful tools in principle for analysing infrastructure investments and

municipal financial performance, but results were mixed because the competence and know-

how of the ‘finance champions’ in the Green Teams to view them as innovative approaches

for dealing with project financing was not mature. Therefore, the product offered by the

Consultant was not yet sufficiently appreciated and applied by the Green Teams.

The Consultant also came to the conclusion that it had tried to push for innovative projects

and unconventional modes of financing while it was still difficult to wean Green Teams away

from their established practices ie not making much effort to mobilize more local resources in

the spirit of decentralization, and primarily asking provincial and central government to

provide grants for infrastructure projects, as this is the status quo.

In late 2015, the Consultant already concluded that reluctance would remain, the most

important reason being that analysis and discussions of cities’ budgets is very political in

nature and should be held on a higher level than the Green Team, i.e the Steering

Committee. The conclusion is that potentially useful financial tools have remained under-

utilized. As their effectiveness cannot yet be ascertained, they remain a work in progress, to

be further pursued in the hope that local mindsets will change.

46

Outputs 5

The first TA output was the methodology for drafting Green City Action Plans (GCAP)

discussed in the previous Sections. The Green Teams applied each of the 10 Steps of the

methodology (with intermittent assistance by the TA city facilitators) to produce a series of

intermediate outputs, usually a document to be used as the basis for completing one or

more next Steps, including green visions, GCPs, project pipelines & project briefs, and

financial reports.

The second TA output was the completion of four GCAPs which summarise the intermediate

outputs and include actions to implement the prioritised programs. The actions relate to

project preparation, institutional set up, technical studies, procurement, financing options &

mechanisms, partnerships, and capacity development measures required to implement the

projects within the prioritised programs.

The results of the TA will eventually be measured in terms of actionable programs and

projects, and outcomes will be measured in terms of sustained activities of the Green

Teams in pursuit of green development.

Intermediate outputs 5.1

The intermediate outputs are summarized in the GCAPs and it is intended that they are

appended in full to the four GCAPs in soft copy on CD inside the GCAPs to keep the GCAPs

concise but to make the outputs available to the Cities for reference.

An overview of the intermediate outputs is provided in table 5.1 below.

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Table 5.1: Overview of Intermediate Outputs and Prioritized Programs

BATAM KENDARI MALANG MEDAN Remarks

Intermediate Outputs

Analysis of Strengths, Opportunities, Aspirations &

Results (SOAR)

Desired green development results identified

Desired green development results identified

Desired green development results identified

Desired green development results identified

Useful visioning tool, but quality of output is facilitation-sensitive

2015 Green City Environmental Profile &

thematic GIS maps

Environmental Profile with maps produced

Environmental Profile with maps produced

Environmental Profile with maps produced

Environmental Profile with maps produced

Useful integrated planning tool, but quality of output is facilitation-

sensitive

“Roadmap” for Green Development performance

to 2045

Green performance score low (‘red’) for baseline 2015

Green performance score low (‘red’) for baseline 2015

Green performance score low (‘red’) for baseline 2015

Green performance score low (‘red’) for baseline 2015

Useful performance appraisal tool, but quality of output is facilitation-

sensitive

Financial Analysis Report (FAR)

Fiscal capacity score sufficient for green

investment in base year 2015

Fiscal capacity score not sufficient for green investment

in base year 2015

Fiscal capacity score sufficient for green investment

in base year 2015

Fiscal capacity score sufficient for green investment

in base year 2015

Useful fiscal analysis tool, but quality of output is leadership-sensitive

(“finance champion”)

Program & Project Digest City has formulated 7

programs based on format City has formulated 5

programs based on format City has formulated 5

programs based on format City has formulated 4

programs based on format

Useful program & project formulation tool, but quality of output is

facilitation-sensitive

Alternative Financing Mechanisms (AFM)

Scoped for selected pipeline projects

Scoped for selected pipeline projects

Scoped for selected pipeline projects

Scoped for selected pipeline projects

Useful financial management tool, but quality of output is leadership-

sensitive (“finance champion”)

Prioritized Programs

“Green Water” project : water supply

Improving water supply and service network

Improving water supply and service network

- Improving water supply and

service network Ready for submission to financing

agencies for further processing

“Green Water” project : drainage & flood control

Improving urban drainage and flood control network

Improving urban drainage and flood control network

Improving urban drainage and flood control network

- Ready for submission to financing

agencies for further processing

“Green Waste” project : solid waste management

Waste-to-Energy plant - Waste-to-Energy plant Waste-to-Energy plant Ready for submission to financing

agencies for further processing

“Green Waste” project: waste water management

- On-site sanitation - Off-site sanitation

- On-site sanitation - Off-site sanitation

- On-site sanitation - Off-site sanitation

- On-site sanitation - Off-site sanitation

Ready for submission to financing agencies for further processing

“Green Transportation” project : BRT

BRT system development (or suitable alternative)

- BRT system development (or

suitable alternative) BRT system development (or

suitable alternative) Ready for submission to financing

agencies for further processing

“Green Transportation” project: NMT

Non-motorized transport network

- Non-motorized transport

network

Ready for submission to financing agencies for further processing

“Green Industry & Commerce” project:

Industrial waste management

- Ready for submission to financing

agencies for further processing

“Green Community” project: - Community-based city-wide Waste Bank system

- - Ready for submission to financing

agencies for further processing

“Green Energy” project: - Tidal energy production in

Kendari Bay Area - -

Ready for submission to financing agencies for further processing

Urban Management Partnership (UMP)

Sustained “Green Team” based on Mayoral Decision

Sustained “Green Team” based on Mayoral Decision

Sustained “Green Team” based on Mayoral Decision

Sustained “Green Team” based on Mayoral Decision

Essential integrated team, but quality is leadership-sensitive

(“green champion”)

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The Green City Action Plans (GCAP) 5.2

Cities often chose to focus on solid waste management, water supply, sanitation, and

transport as their priorities. This is not surprising, as they are the key environmental

challenges facing fast-growing cities, and they are in line with government policies to, among

others, provide 100% sanitation and zero slums by 2020. Improvements in those areas will

improve health, economic development, and the environment, and have a positive impact on

livability.

As discussed previously in this report, actions are to be developed to enable the cities to

implement projects to deliver a number of priority programs that contribute to sustainable

urban development.

For each project budgets and implementing mechanisms are defined. And the actions,

developed to implement the projects are to be realistic and specific with designated

responsibilities. Therefore they have to be achievable within relatively short timeframes of no

more than around 5 years, otherwise responsibilities and objectives may become unclear too

far into the future. The program pipeline covers the longer term green development

objectives of the City, and the rolling action planning process should be used to develop

actions for the next priority programs.

Again, as described before, actions are to include project preparation, institutional set up,

technical studies/aspects, regulatory enablers, financing, and capacity development to

enable implementation of projects. They also include the mobilization of additional resources

(expertise, finance etc) as will be explained in this section.

All four cities have finished 9 out of 10 steps in the “10-Steps to GCAP” process, whereas

step 10 comprises the review, updating and ‘rolling over’ of the GCAP. One should keep in

mind that the GCAP is a ‘living’ document and will continue to undergo review by the cities.

Table 5.2: Status of GCAPs by end of TA

City Step Draft GCAP

prepared

GCAP approved & signed by

Mayor, budgets allocated

Remarks

Batam 9 Yes Pending

GCAP to be translated into Bahasa

Indonesia by ADB, BAPPENAS, or

participating cities

Kendari 9 Yes Pending

GCAP to be translated into Bahasa

Indonesia by ADB, BAPPENAS, or

participating cities

Malang 9 Yes Pending

GCAP to be translated into Bahasa

Indonesia by ADB, BAPPENAS, or

participating cities

Medan 9 Yes Pending

GCAP to be translated into Bahasa

Indonesia by ADB, BAPPENAS, or

participating cities

The completed 10-step methodology resulted in a rolling action plan that can be used by a

municipal team for integrated green development planning and be periodically updated.

Table 5.3 below shows the generic format of the GCAP in brief.

49

Table 5.3: The GCAP in Brief

Contents Description Remarks

Introduction

Explains background and purpose of the GCAP, as well as a summary of the GCAP preparation process and the vision for the City.

Includes foreword by the Mayor approving the GCAP

Green City Profile

Summary

This section of the GCAP contains a summarized version of the city’s environmental profile as a ‘scene setter’ for green development issues. Key baseline data is included where available. Output: Full GCP appended to the GCAP

The full GCP (as far as available) is appended to the GCAP in Bahasa Indonesia

Green Development Strategy 2035

Based on agreed long list and short list, this section provides an overview of selected priority programs and projects until the year 2035 as a reference for implementation and periodical updating of the GCAP Output: Table of priority programs and projects for implementing in short (action plan) and long term

At present it cannot be ascertained yet that the GCAP will be periodically updated, or that the list of priority programs and projects will be adhered to

Program long list and

shortlist

The final long list of programs to implement the Green Vision (in the longer term) is provided, as well as the subsequent short list of prioritized programs for which actions are developed. Output: program pipeline

Program briefs of all prioritized programs are appended for reference. Briefs are described in technical, financial, regulatory, institutional, and risk terms

Enabling actions

Some generic guidance is provided in terms of implementing and enabling actions to avoid repetition within the ‘action’ plans.

This section could be removed as it may be self-explanatory for the cities.

Action Plans

This section provides a list of actions required to bring each program and project to the preparation and implementation stage. To be described in further detail below. Output: Action Plans

Because of the relatively informal status of the GT in the LG hierarchy, at present it cannot be ascertained that the Action Plans will be followed up properly; much depends on the influence that Bappeda can wield It has been argued that a Local Regulation would be required to achieve the required momentum and legal basis for budgeting and implementation

Alternative Modes of

Financing (AMF)

Whilst budgets and finance sources are specified in the action plan, this section summarizes the options for alternative modes of financing for programs and projects in the pipeline Output: Options for AMF incorporated in selected Action Plans

(same as above)

GCAP Appendices

50

Visioning

This section applies the SOAR approach together with the City’s Vision & Mission statement to agree on green development outcomes for the medium to long term Output: Table of agreed Strengths, Opportunities, Aspirations, and Results covering all green attributes

The quality of outputs depends on the qualifications of the members of the GT, which varies considerably between cities.

Green Lensing

This section applies ‘Green Lensing’ to the agreed SOAR to create a wish list of programs and projects Output: Long list of desired programs & projects

The Green Framework is a reference table for Green Lensing provided by the TA consultants, but the GT can modify it if deemed necessary

Multi-Criteria Analysis (MCA)

This section applies a MCA to weigh and rank long list and produce a short list of priority programs and projects Output: Ranked long list with selected short list

The MCA is a method provided by the TA consultants to rank a long list, but the weighting is decided by the GT

Green City Profile (GCP)

The GCP provides a tool for integrated green development planning with a baseline and performance indicators. This section is appended to the GCAP Output: GCP document comprising: - Compilation of city baseline data for 2015 on economic growth, environmental management, and social development - Thematic GIS overlay maps for all green attributes - Overview of existing and planned green initiatives - Fiscal profile with Financial Assessment Report (FAR) - Roadmap with generic performance indicators for green development in the short, medium and long term

Not all cities have a complete and qualified data set in their GCP yet, and at present it cannot be ascertained that GCP data will be completed, updated, and used effectively as an inter-disciplinary and integrated planning tool Ideally, the GT should prepare a GCP before preparing a GCAP, but in the absence of a ready GCP format the process was in parallel (iterative)

Program Briefs

Program briefs of all prioritized programs are appended for reference. Briefs are described in technical, financial, regulatory, institutional, and risk terms. They were developed to help prioritize programs, but also as a basis for discussing financing mechanisms and developing realistic actions for the GCAP

The Brief template was developed by the consultant in the absence of any existing useful template in Indonesian planning process.

Financial Assessment

Report

Financial assessment reports are appended to provide guidance to the cities in improving budgets for green development. These were developed by the Consultant with varying levels of assistance from Green Team financial champions.

Only one city developed public finance management actions as a result of this process due to a reluctance to embrace local budget improvements. It was a useful capacity development process to provide City’s with options to improve financial management.

Action Plans 5.2.1

The key Output from the GCAPs is the actions themselves, developed to facilitate

implementation of every project within each prioritised Green City program.

Actions are developed under all the projects which make up the prioritised programs.

Under each program some information is summarised up front, including:

51

Why?

Current status

Goal

Results

Benefits

Indicators

Risks & mitigation

The projects are then summarised. The responsible agency for each project is included, as

well as the estimated budget, the implementing mechanism (including financing and funding),

and other partners.

Actions are developed under this framework. Where relevant, actions specify the responsible

agency and a timeframe for completion. Actions were developed by the City in Bahasa in a

spreadsheet format and converted (with some amendments/improvements) by the consultant

team into English, for international consumption.

To provide an example of this, the actions for Project 3 of Medan’s Sanitation Program

(Improvement of on-site sanitation system) are presented below.

SAN 3: Establish regular septage pumping (desludging) and management system

The provision of regular septage desludging management services is one of the development challenges for the achievement of the 2017 SDG (Sustainable Development Goals) and the 2020 Indonesia’s national flagship 100%:0%:100%. In the short term, septic tanks will remain the principal form of urban sanitation in Medan as the sewer network is not extensive. Septic tanks require regular removal of septage. Without coordinated septage management, Project 2 (provision of improved tanks), will not result in improved sanitation, health, and environmental protection – as monitored under project 1 (prepare a sanitation baseline).

It is important that these services are implemented in a coordinated and holistic way including institutional and cost recovery aspects to provide a sustainable service to the residents of Medan. It is planned to transfer the responsibility for collection and disposal of waste to PDAM, as they are best placed to manage such operational activities from a technical perspective.

Action Description and responsibilities Timeframe

SAN3.1 To promote sustained operation and enable this off site sanitation program, Medan city government will draft and adopt, through its legislative body (DPRD), a local regulation (Perda) detailing Medan city’s Septage Management System. The regulation will state the rationale, user fees, operation, management (roles and responsibilities), and penalties. Unless otherwise repealed or amended, the septage management ordinance remains valid, thereby ensuring sustained operation.

2016

SAN3.2 Establish a Memorandum of Agreement between the City and PDAM that future septage pumping (collection) and management will be undertaken by PDAM Tirtanadi.

2016

SAN3.3 In 2016, the City Cleaning and Landscaping Agency (DKP) will transfer responsibilities for the management of domestic septage waste to PDAM Tirtanadi, which currently manages off-site sanitation (centralized sewage). This includes the transfer of their existing septage pumping trucks to PDAM.

2016

SAN3.4 The City government will acquire additional septage pumping trucks (2 per year) from The Ministry of Public Works under a grant to the City who will then hand them over to PDAM Tirtanadi.

2017 (annual)

SAN3.5 PDAM Tirtanadi will establish an internal operation unit to manage and conduct septage collection (every 2 years) and disposal.

2017

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SAN3.6 PDAM will prepare and approve standard operational procedures (SOP) in PDAM for septage management.

2017

SAN3.7 PDAM will train staff in latest septage management and disposal options, including developing managerial capacity particularly with respect to asset management, cost recovery, and efficient service delivery - according to performance targets and in responding to customer concerns. Technical training will also need to be delivered to the operation unit in the physical operation of the truck and ancillary equipment (valves, pumps etc).

2017

SAN3.8 The Sanitation Working Group, established under project 1, will coordinate a social marketing and public awareness campaign with PDAM to raise awareness of the benefits of improved sanitation, ensure public acceptability of regulations and tariffs, and ease project implementation.

2017

SAN3.9 PDAM will coordinate with the City government to review and set tariffs (including for adjoining municipalities) and establish a system to recover operational costs from user fees (septage pumping).

2017

SAN3.10 Explore the opportunity to establish household sanitation revolving funds for low costs septic tank and construction and public toilets.

2017

SAN3.11 Consider utilising private sector companies to provide efficient septage collection and transport services.

2018

SAN3.12 PDAM Tirtanadi will establish wastewater and septage quality testing facilities and trained staff at PDAM Tirtanadi.

2018

SAN3.13 It is planned that the Province of North Sumatra will develop a new independent septage treatment facility (Project 4) at the Cemara area. In the interim PDAM will utilize Cemara WWTP for septage disposal, which has been using only ±30 % of its design capacity of 60,000 cubic metres per day.

2017

Responsible agency

PDAM Tirtanadi

Estimated costs

Preparation (design): Rp 1.65 billion Realization (construction): Rp 6 billion

Implementing mechanism, funding & financing

OBA (Government Grant) for equipment

Improved cost recovery for financing operational improvements

International Technical Assistance for Capacity Development and Training.

Private sector contractors to provide efficient septage pumping and transport services.

Other partners

Medan: Sanitation Working Group, Bappeda, DKP (transfer of vehicles and responsibilities), Environment Agency (regarding advocacy)

Regional: Other municipalities (regarding tariff setting)

Social/ communities: Green Communities, social groups such as the Lions Club and AKKOPSI, users, poor households.

Private sector: for septage collection and transport..

International: Technical assistance for capacity development and training.

As can be seen from the above, urban management partnerships have been proposed

and developed at the project and action level. This includes listing the project owner and key

stakeholders and, for example, establishing a City Sanitation Working Group (an action in

53

itself under project 1 of Medan’s sanitation program) which will include PDAM Tirtinadi (an

agency beyond the municipality itself).

Other institutional actions are proposed, including a memorandum of agreement (Action

SAN3.2), transfer of some responsibilities (Action SAN3.3), and establishing an operation

unit (Action SAN3.5) for septage collection and disposal.

Regulatory and operational actions are proposed, including drafting a local regulation

(Action SAN3.1), developing standard operating procedures (Action SAN3.6), and setting

tariffs (Action SAN3.9).

Capacity development actions are proposed, including training in septage management

(Action SAN3.7), and septage quality testing (Action SAN3.12).

Social marketing actions are proposed, including raising the awareness of improved

sanitation (Action SAN3.8).

Finance actions are proposed, including exploring the opportunity for a revolving fund for

septic tank construction (Action SAN3.9), also options for private sector involvement in

desludging are to be considered (Action SAN3.11).

In other projects, particularly when related to infrastructure planning and construction, more

common procurement of technical feasibility studies, goods, services and construction

(including approvals and construction permits) are included.

The action plans also include some specific project preparation and implementation

activities, but to avoid repetitiveness, as some actions will be required for all projects, generic

(project implementing) actions have also been provided in each GCAP, as described in the

section below.

Whilst developing action plans in such an integrated manner has required significant effort

from the Consultant (as opposed to developing separate capacity development and urban

management partnerships plans), the output really is an integrated action plan rather than a

list of ‘projects’ as previous ADB GCAPs have been. The actions are specific activities

required to enable and implement projects which will contribute to Green Cities development.

The plans also serve to separate specific tasks where international partners can support or

provide assistance (particularly when related to infrastructure, which is not the case in the

above example).

By completion of the TA, each city had drafted a first version of its action plan, but it was too

early to determine what kind of implementation issues would occur as the GCAPs had only

reached the approval stage, and implementation budgets had not yet been allocated. For

more details, see the respective GCAPs.

Generic actions 5.2.2

As described above, some generic project implementing guidance/activities are described in

each GCAP to remind cities of best practice approaches to project implementation. These

are provided before the projects and specific actions are listed.

Project Management Unit (PMU)

A temporary organizational unit created for the purpose of preparing a project implement

plan (see below), and managing the project on a day to day basis. A PMU (or committee or

taskforce) is headed by the agency responsible for the project. An operational budget for the

PMU needs to be allocated. Representatives of relevant local government agencies, other

agencies and possibly representatives of the community can also be members of the PMU.

54

The PMU will consider whether or not alternative implementing mechanisms (BOT, Joint

venture, CSR, etc.) will be considered in the feasibility study, but also the actions related to

changing or implementing regulations, issuing permits, etc.

Project Implementation Plan (PIP)

A document that describes in detail the actions needed for implementing the project,

including preparatory activities. The PMU should be in charge of preparing and managing it.

It covers the project cycle -a sequence of events and activities usually starting with a

feasibility study, project design, financing, land acquisition, tendering, procurement,

construction supervision, monitoring and evaluation, as well as operation and maintenance.

It clearly describes the division of responsibilities, timeline and budgets needed. It specifies

what decisions are needed, when, and by whom. A project is normally undertaken by a

contractor, government department, a combination of public and private actors, a consortium,

etc. Different actors can be responsible for different parts of the project cycle.

GCAP implementation 5.2.3

Some guidance is also provided in each GCAP to guide its overall implementation, this is

summarised in figure 5.1 below.

Figure 5.1: Overall Implementation

A Steering Committee (SC) will monitor and guide the progress on GCAP and actions on a

quarterly basis. The Mayor will chair the SC that further consists of heads of SKPDs in the

field of green attributes, and other stakeholders. As chair of the “Green Team”, the head of

Bappeda will keep the Mayor informed about the progress to enable the Mayor to make

decisions when needed.

The “Green Team” will coordinate programs and projects and the interfaces between

programs and projects. They will also update the GCAP every 2 years. The “Green Team”will

meet bi-weekly to monitor progress on specific projects and actions. Those in charge of

specific programs and projects will inform the “Green Team” about their progress and

specific issues, decisions or guidance they need. The “Green Team” will determine the

agenda for meetings with the SC and prepare these meetings. Specific taskforces (PMU)

will be set-up to drive the implementation of programs and projects on a day to day basis.

The taskforces will be made up of representatives of relevant SKPDs and other agencies and

led by the agency/ body responsible for the sector.

Steering

Committee

“Green

Team”

Taskforce / PMU

– Waste

Taskforce / PMU

– Water

Taskforce / PMU

– Green taxes

Monitoring

/ guidance

Progress/

reporting

Taskforce GCAP

Mayor Informs / key

decisions

Monitoring/ guidance Progress/ reporting

55

Table 5.4 below summarizes responsibilities in implementing the GCAP as a whole.

Table 5.4: GCAP Responsibilities

What? Who? When?

Mayoral Decree on set-up and installation of SC and

“Green Team” incl. description of roles, SOP,

membership and budgets

Mayor Update in 2106

Continuation of Mayor’s decree including budget

allocation

Head of Bappeda annually

Work-plan “Green Team” including initiating the set-up of

specific taskforces/ PMUs for agreed projects

“Green Team” as and when

required

Evaluation of performance of “Green Team” Steering Committee

bi-yearly

Financing options & mechanisms 5.2.4

As with the approach and process sections of this report, a separate section is provided in

this report to discuss the outputs of the financing aspects of the TA.

Table 5.5 below shows, as an example, the financing options and mechanisms developed as

part of the City of Medan’s Sanitation Program. These will keep their status of ‘options’ as

the Program has not yet been approved, and prepared (including tangible funding and

financing sources/mechanisms). As can be seen, the Program has limited scope for

alternative modes of financing, but the City of Medan hopes that the introduction of effective

operating mechanisms will attract private operators to manage sanitation services against a

fee to be charged to customers, even though the latter are mostly urban residents classified

as poor. This illustrates the fact that good institutional and regulatory preparation is

necessary to implement alternative modes of finance, and thus justifies the detail in the

‘action plans’.

Table 5.5: MEDAN: Funding & Financing Options, Implementing Mechanisms for Sanitation

Program

Title of Program & Projects Financing Options & Implementing Mechanisms

2B Green Waste (Waste Water): Program: On-site sanitation & Off-site sanitation

Project 1:

Prepare a Sanitation Baseline,

Monitoring Plan, and establish

a Sanitation Working Group to

coordinate monitoring and

related projects

Public funding from Medan (municipal) and provincial

government

Improved revenue resulting from Revenue Improvement

Action Plan (RIAP)

Project 2:

Production and installation of

100,000 impermeable septic

tanks over a five-year period

The City of Medan to pay for impermeable septic tanks

PDAM Tirtanadi to pay for desludging trucks at the rate

of 2 units per year

Subsidy scheme by Ministry of Public Works & Housing,

and Ministry of Health

OBA central government funding for the project (i.e.

sources from APBN and DFAT [Indii-Ausaid])

Project 3:

Establish regular septage

pumping (desludging) and

management system

PPP: PDAM Tirtanadi with private companies to

operate desludging.

Direct service payment by customers

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Project 4:

Build and operate a new

Septage Treatment Facility

and Disposal

Public funding: PDAM Tirtanadi

Subsidy scheme by Ministry of Public Works & Housing,

and Ministry of Health

OBA central government funding for the project (i.e.

sources from APBN and DFAT [Indii-Ausaid])

Other programs, such as water supply, and transport, lend themselves to private sector

involvement. This is established within the GCAPs, but for continuity, the Sanitation Program

is used as an example to illustrate how financing and funding of projects has been addressed

within the GCAPs.

A summary of alternative financing mechanisms is provided in table 5.6 below:

Table 5.6: Options for Alternative Modes of Financing

Project & owner (rows)/ financing options (columns)

(A) Financing

(B) Funding

(C) Implementing mechanism

(D) Financing sources (options)

(E) Funding sources (options)

Waste to Energy (Malang)

BOT (contract); (ii) BUMD/ BLUD

(own company); (iii) Joint Venture

(company public & private)

Not yet explored Tipping fee: Rupiah

100.000 – 150.000 per

tonnes.

Waste to Energy (Medan)

BOT (contract); (ii) BU Joint Venture

(company public & private)

Not yet explored Tipping fee: no number

mentioned

Bus Rapid Transit (Medan)

BUMD/ BLUD (own company)

Private sector: buses and

possibly stations International

National and city budgets: dedicated bus

lines National budgets:

buses development

institutes: business plan BUMD (GiZ),

detailed design

buslanes (ITDP)

Human Waste Management – PLT2 (Medan)

Medan city: sceptic tanks

PDAM Tirtanadi: trucks

No Medan city: sceptic tanks

PDAM Tirtanadi:

trucks Green Water – SPAM (Drinking Water Supply Distribution Network expansion) (Medan)

PDAM Tirtanadi Significant availability

payments could attract private

sector investments.

Lessons learned from ABT (Batam)

PDAM Tirtanadi,

making use of city budgets

57

Project & owner (rows)/ financing options (columns)

(A) Financing

(B) Funding

(C) Implementing mechanism

(D) Financing sources (options)

(E) Funding sources (options)

Waste to Energy (Batam)

BOT (ongoing) Procurement to be re-started

Local regulation (Perda)

needed to determine maximum tipping fee

Non-revenue water (Kendari)

BOT (Inter)national

water companies

Not discussed

Public Finance Outputs per City 5.3

Whilst actions related to establishing the mechanisms for financing projects have been

included in the ‘actions’ of the GCAP, it was hoped the cities would develop further actions

related to public finance improvement.

It was hoped that more generic actions related to improving local revenues, reducing

budgetary ‘waste’, attracting investment, improving ‘creditworthiness’, and generating

municipal loan/debt profiles would be established but this has not been the case. Issues

faced have been discussed in the Process chapter above, and further summarized below. As

such there are limited tangible outputs to discuss in this section but Financial assessment

reports (FARs) have been conducted for each City and they are also summarized in this

section.

Issues and outputs 5.3.1

Draft Financial Assessment Reports are included in Appendix B1-4.

After 2 years, it is not clear to the Consultant whether or not the cities in this TA have a

serious ambition to further improve their fiscal capacity.

The FAR shows that cities, especially Batam, have improved their own local income

(PAD) significantly over the past years. Also, especially the Green Teams of Batam,

Malang and Medan, have all expressed ambitions to further increase PAD in the future.

The table below summarizes the result of the analysis of cities’ budgets, revenues and

expenditures.

The ratios for independency and fiscal decentralize show that all cities are still highly

dependent on high level government transfers of budgets. Medan and Batam do better

than Malang and Kendari. All cities have a clear incentive to increases own local income

(PAD) to become less dependent on central government. Ultimately, this would allow

cities to use own local income for capital expenditures and plan such investments further

ahead. Most cities identified potential actions to improve own local income.

The ratios for effectiveness show that only around 20% of budgets are available for

CAPEX in (green) infrastructure (Kendari is doing better, around 30%). A maximum of

between 20 and 30% is available for good and services, the non-personnel component

of OPEX (Kendari is doing worse with around 17%). All cities have a clear incentive to

improve these ratios and be more efficient in expenditures. However, none of the cities

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identified actions aimed at this, for example decreasing costs of operation and

personnel. All cities expressed it was forbidden by law to “let go” government officials.

They were reluctant to discuss lowering operating costs by phasing out personnel over

time.

Related to personnel expenses it is noteworthy that none of the cities can pay personnel

expenses fully from own local income. Batam and Medan are doing much better than

Malang and Kendari. Table 5.7 below summarizes the result of the analysis of cities’

budgets, revenues and expenditures.

Table 5.7: Financial/Budget Ratios

Ratios

Average of actual numbers realized for years data is available

Malang (2011 - 2015

Medan (2011 – 2014)

Batam (2010 – 2015)

Kendari (2010 – 2015)

Independency

Local income / Transfer 26,3% 57,8% 49,6% 16,4%

Fiscal decentralize

Local income / Total revenues 18,8% 36,4% 30,8% 11,7%

Effectiveness for Infra Assets (lifetime > 12 months)

Capital Expenditures / Total Expenditures 19,5% 20,4% 20,6% 29,3%

Effectiveness for Goods & Services (lifetime < 12

months)

Non personnel expenses / Total Expenditures

25,4% 23,7% 31,9% 16,8%*

Own Revenue vs Personnel Ratio

Own revenue/ Personnel Expenditures 36,3% 65% 69,5% 23,1%*

Personnel Expenses Ratio

Personnel Expenditures / Total Expenditures 55,0% 55,9% 47,2% 57,5%*

Operating Expenses Ratio

Operating Expenditures / Total Expenditures 80,5% 79,6% 79,1% 70,7%

All cities can theoretically borrow in the next 5 years, based on their cashflows available for

debt repayment. This is an opportunity to create significant budget increases available for

capital investments in green infrastructure on the short term. However, despite of some

specific potential actions identified during workshops, none of the cities included actions to

improve their fiscal capacity in the draft GCAPs they produced. The potential borrowing

capacity of each city is presented in table 5.8 below.

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Table 5.8: Potential Borrowing Capacity

Rupiah billion First year 5 years

Malang (2016 – 2020) 1.445 3.532

Medan (2015 – 2019) 3.031 5.523

Batam (2016 – 2020) 1.452 3.509

Kendari (2016 – 2020) 813 1.591

Only Batam finished the analysis of what the city is spending on Green Attributes (see Table

5.9). The other Green Teams did not follow-up on this action, despite assistance offered by

the city facilitators. This is a pity because these data are also useful to estimate if budgets

are available for prioritized green programs and projects. Batam did not discuss the

implications of the analysis amongst the green team.

Table 5.9: Investment in Green Attributes

Ratios

% of total expenditures (actual numbers realized

in years data is available)

Batam

Green Community 0,55%

Green Planning and Design 0,12%

Green Open Space 0,28%

Green Waste 3,48%

Green Transportation & Urban Mobility 4,57%

Green Water 1,35%

Green Energy 0,00%

Green Industry 0,00%

Green Building 0,00%

Total 10,3%

Malang 5.3.2

Malang’s Green Team sees opportunities to further increase own revenues (PAD), but also

indicates that a number of actions are already ongoing to achieve this. Ongoing actions are:

Introduction of E-tax to increase collection rate

Set-up of 1-stop shop with easier procedures so that more people will apply for

licenses

Introduction of new taxes (extensification) for example for advertising

Tariff adjustment (for example street parking, from 1k to 2k)

60

Increase licenses provided by mobile desks (for example for small businesses)

Start public campaign to create awareness about tax obligations (sosialisasi)

Improve database building permit (IMB, currently 70%). This will also help to improve

revenues from property taxes (PBB).

Malang is not yet looking into the possibilities of implementing green tax incentives and

levies. For example, tax deductions (PBB) for green buildings, and higher taxes for polluting

buildings. But this is an option to be further explored as part of the yearly update of the

GCAP. At this time, Malang will focus on implementing the ongoing actions successfully.

Malang also looked into ways to improve the way it spends available budgets. The city

already has taken action to improve planning and procurement to reduce SILPA. The actions

are bundled under the SAKIP programme. The technical capacity of public officials is already

sufficient to plan and procure timely. It could be worthwhile to review the current decision

making structures: can decision making about Green Team proposals be improved?

(including budget allocation)

An initial analysis of the potential borrowing capacity showed that Malang could potentially

borrow little under 1.500 billion Rupiah (~114 million USD) in 2016 and over 3.500 billion

Rupiah (~267 million USD) between 2016 – 2020. The Green Team sees this as an

interesting opportunity and will discuss this with relevant public officials in the city. An action

plan for public borrowing can be developed together with decision makers. This should be

combined with training and technical assistance in the field of public borrowing. This option

can be further explored as part of the yearly update of the GCAP.

Actions and next steps:

Review and improve decision making structure related to planning, budgeting, project

preparation and procurement: can decision making about Green Team proposals be

improved? (including budget allocation)

Prepare and carry out action plan for public borrowing

Medan 5.3.3

The green team concluded that there are possibilities to further increase own local income

(PAD). Possible specific actions to increase PAD that were brought up by the green team

are:

Introduce electronic tax collection system. This will increase collection rates, for

example for restaurant tax and entertainment tax

Improve database for IMB (building permits) and PBB (property tax)

The green team intends to develop a RIAP (revenues improvement action plan) to

further explore these and other options and to formulate specific actions to achieve

this.

To improve budgets available for capital expenditures, the green team sees

opportunities to decrease yearly unused cash balances by improving procurement

and planning. This could partly free up funds for capital projects. Possible specific

actions identified are:

Advanced procurement: Medan can start procurement procedures before the local

budget (APBD) is officially formalized. By this Medan can avoid delays.

Medan is already making use of E-procurement system (electronic).

An initial analysis of the potential borrowing capacity showed that Medan could potentially

borrow over 3.000 billion Rupiah (~230 million USD) in 2016 and over 5.000 trillion Rupiah

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(~424 million USD) between 2016 – 2020. The green team indicates that this looks

promising. The green team will discuss with high level decision makers, the possibility of

attracting loans for green actions and projects that do add value to Medan’s economy and

livability but for which no budgets are currently available and actions to further explore this

opportunity. The city will put special attention to its low classification (score 0,25) according

to MoF Regulation no.33/PMK.07/2015 on Map of Local Government Fiscal Capacity.

Actions and next steps:

Prepare and implement a Revenue Improvement Action Plan (RIAP)

Discuss the possibility of attracting loans for green actions and projects that do add

value to Medan’s economy and liveability but for which no budgets are available.

Batam 5.3.4

Batam’s Green Team sees opportunities to further increase PAD. This will be necessary to

achieve the current mayor’s goal to increase total revenues to Rupiah 4.000 billion (from

around 2.000 now). A specific opportunity identified is implementing an electronic tax and

levies system. This can significantly increase local income (PAD). Specifically, electronic

systems could be applied for collection of parking levies, solid waste levies and restaurant

taxes, and also waste levies. For example, for waste levies, the potential revenues are

Rupiah 75 – 80 billion yearly of which currently only Rupiah 22 billion is collected.

Batam is not yet looking into the possibilities of implementing green tax incentives and levies.

For example, tax deductions (PBB) for green buildings, and higher taxes for polluting

buildings. But this is an option to be further explored as part of the yearly update of the

GCAP.

An initial analysis of the potential borrowing capacity showed that Batam could potentially

borrow over 1.500 billion Rupiah (~114 million USD) in 2016 and over 3.500 billion Rupiah

(~267 million USD) between 2016 – 2020. The Green Team showed interest in the significant

borrowing potential resulting from this initial assessment. However, the Green Team did not

take a clear position on what to do with this knowledge. No actions were formulated so far.

The city could consider to develop an action plan for public borrowing can be developed

together with decision makers. This should be combined with training and technical

assistance in the field of public borrowing. This option can be further explored as part of the

yearly update of the GCAP

While the analysis on Green Attribute expenditures has been prepared, no discussions have

taken place about this in the Green Team. It can be seen that waste, transportation and

water get most budgets. This is in line with the priorities laid down in the GCAP. No budgets

are allocated for energy and industry because investments for this fall under the local

privatized PLN (energy) and PB Batam (industry). It is noteworthy that no budgets are

allocated to green buildings.

Actions and next steps:

Increase PAD (Electronic tax and levies system, increase collection rate waste levies)

Discuss with key decision makers such as the Mayor the option to further explore

Batam’s borrowing capacity.

Kendari 5.3.5

Kendari’s Green Team sees opportunities to further increase own revenues (PAD). A

Cadastre – improving data on land ownership and use - could help to increase the collection

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rate of PBB (land and property tax). Also, Kendari is implementing automatic portal system

and electronic parking.

Kendari is not yet looking into the possibilities of implementing green tax incentives and

levies. For example, tax deductions (PBB) for green buildings, and higher taxes for polluting

buildings. But this is an option to be further explored as part of the yearly update of the

GCAP.

Kendari also looked into ways to improve the way it spends available budgets. Non-

discretionary expenses are hard to decrease, especially the costs of personnel. Government

employees have contracts for life. Based on the discussions held, Kendari intends to focus

its efforts on increasing PAD. PAD measures are easier to implement and Kendari is already

more efficient in spending the available budgets for CAPEX than the other cities participating

in the Green Cities programme.

An initial analysis of the potential borrowing capacity showed that Malang could potentially

borrow little under 800 billion Rupiah (~61 million USD) in 2016 and over 1.500 billion Rupiah

(~114 million USD) between 2016 – 2020. However, the Green Team indicated that Kendari

does not have the human resources to prepare a loan agreement. There is a need for

training and technical assistance in the field of public borrowing. Whit that, the borrowing

option can be further explored as part of the yearly update of the GCAP.

No actions have been formulated.

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Current Status of TA 6

The Consultants’ initiative to require the cities to issue a Mayoral Decision to create a Green

Team of local stakeholders that would be in charge of preparing the action plan was

essential. Without that, the TA would have had no legitimate partner in the municipal

government to prepare a GCAP, and have it endorsed by the Mayor. The actual signing of

the GCAPs by the Mayor is still pending the presentation of the final version of the GCAPs.

Participating in the MPWH’s Green Cities Program (P2KH) since 2011, the 4 cities had

previously only worked on a ‘starter kit’ of 3 green attributes (green planning & design, green

open space, and green community), The TA had challenged them to tackle some of the

‘heavier’ attributes such as green waste, green water, and green transport, and the 4 cities

had responded by proposing GCAPs including a pipeline of infrastructure projects.

The TA was experimental in nature because the methodology had to be developed during

the TA. The Green Teams have by and large adopted the 10-step action planning

methodology because it was pre-tested in the field and modified as necessary. Some local

variations emerged based on Green Team preferences. Especially the Project Briefs

proposed by the consultants were eagerly adopted as they served to create a pipeline of

priority projects.

All 4 cities had different characteristics that required a tailor-made approach. This was time-

consuming, but with the operational framework now developed it can be safely predicted that

the process should take only one year in the future as opposed to the two years allocated to

the TA.

The Consultant had resolved that the GCAP would not replace or conflict with statutory plans

such as a city’s Medium Term Development Plan (RPJMD), but instead would serve to

‘green it up’ because each incoming Mayor has to produce a new RPJMD within 3 months of

taking office. In 2016, the GCAPs for Medan and Batam were produced in time to ‘green up’

the RPJMDs for those cities. In Kendari and Malang, the ‘greening up’ will have to wait till

2017 when new Mayors are elected. By the time the Draft Final Report was submitted, it

was not yet known to what extent the Medan and Batam GCAPs had been able to inform the

new RPJMDs.

The Green City Profile model, although deemed effective when applied consistently, could

not yet be fully embedded in local practice during the CDTA period because it would require

more training and coordination than was available. The Consultant, therefore, could not

ascertain whether the Green City Profile will continue to be used as an active tool for

integrated planning by the Green Teams.

By the time the Draft Final Report was submitted, some project proposals in the pipeline had

apparently been submitted to national government for consideration before the Mayor had

signed off on the GCAP. The Medan Mebidang water supply project, for instance, was

recently included in Presidential Decree No.3/2016, but the Consultant could not ascertain

the contribution of the Medan GCAP in this respect.

Evaluation of the TA in the National Green Cities Roundtable in Surabaya 6.1

Without having participated in the Green City Program, the city of Surabaya is considered the

leader in Indonesia’s Green City Development because of the relative wealth of experience

available. The ADB agreed to hold the final CDTA evaluation workshop in that city. The

64

Consultants endeavored to engage key decision makers in Surabaya and Jakarta, and

scheduled the event for the end of May 2016 to coincide with the City’s 723rd Anniversary.

The Roundtable was the final consultative forum of the 2-year TA for before the submission

of the Draft Final Report and debriefing with ADB in Bappenas.

Its main purpose was to get the 4 participating cities together with the ADB, Bappenas,

MPWH, and the TA team to share experiences with Green City Action Planning and to be

informed on national urban policy development including green city development. The

Roundtable was used to evaluate the TA. This exercise was led by Bappenas, and

implemented by two groups consisting of delegates from two cities each. All 4 cities rated

the CDTA as successful, and raised special points of interest that applied to their city as

described below.

Malang 6.1.1

The city added ‘green education’ as an attribute to develop because of the importance

attached to preparing youth for a more active role in green urban development and

management. In the final action plan (GCAP), however, green education did not make it to

the list of top priorities and was rescheduled for medium-term initiatives.

Batam 6.1.2

The city added ‘green industry & commerce’ as an attribute because of the importance

attached to environmental management of industry and commerce in the Batam special

economic development zone. It had faced a special problem in that the Batam Development

Authority as part of national government and the Municipality of Batam within the same

geographic area had different jurisdictions and authorities, whereas green development

cannot be limited to a single jurisdiction. In the end, the TA managed to bring the two parties

together to agree to resolve such issues in the interest of green development goals. The

potential value of the mediating role of the TA - the results of which will not be immediately

visible- should not be underestimated.

Medan 6.1.3

The city initially was not interested in participating in the TA, later changed its mind, was

subsequently disqualified by Bappenas because of unrelated problems, finally to be admitted

again, starting a year behind the other cities. However, it managed to catch up and finish at

the same time as the other cities. The impact on the TA team was significant because inputs

and timing had to be rescheduled several times, and the consultant had to submit a number

of contract variations for approval by the ADB.

Kendari 6.1.4

The city is relatively small with only 350,000 inhabitants surrounding a bay area with ample

green open space, but experiences shortage in power supply and water supply that hamper

economic development. It also has drainage, flood control, and sedimentation problems. In

cooperation with the UNESCO-IHE MARE project (a partner in the TA also funded by the

ADB), it was agreed to undertake an integrated bay area development project requiring

support from provincial and national government because it requires water catchment area

management across administrative boundaries. The grand scheme is to tackle all problems

together by generating tidal energy to eliminate the shortfall in power supply, dredging the

bay area to help resolve drainage & flood control problems, and use sediments to create a

landfill from sediments to develop eco-tourism in mangrove areas, and finally improve water

65

supply. Scoping all this was beyond the expertise to be provided by this TA, but actions

were formulated to work towards the realization of a large integrated scheme.

66

Lessons Learnt and Recommendations 7

Policy & Practice 7.1

Participants to the Final Roundtable in Surabaya agreed that a lack of incentives for

politicians to pursue agendas for long-term green development, resilience and climate

change mitigation hampered green development because it requires high levels of planning

and investment in the short and medium term while the potential concrete rewards will

become visible only long after their tour of duty. Hence, Green Teams realize they will

continue to face difficulties in persuading decision makers to adopt far-reaching strategies.

As greening problems are rarely confined to a city’s administrative boundaries, the need for

joint planning across administrative boundaries is a prerequisite for effective planning and

investment.

As executive power for urban investment is not with the local planning agency (Bappeda) but

with the Mayor, and legislative power is with the Council, while at the same time meagre

local resources are subject to political push-and-pull, there is no guarantee that even well-

prepared green action plans will be implemented as intended.

The Green Teams are expected to carry forward and safeguard the agreed Green City

Action Plans. However, there is a risk that in the absence of concrete incentives and

sufficient power, the Green Teams will not be fully pro-active and committed, that no local

champion will come forward or that the Green Teams will not be able to safeguard

implementation of the GCAP.

Some stakeholders have observed that the GCAP, despite being embedded in the local

development planning and budgeting process, is only as strong as the city’s commitment to

the local plans and budgets that are made legally binding by LG Regulation. The

Roundtable’s main recommendation, therefore, was for Bappenas to strengthen green

development policies to make them more result-driven and incentive-driven. No concrete

recommendations were formulated on how to do this.

Planning 7.2

Related to this, integrated development planning often is considered an exercise that is only

loosely connected to reality. The cities expressed the need for continued technical

assistance to develop local capacity and functional partnerships to help cities implement and

periodically roll over their action plans (GCAPs). The current Green Teams are convinced of

the importance of their role, but feel they don’t have sufficient strategic planning and

technical and financial capacities to be self-driven. They need to become stronger in order to

be more credible, and become more able to influence decision-makers. The Green Teams

recommended using more or less permanent facilitators (as opposed to the intermittent

facilitators used in this TA) as well as expert advice on technically complicated project

proposals.

Finance 7.3

As this was not part of the agenda of the Roundtable, the Consultant undertook to formulate

a number of recommendations related to finance:

High level decision makers “buy-in” crucial: the Fiscal Capacity Analysis (FAR)

should have resulted in more actions and active discussions within the Green Teams. It

is suggested that in possible next TA’s using the GCAP methodology, the Fiscal

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Capacity Analysis is only started once the intrinsic will to critically review city budgets is

expressed by key decision makers, most importantly the Mayor. Given the polical

sensitivities of the Fiscal Capacity Analysis, it is crucial that high level decision makers

appoint a Green Finance Champion with a clear mandate to come up with

recommendations to increase revenues and spend available funds more efficient.

Focus on specific topics as soon as possible: even the simplified FAR looks into

improving cities’ fiscal capacity from various angles such as: (1) improving own local

income; (2) spending budgets more efficiently; (3) allocating sufficient budgets to

achieve green ambitions and; (4) borrowing. While we believe the FAR is instrumental

to discuss possible improvements, we suggest cities to focus on specific questions

earlier in the process.In all cities, it was observed that Green Teams prefered to

discuss and consider possible actions to increase own local income. If the fiscal

capacity analysis is undertaken with clear political support, it should aim to select

specific angles to further research. For example, a Revenue Improvement Action Plan

(RIAP) could be prepared to come up with specific recommendations to increase cities’

own local income.

Stimulate actions for borrowing: an initial analysis showed that all cities can

potentially borrow. We expect that this is also the case for many other comparable size

Indonesian cities. We suggest the financial part of a GCAP process to look in more

detail into borrowing capacity and formulate specific actions cities can take to borrow

money.

Standardize approach, definitions and measurement methods: given the

challenges resulting from the reluctance of Green Teams to carry out this analysis,

cities and Green Teams are encouraged to intensify their efforts after completion of this

TA. The central government could support this, as for the Green City profiles, with the

aim of standardizing the approach in terms of ratios used, clear definitions of these

ratios and methods to measure the ratios. For example, currently it is arguable what is

the basis to label different budgets lines as “green”.

Incorporate Alternative Mechanisms in cities’ development policies: even for

Medan and Batam and certainly for the other cities are relatively new and experience is

little. Cities could use the knowledge gained during this TA, to discuss and decide how

they want to structurally incorporate the application of Alternative Mechanisms in their

development process. The materials produced during this TA, and meetings and

presentations held with the Green Team provide a good starting point to do this.

Set-up dedicated units for Alternative Mechanisms: dedicated units can be set-up

by cities that decide to structurally incorporate Alternative Mechanisms in their

development policies. These units can inform, train and guide city departments to

identify and prepare projects that can attract alternative sources of finance and funding.

Make use of international experience and experts: to succesfully apply Alternative

Mechanisms, cities will have to go through a learning development curve. Cities are

encouraged to make use of international experience and experts to guide them through

this process. In this way, local expertise can be built. Involvement of international

experts can be decreased over time once Indonesian experts have incorporated their

knowledge and experience.

Apply for support instruments: the learning curve for applying Alternative

Mechanisms comes at significant upfront costs. External experts need to be hired to

prepare projects, in many cases international experts. Luckily various national and

international agencies can be asked for assistance once cities have identified projects

they want to prepare making use of Alternative Mechanisms, such as from National

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Government, LPPI (previously PT SMI), CDIA and other international development

organizations and banks.

The ADB mission concluded the Roundtable with a presentation on ‘Lessons Learnt’, and

expressed the hope that some of the priority project proposals would make it to the Blue

Book and get to the next stage of feasibility studies during 2016 for possible implementation

in 2017-2018. The conclusions and recommendations for future green city action planning in

other cities using the methodology developed, possible improvements, and the roles of the

various stakeholders, are described in the next section.

The fate of the GCAPs 7.4

Commitment to the GCAP may wane before the end of 2016 if bankable project proposals

are not yet in sight, resulting in a local disconnect from the process. This is understood by

the ADB and the EA as an inherent risk associated with this type of TA.

Despite the coaching provided by the TA Team to develop local capacities, there is no

guarantee that Green Teams will commit sufficient resources in terms of time, competent

staff, and money to produce a viable GCAP and commit to its implementation. The TA Team

is ultimately responsible for the agreed outputs, even if in the end they will not be locally

embedded products.

The question remaining is: Will the GCAP stick as an action plan and get implemented and

updated? In the opinion of the Consultant it can, as long as GoI makes a stance on green

and sustainable urban development, supported by clear policies and appropriate incentives.

If not, the TA will remain a pilot project. This will be further discussed in the section on

Conclusions and Next Steps.

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Conclusions and Next steps 8

National Policies on Urban Infrastructure Development 8.1

The National Development Planning Agency Bappenas and the Ministry of Finance (MoF)

have been preparing a new financial institution called the Infrastructure Development

Finance Institute (IDFI or LPPI - Lembaga Pendanaan Pembangunan Infrastruktur) which

basically would be the result of merging two parastatals, the Indonesia Infrastructure

Guarantee Fund (IIGF) and the multi-Infrastructure financing facility PT. SMI (Sarana Multi

Infrastruktur).

In parallel to that, the World Bank is preparing the Regional Infrastructure Development Fund

(RIDF) with a mandate (among others) to support the LPPI. These initiatives are soon to be

included in the public infrastructure investment portfolio (aka Blue Book) that is managed by

Bappenas and MoF.

At the same time, the Directorate General of Human Settlements in the Ministry of Public

Works and Housing (MPWH) that is in charge of the Green Cities Program is preparing a

National Urban Development Program (NUDP) for which is the Implementing Agency and

Bappenas the Executing Agency, also to be included in the Blue Book. Once that is done,

Bappenas will request participation in the NUDP by the ADB and other Donor in the form of

loans and grants.

While the LPPI is being set up, PT. SMI has started working on its new mandate to provide

support to the RIDF in helping local governments prepare bankable project proposals and

assist them in managing the projects. Bappenas is proposing to link the GCAP process to the

PT. SMI program once the 4 Green City Action Plans are ready in order to facilitate the

process of developing bankable project proposals.

GCAP Methodology Development 8.2

Development of the GCAP methodology has resulted in Version 1.0, but additional support is

still required to bring it to Version 2.0. The Consultant believes that the methodology provides

an important tool for the development of GCAPs throughout Indonesia as it has been

designed specifically with the Indonesian institutional context in mind.

While questions remain about the future of GCAP implementation, the process now been

established, and has so far proved to be quite successful. The Consultant believes that once

the methodology is finalized, a useful knowledge product can be put together to help guide

Indonesian cities along the creation of their own GCAP.

There is reason to believe that a finalized and streamlined methodology could easily be

implemented by any city within one budget year. However, the methodology will still have to

be consultant-led for now. This does not in any way detract from the city’s ‘ownership’ of the

plans. Rather, the consultant acts as a moderator and facilitates discussion throughout the

different steps.

Eventually, the hope is that the methodology will become adopted and mainstreamed into the

central government’s green city program for Indonesia (P2KH). This will ensure that

sustained political will and momentum will push the GCAP methodology to the forefront of

green urban planning in Indonesia. Initial suggestions for consolidating the GCAP

Methodology are shown in Table 8.1 below.

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Table 8.1: Initial Suggestions for Consolidating the GCAP Methodology

Version 1.0 Version 2.0

Step 0

GoI socializes the CDTA to the four cities

GoI approves and fields TA to help prepare GCAP

Green development often concerns planning issues that are not confined to municipal boundaries, so in some cases one or more adjacent districts, provincial government, or even national government need to be involved. The MoU for the CDTA, however, did not describe such inter-government implementation arrangements.

Startup sequence:19

GoI distributes GCAP Guide V.2.0 to Cities;

GoI appraises commitment and readiness of interested City (local champions);

Mayor issues Decision on Green Team based on agreed format, and allocates budget from APBD

Green Team prepares Baseline Profile based on agreed format;

GoI provides short preparatory assistance to complete pre-qualification

GoI signs SOP/MOU with Mayor

Goi approves and fields TA to help prepare GCAP

20

The consolidated GCAP methodology specifies arrangements for the coordination of GCAP preparation across jurisdictions and between levels of government.

21

Step 1 Issue Mayoral Decision establishing GCAP Green Team (SKW Pokja Hijau)

Move to startup sequence; Mayor has to safeguard multi-stakeholder, multi-year budget character of SK

Step 2 Visioning: Analyze Strengths, Opportunities, Aspirations, and Results (SOAR)

(no change) Note: Set time for completion (<1 month) to avoid loss of momentum

Step 3 Apply ‘Green Lens’ framework for livable and sustainable city development (social, environmental, economic) Use Multi-Criteria Analysis (MCA) to agree on issues considered most important

Develop Roadmap for Green Development (previously under Step 4) Note: Set time for completion (<1 month) to avoid loss of momentum

Step 4 Prepare Green City Profile (GCP) with maps and baseline performance indicators (based on model)

Move to startup sequence; Set time for completion (<1 month) to avoid loss of momentum Profiling should be simple and focus on a few key performance indicators based on available or easy to collect data (to be agreed by GoI). If needed, more indicators can be developed to monitor program success at the action planning phase. Monitoring and performance measurement needs to be done at national level, firstly to highlight performance relative to other cities, and secondly to ensure a realistic SOAR. Technical assistance can be given in project/investment, action planning and project preparation. Remove fiscal capacity analysis from GCP.

Step 5 Prepare long list of program proposals (existing, planned, new, short,

(No change) Note: Green Team prepares Long lists,

19

The correct sequence is to be discussed by the team that will prepare Version 2.0

20 This assumes that GoI can provide qualified GCAP facilitators

21 Or between municipal government and a development authority as is the case in Batam

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Version 1.0 Version 2.0

medium, long)

Program Briefs & Project Briefs in roundtable discussions but only when all partners are around the table. This requires facilitation by strong (international standard) civil/environmental engineers and finance consultants.

Step 6 Use Multi-Criteria Analysis (MCA) to prioritize Programs and prepare Program descriptions; assess ease of implementation (checklist)

(No change) Note: Set time for completion (<1 month) to avoid loss of momentum

Step 7 For prioritized Programs, prepare Program Briefs (or Project Briefs, depending on size); Assess alternative financing mechanisms and options

Note: Given the need for basic services to meet minimum public service standards, it is difficult to inspire a Green Team to think in terms of integrated green plans based on results of the SOAR analysis. Sectoral plans are a simpler entry point than integrated plans, so the Green Team can start with sectoral projects to meet public service standards, and integrate them later instead of trying to define integrated programs from the start. Change: As cities are still relatively unfamiliar with exploring alternative modes of financing, and are bound by current government regulations while new ones are still being prepared (such as availability payments), the finished CDTA could only serve as an exercise to sensitize Green Teams to the options that are currently available for priority programs/projects. Any TA to work out financing modalities would normally be provided as part of a feasibility study (FS) and require specialist inputs. If cities so require, a short TA can be planned to help mayors work out the AMFs for an already approved GCAP, or to grant a TA for FS preparation. Note: Set time for completion (<2 months) to avoid loss of momentum

Step 8 Through Focus Group Discussion (FGD), prioritize Programs (Projects) based on institutional and fiscal capacity, risks, and impact criteria using Multi-Criteria Analysis (MCA)

(No change) Note: Set time for completion (<1 month) to avoid loss of momentum

Step 9 Based on a set of agreed prioritized Programs (Projects), prepare a GCAP that explains how to achieve the agreed results, mainly for the short term

(No change) Note: Set time for completion (<2 months) to avoid loss of momentum

Step 10 Using Development Monitoring Framework (DMF), (SMART Logframe) or similar method, verify achievement of results; update City Profile and GCAP annually.

(No change) Note: performance measurement tools will be applied once GCAPs are implemented and reviewed

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Future TA Delivery 8.3

In more or less the same way that the current CDTA was organized, TA delivery in the future

can be undertaken through short intermittent facilitation combined with a couple of key

workshops at city level:

Based on national baseline data, a SOAR can be done, and a Roadmap developed;

Workshop for Program/Project long list development and MCA;

Workshop to discuss prioritised Program/Project Briefs;

Workshop to discuss action development and financing.

In the future, it cannot be expected that cities will have joint initial visioning workshops and

final roundtable workshops because they will probably be on different timelines.

Next Steps 8.4

Following the Roundtable workshop in Surabaya, a final wrap-up meeting was held in

Bappenas with the Consultants (see Appendix X for the presentation used by the Consultant

for reporting to Bappenas). A number of next steps were discussed and in principle agreed

upon:

1. As a first activity, Bappenas is willing to convene a meeting of the Mayors of Batam, Kendari, Malang and Medan in Jakarta to jointly sign their GCAPs once finalized.

2. As a second activity, Bappenas is willing to convene an inter-agency workshop to discuss and agree on the GCAP Methodology Version 2.0 before disseminating it as a knowledge product. The approved and signed GCAPs can be used as examples for other cities.

3. As GoI is currently preparing a new framework for urban infrastructure development financing that is expected to start functioning in 2017, the GCAP can be used as a tool for mainstreaming the preparation and pipelining of bankable investment proposals based on integrated local development planning with increased focus on green and resilient development and climate change mitigation. As such, GoI has an interest in consolidating the GCAP as a knowledge product, print it as a guideline, and disseminate it.

4. Bappenas is willing to consider establishing a national inter-agency standing committee of selected experts (“Green Cities Forum”) that can screen applications and select interested cities based on pre-qualification, provide training on GCAP, periodically visit cities to assist them with green performance appraisal, and liaise with support facilities such as the CDIA; it can act as a clearinghouse for the production and exchange of knowledge products and information, as well as the processing of requests for support in preparing masterplans, feasibility studies, local regulations, or the creation of a task force to move priority project proposals forward. This will ensure that sustained political will and momentum will push the GCAP methodology to the forefront of green and resilient urban planning in Indonesia.

5. In the absence of guaranteed sources of infrastructure project financing, the proposed Green Cities Forum should monitor GCAP implementation in active cities, especially for actions that do not require external support, as that was one of the main purposes of the GCAPs.

Several issues remained outstanding as shown in Table 8.2 below, and were left to further

consideration.

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Table 8.2: Outstanding Issues

Issues & Risks Proposed Solutions

1 During the CDTA, the 4 participating cities

had different levels of readiness, and

therefore required tailor-made facilitation.

GoI needs to apply a differential approach for TA

and training in which each city receives tailor-

made (flexible, intermittent) support, including

engagement of local champions in each city.

2 There is need for a paradigm shift that

provides concrete incentives to city

governments for turning action plans into

action, local knowledge into practice, and

local resources into investments.

GoI needs to formulate incentives that can

persuade city governments to voluntarily

improve urban management effectiveness,

efficiency, and equity. It is therefore suggested

that Bappenas establish a National Green City

Forum to address such issues and formulate

appropriate incentives.

3 There is need for more hard evidence that

sustainable green city development

brings real benefits; at present, some

cities will still be reluctant although the

MoU for the CDTA assumed that the

cities did not need to be convinced.

GoI needs to provide more concrete evidence of

the benefits of sustainable green city

development. A National Green City Forum

would be well placed to undertake basic

research to collect and disseminate such

evidence based on reliable facts and figures.

4 There is a risk that no suitable innovative

financing mechanisms are available that

city governments are able to manage.

In order to boost infrastructure investment, GoI

needs to promote efficiency gains in city

financial management and public service

delivery, while at the same time promoting

alternative financing mechanisms. This is

probably best achieved through regulatory

framework development, followed by regular

training programs combined with incentives.

City of Batam GREEN CITY ACTION PLAN 2035

1

Foreword by the Mayor Assalamuallaikum, Wr. Wb.

The City of Batam’s Green City Action Plan (GCAP) is an initiative that serves as a “roadmap” towards improving the quality of life in the city by applying “green attributes” generally known as green planning and design, green open space, green building, green energy, green transportation, green waste, green water, and green industry & commerce, all significantly based on and supported by a green community. The basic reason for the City of Batam to prepare a GCAP is to help

achieve development that is sustainable, fair and profitable at the same time because we are convinced that green development can realize economic and social equity as it will be able to suppress and manage conflicts between economic interests on the one side and the need for environmental preservation on the other side. The GCAP succinctly describes our priority programs as a reference for any citizens who want to understand our framework for aspiring to become a Green City, including external parties interested in participating in our Green City development. The government of the City of Batam commits itself to continuing the process of capacity development for greening the city through a multi-year and multi-stakeholder rolling green action planning process led by the “Green Team” to strengthen the City’s Medium Term Development Plan (RPJMD). The Green City Action Planing process is supported by an appropriate resource allocation based on a Mayoral Decision. Hopefully we will all be blessed with the help of the Almighty God in transforming the City of Batam into a Green City. Aamiin. Wassalam, Batam, August 2016

H. Muhamad Rudi SE.MM Walikota Batam

Hartanto Reksodipoetro Kepala Badan Pembangunan Batam

2

Table of Contents

Foreword by the Mayor .......................................................................................................................... 1

Table of Contents .................................................................................................................................... 2

Introduction ............................................................................................................................................. 4

What is a GCAP? ...................................................................................................................................... 4

Summary of GCAP Preparation Process .................................................................................................. 4

Green City Profile .................................................................................................................................... 8

Green City Development Strategy to 2035 ........................................................................................... 14

Batam Green Urban Development Strategy until 2035 .................................................................... 15

From Long List to Short List ................................................................................................................... 16

Long List of 19 Ranked Green Programs ........................................................................................... 17

Priority Green Programs ........................................................................................................................ 18

Final Selection of Priority Programs ...................................................................................................... 18

The Next Five Years – Priority Programs, Projects & Actions ................................................................ 19

Introduction ........................................................................................................................................... 20

Institutional Enabling Actions for “Green Team” and PMUs ................................................................ 21

The Six Priority Programs – Action Plans ............................................................................................... 22

Green Water – Action Plan Batam ........................................................................................................ 24

Program: Improving water quality in Duriangkang Reservoir ........................................................... 24

Green Waste – Action Plan Batam ........................................................................................................ 30

Program: Improvement of on-site sanitation system in parallel with ongoing wastewater network

and treatment project ....................................................................................................................... 30

Batam Green Waste Action Plan ........................................................................................................... 37

Program: Environmentally Friendly SWM System including WTE plant in Telaga Punggur ............. 37

Green Transport – Action Plan .............................................................................................................. 46

Program: Development of the “Trans Batam” Bus Rapid Transit System (BRT) ............................... 46

Green Transport – Action Plan .............................................................................................................. 52

Program: Development of Network of Bicycle Lanes and Footpaths in Batam City ......................... 52

Green Water – Action Plan .................................................................................................................... 58

Program: Improvement of urban drainage and flood control system .............................................. 58

The Six Priority Programs – Finance Actions ......................................................................................... 63

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4

Introduction This GCAP supports the National Urban Development Policy and Strategy (NUDPS) for the period 2015-2045. The long-term vision is to realize sustainable and competitive cities for people’s prosperity based on physical characteristics, economic advantages, and local culture by 2045. This vision will be achieved in three phases: (i) creating a national urban system, (ii) having urban areas meet national service standards and creating sustainable cities that are green, livable, smart and competitive, and (iii) strengthen governance and government institutions.

In addition, the GCAP is based on the “Green Vision” of the Mayor of Batam stated below:

“ACTUALIZING BATAM CITY AS A MODERN CIVIL WORLD PORT AND BEING THE CENTRE OF NATIONAL ECONOMIC GROWTH”

This vision is a broad statement, consistent with national urban development policies and strategies, and able to accommodate a number of green development goals.

One of the pillars for implementing the NUDPS is the Green Cities Program (GCP)1 which is implemented with the National Development Planning Board (Bappenas) as the Executing Agency, and the Directorate General of Human Settlements in the Ministry of Public Works and Housing (MPWH) as the Implementing Agency. The City of Batam has been participating in the GCP since 2010. It focused primarily on implementation of three ‘attributes’ (Green Planning and Design, Green Open Space and Green Community). With the new National Development Plan period that started in 2015, the City of Batam endeavored to scale up its GCP by promoting some of the ‘heavier’ green attributes such as Green Water, Green Waste, etc. by preparing a Green City Action Plan (GCAP) with technical assistance by the ADB.2

What is a GCAP? A GCAP is a time scaled green investment plan for a city. It includes specific actions for preparing and implementing prioritised investments over short/medium term, which covers urban management and institutional aspects, capacity development, and financing. Where appropriate, performance indicators are provided to enable monitoring and updating. While ‘actions’ focus on the short to medium term, it also provides a strategy for achieving the City of Batam’s green vision over longer-term time scales. This integrated action plan complements the City of Batam’s statutory planning process, notably the Medium Term Development Plan (RPJMD). Successful implementation of the GCAP would allow the City of Batam to become a ‘champion’ for Green Cities in Indonesia.

The GCAP uses the term ‘Green’ as a metaphor for cities that are clean, healthy, safe and energy-efficient so as to become liveable and sustainable. It also reflects efforts to balance the economy and the environment with social inclusiveness.

Summary of GCAP Preparation Process In 2015, the Mayor issued a Decision (SK 800/449.k/2015) to create an inter-disciplinary municipal ‘Green Team’ that would become responsible for preparing the GCAP and allocated a budget for its operations. The ‘Green Team’ was chaired by the Head of the Municipal Development Planning Agency (Bappeda) and intermittently facilitated by ADB consultants.

To realize this Green City Action Plan, it was essential to start with a vision for green development to guide the development of priority programs, projects, and manageable actions. The GCAP is the

1 Program Pengembangan Kota Hijau (P2KH)

2 TA-8518 INO: Green Cities: A Sustainable Urban Future in Indonesia - 2 Capacity Development (46380-005)

5

result of a process of identifying city development aspirations through a “green lens” to formulate a framework for sustainable development, and subsequently narrowing it down through a process of further analysis and selection to result in the formulation of several priority programs, which were then developed into detailed program briefs.

The Programs that will help the City achieve its vision for green development are shown in the “Green Development Strategy 2035” on page 16. Based on further considerations of implementability including current capacity limitations, the Green Team subsequently shortened the list drastically to focus on three priority Programs (a) Environmentally Friendly Solid Waste Management (SWM), (b) On-site Sanitation and regular septage desludging services and (c) Ecotech Garden to protect Duriangkang dam water quality as the main raw fresh water source of Batam city for the short term, and on three secondary priority Programs (d) Bus Rapid Transit (BRT), (e) Bicycle Paths & Pedestrian Walkways and (f) Urban Drainage and Flood Control System for the medium-to-long term. Because the GCAP is a rolling plan, programs, projects and actions may be added and modified periodically.

The six Priority Programs were used to prepare a list of Actions in the form of a spreadsheet as shown in “The Next Five Years – Programs, Projects and Actions”.

The City of Batam’s Green Team will prepare annual updates of the GCAPs as a rolling plan by adding new green project proposals in order to ‘green up’ the city’s future medium-term and annual development plans, starting with the new Medium Term Development Plan (RPJMD 2016-2020).

To clarify the GCAP formulation process, the two tables below show the “10 step approach” and “toolbox” used by the Green Team to systematically prepare its GCAP. This section serves to explain the intermediate steps and products that led to GCAP formulation.

6

7

The first (administrative) step was to establish a multi-stakeholer “Green Team” by Mayoral Decision. The Green Team then started visioning a green future, and used the tools from the ‘Toolbox’ diagram shown above to proceed from vision to aspirations and expected results.

Once the Green Team completed the SOAR (Step 2), it proceeded to ‘greening up’ the city’s existing Medium Term Development Plan (RPJMD) by applying a ‘green lens’ using the Livable Cities Framework and a Multi Criteria Analysis (MCA) to develop and prioritise programs (Step 3). The purpose of this exercise was to identify where existing and planned infrastructure developments fell short of achieving green objectives, and could be improved by adding components that would increase their green development content. This process will be repeated to inform the next RPJMDs to sensitize decision makers and gradually strengthen the green value or ‘greenness’ of development plans. Although the Green Team was free to introduce new ideas (for example MRT for Green Transportation, and LED street lighting for Green Energy), it opted not to do so because of other more pressing needs that needed to be addressed first. This was a deliberate strategy because existing plans already proposed in municipal plans should have priority.

At the same time, the Green Team started working on a “Green City Profile” (Step 4) with the aim of developing a baseline for performance measurement. The Green City Profile includes the results of Step 2 and 3. It also includes a “Roadmap” spreadsheet for green development, an environmental profile with thematic GIS maps used for integrated ‘rolling’ plan development, as well as an inventory of current and planned green initiatives. The Green Team used the Roadmap to rate the city’s green performance and progress towards green development objectives as part of a rolling plan process. The Roadmap uses generic green performance indicators that the Green Team can use to formulate short (2015-2019), medium (2020-2034), and long-term (2035-2045) targets toward sustainable development. The Roadmap’s aggregate score for all indicators combined can be red, yellow, or green. By objectively rating the Roadmap using 2015 as the baseline, the Green Team concluded that Batam’s aggregate score was still in the “red” zone. The section below is a summary version of the City’s environmental profile taken from the Green City Profile including current and planned initiatives from the Green City Profile. The full Green City Profile is attached to the GCAP.

In line with Step 5, 6, 7, the Green Team prepared a number of Project Briefs, undertook a fiscal capacity analysis for green infrastructure investment, and scoped options for alternative modes of financing. As all four Programs were adopted for action, there was no need anymore for prioritizing projects (Step 8). Step 9 has resulted in this GCAP, while Step 10 will be done to monitor performance when the next update of the GCAP is due.

The Fiscal Analysis can be found in Appendix A.

The Project Briefs can be found in Appendix B.

The Green City Profile can be found in Appendix C.

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Green City Profile The section below is a summary of the full Green City Profile developed by the Green Team as part of the action planning process, which is appended to the GCAP. It is shortened here to provide a brief introduction.

Batam is a group of small islands with municipal status, with Batam City located on the northernmost island near Singapore across the strait. Batam is the largest city in the Riau Islands Province of Indonesia, the third-largest city in Sumatra region after Batam and Palembang, and the eighth-largest city in Indonesia after Jakarta Raya, Surabaya, Bandung, Batam, Semarang, Makassar, and Palembang.

The Batam Free Trade Zone Authority (BIFZA) also known as the Batam Development Authority (BDA) or Badan Pengusahaan Batam (BP Batam) is a national organization located in Batam with a mandate to develop Batam into an international industrial hub based on the original Batam Industrial Zone created in 1970-1971. It now has 21 industrial parks with more than 1,000 companies currently in residence.

According to its mission,3 Batam is to become a leading economic region in Asia and the Pacific, and a major contributor to national economic development. Batam also aims to become a hub of export-oriented green industries, and a provider of nautical tourism, trade, and international transshipment.

Batam is an industrial boomtown, an emerging transport hub, and part of a free trade zone, the Indonesia–Malaysia–Singapore Growth Triangle, located 20 km off Singapore's south coast. The 715 km2 main island is the core of the municipality of Batam, of which 450 km2 is classified as urban. Batam administratively covers a number of scattered islands and islets totaling 2,200 km2, with Galang and Rempang islands to the immediate south connected to Batam by short bridges, collectively called Barelang. These two islands maintain their rural character. Bulan Island is also rural. The municipality has a population of 1,035,280 (May 2015). According to the 2010 national Census,

3 bpbatam.go.id

Batam is the fastest-growing municipality in Indonesia, with a population growth rate of 11% per year.

Batam feels the impact of rapid urbanisation. The City is becoming densely populated with newcomers and seasonal workers. This will cause a shortage of land to build on, and a corresponding rise in land prices, which in turn has had a negative effect on economic growth as well as environmental preservation.

Urbanization and industrial growth also causes environmental problems such as insufficient housing, water supply, industrial, commercial and household waste management, traffic congestion, and pollution of air and groundwater.

Even though the GCAP in principle only covers the municipality, in reality green development issues tresspass administrative boundaries, and this is an issue in the case of Batam. The BDA, established in 2007, considers the whole of Batam to be an industrial development zone, whereas the municipality of Batam (which obtained its status in 1999, decades after the original Batam Industrial Zone was created) wants to manage the City according to its ‘autonomous’ municipal status. Because of differing views and overlapping authorities, it has been difficult to align development planning and environmental management within the municipality with the broader interests of the BDA, and recently there have been high-level discussions about solving this problem by modifying the status of the BDA to share more authority with the municipality.

Spatial Development

The municipal Spatial Planning Department has only partial control over land use based on the current City’s Spatial Planning 2004-2014 as most allocation decisions are made by the BDA. The renewal spatial planning is still under development. The result is that the best sites are reserved for industrial purposes, whereas the municipality is left will commercially less attractive and harder to develop hills and slopes. As spatial planning is often associated with public open spaces, this appears to make sense, but it also prevents spatial planning from

9

becoming inclusive and integrated by mixing land use and providing green space near housing, places of work and public facilities.

One of the adverse effects of this is that new residents of Batam City encroach on land that is considered to be under BDA’s authority, for example water catchment areas.

Because of its geography, Batam’s spatial development is uneven. There is a development gap between the northern and southern parts caused by the general lack of public services and infrastructure in the southern part because the north is closer to the city, and therefore more attractive to investors.

Green Open Space (RTH) Population density is 470 people per km2 (May 2015) based on total administratively land area (2,200 km2), and 2,300 people per km2 (May 2015) based on built-up urbanized Batam city area (450 km2).

According to Law No. 26 year 2007 on Spatial Planning, ideally open space in Batam shall be 30% of the total area of 2,200 km2, or equal to 7,333 ha consisting of 20% public open space (4,888 ha) and 10% private open space (2,445 ha). According to the Government’s 2013 Green Cities Program (P2KH) report, overall green open space stood at 5,667 ha, but is it not clear if this low figure is based on the urbanized area on the main island only, because Batam as a whole is not densely populated and should be able to easily meet the standard. This shows that in the case of Batam, a uniform national standard is difficult to apply.

According to the Ministry of Public Works Regulation No. 5/PRT/2008, the City shall provide an open space of 250m2 at neigh-bourhood level (RT) (= 1 m2/capita), 1,250 m2 at community level (RW) (= 0.5 m2/capita), 9,000 m2 at village level (Kelurahan) (= 0.3 m2/capita) and 24,000 m2 at sub-district level (Kecamatan) (= 0.2 m2/capita). In practice, however, it is difficult to apply this standard.

There are plans to upgrade and increase public open space, mainly by developing a Batam Botanical Garden (Kebun Raya Batam) with 86 ha located at Sambau Village - Nongsa Sub-district with Government funding.

Batam also has plans to upgrade the existing Green Open Space master plan from the municipal budget, for which the engineering design is currently taking place. According to the P2KH report, several public areas have greening potential including green ways, public parks, and sport facilities covering a total of 196 ha. Potential private areas such as gardens and golf courses can contribute a total of 3,838 ha.

However, current greening plans and programs are currently not yet integrated with cultural heritage sites that fall under the Department of Tourism.

In addition, CSR funds should be able to significantly contribute to developing and safeguarding green public spaces, and be able to mobilize communities to campaign for more such facilities near their places of residence.

The overall target of the Batam Green Community is to achieve 30% green open space (20% public and 10% Private). Presently its primary concern is to ensure that green open area is not further reduced. It advocates for making good use of the open space for a number of social and small economic activities to reduce the chances for a possible change of function.

Green Energy Energy consumption (based on bill payments in 2013) was 1,993 GWh per year. This is projected to increase to 4,248 GWh in the year 2020. This target will be difficult to meet, but so far, no renewable sources of energy are available. A waste-to-energy plant that is currently being re-tendered (see Green Solid Waste converts to Energy below) is planned to supply 15 MW of energy, and undersea cables are planned to provide electricity to the small outlying islands.

There is future potential for using natural gas as a source of energy supplied from Sumatra main island and Natuna island, but for the time being it is still only for household use.

As energy supply currently is beyond municipal authority and its statutory development planning process, this GCAP has not yet attempted to specify actions to provide greener energy and reduce consumption. It is expected,

10

howeer, to become a component of the next GCAP.

Baseline Installed Capacity (MW)

Required Supply Capacity

2015 508,42MW 1.284,6 MW (73%)

Source: PLN Business Plan 2015-2024

Green Industry According to Bappeda, annual CO2 emissions amount to 7,375 ton for transport, and 125,811 tons for industry. So far Batam has not yet been able to persuade local industries to reduce emissions and apply energy saving measures such as LED lighting, efficient air conditioning, energy-efficient manufacturing, efficient water and waste-water management, clean industrial solid waste management, efficient logistics, etc. Good practices elsewhere demonstrate that this is not only meant to improve the environment, but also to ‘green up’ industries with a view to future competitiveness and sustainability.

Because of the volume and speed of its industrial operations, Batam is in need of special measures to manage industrial development. Even though regulations for industrial management exist, they are not always consistently applied. So far, Batam has not yet been able to fully inventorize, assess, and enforce regulations on industrial management, and for that reason no actions have yet been proposed in this GCAP. It is expected that it will become an important action area in the next GCAP.

Green Water: Drinking Water Supply Batam has a relatively good water supply from 5 reservoirs covering 97% of the population on the main island at the rate of 3,500 litres/sec. On the other islands, average service coverage is only 30%. The reservoirs are surrounded by fences to protect them from human encroachment. Because of its small size and salt water intrusion, Batam cannot use groundwater as a source of drinking water. The BDA has a water supply contract with a private Indonesian company PT Adhya Tirta Batam (ATB). The shareholders of ATB consists of PT Bangun Cipta Kontraktor 50% and Sembcorp of Singapore 50%. PT ATB has a program to supply water

through kiosks to informal settlers who are not eligible for a water connection. Non-revenue water (NRW) was 23% in 2014, and PT ATB has set a target to reduce this to 20% by 2020.

Because of the limited size of the reservoirs, Batam will have to develop additional sources of water supply to keep up with increasing industrial, commercial and household demand. In addition, the reservoirs and surrounding catchment areas need increased surveillance to prevent encroachment, pollution, and rapid shallowing. Also, it has proven difficult to stop residents from creating fisheries in the reservoirs.

Green Water: Drainage & Flood Control At present, flooding is not yet a critical problem, even though after heavy rains some roads can be inundated for several hours.

However, this will change in the future as a result of rapid urbanization and industrial development, so now is the time to prepare an urban drainage and flood control Masterplan. This has not yet been included in this GCAP because preparatory consultations and data gathering are required between the BDA and the Batam municipality. It should, however, become part of the green development strategy until 2035 (see Climate Change below).

Green Solid Waste At the moment, the City Sanitation Department collects 750 tons of household waste, 140 tons of non-toxic industrial waste, and 50 tons of yard and street waste.

All waste is disposed in a controlled landfill site managed (40 ha) located at Telaga Punggur by the City Sanitation Department. Industries have to deposit their non-toxic waste in a special site (KABIL) owned by the BDA and managed by a private operator. Toxic industrial waste is collected and managed by another entity (PT Prasadha Pamunah Limbah Indonesia) and transported to Cileungsi in the district of Bogor (West Java Province) for treatment.

There are 101 household-operated waste banks in Batam, and 10 school-operated ones in which people can deposit and ‘save up’ waste for

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money. Even though they collect about 30.5 tonnes of waste per month, their combined capacity so far is only 0.14% of total household waste production.

Until now the City has not enacted a policy to force households to segregate their waste at home, which would greatly increase the effectiveness of the waste banks. According the the Ministry of Environment & Forestry, the Government of Indonesia aims to establish parent waste banks in Batam (and five other cities, i.e. Makassar, Jakarta, Surabaya, Semarang, Surakarta) to coordinate all other subordinate banks and waste management services in 2016.

Anticipating future demand for waste disposal and green energy, a Waste-to-Energy Plant is planned with a capacity of 700 tons/day. It is expected to generate 15 MW of power that will be sold to the National Electricity Company (PLN). The WTE plant is to be managed by a private operator under a PPP contract.

Even though a winning bid is already available, the project has been put on hold pending the drafting and enactment of a Local Regulation on the Tipping Fee, which is proposed as part of the actions to be undertaken for SWM in this GCAP.

Green Human Waste Current human waste management capacity is 33 lps, and only connects 2.3% of the population.

Industries are required by law to build their own human waste processing facilities, but so far controls are not stringently applied, and there is no mechanism to require ships passing through the Batam port to manage ship-borne human waste that pollutes the coastal areas.

According to a study by EHRA (Environmental Health Risk Assessment) 75% of unconnected households use private septic tanks. Based on a current population of 1,030,528 and a water consumption of 150 litres lpcd, and assuming that 80% of water is converted into waste, daily human waste production is about 123,000 m3. Total waste management capacity currently stands at 14,720 m3 per day or 12% of required capacity. A new centralized system with a capacity of 230 lps is being planned, and is

expected to serve 11,000 household connections or 16% of the population by the year 2020. The Sanitation Masterplan has identified 5 sites for centralized household human waste processing. The pilot project located in Batam Centre area is financed through a loan from Korea managed by the Government. For this GCAP, a number of actions are proposed to support development of an integrated off-site sanitation system.

Green Buildings Green buildings have not yet become an important attribute for green development in Batam, but that is likely to change in the future because of its potentially significant contribution to saving energy (see section on Green Energy) and other resources such as water, as well as improving environmental health, thus providing a safer, environmentally friendly, and more productive environment. Initially, public buildings can acquire green certification provided by third parties to help make the concept familiar. Also, the Government can provide incentives for construction or retrofitting buildings to meet energy efficiency criteria, especially in industrial areas. In the future, certification should become a prerequisite for issuing building permits for any type of construction. The province of DKI Jakarta has issued the Governor Regulation No. 38 Year 2012 on The Green Buildings that can be used as an example for Batam City. So far, Batam City has no Green Building regulations.

Green Transportation Traffic congestion has not yet acquired critical proportions in Batam, but needs to be anticipated as a result of rapid urbanization.

The BDA has prepared a Transportation Masterplan. There are plans to build a monorail system starting 2017 with a length of 54 km. It will cross Batam Center from east to west and north to south. According to the director of infrastructure in the BDA, financing will be achieved through a PPP contract. Another component of the Masterplan is a 20 km network of bicycle paths.

Because Batam’s built-up area is not very dense, it has good potential for non-motorized

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transport (NMT). Shaded/canopied pedestrian walkways and bicycle paths (essential in tropical climates) can be segregated from automotive roads. It should be noted that the original 1970 design of Batam Center (by Bechtel and Nissho Iwai) was car-free.

As a contribution to traffic management in the short term, an area traffic control system (ATCS) will synchronize the operation of traffic lights at major intersections to help reduce traffic jams.

In addition, the GCAP strategy to 2035 anticipates the development of a BRT system.

Baseline Number of Motorized Vehicles

% Of Citizens Using Public Transport

2015 5.531.777 3.0

Source: BPS Statistics 2015

Green Community Batam has a program for engaging urban residents in greening the City, among others by planting trees in open spaces, mangrove conservation, household waste segregation, and promoting the use of bicycles for going to work. Private companies take part in this through their CSR initiatives.

Batam’s Green Community was established in 2013 in line with the Government’s Green City Program (P2KH). Its Forum undertook a series of promotional acclivities that were packaged under the theme of Green Festival.

Climate Change As outlined in Indonesia’s National Action Plan for Climate Change Adaptation (RAN-API), the projected rise in sea levels (SLR) has a strong potential to become a serious threat because of the country’s many maritime and coastal activities. Around the year 2050, global warming is expected to raise seawater levels to 35-40 cm above current levels.

Based on that projection, the maximum SLR in Indonesia could reach 175 cm by the year 2100 (Bappenas, 2010b).

The map below (prepared by Maplecroft) with the index below it shows that Batam falls in the “extreme risk” zone that combines risks of rising seawater levels, floodings from increased rainfall, etc. The effect on Batam needs to be

modeled in more detail in order to plan for appropriate mitigation measures.

Resources The City of Batam currently does not have all human, financial, institutional, regulatory, and other resources needed to simultaneously address all of its green development problems, but hopes that this GCAP will adequately address some of the urgent issues that hamper sustainable development. The main resource issues are summarized below.

FISCAL RESOURCES

Batam is still highly dependent on high levels of government transfers to its municipal budget. 63% of total budgets came from transfers between 2011 and 2014. Batam spends only little over 20% of the budgets available for capital investments. Currently Batam’s yearly budget is not enough to finance the preparation of green capital projects such as a BRT, Waste to Energy and others. As part of this, GCAP Batam has looked into ways to improve this situation by:

Increasing own local revenue

Attracting loans (municipal lending)

Use available funds more efficient towards green capital projects

Attracting alternative sources of finance to projects, for example by setting-up Joint Ventures with the private sector, BOT contracts, involving communities through cooperatives, etc.

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INSTITUTIONAL RESOURCES

Related to attracting alternative sources of finance, most of Batam’s know-how is currently vested in the BDA, and it will take some time to develop it for the municipality.

REGULATORY RESOURCES

Batam still needs regulations that will allow it to effectively implement and enforce the environmental issues it wants to address, such as regulations on water management, transport management, and waste management. These will be part of the GCAP.

Conclusion Based on the City Profile, as well as agreed priorities based on the existing situation and capabilities, the City of Batam has defined actions related to prioritized programs and more generic actions focusing on the short term to make these programs and projects more achievable. In the GCAP, actions are formulated to help improve fiscal and institutional capacity, create more durable partnerships, strengthen the regulatory framework and ability to finance projects, and potentially increase impact of such projects.

The Profile signals that sanitation and waste management are the key focus areas for the City at the moment, and justifies selection of these programs. In parallel, Batam should prioritize increasing the budgets they have available for green capital expenditures and improve their institutional capacity and ability (human resources) to prepare projects so that they can be offered to involve the private sector and others (such as national government programs and development banks) to finance. This will be further addressed in the next sections of this GCAP.

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Green City Development Strategy to 2035

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Batam Green Urban Development Strategy until 2035 After completing the SOAR, ‘green lensing’ process, selection of priority Programs going from a long list to a short list, the Matrix below summarizes our green urban development strategy until 2035, showing green attributes and the rough time frame for realizing them. This GCAP specifies green development actions for the current plan period until 2019, but will be expanded and rolled over to future plan periods.

GREEN ATTRIBUTES 2015-2019 (this GCAP) 2020-2024 2025-2029 2030-2034 2035-2045

1 Green Planning, Finance, and Implementation Management

Continuous

2 Green Open Space (RTH) (public parks, burial grounds, water retention areas, greenbelts,etc.)

To be designed in next phase of the CGAP

Program for urban forest development including mangrove areas Program for acquisition of green open space to meet legal requirements (RTH)

3 Green Community (Resilient Community) (includes health care and education)

Continuous (including Program for Green Schools (Sekolah Adiwiyata) and resilient kampungs (PROKLIM)

4 Green Transport & Urban Mobility (motorized & non-motorized)

BRT system development BRT system development, including bicycle paths and pedestrian walkways

5A Green Waste (sanitation)

On-site and Off-site Sanitation System development

Program for acceleration of house connections to central sewerage system

5B Green Waste (solid waste)

SWM system development Integrated SWM program including industrial areas

6A Green Water (water supply)

Ecotech Garden to reduce pollutants entering Duriangkang dam as the fresh raw water source for Batam City

Integrated water management program including industrial areas

6b Green Water (urban drainage & flood control)

Urban Drainage and Flood Control for Batam City

Program for normalization of streams and drains, enlargement of drainage network, construction of water reservoirs, retention areas, water absorption wells, etc.

7 Green Building (energy efficiency, climate resilience)

To be designed in next phase of the CGAP

Program for green certification of buildings, including promotion of roof gardens, hanging gardens

8 Green Energy (clean, efficient & renewable)

To be designed in next phase of the CGAP

9 Green Industry & Commerce (sound environmental management)

To be designed in next phase of the GCAP

10 Green Air (Blue Sky) (emission reduction & control)

To be designed in next phase of the GCAP

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From Long List to Short List A long list of proposed programs (Step 5) was given a code number and ranked with the help of a Multi-Criteria Analysis (MCA) (Step 6) based on criteria for liveability and sustainability developed by the Green Team. It subsequently attributed weights to the long list. The result of the weighted MCA scoring provides a ranked list of 19 Programs as shown on the following page. Listed programs that could not be accommodated in this version of the GCAP will be further specified and incorporated into future versions.

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Long List of 19 Ranked Green Programs

Program Code

Program Title MCA weight

Ranking

9 Spatial Development Planning & Control 6,0680 1

14 Environmental Pollution & Degradation Control 5,9680 2

15 Provision of Facilities & Infrastructure for Environmental Protection & Management

5,9300 3

10 Land Use Planning 5,7180 4

16 Environmental Planning and Natural Resources Conservation 5,7000 5

12 Development, Construction, and Maintenance of Housing & Environmental Infrastructure & Facilities

5,6640 6

4 Improve quality & quantity of public green open spaces 5,2058 7

8 Develop synergy between water supply management and human waste management

5,1776 8

13 Improve construction quality and oversight of buildings 5,3010 9

11 Human resources development and oversight in the field of mining, electricity supply, fossil fuels (BBM) and gas

5,0710 10

18 Development, improvement, maintenance and rehabilitation of public transport infrastructure and facilities

5,1420 11

19 Improve public transport service delivery 5,1630 12

5 Protect water sources, reservoirs, and catchment areas 4,9116 13

1 Reduce domestic waste production 4,9016 14

7 Develop drainage & flood control network 4,8576 15

6 Build human waste treatment plant (IPAL) to reduce domestic human waste

4,7114 16

2 Reduce industrial waste production 4,6664 17

17 Program to improve community safety and comfort and prevent natural disasters

4,5360 18

3 Develop ROW and median of public roads as green open spaces (RTH) 4,4380 19

80% Percentage weight assigned to green city attributes/criteria

20% Percentage weight assigned to ease of implementation

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Priority Green Programs

From the above long list, the priority Programs ranked 2 and 3 were selected based on their strategic importance to green development (Step 6). Spatial Development Planning & Control, despite being ranked No.1, could not be converted into an action plan at short notice for inclusion in the GCAP. This one, as well as other priorities, will be considered in the next GGAP.

Ranking Program

2 Environmental Pollution & Degradation Control

3 Provision of Facilities & Infrastructure for Environmental Protection & Management

Final Selection of Priority Programs

The Green Team reported the result to the GCAP Steering Committee including the Heads of all local government agencies (SKPD) involved (Kepala Bappeda, Dinas Kebersihan, Dinas Perumahan dan Permukiman, Dinas Pekerjaan Umum, Dinas Tata Ruang and Tata Bangunan, Badan Lingkungan Hidup, and PDAM), and finally had a consultation with the Regional Secretary (Sekretaris Daerah Kota Batam) as the representative of the (previous) Mayor.

As the two proposed programs are similar in the interpretation of their purpose, the Green Team resolved to adopt both as a program guide, and to use three ongoing initiatives as a project guide for the short term.

Ranking Program

2

Environmental Pollution & Degradation Control

Construction of an on-and-off-site sanitation system including intermediate and final treatment facilities

Construction of an Ecotech Garden to protect Duriangkang dam water quality as the main raw fresh water source of Batam City

3

Provision of Facilities & Infrastructure for Environmental Protection & Management

Construction of an environmentally friendly solid waste management system including “Waste to Energy” technology

After final consideration of financial, regulatory and institutional risks for implementing each project and the interfaces and possible synergies between projects, it was concluded that the three Programs listed above were the most likely to be supported with clear and realistic actions, and therefore should constitute the GCAP.

However, after the new Mayor was appointed, he provided guidance to the Green Team by attaching a higher priority to developing a BRT system and non-motorized transport (NMT) network, as well as an urban drainage & flood control system, with the result that these were subsequently included as priorities for the medium-to-long term.

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The Next Five Years – Priority Programs, Projects & Actions

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Introduction This section describes the prioritized programs, projects and actions we will undertake in the next five years. It also describes the institutional set-up we will implement to ensure informed and timely decision making and careful management of the interfaces between different projects. To avoid misunderstandings, we include a short list of definitions of key terms used in this section.

Program An initiative for promoting green development having stated goals that match the city’s vision and mission. A program normally comprises a number of projects that have clear interfaces, and is formulated in a Program Brief or Digest.

Project An investment in a physical infrastructure project, or the creation of a new organization, or a policy revision, or a local regulation, to be formulated in a Project Brief. If the project (such as establishing a new body or policy) is subsidiary to another project, it is understood to be a sub-project or action.

Action In the context of the GCAP, actions comprise one or more activities required to meet the conditions for project implementation, such as setting up a Project Management Unit (PMU), preparing a project implementation plan (PIP), preparing Terms of Reference, identifying sources of financing, acquiring land, etc.

Project Management Unit (PMU) A temporary organizational unit created for the purpose of preparing a project implementation plan, and managing the project on a day to day basis. A PMU is headed by the agency responsible for the project. An operational budget for the PMU needs to be allocated. Representatives of relevant SKPDs, other agencies and possibly representatives of the community can also be members of the PMU. The PMU will consider whether or not alternative implementing mechanisms (BOT, Joint venture, CSR, etc.) will be considered in the feasibility study, but also the actions related to changing or implementing regulations (Perda), issuing permits, etc.

Project Implementation Plan (PIP) A document that describes in detail the actions needed for implementing the project, including preparatory activities. The PMU should be in charge of preparing and managing it. It covers the project cycle -a sequence of events and activities usually starting with a feasibility study, project design, financing, land acquisition, tendering, procurement, construction supervision, monitoring and evaluation, as well as operation and maintenance. It clearly describes the division of responsibilities, time-line and budgets needed. It specifies what decisions are needed, when, and by whom. A project is normally undertaken by a contractor, government department, a combination of public and private actors, a consortium, etc. Different actors can be responsible for different parts of the project cycle. The PMU will update the PIP over the course of developing the project. At the start, the PIP will focus on the activities to prepare a detailed design, feasibility study and tender strategy. Based on the choices made related to the implementing mechanisms (traditional, PPP, joint venture, communities, etc.), the PIP can be further detailed for procurement, construction and O&M.

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Institutional Enabling Actions for “Green Team” and

PMUs We will use the results of the Green Cities Program (Asian Development Bank, Bappenas, Kementerian PUPR) as a starting point to further intensify our efforts to transform Batam into the greenest city in Indonesia. On top of the specific actions we have formulated for prioritized programs and projects, we intend to further improve the institutional set-up needed for a well-informed and timely decision making process.

A Steering Committee (SC) will monitor and guide the progress on GCAP and actions on a quarterly basis. The Mayor will chair the SC that further consists of heads of SKPDs in the field of green attributes, and other stakeholders. As chair of the “Green Team”, the head of Bappeda will keep the Mayor informed about the progress to enable the Mayor to make decisions when needed.

The “Green Team” will coordinate programs and projects and the interfaces between programs and projects. They will also update the GCAP every 2 years. The “Green Team”will meet bi-weekly to monitor progress on specific projects and actions. Those in charge of specific programs and projects will inform the “Green Team” about their progress and specific issues, decisions or guidance they need. The “Green Team” will determine the agenda for meetings with the SC and prepare these meetings. Specific task-forces (PMU) will be set-up to drive the implementation of programs and projects on a day to day basis. The task-forces will be made up of representatives of relevant SKPDs and other agencies and led by the agency/ body responsible for the sector.

Institutional Enabling Actions What? Who? When?

Mayoral Decree on set-up and installation of SC and “Green Team” incl. description of roles, SOP, membership and budgets

Mayor Update in 2106

Continuation of Mayor’s decree including budget allocation

Head of Bappeda annually

Work-plan “Green Team” including initiating the set-up of specific task forces/ PMUs for agreed projects

“Green Team” as and when required

Evaluation of performance of “Green Team” Steering Committee

bi-yearly

Steering

Committee

“Green

Team”

Taskforce / PMU

– Waste

Taskforce / PMU

– Water

Taskforce / PMU

– Green taxes

Monitoring

/ guidance

Progress/

reporting

Taskforce GCAP

Mayor Informs / key

decisions

Monitoring/ guidance Progress/ reporting

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The Six Priority Programs – Action Plans The Action Plans that were included in the GCAP are shown on the following pages.

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Green Water – Action Plan Batam Program: Improving water quality in Duriangkang

Reservoir

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Green Water – Action Plan Batam Program: Improving water quality in Duriangkang Reservoir

Why? Duriangkang Reservoir has been operated since 2001 and is the largest reservoir of 7 existing reservoirs in Batam Island which is used as a source of raw water for drinking water, with a storage capacity of 78.56 million m3 and a freshwater area of 23.4 square km. It provides around 75% of the freshwater supply for Batam.

Water quality is affected by industrial and human activities in the catchment, and storage capacity is also being affected by ongoing silting of the reservoir through elevated suspended solids in surface runoff due to land clearance and construction in the catchments.

Protection of this key reservoir is crucial to maintaining a sustainable water supply.

There is a need to coordinate on ongoing activities to reduce pollution in the cachments and the reservoir protected area to reduce contamination, also wetlands and other measures can be constructed within the reservoir protected area to make further improvements to influent water quality.

Current status Current average water quality is poor, defined as, COD: 134.61mg/l, BOD5: is 58.22mg/l, ammonia: 10.5mg/l.

There is illegal activity in the water catchment protected area, such as illegal housing and fish ponds. Furthermore there is heavy construction within the drainage catchments of the reservoir and (linked with the Sanitation program) poorly constructed and managed off site sanitation within the catchment.

Annually, BP Batam cleares the water hyacinth plant (Eichhornia crassipes) in surface water reservoirs that can cover about 25 hectares on Duriangkang Dams. Also periodically the reservoir is dredged of sediments.

Goal The main objective of this project is to improve reservoir water quality to improve raw water quality for more efficient treatment and provide a cleaner, healthier and more attractive ecosystem, through integrated management of the catchments.

Results 1. Reduce pollution of the environment. 2. Improving the quality of water and the aesthetics of the reservoir.

Benefits 1. Improving quality of the environment; 2. Limited operational costs; 3. Smell reduction; 4. Improving efficiency of downstream water treatment

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Success indicators (targets) Area Ecotech Garden

2010 0 m2

2019 5,550 m2

COD

2010 134mg/l

2019 80mg/l

BOD5

2010 58mg/l

2019 50mg/l

Ammonia

2010 10.5mg/l

2019 6mg/l

Key risks Even though the projects are relatively well defined, the technology is straightforward, and the capacity is there to deliver them, key risks are:

1. Availability of Management Organization 2. Source of Funds Availability (APBD, APBN) 3. Availability of regulations and enforcement 4. The approval of Parliament and the Local Government of Batam City

Risk mitigation These risks can be mitigated to the extent possible by prioritizing the following measures and allocating sufficient resources to their implementation:

1. Implement regulatory updates as soon as possible while local political will is present (before policy / regime changes occur).

2. Establish a working group to coordinate this program and other activities related to Duriangkang Reservoir.

3. Undertake a social marketing strategy to engage public awareness for environmental management around the dam and disseminate information.

Project WAT1: Preparation, including establishing a Duriangkang Reservoir Catchment Management Unit. Collaboration between agencies is necessary to implement an integrated project to improve and protect water quality in the Duriangkang Reservoir. This unit will provide better coordination of ongoing activities; develop a plan to implement a project for integrated measures to treat surface water flowing into the reservoir; and, develop a public awareness raising campaign to increase the awareness of improved local environmental management.

The Catchment Management Unit will be developed under BP Batam, but will include or collaborate with members of:

Bappeda

Ministry of Public Works

Dinas Housing

Dinas City Cleaning and Parks

L:aw enforcement

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Action Description and responsibilites Timeframe

WAT1.1 A Catchment Management Unit (CMU) will be established to be responsible for managing ongoing activities related to water quality management in the Duriangkang Reservoir, and coordinate with relevant stakeholders.

2016

WAT1.2 CMU agrees responsibilities for ongoing activities including annual monitoring, dredging, and vegetation clearing.

2017

WAT1.3

Evaluate and update the monitoring plan, purchase monitoring equipment, develop a simple baseline.

2017

WAT1.4

Liaise with the Sanitation Committee (see Program B) on householde waste management within the catchments.

2017

WAT1.5

Review regulations related to the protection of catchment areas, and measures in place to enforce these regulations.

2017

WAT1.6 Work with Bappeda to develop a resettlement plan for illegal residents in the protected catchment area.

2017

WAT1.6 Work with law enforcement to stop other illegal activities in the protected catchment area.

2017

WAT1.7 CMU to further develop the concept for integrated surface water treatment within the catchment.

2017

WAT1.8 A public campaign is required to raise awareness local and establish community support for the success of the project. It should be continuous and sustained but also will be necessary to promote community participation in planning, design, and implementation of any local treatment measures.

2017

Responsible agency

BP Batam

Estimated costs (budget needs)

Limited hardware

Implementing mechanism, funding & financing

Allocate own budgets

Other partners Bappeda Ministry of Public Works Dinas Housing Dinas City Cleaning and Parks L:aw enforcement Local communities Illegal residents

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Project WAT2: Planning, Design and construction of Integrated surface water treatment measures (including Ecotech garden) The project is designed to reduce pollution to the reservoir from surface waters. The Project is expected to integrate a number of treatment components, including but not limited to:

Household ecotech garden pilot projects to treat grey water and/or setic tank effluent.

Check dams in streams and drains to retain sediment.

Trash screens to screen rubbush and debris with safe access for cleaning.

Constructed wetlands (large scale Ecotech garden) to remove organic and sediment loads.

Oxidation ponds

Planning should be undertaken to integrate the above aspects in partnership with residents within the catchment areas of the reservoir.

A combined outline design, costing and feasibility assessment should lead into dedtailed design and construction.

Working Principle of Constructed wetalnds:

A constructed wetland (or ecotech garden) is an engineered sequence of water bodies designed to filter and treat waterborne pollutants found insewage, industrial effluent or storm water runoff. Constructed wetlands are used for wastewater treatment, greywater treatment, or surface runoff and can be incorporated into an ecological sanitation approach. They can be used without primary treatment, or after a septic tank for primary treatment, in order to separate the solids from the liquid effluent.

Vegetation in a wetland provides a substrate (roots, stems, and leaves) upon which microorganisms can grow as they break down organic materials. Different species of aquatic plants have different rates of heavy metal uptake. Many regulatory agencies list treatment wetlands as one of their recommended best management practices for controlling urban runoff.

Action Description and responsibilites Timeframe

WAT2.1 CMU to appoint Project Management Unit and develop project implementation plan

2017

WAT2.2 Consult communities in developing design concepts and future ownership, operation and maintenance.

2017

WAT1.3 Commission outline design costing and feasibility study to cover hydrological assessment, hydraulic design and topography, ecological design, biological treatment design and sedimentation. Design should be gravity fed to reduce operation and maintnenace costs (no pumpng).

2017

WAT1.4

BP Batam to allocate and approve budget. 2018

WAT1.5

Tender detailed design and construction 2018

WAT1.6 CMU to oversee construction. 2018

WAT1.7 Continue monitoring and evaluation of the scheme against baseline and scale up the project to improve the ecological and aesthetic value of the reservoir.

2019

Responsible agency

BP Batam

Estimated costs (budget needs)

Preparation: IDR 2.8 Million Construction: IDR2,500 Million Operation and maintenance: integrated with existing activities.

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Implementing mechanism, funding & financing

Allocate own budgets

Other partners Local community groups and residents.

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Green Waste – Action Plan Batam

Program: Improvement of on-site sanitation system in parallel with ongoing wastewater network and

treatment project

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Green Waste – Action Plan Batam Program: Improvement of on-site sanitation system in parallel with ongoing

wastewater network and treatment project

Why? Batam does have an existing sewerage system in the Batam Centre, which is run down and does not operate effectively. The remainder of the island has no other significant existing domestic sewerage system.

Duriangkang reservoir is the main source of more than 50 percent of Batam's fresh water supply. The dam was built in the inlet to the bay to create the catchment area. The reservoir is now has a fresh water with area of 23.4 square kilometers. More than 50% of the city’s domestic waste-water enters the Duriangkang reservoir, this drastically reduces the water quality and increases the treatment intensity required for water distribution – it is not efficient. The reservoir water is treated before distribution to consumers but the reservoirs are highly polluted. BOD levels in the reservoirs regularly exceed the BOD standard by 50 times; levels in excess of 180 mg/L have been recorded in the reservoirs. Many parts of the city have basic on‐site systems such as septic tanks and pit latrines. These areas have been identified and management structures recommended for the safe removal of septic tank sludge and the design and management of improved pit latrine systems.

The government of Indonesia has introduced the “100-0-100” program to raise the quality of life for Indonesia’s citizens. 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. To meet this target, the government will have no choice but to forcefully support rapid, sustainable and inclusive economic growth and improved access to basic infrastructure services to achieve 100%-0%-100%.

Current status Currently, there is no effective regulation in place to ensure that sludge (or septage) is removed (pumped) at regular intervals, and the operation of tankers for septage pumping is not well managed. As a result of both poor construction and operation, it is also estimated that about 70% of septic tanks have contaminated the ground water. The direct relationship between diseases such as cholera, hepatitis and dysentery and the unrestricted discharges of residential sewage is well documented and therefore this program aims to improve the City wide system for management of on-site sanitation. To increase coverage, the City Government of Batam has already decided to develop a new city-wide sanitation strategy. In 2012, the Directorate General of Human Settlements in the Ministry of Public Works & Housing provided technical assistance through Indii (AusAid) to prepare a Master Plan and Feasibility Study for the sewerage system of Batam City. The document indicated four locations for waste-water treatment plant (IPAL), among others one in the Kecamatan of Batam Centre (capacity 35 liter/second) and another in Bengkong (250 liter/detik). The Governments of Korea and the Republic of Indonesia have signed a US$ 50M loan agreement for design and construction of the sewerage system in Batam Center. This program for on site waste water management has to work along side these two ongoing sanitation inititives to provide an integrated sanitation system for our City.

Goal The main objective of this program is to provide by 2020 a city-wide central sewerage system including regular on-site services to desludge human waste (septage) from individual septic tanks and improve facilities for individual household and communal septic tanks which are viable and meet technical and environmental requirements. A number of parallel activities are required to support this main goal including the passage of a septage management by law, the provision of a

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fleet of septage pumping trucks, construction of a new STP (Septage Treatment Plant), some restructuring of institutional responsibilities, and capacity development. A further objective is to provide full cost recovery of staff and operational expenses.

Results 1. Improved the sanitation facilities by providing regular septage desludging services for the

areas without sewerage system; 2. Improved sewerage services in Batam Centre by providing of wastewater collection system

for the areas of Batam Centre including drainage, pump station, and transmission line as well as waste water treatment facilities.

3. Reduced the level of pollution in Duriangkang reservoir as the main fresh water source for Batam island and coastal water

4. DKP Organization strengthened and trained to implement O&M sewerage management system for Batam Centre area;

5. Population of Batam educated to use, and pay for, the sewerage services.

Benefits 1. Reduces the sanitation impact on both groundwater and surface water (particularly

Duriangkang reservoir), to protect the environment and the natural resources and thus on human health.

2. Strengthens resistance to ecological hazards. 3. Provides a public service that is efficient and reliable, economically viable, socially

acceptable, and technically and institutionally appropriate. 4. Provides regulatory and management oversight for the septic tank design, construction, and

use of septic tanks as well as septage transportation, treatment and disposal. 5. Equitable access to water and sanitation services is considered a human right, which

constitutes the basis for a life in dignity. Water and improved sanitation both must be available, accessible, of good quality and affordable.

Success indicators (targets) on Sewerage & Sanitation Sewers pipeline networks

2015 2 km

2020 81 km

Sewers House Connections

2015 0 households

2020 11,000 households

Regular Septage Pumping Customers

2015 1,500 families

2020 5,000 families

Key risks Even though the projects are relatively well defined, the technology is straightforward, and the capacity is there to deliver them, key risks are:

1. Delayed approval of the regulation and law governing on-and-off site sanitation; 2. Cooperation between the City and the BP Batam is not guaranteed yet. A lack of

mechanisms for inter-agency collaboration on planning and service delivery, bearing in mind the range of organizations that have a stake in sanitation.

3. Low interest of the community on aspects of septic tank sanitation is not easily improved and may slow down implementation;

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4. An under-developed (and unregulated) role for the private sector in service delivery and maintenance (for example in the safe removal, treatment and disposal of septic tank sludge).

Risk mitigation These risks can be mitigated to the extent possible by prioritizing the following measures and allocating sufficient resources to their implementation:

1. Implement regulatory updates as soon as possible while local political will is present (before policy / regime changes occur).

2. Establish a working group to coordinate this program and other sanitary activities 3. Undertake a social marketing strategy to engage citizens in environmental aspects of

sanitation and disseminate information.

Project SAN1: Preparatory Actions for Sanitation Program This first project consists of a number of actions to enable further projects in the sanitation program.

Including:

Review current Sanitation Masperplan and Feasibility study.

Establish a City Sanitation Committee

Create a Sanitation baseline for the City

Public campaign and socialization Program The review of the Waste water masterplan confirms the current understanding of where the efforts in sewer network expansion and imporved septage management should be focused.

A number of smaller discrete systems need to be considered on a drainage catchment basis. The natural gradients mean waste-water collection in most of the service areas are able to function via gravity, and will therefore minimize energy use.

A Sanitation Committee is to be established to coordinate monitoring and related projects, coordinate planning, and promote the advocacy of good sanitation practices among residents. Collaboration among various stakeholders (e.g. DPRD as policymakers, regulatory agencies, Bappeda, Housing Agency, household users, society groups, private collection and transport companies, PT ATB as the operators of clean water, regular desludging septage management and both sewerage system wastewater treatment plants and the end-user of treated sludge), is crucial to move towards a functioning City wide sanitation management system.

It is necessary to create and establish a sanitation baseline for the Batam City to help evaluate progress under this program and develop projects to address other specific issues which become apparent to reduce the environmental impact of the City and help achieve our Green Vision. This project will be led by Bappeda and the City Sanitation Committee, and future annual monitoring will occur according to an agreed monitoring plan.

The baseline will include, and the following indicators may also be established:

% of sealed septic tanks,

Number of desludging customers

Number and construction type of septic tanks

Connections to piped sewerage

Water quality (biological and chemical) monitoring at selected indicator wells/boreholes and/or streams.

Occurrence of waterborne diseases among residents.

Engaging stakeholders from the beginning of program development helps in determining the actual sanitation needs, information and capacity gaps, as well as their perception towards the project. It is also proven to be effective in designing tools for raising awareness, ensuring public acceptability, tariff setting, and easing program implementation.

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Action Description and responsibilites Timeframe

SAN1.1 Bappeda to Establish a City Sanitation Committee, including a core team to act as a Project Management Unit (PMU).

The comittee contains members from all relevant stakeholders, including Bappeda, BA Batam, the Cleaning and Landscaping Agency, Environment Agency, Health Agency, PDAM, and the Provincial government. Working group to coordinate with Green Team on the implementation of this Program and projects within it.

2016

SAN1.2 Sanitation committee PMU drafts an annual monitoring plan, and coordinates the 1

st year (City Sanitation baseline).

2017

SAN1.3

Sanitation committee PMU reviews existing Sanitation Masterplan and Feasibility Study for gaps and updates City sanitation plans, particularly relating to septage management.

2017

SAN1.4 Once plans are developed further a public campaign is required to establish community support for the success of the project, it should be continuous and sustained and include:

raising awarenesds of the benefits of imporved sanitation

increasing demand for sanitation infrastructure and services through marketing;

ensuring public acceptability of regulations and tariffs; and

easing project implementation.

2017-18

Responsible agency

Bappeda and City Sanitation Committee

Estimated costs (budget needs)

Preparation (design, procure): ~ this activity is only software Socialisation: Rp 500 million annually Realization (CAPEX): ~ this activity is only software Maintenance & operation: ~ this activity is only software

Implementing mechanism, funding & financing

Not applicable

Other partners Batam: Bappeda Office Provincial: Dinas PU National Government: Ministry of Public Works and Housings; Social/ communities: Sanitation Working Group and Green Communities

Project SAN2: Establish regular septage pumping (desludging) and management system

The provision of regular septage desludging management services is one of the development challenges for the achievement of the 2017 SDG (Sustainable Development Goals) and the 2020 Indonesia’s national flagship 100%:0%:100%. In the short term, septic tanks will remain the principal form of urban sanitation in Batam as the sewer network is not extensive, sludge pumping schemes and outreach should work closely with the sewer network upgrade project funded through the loan from the Government of Korea and phase out appropriately as household connections are made. Septic tanks require regular removal of septage. Without coordinated septage management, will not result in improved sanitation, health, and environmental protection – as monitored under Project 1.

It is important that these services are implemented in a coordinated and holistic way including institutional and cost recovery aspects to provide a sustainable service to the residents of Batam. It is planned to transfer

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the responsibility for collection and disposal of waste to DKP (Department of City Cleaning and Parks), as they are best placed to manage such operational activities.

Action Description and responsibilites Timeframe

SAN2.1 To promote sustained operation and enable this off site sanitation program, Batam city government will draft and adopt, through its legislative body (DPRD), a local regulation (Perda) detailing Batam city’s Septage Management System. The regulation will state the rationale, user fees, operation, management (roles and responsibilities), and penalties. Unless otherwise repealed or amended, the septage management ordinance remains valid, thereby ensuring sustained operation.

Consideration will be given to including local design standards.

2016

SAN2.2 Establish a Memorandum of Agreement between the City and BP Batam that future septage pumping (collection) and management will be undertaken by the City (DKP).

2017

SAN2.3 DKP and sanitation working group to liaise with Provincial Government on most appropriate mechanism for expanding Septage treatment capacity.

2017

SAN2.4 The City government will acquire additional septage pumping trucks (2 per year) from The Ministry of Public Works under a grant to the City who will then hand them over to DKP.

2017 (annual)

SAN2.5 DKP will establish an internal operation unit to manage and conduct septage collection (every 2 years) and disposal.

2017

SAN2.6 Operation Unit to prepare and approve standard operational procedures (SOP) for septage management.

2017

SAN2.7 DKP will coordinate with the City government to review and set tariffs (including for adjoining municipalities) and establish a system to recover operational costs from user fees (septage pumping).

2017

SAN2.8 DKP to consider utilizing private sector companies to provide efficient septage collection and transport services.

2017

Responsible agency

Dinas Kebersihan & Pertamanan (DKP)

Estimated costs (budget)

Preparation (SOP, socialisation): Rp. 1500 million Realization (construction): Desludging trucks will be provided as grant by DGHS. Maintenance & operation: approximately Rp. 15,000/customer/month

Implementing mechanism, funding & financing

OBA (Government Grant) for equipment

Improved cost recovery for financing operational improvements

International Technical Assistance for Capacity Development and Training.

Private sector contractors to provide efficient septage pumping and transport services.

Other partners Batam: Sanitation Working Group, Bappeda, DKP (transfer of vehicles and responsibilities), Environment Agency (regarding advocacy), Regional: Other municipalities (regarding tariff setting), DKP Social/ communities: Green Communities, social groups such as the Lions Club and AKKOPSI, users, poor households. Private sector: for septage collection and transport. International: Technical assistance for capacity development and training.

Project SAN3: Construct communal septic tanks in the area of Cagar Budaya (Kampung-Kampung Tua) The Kampung Tua serves as an old village for housing Batam natives who lived there before 1970. The

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cultural and historic value of these sites must be preserved. The City has a responsibility to provide sanitation services to the residents. Communal septic tanks are seens as the most cost effective and appropriate solution as land availability is limited.

The communal systems will be designed, built and maintained by the City.

Action Description and responsibilites Timeframe

SAN3.1 DKP to set up PMU to deliver this as a separate project.

SAN3.2 Community consultation on placement, sizing, appropriate design etc.

SAN3.3

DKP PMU to tender for appropriate detailed engineering design, enabling affordable O&M costs.

2017

SAN3.4 Approval, land compaensation, develop construction program.

SAN3.5 Construction supervision and management 2017

SAN3.6 Inclusion of all Kampung Tua communal tanks in septage pumping and management system

2017

Responsible agency

Dinas Kebersihan & Pertamanan (DKP)

Estimated costs (budget)

Preparation (DED, socialization): Rp. 500 million Realization (construction): Rp. 2 billion Maintenance & operation: Rp. 10,000/customer/month

Implementing mechanism, funding & financing

Direct, local design and construction contracts

Other partners Batam: Sanitation Working Group, DKP, Environment Agency (regarding advocacy) Social/ communities: Heads of communities, households, females.

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Batam Green Waste Action Plan

Program: Environmentally Friendly SWM System including WTE plant in Telaga Punggur

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Batam Green Waste Action Plan Program: Environmentally Friendly SWM System including WTE plant in

Telaga Punggur

Why? It is estimated that within 5 years, there will be no more space for Batam City to dump its waste. Therefore, a solution is needed so that solid waste disposal needs can continue to be met. As the amount of waste in Batam is growing rapidly, it is believed that the investment costs of such a project is feasible and can be offset through revenue.

Utilisation of urban waste is one of the national priorities in the new and renewable energy area as stipulated in the National Research Agenda 2010-2014, which is also become one of the motives for converting garbage into energy. Garbage has always been a problem of big cities in Indonesia including Batam. The discrepancy between an increasing volume of waste and the limitation of landfill sites will obviously become an issue if not handled carefully. Municipal solid waste has a potential of converting biomass energy into electricity.

Given the limited land resource for landfills, the cost of investment and operating of landfill site, the need to recover material waste as a useful resource, the City of Batam, with support from the Central Government, would like to partner with a competent investor in the bid to convert waste-to-energy using the appropriate and scientifically approved technology that converts municipal waste into energy. Waste to energy is a very relevant issue for Batam City because its commercial and industrial base includes several high energy use industries. One major issue that is being addressed is the capacity of the PLN’s electricity distribution network and the need to reinforce it. It is important to note that, when considering waste-to-energy as a sustainable way of managing both waste and providing energy, no single technology dominates – there is no “one size fits all” solution. On-going WtE projects worldwide have shown various technological approaches based on varying criteria, needs, limitations, opportunities and public acceptability.

Current status A series of legislations and policies has been enacted in Indonesia in order to effectively manage municipal solid waste (MSW), promote its utilization as a source of energy, and protect the environment. The City of Batam, supported by the Central Government has identified -among others- the investment in a Waste-to-Energy plant as a viable alternative and a priority for an integrated municipal waste management.

In June 2015, the transaction for a WtE project for the City of Batam under a PPP (KPBU) scheme was declared failed for several reasons:

1. The investment (CAPEX) for the incinerator technology was estimated at USD 10 million with a payback period of 11 years, with the result that the investor required a bylaw (Perda) to guarantee return on its investment.

2. In 2014, the municipal government of Batam submitted a Draft Bylaw on the Tipping Fee (Ranperda Tentang Bea Gerbang) to the City Council. It stipulated the responsibility of the municipality in providing the investor with a reasonable profit margin. The tipping fee was set at the maximum legally allowed IDR 300,000 per ton, with the lowest bidder winning the contract. Based on a daily volume of 1,000 tonnes of waste, the City had to allocate a budget of IDR 110 billion per year, which was deemed too high, and rejected by the Council.

3. Another problem was that the cost of energy supplied by the WtE plant did not match the purchasing capacity of the electricity company (PLN). Based on a Regulation of the Ministry of Energy and Human Resources (ESDM), the electricity company can pay only IRD 850 /

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KWh, whereas the electricity from the WtE plant should cost IDR 1,350 /Kwh, causing a gap of IDR 500 /KWh.

4. Finally, the Consortium (SITA-Hitachi Zosen-Itochu) that submitted the winning bid fell apart because SITA withdrew from the Consortium without stating a clear reason.

Goals The objective of this project is to develop an environmentally friendly SWM system in the Telaga Punggur final disposal site (TPA) that includes a waste-to-energy plant using the available modern technology that would absorb all municipal solid waste, and mitigate climate change. The power generated shall be sold to the PLN’s national grid at a fee that would enable the investor to get returns on their investment. The feasibility study, preliminary design, and budgetary cost estimation will be conducted as part of this project shall be expected to be well prepared to enable the City Government of Batam to effectively pre-qualify bidders and evaluate their proposals and bids. The goals of this project are:

1. Implementation of feasible and appropriate technology for integrated municipal solid waste management focusing on waste to energy scheme;

2. Reduction of municipal solid waste to be disposed of in landfill in target areas and utilization of MSW for energy generation.

Results The Program is expected to have the following results:

1. Infrastructure: Improved SW collection and an operational WtE power plant combined with a sanitary landfill site;

2. Organization: an effective and environmentally friendly management and enforcement system; and

3. Finance: Improved cost recovery for SWM.

Benefits 1. Promotes energy efficiency and the use of renewable natural resources, in which the

methane gas and other recovery materials from Telaga Punggur landfill site can be used to generate electricity energy.

2. Reduces impact on the environment of Batam and around the Telaga Punggur landfill site (create a clean, safe, and healthy environment).

3. Increasing regional’s revenue in the total budget plan of Batam. 4. Helps strengthen the resilience to ecological hazards. 5. Reduces greenhouse gas emissions by as much as 1,540,000 tons of CO2 annually.

Success indicators (targets) Reduction of greenhouse gas emissions (SW Reuse, Recycle, Reduction)

2015 2,567,523 tons CO2/year

2020 1,540,000 tons CO2/year

Households served by Municipal SWM

2015 70 %

2020 85 %

Solidwaste processing within the landfill

2015 840 tons of waste

2020 1200 tons of waste

Municipal Solidwaste Cost Recovery

2015 80% subsidies by City Government

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2020 50% subsidies by City Government

Key risks and Mitigation Measures (WTE only) Although the projects are relatively well defined, the technology is straightforward, and the capacity is there to deliver them, there are key risks including:

Key Risks Risk Events Risk Mitigation Measures

Technology risk

WTE plant cannot be applied for local MSW, due to inappropriate technology and the deficiency of the project feasibility study

Gain WTE experience and improve capacity on decision-making for PPP WTE project.

Emphasize project feasibility study.

Establish a clear accountability system for WTE & MSW treatment.

Consider and evaluate carefully the results of the decisions made by public agency.

Plan remedial measures well beforehand, such as insurance from insurance company.

Government credit risk

The City government of Batam (or local GCA) breaches the contract and does not pay subsidy (tipping fee) as promised.

Establish public monitoring mechanisms, and improve government credit and performance evaluation systems;

Avoid pursuing political gains for individuals;

Obtain credit support from the government in written form, and look for guarantee from the government by defining the obligations and rights in the contract.

Keep in touch with public agency to have the latest information on relevant policies.

Legal and political risk

There is no legislation (Perda on Tipping Fee) and policy to deal with contractual breaches.

There is lack of policies to motivate the paying activity of the residents and support the WTE project.

Set up clear policy goals in order to avoid different public agencies making policies from their own perspectives.

Specify influencing factors (example, replacement of the government officials, policy inconsistency between the central and local governments) of the risk in the contract to lessen the potential loss.

Include compensation clauses of raising concession price or extending concession period in contract.

MSW supply risk

Insufficient employees and vehicles for MSW transportation led to the short supply of MSW to landfill site

Set up a complete MSW classification system, and establish appropriate legislations and policies to restrict MSW dumping.

Invest more in infrastructure to promote the quality of MSW sorting and classification.

Strengthen publicity, education, and demonstration activities.

Reach an agreement of “take or pay” with public agency to ensure returns on the project.

Environment risk

Neighbored environment will be polluted by WTE landfills and wastewater due to insufficient treatment facilities.

Toxic emissions will be discharged directly into the air without disposal

Oversee the whole process of emissions strictly.

Treat the MSW classification prudently.

Control emissions according to the legislation.

Report the contaminants discharged.

Make appropriate compensations to residents close to the plant.

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Payment risk

It is difficult to charge fees to local residents for WTE treatment facilities

Use a flexible concession period mechanism (i.e., on condition that a reasonable profit is set, whatever the revenue change, and the contract will expire only when the actual profit arrives at the reasonable profit).

Include the formulas and conditions for adjusting the subsidy in the contract.

Include the distribution clauses of extra profit between the public and private sectors in the contract.

Technology risk

The equipment imported for treating waste gas cannot run properly because the local voltage is unstable

Adopt an effective bidding process to select qualified and experienced private participant.

Analyze carefully the characteristics of local MSW, and adopt suitable technologies.

Promote research on WT technology.

Enhance personnel technical training.

Improve experience and capacity through the cooperation with research institutes.

Government credit risk

Subsidy for MSW treatment and payment for power generation are both delayed

Make reasonable payment for WTE treatment to private sector.

Faithfully implement unified price policies of PLN’s grid-connected power.

Reach an agreement with public agency on surcharge for overdue payment.

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Project WAST1: Improvement of SW collection system and organization

Currently, the Municipal Sanitation Agency (DKP) collects 750 tons of household waste, 140 tons of non-toxic industrial waste, and 50 tons of yard and street waste. Anticipating a contiuous growth of Batam’s population, the generation of waste from households, markets, commercial, and public institutions is expected to grow in the next 25 years. Household waste is collected by a private operator under contract with the Municipal Sanitation Agency (DKP). DKP collects waste from public facilities, while industrial waste is collected by a private operator paid for by the industries, but regulated by DKP (providing dumping permits for industrial waste at its landfill site (TPA Telaga Punggur).

Household waste is initially disposed at intermediate collection points (TPS) or at 101 household-operated and 10 school-operated ‘waste banks’ who segregate recyclable waste. According the the Ministry of Environment & Forestry, the Central Government aims to establish a so-called parent waste banks in Batam in 2016 to coordinate all other subordinate banks and waste management services.

In order to improve living conditions and public health around TPS sites, Batam plans to provide (new covers for) bin containers, and build capacity of local staff to maintain these TPS. Since DKP is also responsible for solid waste collection on surrounding islands, the agency will establish an appropriate number of TPS on each island. Improved coordindation with ‘waste bank’ operators is needed to ensure that non-recyclable waste is properly disposed at a TPS. Raising community awareness is important to promote waste segregation, reduction in waste, and proper disposal.

Currently the collection of solid waste from TPS to the TPA is insufficient, leaving waste at TPS sites longer, causing overspills and public health hazards. Additional collection trucks are needed, covering all districts. Waste transportation from the surrounding islands also needs improvement.

Action Description and responsibilities Timeframe

WAST1.1 Set-up project management unit (PMU) 2016

WAST1.2 Prepare and approve a project implementation plan (PIP) including detailed activities, responsibilities, timeline, identification of qualified consultants, budget

2016

WAST1.3 Identify gaps in STP distribution and quality of existing storage facilities to determine investement needs for additional STP, new bin containers with agreed specifications (including on surrounding islands), and other improvements to properly collect waste at neighbourhood level.

2016

WAST1.4 Study alternative options for more environmental friendly TPS solutions (study tour) and propose workable solutions for Batam

2017

WAST1.5 Identify human resources requirements to properly maintain all STP sites and prepare budget requirements for proper staffing, education, community outreach, and other initiatives to improve household and commercial waste collection. This will include coordination with Ministry of Environment & Forestry on the establishment of a parent waste bank in the city.

2016-17

WAST1.6 Include appropriate budget for CAPEX and OPEX for improved STP system 2017

WAST1.7 Identify investment needs, opportunities for PPP, and other arrangements needed to further expand the waste transportation system to meet future needs

2017

WAST1.8 Tender for additional waste transport and TPS equipment 2018

WAST1.9 Continued consultations/dialogue with private truck and waste bank operators, and community and commercial stakeholders outreach to further improve collection system and to monitor waste collection performance

2018-20

Responsible agency (PMU)

Dinas Kebersihan dan Pertamanan (DKP) in cooperation with BP Batam

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Estimated costs (budget needs)

Preparation (design, procure): $ 0.1 million (~Rp 1.3 billion)

Realization (CAPEX): $ 0.375 million (~Rp 4.9 billion)

Maintenance & operation: to be determined

Implementing mechanism, funding & financing

Options:

Traditional procurement and ABPD I and APBD II budgets

JV or management contracts with private sector for waste collection & transportation

Other partners

Batam: Bappeda, Environmental Agency (environmental documents and issues the environmental permit) ; Regional: BP Batam National Government: Ministry of Public Works, Bappenas (PPP book), PT SMI. Social/ communities: Affected communities, waste bank and truck operators

Project WAST2: Improved managerial capacity While DKP is the main responsible agency for solid waste management in Batam, the city is considering the establishment of a General Municipal Public Service Body (BLUD Persampahan), following the example of other cities. This semi-private entity, like a PDAM, would be responsible for all solid waste management functions, and would need to operate on a cost recovery basis. The Body, in turn, could enter into PPP arrangements with private operators of waste collection trucks and the planned Waste to Energy Plant at the TPA Telaga Punggur (see project WAST3 – Waste to Energy Plant).

With operational costs for waste collection and disposal currently at almost twice the amount of total garbage collection fees (Rp.44 billion in OPEX versus Rp.22 billion in fees collected in 2014), there is an urgent need to identify ways to improve fees collection, increase fees, and/or reduce OPEX. Batam could learn from other cities that are doing a better job in reaching full full SWM cost recovery, and then apply these lessons learned.

Another improvement need is to ensure that collection regulations are effectively enforced and monitored. A possible opportunity to collaborate with the police and armed forces will be investigated, trialed, and when proven effective, further replicated throughout the city

Action Description and responsibilities Timeframe

WAST2.1 Set-up project management unit (PMU) 2016

WAST2.2 Prepare and approve a project implementation plan (PIP) including detailed activities, responsibilities, timeline, identification of qualified consultants, budget

2016

WAST2.3 Compare Batam’s local own revenue (PAD) performance with other cities in Indonesia and identify cities that perform much better in terms of SWM cost recovery. Organize a study tour to one or more of these cities, and arrange for a partnership/knowledge exchange with a mentor city to help improve PAD performance in Batam.

2016

WAST2.4 Draft loal regulations on SWM cost recovery, enact and start implementing the new regulations

2017-19

WAST2.5 Organize consultations with POLRI and TNI to agree on their role in enforcing SWM regulations, particularly at the community level, communicate this role to the general public through a promotion campaign, and start ‘audits’ by POLRI/TNI to prevent random waste dumping.

2017-19

WAST2.6 Identify examples of successful Public Service Bodies in Indonesia, organize a study tour to one or more of these Bodies, and arrange for a

2017-18

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partnership/knowledge exchange with a Public Service Body willing to help with the establishment of BLUD Persampahan.

WAST2.7 Draft local regulations on BLUD Persampahan. Identify investment needs and other arrangements needed to establish BLUDP.

2018

WAST2.8 Establish BLUDP and hand-over responsibilities from DKP to the new organization.

2018-19

WAST2.9 Continued consultations/dialogue with government, community and commercial stakeholders to further improve SWM management in Batam

2017-18

Responsible agency (PMU)

Dinas Kebersihan dan Pertamanan (DKP) in cooperation with BP Batam

Estimated costs (budget needs)

Preparation (design, procure): to be determined

Implementing mechanism, funding & financing

Options:

ABPD I and APBD II budgets

Other partners

Batam: Bappeda, Environmental Agency (environmental documents and issues the environmental permit); POLRI, TNI Regional: BP Batam National Government: Ministry of Public Works, Bappenas Social/ communities: Affected communities, commercial and other SW clients

Project WAST3: Improvements at TPA landfills, including Waste to Energy plant at TPA Telaga Punggur All solid waste is currently disposed in a controlled landfill site (40 ha) located at Telaga Punggur, managed by DKP. Industries deposit their non-toxic waste in a special site (KABIL) owned by the BDA and managed by a private operator. Toxic industrial waste is collected and managed by PT Prasadha Pamunah Limbah Indonesia and transported to Cileungsi in the district of Bogor (West Java) for treatment.

Other TPA sites need to be explored as well, including a site at Batu Aji and Belakang Padang. The latter is to serve a population of 20,000. Additional sites may need to be identified on neighboring islands. Feasbility studes will need to be prepared, and sufficient budget allocated to build, operate and maintain these new sites.

Anticipating future demand for waste disposal and green energy, a Waste-to-Energy Plant is planned with a capacity of 700 tons/day. It is expected to generate 15 MW of power that will be sold to PLN. The WtE plant is to be managed by a private operator under a PPP contract. Given the recent failure of a PPP for s similar plant, the government is keen to further study how to make the PPP scheme more attractive to potential investors.

A Perda (local regulation) is required as a basis for PJPK about the Environmentally Friendly Technology Based Waste Processing Service Expenses through the Mechanism of Local Government Cooperation with Business Entities. The regulation needs to mention that for the next 20-25 years, Batam will spend it’s APBD (2018-2038) for the "tipping fee" of the private sector that manages PLTSa (Waste to Energy) Plant. The value of the tipping fee will be calculated in a Feasibility study.

Action Description and responsibilities Timeframe

WAST3.1 Set-up project management unit (PMU) 2016

WAST3.2 Prepare and approve a project implementation plan (PIP) including detailed activities, responsibilities, timeline, identification of qualified consultants, budget

2016

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WAST3.3 Identify potential locations for TPAs on neighboring islands, and conduct a FS for alternative sites/landfill systems. Also conduct a FS and development plan for the Batu Aji site

2017

WAST3.4 Determine appropriate TPA/landfill systems for Belakang Padang. Explore challenges in coastal area, and allocate appropriate funding for implementation

2017-18

WAST3.5 Commission Feasibility Study on WtE and landfill including preparation of ToR, identification & recruitment of qualified consultants, FS implementation

2017

WAST3.6 Prepare detailed design (incl. cost estimates) including environmental impact assessment (EIA)

2018-19

WAST3.7 Prepare Tender strategy, determine need to change existing (2013) Technical and Tender Committees, Train new Committtee members (if needed), Tender project(s), select contractor(s), award contract(s)

2018-19

WAST3.8 Arrange permits, land rights and any other regulations needed to realize infrastructure

2018-19

WAST3.9 Prepare and draft tipping fee Perda as a result of financial analysis in the feasibility study, through relevant working groups including Bappeda, finance, dinas DKP and other relevant stakeholders.

2018-19

WAST3.10 Establish BLUDP and hand-over responsibilities from DKP to the new organization.

2018

WAST3.11 Oversee construction up till completion of WtE 2017-18

Responsible agency (PMU)

Dinas Kebersihan dan Pertamanan (DKP) in cooperation with BP Batam

Estimated costs (budget needs)

Preparation (design, procure): $ 1 million (~Rp 13 billion)

Realization (CAPEX): $ 58.5 million (~Rp 760 billion)

Maintenance & operation: $ 11 million/yr (~Rp 143 billion/yr)

Implementing mechanism, funding & financing

Options:

ABPD I and APBD II budgets

Other partners

Batam: Bappeda, Environmental Agency (environmental documents and issues the environmental permit); POLRI, TNI Regional: BP Batam National Government: Ministry of Public Works, Bappenas Social/ communities: Affected communities, commercial and other SW clients

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Green Transport – Action Plan

Program: Development of the “Trans Batam” Bus Rapid Transit System (BRT)

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Green Transport – Action Plan Program: Development of the “Trans Batam” Bus Rapid Transit System (BRT)

Why? Batam City is suffering from growing traffic congestion and air pollution. This is caused by a rapid increase of motorized vehicles (currently over 1 million, fivefold in comparison to 2000) and a low share of public transport (1.5% of total vehicles). The situation is urgent given the expected population growth from 1 million in 2015 to 2.5 million in 2025. By 2025, there will be 500,000 potential daily BRT customers, a sustainable and financially viable public transport system can be developed based on this potential.

Small buses (angkots), motor cycle - and car taxis are owned by small companies and individuals, but they create more problems than they solve because this decentralized and poorly regulated system makes it impossible to work on solutions that can improve the public transport system in a structural and sustainable way. Currently only 10% of the independent licenses are in operation. A solution is needed that will improve traffic conditions and allow citizens to travel comfortably, safely and reliably.

Continued reliance on, and uncontrolled growth, of private motorized transportation is deemed unsustainable. Citizens want clean, safe and healthy public transport as part of local economic and social development as well as environmental sustainability. The green benefits include reduced congestion, reduced pollution, improved road safety, and improved mobility.

Current status of planning and decision-making on the proposed BRT The Batam Transport Department (BTD) already designed 11 corridors for the “Trans Batam” system, and currently operates 5 corridors using 48 buses as a Technical Service Unit (UPT). Corridor No.3 has been tried since November 2015, facilitating access to the Sekupang Port.4 If the current fare of IDR 4,000 can be maintained, customers can save about 50% in comparison to other modes of transport.5 However, the current load factor is still far below the economic load factor of 70%.

No Point Corridor Length

(km) Transit in

∑ BRT (unit)

Year

1 Sekupang – Batam Center

22.5 Pelab. Sekupang –Tiban – RSAB –My Mart - Balai kota – Mega Mall

12 2014

2 Tg Uncang- Batam Center

22.0 Fanindo -Basecamp – Tembesi – Kepri Mall -Balaikota – Mega Mall

10 2015

3 Sekupang - Jodoh

20.0 Pelab. Sekupang – Tiban – UIB –Penguin - Nagoya Hills – Jodoh

10 2015

4 Tg Uncang- Sekupang

18.0 Pool Damri – Basecamp –Marina - Tg. Riau - Sei Harapan - Pelab. Sekupang

8 2017

5 TM Jodoh – Batam Center

15.0 Jodoh – Harbour Bay –Batu Ampar - Sei Panas – MyMart -Balaikota - Megamall

9 2016

6 Tanjung Piayu – Batam Center

14.0

Perum GMP, Kampung Bagan, SimpangMangsang, Simpang Bidaayu, Simpang Bukit Kemuning, SMPN 16, SMPN 40, dan Tanjung Piayu Laut

7 2016

7 Batam Center- Nongsa

25.0 Mega mall – Tunas – KDA –UNIBA - Botania II-

Botania I -SMA3 - Simpang Bandara - Batu Besar - Polda

10 2017

4 Source: http://batampos.co.id/2015/12/01/dishub-operasikan-empat-bus-trans-batam-trayek-sekupang-jodoh/

5 Source: http://batamekbiz.com/trans-batam-layani-rute-piayu-laut-batam-centre/

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No Point Corridor Length

(km) Transit in

∑ BRT (unit)

Year

8 TM Jodoh- Telaga Punggur

29.0 Jodoh – DC Mall – BCS –Sudirman – Telaga

Punggur 10 2018

9 Jodoh – Nongsa

30.0 Jodoh - Nagoya Hill –Raden Patah – Sudirman –

Batu Besar – Nongsa 12 2018

10 Nongsa – Telaga Punggur

25.0 Simpang Bandara - Batu Besar – Polda-

Telaga Punggur 10 2019

11 Tembesi – Galang

60.0 Tembesi -

Jembatan I - VI 10 2019

Total 280.5 108

Goal A city-wide Bus Rapid Transit system (BRT) is an important pillar to structurally improve traffic conditions. It enables citizens to reach key destinations by means of air-conditioned and eventually low-emission buses that use dedicated bus lanes and have traffic light priority (ITS system) thus allowing comfortable and reliable travel. The Batam Transport Masterplan (2013) contains a lay-out for the city-wide BRT that can serve as a blueprint for its phased implementation. In parallel, Batam wants to set-up a Batam Public Transport Company (BPTC) in the form of a General Municipal Service Agency (BLUD) that will manage and operate the BRT as well as the fleet of buses. However, the possibility of establishing a more corporatized General Municipal Service Enterprise (BUMD) should also be considered.

Expected Results When the Program is completed, the current BRT network will have been expanded to cover the planned network, with improved infrastructure an expanded operational fleet of buses. It is expected to expected to expand and modernize the fleet over time, and gradually replace diesel-fueled buses with hybrid ones or buses running on electricity or gas only.

A new Batam Public Transport Company will be establisheded and current operators of smaller vehicles (angkot, becak bermotor and taksi) will be incentivized (and regulated) to join this new public company. They should benefit from this change, for example by a financing mechanism that would make it possible for small operators to join forces and jointly operate new bigger buses on the dedicated lanes as a feeder system.

Expected Benefits 1. Improved urban mobility for citizens. This will improve time spent on travel, and improve

access to places of employment. By 2025, there will be 500,000 potential daily BRT customers;

2. Improved road safety and security for passengers and pedestrians alike with a positive impact on quality of life;

3. Reduced air pollution with a positive impact on the quality of life and citizens’ health; 4. Reduced carbon emissions contributing to Indonesia’s commitment to the UN-FCCC; 5. Economic opportunities for low-and-middle class citizens, for example better business

outlooks for current operators of angkot and taksi as well as economic activities around stations in transit-oriented development (TOD).

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Key Risks and Mitigation An initial risk assessment informed Batam about the key risks of developing the BRT:

1. Limited knowledge and capacity to implement a BRT can result in delays, cost overruns and poor implementation. To mitigate this risk, the management of interfaces between different technical projects and between infrastructure delivery and setting up the BPTC (BLUD) deserves special attention. The need for capacity building and consultant assistance will be further detailed in the project implementation plan (PIP).

2. The BRT has significant impact on Batam’s communities, especially current operators of smaller vehicles (angkot, taksi) with the potential to cause considerable resistance and backlash. To mitigate this risk, the project implementation plan (PIP) for the BPTC needs to involve them in designing appropriate mechanisms for association and/or integration into the BRT system.

Investment Summary (2016 estimates) Project Description Timeline Preparation

(billion IDR) CAPEX (5 year)

OPEX (annual)

Finance

I Batam Public Transport Company (BUMD)

2016-2019 Rp 500 million

Rp 9.3 billion

Rp 1,5 billion

PPP

II BRT infrastructure 2016-2020 Rp. 1,5 billion

Rp. 25,2 billion

Rp. 2.5 billion

Public

III BRT bus fleet 2019- tbd tbd tbd PPP

Success indicators (targets) Public transport share (from 1.5% now)

2020 10%

2025 15% Targets are indicative and will be determined in detail based on detailed design for phase 1 and business plan for new transport company.

TRANS1: Establish a new Batam Public Transport Company

It is not critical at the moment to implement institutional change but this should be considered as early as possible to improve operational efficiencies and facilitate private sector engagement and financing in Batam’s public transport sector which has a high potential for growth.

It is proposed to upgrade the current BRT Technical Service Unit (UPT) to a General Public Service Agency (BLUD) through a Local Regulation. The new Batam Public Transport Company (BPTC) will have ultimate responsibility to plan, develop, operate and manage, promote and market the BRT service and bus fleet.

The business plan for the company will include details about the goals, responsibilities, management structure and operating procedures including possible external maintainance of bus fleets, stations and bus lanes. Choices made will have a direct relation with the tender strategy for infrastructure and procurement of buses, and will be monitored for consistency.

The ongoing BRT expansion work and expansion in the near future is expected to be managed under the existing Technical Unit but transport of these responsibilities to a public company should be considered as soon as possible.

Action Description and responsibilities Timeframe

TRANS1.1 Set-up project management unit (PMU) to be led by the BTD in partnership with BP Batam, coordinated by Bappeda.

2016

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TRANS1.2 Prepare project implementation plan (PIP) for creating a Transport Company, including detailed activities, responsibilities, need for external assistance, engaging stakeholders, approvals and timeline.

TRANS1.3 Commission the drafting of an Academic Paper as the basis for drafting a Local Regulation on BRT under a BPTC (BLUD)

TRANS1.4 Study the possibility of a corporate BUMD as an alternative to the BLUD, and make recommendations

TRANS1.5 Draft and approve Local Regulation on BRT and BPTC approved by City Council

TRANS1.6 Develop Business plan for the operation and funding of BTPC (including set up costs) and BRT infrastructure.

TRANS1.7 Arrange funding for the operation of the BPTC (both upfront investments for set-up, office infrastructure; funding requirement is subject to results of the business plan; possibly BPTC will be responsible for maintaining infrastructure as well)

TRANS1.8 Develop and manage a marketing campaign with permanent and real time Public Information System for promoting the BRT system

TRANS1.9 Develop and manage smart payment system

TRANS1.10 Restructure and regulate the current system of minibuses (angkoy) and draft a local regulation to establish a new integrated public transport network (unifying existing formal and informal operators), including Public Service Obligation.

TRANS1.11 Procurement, operation and maintenance of BRT fleet (rolling stock) through Central government assistance. APBD II (traditional procurement)

Responsible agency

Batam Transport Department in partnership with BP Batam

Estimated costs (budget needs)

Preparation (design): Rp. 1 billion Realization (construction): Rp. 3 billion (marketing); 1.6 billion (smart payment system) Maintenance & operation: to be determined

Implementing mechanism, funding & financing

Traditional procurement

Other partners

Batam: Bappeda, Regional: BP Batam, Universities National: DG of Land Transportation, Liaise with Medan who also plan to set up a (BLUD) Social/ communities: Affected communities, informal operators, citizens (survey) Private: Industry with large workforces, parking operators, private BRT operators

TRANS2: Expand BRT infrastructure to 11 corridors.

The Planned BRT corridors should be realized over the next 5 years: Corridors 3 to 11 are still not in full operations. This sub-project includes construction of bus lanes, ACTS, traffic lights, signs, elevated bus stops, shelters, and line painting.

The Project Management Unit (PMU) required to initiate action will prepare a project implementation plan (PIP). It will specify more detailed choices to be made. It will be considered to bundle the detailed design of all related infrastructure, even in cases that different government departments will become responsible for funding and tendering different infrastructure (tender strategy). A tender strategy will be prepared that will take into account the division of responsibilities for operation and maintenance between stakeholders such

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as the Batam Development Authority (BP Batam), Batam Department of Public Works (Bina Marga), the Batam Department of Transport, the Batam Public Transport Company (once established) and private companies/ investors.

Action Description and responsibilities Timeframe

TRANS2.1 Set-up project management unit (PMU) to be led by the BTD in partnership with BP Batam, coordinated by Bappeda.

2016

TRANS2.2 Prepare project preparation & implementation plan (PIP) including detailed activities, responsibilities, time-line, need for external assistance (consultants), budget etc.

TRANS2.3 Approve project implementation plan (PIP) and budget

TRANS2.4 Review and evaluate existing systems, technologies, networks and development planning.

TRANS2.5 Coordinate consultation with all relevant stakeholders

TRANS2.6 Prepare tender strategy

TRANS2.7 Arrange funding for infrastructure

TRANS2.8 Arrange permits, land rights and any other regulations needed to realize infrastructure

TRANS2.9 Tender project(s), select contractor(s), award contract(s)

TRANS2.10 Construction supervision and project completion

TRANS2.11 Periodical monitoring and evaluation of results

Responsible agency

Batam Transport Department (or BPTC) in partnership with BP Batam

Estimated costs (budget needs)

Preparation (design): Rp. 2.5 Billion Realization (construction): Bus stops and shelters, Rp. 3.6 Billion; Ground marking, 7.4 Billion; Other infrastructure, Rp, 10 Billion Maintenance & operation: Rb. 1.25 Billion (annually)

Implementing mechanism, funding & financing

Traditional procurement

Funding by APBD II

Other partners

Batam: Batam Bappeda, Office of Bina Marga, Office of Perkim, Environmental Agency, Department of Housing and Settlement (builds park & ride facilities), Department of Parks (prunes the trees along the BRT corridor), Environmental Agency (environmental documents and environmental permits) Central government: BP Batam, National Transport Authority, Department of land transportation (Ministry of transportation), Organda (Land Transport Organization) Private sector/ government enterprises: newly formed Batam public transport organization (BLUD), private operators (BRT Bus Manager, parking management) Social/ communities: citizens of Batam

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Green Transport – Action Plan

Program: Development of Network of Bicycle Lanes and Footpaths in Batam City

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Green Transport – Action Plan Program: Development of Network of Bicycle Lanes and Footpaths in Batam

City

Why? Batam is suffering from growing traffic congestion and air pollution. This is caused by a rapid increase of motorized vehicles (currently over 1 million, fivefold in comparison to 2000) and a low share of public transport (1.5% of total vehicles). The situation is urgent given the expected population growth from 1.03 million in 2015 to 1.52 million in 2020. Continued reliance on, and uncontrolled growth, of private motorized transportation is deemed unsustainable.

While our citizens want clean, safe and healthy public transport options (see Program D – Development of the “Trans Batam” Bus Rapid Transit System), we are also keen to promote the use of non-motorized modes of traffic (walking, bicycling) by providing exclusive pedestrian and bicycles lanes. While in the short-term a reduction of motorized private transport is sought, ultimately we aim to transition from a motor-vehicle oriented society to a multi-modal society.

Currently only the town center has dedicated pedestrian pathways, but still insufficient. Because Batam’s built-up area is not very dense, it has good potential for non-motorized transport (NMT). Shaded/canopied pedestrian walkways and bicycle paths (essential in tropical climates) can be segregated from automotive roads. We would like to design our major streets for walkable communities, with ample safe crossings, pedestrian signals, cycle lanes, and shaded public areas and walkways.

To further encourage non-motorized transportation, we will pay specific attention to integrating NMT modalities with the new public transportation options. We consider NMT facilities provision as an integral part our BRT system development. Another priority is the need to provide a safe environment for pedestrians, transit users and cyclists as they are the most vulnerable users on urban streets.

Planning and decision-making on non-motorized transport In 2008, the mayor of Batam, together with ten other Asian mayors, signed the Kyoto Declaration. Under the declaration, the mayor pledged to provide exclusive pedestrian and bicycles lanes and ensure safe and comfortable movement of women, children, the elderly and people with disabilities.

BP Batam developed a transportation master plan in 2014. This plan includes 20kms of bicycle lanes, in addition to development of a BRT system. The city of Batam has yet to include non-motorized

transportation in its Spatial Development Plan (RTRW). The responsibilities for planning, construction and operation of NMT needs to be coordinated between BP Batam and the municipality, with the latter taking responsibility. A NMT Master Plan should be developed for the period 2016-2035.

Goal The NMT Masterplan 2016-2035 should connect NMT and MT modes of transportation (such as the Trans Batam Ferry and the Trans Batam BRT) in Batam’s RTRW that is currently being prepared, integrate with the new Medium-term Development Plan (RPJMD), and create opportunities for Transit Oriented Development (TOD).

A total of 78kms of bicycle lanes and 36kms of footpath network will be constructed in strategic areas in the city. NMT facilities will connect other modes of transport. We will add shading, pedestrian crossings, and other features to make walking more enjoyable and safe in areas with

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significant pedestrian use. We will add sufficient parking at strategic areas, such as larger BRT stations, major facilities, to encourage multi-modal transport.

Expected Results Improve urban mobility by integrating motorized and non-motorized modes of transportation, creating a clean, safe and healthy NMT system as part of local economic and social development as well as environmental sustainability.

Expected Benefits 1. Improved urban mobility both for long distances (buses) and short distances (bicycle lanes

and pedestrian walkways) for citizens; 2. Improved road safety and security for passengers and pedestrians alike with a positive

impact on quality of life; 3. Reduced pedestrian related road accidents; 4. Reduced air pollution with a positive impact on the quality of life and citizens’ health; 5. Reduced carbon emissions contributing to Indonesia’s commitment to the UN-FCCC;

Key Risks and Mitigation An initial assessment of the key risks of developing the NMT network:

1. The current lack of coordination combined with overlapping authorities between the various stakeholders including the municipality of Batam and the Batam Development Authority (BP Batam) can hamper development; this will necessitate the creation of an integrated committee or organization (PMU).

2. The need for significant public funding for expropriation and securing the rights-of-way and other practical bottlenecks that can hamper construction; private funding under CSR to pay for beautification and maintenance is not assured, so this will also necessitate the creation of an integrated committee or organization (PMU).

Investment Summary (2016) Project Description Timeline Preparation

(billion Rp) CAPEX (once)

OPEX (annual)

Finance

I Infrastructure 2016-2020 Rp. 700 million Rp 10 billion Rp. 200 million

Public

II Management 2016-2019 Rp. 200 million 0 0 PPP II CSR 2019 0 Rp.500million 0 CSR

Success indicators (targets) Year Pedestrian walks Bicycle path

December 2018 28.8 km 52 km

December 2020 36.0 km 78 km

Share of NMT as % of total public transport for short distances

December 2018 3% 1%

December 2020 5% 2% Targets are indicative and will be determined in detail based on detailed design for phase 1 and business plan for new transport company.

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Project NMT1: Develop Master Plan & Detailed Engineering Designs for Non-Motorized Traffic

Based on the Program Brief (attached), this Project includes the following sub-projects: (A) Prepare a Non-Motorized Traffic Master Plan for 2016-2035, and (B) Detailed Engineering Designs. This program is led by the Batam Department of Transportation (BDT), and should be developed in close collaboration with BPTC, the Batam Public Transport Company established under Program D – Development of the “Trans Batam” Bus Rapid Transit System. BDT will also seek input from BP Batam and Bappeda.

The NMT Master Plan will follow, and seek to support, the spatial plans set out in the latest RTRW, and specifically will focus on creating walkable communities, and feeder connections with BRT and other modes of public transport. The Plan will focus on short-term interventions (2016-2020), and medium- to long term interventions (2020-2035). The initial focus will be on creating additional NMT facilitates (paths, lanes, crossings, etc), while the medium- to long term focus will be on further integating NMT into a multi-modal transport system, with specific emphasis on BRT.

The initial designs should focus on cost-efficient and safe solutions for integrating NMT with motorized modes of transportation in the period 2016-2020. Designs are needed for 36kms of footpaths (including shading, pedestrian crossings, markings, and other features), and 78kms of dedicated bicycle paths (including markings, crossiings, etc).

Action Description and responsibilities Timeframe

TRAN3.1 Set up a project management unit (PMU) to plan and design Non-Motorized Traffic investments

2016

TRAN3.2 Prepare and approve project implementation plan (PIP) and budget for 2016-2020

2017

TRAN3.3 Identify and hire consultants to assist in the development of a NMT Master Plan. The focus here is on driving the development of the Master Plan through own resources

2017

TRAN3.4 Develop the NMT Master Plan and ensure approval and enactment of associated local regulations

2017-18

TRAN3.5 Prepare ToR and select qualified consultants for DED preparation 2017

TRAN3.6 Finalize the DED for pedestrian pathways and bicycle lanes, including Bill of Quantities (BOQ)

2017

TRAN3.7 Develop Project Preparation Plan and Budget and get DED and get these approved by City Council

2018

Responsible agency

Batam Department of Transportation: Preparing this program as an integral part of the business plan for the Batam Public Transport Company

Estimated costs (budget)

Rp. 700 million

Implementation mechanisms, funding & finance

Funding by APBN, and APBD II.

Other partners

Batam: Batam Public Transport Company, Bappeda, Department of Public Works Regional: BP Batam Social/ communities: Affected communities Central government: Directorate General of Land Transportation Social/ communities: Affected communities

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Project NMT2: Constrtuct Non-Motorized Traffic Interventions

Based on the Program Brief (attached), this Project includes the following sub-projects: (A) build the network of bicycle lanes and foothpaths, (B) install road safety features, and (C) landscaping of new paths/lanes during 2017-2020.

This program is led by the Batam Department of Transportation (BDT), and should be developed in close collaboration with BPTC, the Batam Public Transport Company established under Program D – Development of the “Trans Batam” Bus Rapid Transit System. BDT will also seek input from BP Batam and Bappeda.

Foothpaths and bicycle lanes will predominantly be constructed along existing traffic corrdidors. An important focus for construction will be to minimize the construction impact on traffic flows (minimal traffic congestion) and living environment (especially in downtown areas). When planning for, and during construction, BDT will seek continuous coordination with relevant government entities, such as POLRI, and neighbourhood representatives.

Where possible, BDT will select local contractors for the implementation works, and will encourage the use of locally available construction materials.

Action Description and responsibilities Timeframe

TRAN3.1 Set up a project management unit (PMU) to implement the Non-Motorized Traffic investments. This PMU may be the same as the one set up for the Master Planning, but will also include POLRI and possibly neighbourhood representatives for affected areas.

2016

TRAN3.2 Allocate sufficient budgets for project preparation and implementation for 2017-2020

2017

TRAN3.3 Pappeda to coordinate consultation and collaboration among all stakeholders

2017-20

TRAN3.4 Prepare Tender Documents, and award projects to (local) contractors for all works. Bids will be packaged by area. All bids will include hardscape (paths/lanes, markings, etc), landscaping (trees, canopies and other shading structures, plantings and other ‘natural dividers’), and safety measures (crossings, safety railings, streetlighting, etc). BTD will issue bids in tranches from late 2017-2019).

2017-18

TRAN3.5 Supervise the construction works (if needed a consultant may be hired to assist), test-run and approve completed works

2018-20

TRAN3.6 Monitor and evaluate progress and results. This may include conducting surveys in affected areas. As this is the first stage of construction the focus will be on learning from feedback. One aim is to determine most effective shading and safety solutions based on actual usage.

2019-20

TRAN3.7 Develop Project Plan and Budget and get DED and get these approved by City Council

2018

Responsible agency

Batam Department of Transportation

Estimated costs (budget)

Rp. 10,000,000,000,-

Implementation mechanisms, funding & finance

Funding by APBN, and APBD II.

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Other partners

Batam: Batam Public Transport Company, Bappeda, Department of Public Works Regional: BP Batam Social/ communities: Affected communities Central government: Directorate General of Land Transportation Social/ communities: Affected communities

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Green Water– Action Plan

Program: Improvement of urban drainage and flood control system

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Green Water – Action Plan Program: Improvement of urban drainage and flood control system

Why? Our city currently hasflood inundation problems in 9 sub-districts (Kecamatan) over 45 sites during the rainy seasons due to the advancing urbanization of Batam City where flood plains have been improperly occupied and developed, and where local drainage problems have not been adequately considered and handled. Flooding has an adverse impact on the economy, and also the safety of residents.

Impermeable areas are rapidly developing and drainage systems are not adequate to cope with the additional stormwater runoff. There is a need for improved draiange and flood management and also regulations to reduce surface runoff production from new developments, including water retention on site, reduced permeable surface areas, as well as design of suitably sized drains.

The most affected areas are located in the urbanized area Batam Centre, Sungai Harapan, Marina, Sungai Pelungut, Buliang dan Duriangkang and included some private housing complexes. Flood flows can damage built assets, create loss of earnings and GDP, and impact on human safety.

The lack of a standard set of performance indicators for urban drainage is seen by many, including Bappenas, as a serious disincentive for funding in the sector for without measureable and verifiable outputs of project success, justification for budget expenditure becomes difficult; however, defining the performance of a storm drainage system is not straightforward.

Current status There is no updated Urban Drainage and Flood Control (UDFC) Master Plan for Batam City. The first UDFC Master Plan was established in early 1980 by BP Batam and since then there is no planning document even after the establishment of an autonomous Batam City local government in year 1999.To improve the situation, the City Government of Batam has already decided to develop a new integrated urban Drainage and Flood Control Master Plan.

Goal The contemporary engineering approach to drainage is to recognise storm water is part of the total water cycle. Consideration needs to be given to the impact on the receiving environment, its integration into the built environment, and to recognize Batam’s water supply is a limited resource and the urban drainage system provides opportunities to provide important water resources.

Successful integration of elements of Batam’ urban drainage systems into the urban landscape can provide benefits to all stakeholders. These resources can enhance visual amenity, provide recreational opportunities and can help to engender a sense of 'ownership' and focus for the local community. Preserving, and in some cases restoring, natural features of drainage lines and waterways, such as natural channels, wetlands and riparian vegetation can often be advantageous to both the environment as well as enhancing visual amenity.

Results 1. An urban drainage and flood control master plan for Batam City. 2. Better integrated and maintained sustainable drainage infrastructure. 3. Flood hazard management/warning plan

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Benefits 1. Minimise economic impacts of flooding, in GDP and earnings losses. 2. Increase urban resilienece 3. Reduce impacts of floods on health, safety and built assets. 4. Ensure future development don’t have impacts on downstream properties. 5. Safeguard Batam’s water resources

Success indicators (targets)

Flooded areas

2015 45 sites

2020 20 sites

Key risks 1. Uncontrolled development

Risk mitigation 1. Approve a drainage and flood risk master plan which is integrated into the City’s spatial

development plans and enforce development control.

Project UDFC-1: Prepare a new Master Plan for Urban Drainage and Flood Control System

It is necessary to create and establish a new Urban Drainage and Flood Control (UDFC) system for our City. This new Master plan is an important tool to to identify remedial drainage projects for construction, and also to guide new land development projects (in collaboration with BP Batam) to be consistent with Batam island drainage needs. The master plan also provides valuable input to the City’s RPJMD (2016-2020) Five Year Capital Investment Program, and help to identify and acquire land or access for future capital improvements and areas for preservation of raw water sources (In Line with Green Water and Sanitation Programs) to reduce the environmental impact of the City and help achieve our Green Vision. This project will be led by Dinas PU in collboration with Bappeda of Batam City and BP Batam.

The Master Planning will:

Flood hazard areas under existing and various future development conditions must be defined;

Take into account climate change;

Identify flooding problem areas, and infrastructure that will require improvements where future development is planned;

Preparation of conceptual plans for drainage and flood control infrastructure, with short medium and long term priorities;

follow the Ministry of Public Works guidelines No. 12 /PRT/M/2014 regarding the Urban Drainage Management.

Provide recommendations for improved floodplain management and river enhancement, to keep new land development out of floodplains, while emphasizing their natural and beneficial functions.

Provide recommendations on catchment management and land use planning.

Provide recommendations on, generic design (design flood, design storm etc), construction and maintenance.

Develop recommendations on monitoring, information services, and flood warning.

Develop procedures for the reporting of information on flooding incidences and advice to residents.

Engaging stakeholders, including both upstream and downstream developers and landowenrs, from the beginning of project development helps in determining the actual drainage needs.

Action Description and responsibilities Timeframe

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UDFC-1.1 A PMU (Project Management Unit) shall be established that needs to design and coordinate and monitor related projects, and promote the advocacy of good urban drainage practices among residents and housing developers. The PMU contains members from all relevant stakeholders, including Bappeda, Dinas PU (Public Works Agency), Highways Agency, Dinas Tata Bangunan (Building Codes Agency), DKP (the Cleaning and Landscaping Agency), BLH (Environment Agency), Health Agency, BP Batam, and the Provincial government and the Ministry of Public Works & Housings (DG of Human Settlements and DG Water Resources). PMU to coordinate with Green Team on the implementation of this Program.

2017

UDFC-1.2 PMU will prepare a robust terms of references (TOR) for the preparation Master Plan. A competitive tender consultancy procurement will be done in order to get the maximum results.

2017

UDFC-1.3 The Consultant to work with relevant City stakeholders in developing new Master Plan as guided by the Ministry of Public Works regulation No. 12 /PRT/M/2014 regarding the Urban Drainage Management, including the environment agency, highways agency, social groups etc.

2017

Responsible agency (PMU)

Dinas PU

Estimated costs (budget needs)

Preparation (design, procure): Rp. 2,400,000,000

Implementing mechanism, funding & financing

Traditional procurement

Other partners Batam City: Bappeda, City spatial planning agency Provincial: River Basin Authorithy (Balai Wilayah Sungai) National Government: Ministry of Public Works Private: REI (Housing Estate Developers) Social/ communities: Universities, NGOs, Sanitation Working Group and Green Communities

Project UDFC-2: Implement construction of priority drainage infrastructure

This will include aspects related to design, construction and maintenance of priority drains and related infrastructure. The construction works will follow the Ministry of Public Works regulation No. 12 /PRT/M/2014 regarding the Urban Drainage Management as well as to refer for the Environmental Management & Monitoring plans (RKL & RPL).

Action Description and responsibilities Timeframe

UDFC-2.1 Commission consultants to develop detailed engineering design (DED) for prioritised infrastructure, including production of: Hydraulic calculations, design notes, construction drawings, technical specifications, bills of quantities, and cost estimates

2017-2018

UDFC-2.2 PMU will conduct an enviromental study (AMDAL) according to the environmental law No. 5/2012, such that construction of drainage canal > 5km and sedimentation excavation >500,000 m3 has to provide the full EIA study.

2018

UDFC-2.3 PMU to arrange all the necessary permits and coordinate with all utility providers (i.e. water supply pipelines with PT ATB, telecommunication lines with PT Telkom and other private services,

2019

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gas pipeline with PT PGN, eleectricity with Bright PLN Batam, etc)

UDFC-2.4 Construction to commence from downstream first, and will compy with the environmental management and monitoring plans (RKL & RPL).

2019-20

UDFC-2.5 Drainage maintenance unit (public works) to develop a maintenance (asset management) opertional procedure, including a rational basis for ranking maintenance projects for implementation (given the limited budget available through APBD), inspection of assets, and responding to reported failures/damages.

Responsible agency Batam Public Works Agency (Dinas PU)

Estimated costs (budget needs)

Preparation (design): Rp. 1,500,000,000 Realization (construction): to be determined based on the DED works.

Implementing mechanism, funding & financing

Traditional procurement

Funding by APBN, ABPD I and APBD II

Other partners Batam: Bappeda, PMU, BLH, Transport, Private sector: Housing Estate Developers Provincial: Balai wilayah Sungai Social/ communities: Poor communities and households regarding appropriate design.

Project UDFC-3: Non Structural Measures The non structural measures is meaning to protect the urban drainage system from the software perspective (non-phisycal works) will include the following activities:

Establish Perda (local regulations) on urban drainage and flood control.

Prepare community flood preparedness.

Prepare an Emergency response.

Action Description and responsibilities Timeframe

UDFC-3.1 Public works to draft academic paper and local regulation including:

Developers will be required to fund and construct on site water quality treatment to meet Best Practice Objectives for the removal of litter, total suspended solids, total nitrogen and total phosphorus.

Developers will be required to fund the infrastructure necessary to cater for upstream rural flows.

The Housing Developers will be required to maintain existing (pre-development) runoff rates and volumes by including infiltration and retention features into landscaping and design.

Legislation for flood reduction measures should be incorporated within the technical legislation covering urban development, regional development, environmental management, resource management, communication, housing etc.

2017-2018

UDFC-3.2 Councillors approval of local regulation 2018

UDFC-3.3 Commission an academic study to develop a hydrological design manual to assist developers in sizing and designing sustainable drainage systems. Including standard, soil group, appropriate rainfall-

2019

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runoff methods, design storms (5, 10 ,25yr) and durations for the design of retention, infiltration, and conveyance features.

UDFC-3.4 Public works to Develop a flood emergency warning and response plan.

2019

UDFC-3.5 Public Works to report annually to Bappeda, Spatial planning agency, and BP Batam to assist with development control around floodplains.

annual

Responsible agency Batam Public Works Agency (Dinas PU)

Estimated costs (budget needs)

Preparation (design): Rp. 500,000,000

Implementing mechanism, funding & financing

Traditional procurement

Funding by APBN, ABPD I and APBD II

Other partners Batam: Bappeda,

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The Six Priority Programs – Finance Actions

Fiscal Capacity The Green Team concluded that there are possibilities to further increase own local income (PAD). Possible specific actions to increase PAD that were brought up by the Green Team are:

- Introduce electronic tax collection system. This will increase collection rates, for example for restaurant tax and entertainment tax

- Improve database for IMB (building permits) and PBB (property tax)

The Green Team intends to develop a RIAP (revenues improvement action plan) to further explore these and other options and to formulate specific actions to achieve this.

To improve budgets available for capital expenditures, the Green Team sees opportunities to decrease annual unused cash balances by improving procurement and planning. This could partly free up funds for capital projects. Possible specific actions identified are:

- Advanced procurement: Batam can start procurement procedures before the local budget (APBD) is officially formalized. By this Batam can avoid delays.

- Batam is already making use of E-procurement system (electronic).

An intitial analysis of the potential borrowing capacity showed that Batam could potentially borrow over 3.000 billion Rupiah (~230 million USD) in 2016 and over 5.000 trillion Rupiah (~424 million USD) between 2016 and 2020. The Green Team indicates that this looks promising. The Green Team will discuss with high level decision makers, the possibility of attracting loans for green actions and projects that do add value to Batam’s economy and liveability but for which no budgets are currently available and actions to further explore this opportunity. The city will put special attention to its low classification (score 0,25) according to MoF Regulation no.33/PMK.07/2015 on Map of Local Government Fiscal Capacity.

The following pages show the result of the Fiscal Analysis and Financial Assessment Report.

Alternative Mechanisms to attract finance Table 1 below summarizes the result of exploring the potential for applying alternative mechanisms to priority programs. The Green Team learned that alternative mechanisms can be applied to a BOT contract for new bulk water treatment facility, Waste to Energy and BRT. Actions aimed at further exploring and applying these models have been incorporated in the action plans for these priority programs.

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Table 1 – Summary of Batam Action Plans

Project & owner (rows)/ financing options (columns)

(A) Financing

(B) Funding

(C) Implementing

mechanism

(D) Financing sources

(options)

(E) Funding sources

(options)

Waste to Energy

BOT (contract); (ii) BU Joint

Venture (company public & private)

Investor has withdrawn

Tipping fee: new regulation required

Bus Rapid Transit

BUMD/ BLUD (own company)

Private sector: buses and

possibly stations International

National and city budgets: dedicated

bus lines National budgets:

buses development

institutes: business plan BUMD (GiZ),

detailed design buslanes (ITDP)

Human Waste Management – PLT2

Batam city: septic tanks,

trucks

APBN; Batam city: sceptic

tanks trucks