PPP scheme prepared for Lampung's water project

JAKARTA: Development Supporting Agency for Water Supply System is formulating two schemes of public private partnership with local government for a clean water project in Lampung spending US$38 million investment.The scheme had been confirmed by Head of Development Supporting Agency for Water Supply System (BPP SPAM) at Public Work Ministry Rachmat Karnadi.In the first scheme, investors just prepare for a drilling machine for water processing installation (IPA), while the additional pipes will be supported by local government. Meanwhile, the investors should have been ready with IPA including additional distribution pipes in the second scheme.The PPP scheme is being formulated. We still have to discuss with the local governor first whether local government is willing to provide additional pipes, he told Bisnis, yesterday.In the meantime, if the private party provides IPA and distribution pipes, automatically the water tariff will be imposed for people to IDR6,000 per liter.Therefore, the local government should participate in the project with a maximum at 30% of total investment leading to cheaper water tariff within of IDR3,500-IDR4,000 per liter.In addition, today government through a foreign party is undergoing a feasibility study process to provide adequacy of raw water having a capacity of 400-500 liter per second which is one of requirements for the financing scheme system to 500 liter per second.Even though, there is no a privilege right for the foreign party because PT Penjaminan Infrastruktur Indonesia and PT Sarana Multi Infrastruktur, acted as a representative of government, keep watching the process to run equitably.Later, the prequalification process for the drinking water supply is targeted to be realized at least in July or August, so the project can be offered for next four months.Get higher investors interestIn the meantime, there are many interests from local and foreign investors, such as Malaysia and Singapore for the water supply project. Unfortunately, he declined to mention the name of investors.In addition, governments support through PII and Financial Ministry is a factor for higher interests from investors as they can pocket certainly a guarantee on tariff increase and policies changes.President Director of PII Shintya Roesli also confirmed that the project of Bandar Lampung Water Supply is one of projects having a guarantee from PII. Now, the feasibility study for the project is still on process, Shintya affirmed.Besides, a clean water project of Umbulan having a capacity of 4,000 liter per second has been also guaranteed.Expectedly, the guaranteed clean water projects can be a positive precedent for other projects having PPP scheme to be also guaranteed by government. Thus, positive impacts could be pocketed by investors.Meanwhile, PT Nusantara Infrastruktur Managing Director Bernadus Djonoputro that the management has great interest for PPP-scheme projects offered including Bandar Lampung Water Supply.Every PP project in Indonesia is predicted to be a profitable strategic sector, so we will definitely take a part on that.