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Performance Based Grant Offers Incentive for PDAMs to Increase Accomplishment

Performance Based Grant Offers Incentive for PDAMs to Increase Accomplishmentq

Performance has become a key indicator to measure the success of PDAMs in managing water supply systems.

However, many PDAMs in Indonesia are still struggling to improve their performance. The appraisal on the performance of 380 Regional-Owned Enterprise Managing Water Supply Management System in Indonesia carried out by BPPSPAM in 2019 found that 224 of them were healthy, 102 PDAMs were in less healthy, and 54 PDAMs were in unhealthy criteria. This condition will impact the PDAM’s capability to deliver sustainable water services to their customers.

To address this issue, the MPWH through the NUWSP program has initiated a performance-based grant (PBG) as a mechanism to stimulate the PDAM to improve and sustain their performance.

Supporting the MPWH’s program, USAID-SECO partnership assists its seven PDAM partners in West Java and Central Java to participate in the PBG. Those PDAMs are from Bogor, Karawang, Magelang, and Sukoharjo districts as well as Depok, Surakarta, and Magelang cities.

Assistance from the USAID-SECO partnership program focuses on the energy efficiency (EE) increase and non-revenue water (NRW) reduction as two critical issues that many PDAMs are facing. Moreover, low energy efficiency and high-water loss significantly impacts on PDAM operations.

On June 15, 2020, the directors of the seven PDAMs participated in a workshop to disseminate information on the PBG conducted by the Ministry of Public Works and Housing. Through this event, the PDAMs learned about the mechanisms, timeline, and supporting documents required to apply for the performance-based grant, such as letter of interest, proposal, feasibility study, and copy of the regulation on the capital participation for water supply development system.

Thus, the USAID-SECO partnership has also supported its PDAM partners to develop feasibility study documents of the NRW reduction and EE increase as a requirement of the PBG. The USAID-SECO partnership also supported the PDAMs to advocate the local governments in their respective areas to provide the equity participation.

In technical areas, the PDAMs also installed master meter and loggers to calculate inputs for the NRW system and the volume of water debit pumping for EE to enable the Directorate of Water Supply read the water debit in real time.

“Thanks to USAID-SECO partnership for their assistance in the PBG, water meter and loggers to refine the recording and monitoring of water distribution.  With these aids, I hope we can improve our works and service,” said Mr. Mat Hasyim, the Head of Technical Division of PERUMDA Air Minum Tirta Makmur of Sukoharjo district.

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