ISSN 1347-5703 JBICI Research Paper No. 36-2
JBICI Research Paper No. 36-2 Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa, Case Studies
Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa
Case Studies of East Asia
July 2008 July 2008
JBIC Institute Japan Bank for International Cooperation
4-1, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8144, Japan Tel: 03-5218-9720 （ JBIC Institute） Internet: http://www.jbic.go.jp/ Recycled paper JBICI Research Paper No. 36-2
Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa
Case Studies of East Asia
July 2008
JBIC Institute Japan Bank for International Cooperation JBICI Research Paper No. 36-2 Japan Bank for International Cooperation (JBIC) Published in July 2008 © 2008 Japan Bank for International Cooperation All rights reserved.
This Research Paper is based on the findings and discussions of the JBIC. The views expressed in this paper are those of the authors and do not necessarily represent the official position of the JBIC. No part of this Research Paper may be reproduced in any form without the express permission of the publisher. For further information please contact the Planning and Coordination Division of our Institute. Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa
Indonesia Case Study
Prof. Koji Fujimoto Takushoku University i Table of CONTENTS
1. INTRODUCTION… ………………………………………………………………………… 1
2. BRANTAS RIVER BASIN DEVELOPMENT PROJECT (The Brantas Project)… …………………………………………………………………… 2 2.1 The Brantas Project and its Development Performance… ……………………… 2 2.2 Institutions Developed during the Course of the Brantas Project by Stakeholders……………………………………………………………………………… 17 2.3 Institutional Development and Development Performance of the Brantas Project �������������������������� 38
3. A COMPARATIVE VIEW ON THE BRANTAS RIVER BASIN DEVELOPMENT PROJECT AND THE CITARUM RIVER BASIN DEVELOPMENT PROJECT… …………………………………………………………… 47 3.1 Development Area …………………………………………………………………… 47 3.2 Development Principle… ……………………………………………………………… 47 3.3 Development History…………………………………………………………………… 48 3.4 Coordination between Planning and Project Implementation…………………… 49 3.5 Project Management Unit……………………………………………………………… 49 3.6 Projects (Master Plans/Studies and Physical Projects) Implemented and External Assistance… ………………………………………………………………… 51 3.7 Performance (Output and Outcome)… ……………………………………………… 52 3.8 Institutions Created and Developed… ……………………………………………… 52
4. JAKARTA WATER SUPPLY SYSTEM DEVELOPMENT PROJECT (The JWSSD Project)………………………………………………………………………… 56 4.1 The JWSSD Project and its Development Performance…………………………… 56 4.2 Institutions Developed during the Course of the JWSSD Project by Stakeholders……………………………………………………………………………… 68 4.3 Institutional Development and Development Performance of the JWSSD Project…………………………………………………… 86
5. CONCLUSION … …………………………………………………………………………… 93 5.1 Stakeholders and Institutions Created/Developed………………………………… 93 5.2 Performances within the Project Cycle and Spillover Performance outside the Project Cycle………………………………………………………………………… 94 5.3 Contributions of Institutions to Performances……………………………………… 94
i REFERENCES 1. References for the Brantas Project and the Citarum Project… …………………… 97 2. References for the JWSSD Project… …………………………………………………… 98
INTERVIEWEES 1. List of Interviewees on the Brantas Project and the Citarum Project… ………… 99 2. List of Interviewees on the JWSSD Project… ………………………………………… 100
ii iii List of Figures
Figure 2.1: Organization of Brantas River Basin Development Executing Office…… 31 Figure 2.2: Linkages between Institutions and Development Performances of the Brantas Project… ………………………………………………………… 46 Figure 4.1: Organization of the Jakarta Project Office -PMU-… ……………………… 79 Figure 4.2: Organization of Pulogadong Project Site Office (Sub-PMU)… …………… 79 Figure 4.3: Organization of Buaran Project Site Office (Sub-PMU)… ………………… 79 Figure 4.4: Organization of PJSIP Project Site Office (Sub-PMU)……………………… 80 Figure 4.5: Organization of Ministry of Public Works… ………………………………… 81 Figure 4.6: Linkages between Institutions and Development Performances of JWSSD Project… ………………………………………………………………… 92
ii iii List of Tables
Table 2.1: Master Plans and Projects Implemented… …………………………………… 6 Table 2.2: Dam and Hydropower Projects…………………………………………………… 7 Table 2.3: Barrage Projects… ………………………………………………………………… 7 Table 2.4: Irrigation Projects… ……………………………………………………………… 8 Table 2.5: River Improvement Projects……………………………………………………… 9 Table 2.6: Debris Control/ Sabo Projects… ………………………………………………… 9 Table 2.7: Installed Capacity of Electricity in Java and in Brantas Basin… ……… 10 Table 2.8: Agricultural Land Use and Irrigation………………………………………… 12 Table 2.9: Rice Yields in Brantas Basin…………………………………………………… 12 Table 2.10: Number of Brantas Office Staff……………………………………………… 15 Table 2.11: Number of Staff Distributed to Each Organization………………………… 16 Table 2.12: Average Annual Income per Farming Household………………………… 16 Table 2.13: Aid Commitments to Indonesia by Major Donors on CGI Basis… ……… 19 Table 3.1: Comparison between Brantas River Basin Development Project and Citarum River Basin Development Project… ……………………………… 54 Table 3.2: Summary of External Assistance to the Citarum River Basin Development ……………………………………………………………………… 55 Table 4.1: Japanese ODA Assistance and Development of Jakarta Water Supply System…………………………………………………………………………… 59 Table 4.2: Summary of Japanese Assistance to JWSSD… …………………………… 61 Table 4.3: Performances in Project Implementation… ………………………………… 62 Table 4.4: Planned Costs and Actual Costs… …………………………………………… 65 Table 4.5: Changes in Project Scope… …………………………………………………… 66 Table 4.6: Financial Internal Rate of Return (FIRR) …………………………………… 67 Table 4.7: Water Treatment Plant… ……………………………………………………… 67 Table 4.8: Served Population and Service Ratio… ……………………………………… 67 Table 5.1: Stakeholders and Institutions Identified… ………………………………… 96
iv v Acronyms and Abbreviations
AAP Annual Action Program ADB Asian Development Bank CFE Compagnie Francaise d’Enterprise CGI Consultative Group for Indonesia COB Coyne et Bellier Consultant DWS Directorate of Water Supply EIRR Economic Internal Rate of Return ETC East Tarum Canal FIRR Financial Internal Rate of Return GOJ Government of Japan IDA International Development Association IGGI Inter-Governmental Group on Indonesia IRR Internal Rate of Return JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency JWSS Jakarta Water Supply System JWSSD Jakarta Water Supply System Development MDBs Multilateral Development Banks M/Ps or M/P Master Plans NK Nippon Koei Co., Ltd. NTC North Tarum Canal ODA Official Development Assistance OECF Overseas Economic Cooperation Fund OJT On-the-Job-Training OMM Operation, maintenance and management OTCA Overseas Technical Cooperation Agency PCR Project completion report PJSIP PAM JAYA System Improvement Project PJT Perum Jasa Tirta Public Corporation PLN National Power Company PMU Project Management Unit SAPROF Special Assistance for Project Formation the Brantas Project the Brantas River Basin Development Project the Citarum Project the Citarum River Basin Development Project the JWSSD Project the Jakarta Water Supply System Development Project TOR Terms-of-Reference
iv v TSL Two Step Loan WTC West Tarum Canal WTP Water Treatment Plant
vi 1 1. INTRODUCTION
In accordance with the research framework and TOR spelled out in the Framework Paper of this study “Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa” (Jerve and Nissanke, 2008), the Indonesian case selected two projects; the Brantas River Basin Development Project (the Brantas Project) and the Jakarta Water Supply System Development Project (the JWSSD Project). In addition, the Citarum River Basin Development Project (the Citarum Project), which is quite similar to the Brantas Project in its natural, climatic and physical conditions, is chosen as a reference project for a brief comparative study against the Brantas Project. One of the distinct characteristics common to the Brantas Project and the JWSSD Project is that each Project is composed of multiple individual projects. Throughout this paper, therefore, both Projects are analyzed in an aggregate manner, not on an individual project basis.
The analytical framework applied to the Brantas Project and the JWSSD Project is the same. It consists of three steps. First, a big picture of project development vis- à-vis Japanese assistance is reviewed together with its development performances at each stage of the project cycle (pre-implementation stage, implementation stage and post-implementation stage). Second, major stakeholders involved are specified from the donor side, Japan, and the recipient side, Indonesia. Then, a variety of institutions created and developed by all the stakeholders during the course of Project’s realization are identified. In doing so, backgrounds and reasons why those institutions are formed are also investigated. Third, relationships between project performances perceived in the first step and institutions identified in the second step are analyzed in such a way as to identify cause-and-effect linkages between them as well as qualitative and quantitative contributions of the institutions related to the performances.
In addition, in an attempt to assess the effectiveness of Japanese ODA, the Japan- assisted Brantas Project and the Euro/World Bank-assisted Citarum Project are comparatively analyzed, within the analytical framework of the Brantas Project/the JWSSD Project, with institutional development in mind.
In this paper, assuming that all the stakeholders make their best efforts to carry out their roles and responsibilities in the most effective and efficient way or to reduce transaction costs in the North’s terminology and, to this end, develop a variety of institutions, the author defines “institutions” in the broadest sense and, therefore, includes systems, measures, methods, policies, rules/regulations, procedures, modalities, organizations and so forth, anything that can contribute to project performances. vi 1 2. BRANTAS RIVER BASIN DEVELOPMENT PROJECT (The Brantas Project)
2.1 The Brantas Project and its Development Performance
Japan has assisted in the development of the Brantas River Basin for 40 years. The Brantas Project is said to be the flag symbol of the successful cooperation between Japan and Indonesia on water resources development. We, in this sub-section, review the entire picture of the Brantas Project, as well as continuous and massive Japanese development assistance together with its performances.
(1) Prelude to Brantas River Basin Development Development of the Brantas river basin began during the Dutch colonial days in the 1840s. During the period of World War II and independence, between 1941 and 1947 in particular, the condition and performance of the facilities deteriorated badly due to the shortage of funds for maintenance. In the late 1950s, the government of Indonesia established a national development policy to develop irrigation and hydropower with priority to increase food production and to accelerate industrialization. The Brantas river basin was selected as one of the strategic basins for this policy.
A Japanese consulting company, Nippon Koei Co., Ltd. (NK) was established in 1946 by Mr. Yutaka KUBOTA. Mr. Kubota, in his attempt to foster his consulting company to be regarded as an international development consultant, visited Indonesia, Thailand, Burma, India and Pakistan in September 1953. A few years later, Mr. Kubota revisited Indonesia having the Asahan River Hydropower Development Project in mind and recommended its implementation to the Secretariat of the President Office. The Indonesian authorities then, instead of the Asahan project, requested Mr. Kubota to undertake a pre-investment study on the Brantas river basin development. NK under the guidance of Mr. Kubota quickly responded to this request and prepared a study report on the Brantas river basin development under Indonesian Government’s contract number: 16/MISPRI-33/59. This report was initiated by a reconnaissance report completed in October 1959, followed by an interim report in August 1960. A preliminary report was released in September 1960 which was finalized as the Comprehensive Report on the Kali Brantas Overall Project in April 1961, the first Master Plan for the Brantas River Basin Development.
In 1961, the Brantas Project was formerly launched under the initial title of “State Electricity Company, Brantas Hydropower Development Project” as stipulated by the decree of the Minister for Public Works and Power Generation, number: 16/2/11 dated
2 3 June 6, 1961. The late Prof. Ir. Suryono was appointed as the first project manager. NK was awarded contract (No. MISPRI/178/62) to undertake the engineering services for the Karangkates dam and power station which was the first priority infrastructure project within the first master plan.
(2) Socio-Economic Conditions of the Brantas Basin during the Early Days of Its Development The Brantas River Basin covering a catchment area of 12,000 km2, blessed with favorable natural conditions such as water resources and a tropical climate, had been developed as the granary of Java for many years. Besides, making the most use of its favorable conditions various industries had been developed around Surabaya city. This was attributable not only to the above available resources but also to the favorable transportation conditions, such as the fairly developed railway, a highway linked with Middle Java and the second largest sea port located in the center of inter-insular trade among Java, Kalimantan, Sulawesi and other islands.
The major industry in the basin was agriculture in which about 70% of the population was engaged. Total farmland occupied 730,000ha or about 60% of the basin area. Mountain slopes mostly occupied the remaining areas where the lands were not so suitable for irrigation farming due to the topography and soils as well as limited availability of water.
The major agricultural products in the basin were rice, sugar cane, cassava, soybean and maize. The total production of milled rice in 1971 was about 600,000 tons, accounting for about 5% of the national production. The basin produced about 230,000 tons of sugar annually occupying about 30% of the total production in Indonesia.
The population in the basin was about 10 million in 1971 which constituted 13% of the population of Java or 8% of the country’s total. The population density in the basin was as high as 850 persons per km2. Population versus land area naturally limited the average holding size of farmland as little as 0.5 ha per farming family. There existed substantial surplus labor force in the rural area which would be available for various industries when they were developed later on. Such unemployment or underemployment, therefore, could only be mitigated by intensification of crop farming for years to come. Thus, special attention had to be paid to the increase of crop yield to raise the living standard and to stabilize the farm economy. Crop diversification would have to be studied to improve the diet of the people in the area from depending on starchy foods to protein and vegetable fat foods.
Out of 730,000 ha of farmlands in the basin, the paddy area occupied 321,000 ha.
2 3 The irrigation areas which depended on the Brantas main stream were 77,000 ha. The existing intakes for these irrigation areas mostly faced the river directly. However, the river water of the Brantas was not always effectively utilized for these areas due to the unfavorable condition of intake structures, deterioration of the existing irrigation facilities and insufficient maintenance and management. The river water used for municipal and pollution control was also limited. However, water demand was gradually increasing along with the progress of industrialization of Surabaya. Thus, much more effective utilization of the water resources was to be planned under a well balanced distribution of the available river discharge.
Against this socio-economic background, efforts to develop the Brantas River Basin started in the late 1950s under the assistance of the Japanese Official Development Assistance (ODA) program.
(3) Brantas River Basin Development and Japanese Assistance Since the late 1950s, development of the Brantas river basin has been achieved using a holistic approach, with well planned, sustainable and environmentally sound management, based on the philosophy of “One River, One Plan and One Management”. The development projects have been constructed steadily based on four Master Plans (M/Ps or M/P) which were formulated in 1961, 1973, 1985/86 and 1998 on a 10 year review basis. Each M/P contained several to a dozen feasibility studies. The first M/ P (Comprehensive Report on the Kali Brantas Overall Project, 1961) was prepared by NK with the financial support of the Japanese war reparation fund. The second M/P (Report on the Brantas River Basin Development Plan, 1973) was also formulated by NK with a T/A grant sponsored by OTCA (present JICA). The third (Final Report for the Study of Widas Flood Control and Drainage Project Part I & Part II Study, 1985 (I) and 1986 (II)) and the fourth M/P (Operation, Maintenance and Rehabilitation of Brantas River Basin Development, 1998) were prepared by NK with a T/A grant by JICA. Almost all the projects proposed in the M/Ps were implemented with Japanese financial loan assistance by OECF (present name is JBIC and hereinafter referred to as such). In Table 2.1, the four Master Plans, and major development projects proposed in the M/Ps and implemented over 40 years are sorted out.
Throughout the development of the Brantas River Basin, the principle of “One River, One Plan and One Management” has been well kept. The Brantas River has been the only target. There were four M/Ps, but the relationship between them has been so closely interrelated and synchronized as if they were one long-term plan. Further at an early stage of the Brantas development (1965), the Brantas River Basin Development Executing Office was firmly established as an independent Project Management Unit. This Unit supervised and implemented the projects in a
4 5 unified manner. This development principle must have been supported partly by NK who had been for over 40 years the sole expatriate consultant for the entire Brantas development.
It is quite interesting to see that some of the projects recommended in a particular M/P were implemented in the following M/P period. Tulungagung Diversion Improvement Project and Waruturi Irrigation Project are a case in point. They were planned in the M/P II and implemented during the period of the M/P III. And it turned out that both projects were Asian Development Bank (ADB) loan-assisted. The Japanese ODA loaning institution, JBIC, almost solely provided the financial loan assistance. However, the World Bank (IBRD) and ADB as well as Austrian government supported, on an ad hoc basis, some of the projects proposed in the M/Ps.
As of 1996, total investment in the Project (except for urban-related development projects) amounted to \216.9 billion including local funds. Of this, the foreign currency component amount was \103.7 billion, of which Japan’s loans and grants (including the reparations provided during the early phase of the development) account for approximately 73%. Further, it is estimated that a sum almost equal to the above investment to the Brantas Project was invested in the urban related development projects of Surabaya. The investments up to 1996 on the Brantas Project are less than US$250 per resident at the 1996 current price basis on a population average of 25 years. In a way, it can be said that an investment as little as US$250 laid the foundation for acceleration of the economic activities of the entire basin.
4 5 Table 2.1: Master Plans and Projects Implemented
(4) Development Performance of Japanese Assistance over 40 Years (i) Physical Structures Implemented Almost three dozen physical structures were constructed over 40 years and they are sorted out and grouped by their characteristics in the 5 tables below.
Generally speaking, all those projects were implemented fairly successfully as planned and considerably satisfied their performance indicators in terms of conventional evaluation.
(a) Dam-cum-Hydropower Projects Nine multi-purpose dams were constructed, out of which 7 dams were supported by Japan in one form or another. Of the remaining two, one, Sengguruh Dam, was financially supported by ADB and Austria, and the other, Tulungagung Hydropower, by Austria. Austrian Government supported the latter project in response to Indonesian Government’s aid request due to the fact that an Austrian contractor supplied Austrian-made mechanical and electrical equipment to Sengguruh Dam project, and the Brantas Office as well as the Indonesian Government wanted to quickly acquire Austrian technologies which were then new to them. (Table 2.2 below)
6 7 Table 2.2: Dam and Hydropower Projects
(b) Barrage Projects For over 40 years 6 barrages, as shown in Table 2.3, were constructed along the Brantas River. These barrages were mostly constructed for irrigation purposes, but a couple of them had different purposes such as flood control (New Lengkong Barrage) and water supply (New Lengkong Barrage and Tiudan Headworks). Of these 6 projects, only one, the Mrican Barrage project was financed by ADB. This barrage covers the entire Widas river area and ADB as well as IBRD supported the irrigation development in and around the down stream area of the Mrican Barrage. Specifically, the Kediri-Nganjuk Groundwater Irrigation project and Warujayeng-Tri Tunggorono Irrigation project was respectively supported by IBRD and ADB. (Table 2.4 below)
Table 2.3: Barrage Projects
(c) Irrigation Projects Eight projects listed in Table 2.4 are characterized as irrigation projects and were constructed successfully over the years. The very first project of the Brantas Project was South Tulungagung Drainage project or South Tulungagung Irrigation project (so called, the Neyama Diversion Tunnel project), which was implemented between 1959
6 7 and 1961. This project was funded by the Japanese war reparation fund.
In those days, every year the 3,000 ha marsh area in the Ngrowo river middle reaches expanded up to 28,000 ha during the rainy season. For many years, the Government of Indonesia tried to construct an open channel to discharge the rainy season flood water into the Indian Ocean without succeeding. NK proposed to the Indonesian Government a plan to drain these floodwaters directly into the Indian Ocean by constructing a tunnel (7.2 m in dia. ×1,000 m in length). NK and the Japanese construction company (Kajima Corporation) successfully completed the project in less than three years as promised to the Government of Indonesia. Indonesian Government high officials were greatly impressed with the level of Japanese technology used on as well as efficiency and economy of the Japanese consultant and the contractor that worked for the Neyama Diversion Tunnel project. One of the reasons that NK has been appointed as the main consultant throughout the Brantas Project must have been due to this early demonstration of success. The Neyama Tunnel project brought about great effects such as the expansion of the rice growing area by over 25,000 ha and even a reduction of the 3,000 ha marsh by half, an increase of farming products worth US$2 million per annum which is approximately equivalent to the construction cost of the Neyama Tunnel project. Further, unlike the pre-tunnel days, malaria has been nearly eradicated in the area, a salient factor not to be understated. Out of the 8 irrigation projects, only three projects were financed by Japanese assistance. As touched briefly in “Barrage Projects” above, ADB played a substantial role in constructing irrigation facilities under the Brantas Project. Out of the remaining 5 projects, 4 projects by ADB and one by IBRD were financed, yet NK was the consultant for all 8 projects. So far as the irrigation sector projects are concerned, Japanese assistance did not play a major role. The Brantas Project was too grand for Japan to support totally by itself.
Table 2.4: Irrigation Projects
8 9 (d) River Improvement Projects River improvement is the backbone of Brantas water resources development, and therefore all 7 projects tabled below were carried out continuously over 30 years in sequence one after another. JBIC handled 6 projects along the Brantas main stream over the middle reach, and the lower reach (Porong River and Surabaya River) which runs through the City of Surabaya. ADB financed a branch river project, the Widas River Improvement project to support the JBIC-financed Widas Irrigation project. (Table 2.5 below)
Table 2.5: River Improvement Projects
(e) Debris Control/Sabo Projects Two major debris control/Sabo projects are listed in Table 2.6. One is the ever-lasting debris control project, financed by the Government of Indonesia, which started in 1960 and is still under implementation. This project is meant for eruptive debris control. JBIC assisted the other project, Mt. Kelud Emergency Debris Control Project, which was to rehabilitate the crater lake diversion tunnel. It was completed in 1997.
Table 2.6: Debris Control/ Sabo Projects
(ii) Development Benefits (a) Electric Power Electrification is indispensable to promote the living standard of people through enhanced economic and social activities. The electrification rate of the Brantas Basin villages was below 10% in the 1960s.
In order to integrate hydroelectric generation as one of the purposes of the Brantas
8 9 Project, two fundamental principles of planning were employed: 1) hydroelectric generation is to be introduced where possible, as part of multipurpose development, along with water resources development, and 2) mini-hydroelectric development is to be included where economically feasible.
The power generation capacity in the basin in 1961 was 31.7 MW for hydroelectric and 21.6 MW for thermal power (53.3 MW in total). Hydroelectric power was developed as part of the Brantas Project and as of 1993 it reached 268 MW (Table 2.7), an 8-fold increase. Progress of industrial development in particular further boosted the demand for electricity in the basin and thermal power generation was drastically increased. As of 1993, the installed capacity of thermal power generation reached 1,350 MW (Table 2.7). Thus, the installed capacity of power generation increased from 52 MW in 1960 to 1,618 MW in 1993.
Thanks to the development of electric power generation, the electrification of the Brantas River villages improved from less than 10% in 1960s to 85% in 1993. Although the effects of the electrification are difficult to measure, there is no doubt that such progress enhanced substantially the living standard of the Brantas people.
Table 2.7: Installed Capacity of Electricity in Java and in Brantas Basin
(b) Flood Control Flood control was a serious concern not for only the classic Mataram Kingdom (8th and 10th century AD) but right through to the Dutch colonist as well. Rudimentary dikes and flood retaining structures were constructed as early as the 9th century. The Dutch also constructed various gates and flood diversion channels in the late 19th century. However, around 1958, when the Brantas Project was initiated, a huge amount of debris produced by the eruption of Mt. Kelud accumulated on the beds of the Brantas main stream and its tributaries. This sediment deposition decreased the river discharge capacity especially for carrying floodwaters. This incurred flooding almost every year, which caused human calamities, crop damage and loss of assets.
10 11 In order to prevent the basin from flooding, three measures were introduced in the development planning. First, multipurpose dams are to be constructed in the upper reaches to control floods. Second, floodwaters of the upper Brantas and its tributaries are to be partly discharged into the Indian Ocean. Third, natural retarding basins in the middle reaches of the main Brantas are to be converted to artificial basin for more efficient reduction of the flood runoff in the lower reaches.
Most of the measures were successfully carried out in the form of specific projects and, as a result, the Brantas River Basin succeeded in reducing flood damages considerably, as it is evidenced in an article written in Kompas (Indonesian Newspaper), dated February 17, 1993, “Why is it that in the year 1993 there were floods in many places, even in the Citarum River Basin with 3 big reservoirs, but in the Brantas River Basin no floods occurred?”
The total cost of flood control projects of the Brantas Project is estimated to be approximately \85 billion at 1988 prices. On the other hand, the estimated savings in flood related damages to residential, agricultural and social capital is estimated to be \13.5 billion per annum. From these figures alone, the flood control projects can be considered very effective. In addition, there must have been invaluable effects brought about by the projects such as the stabilization of livelihoods, improvement of living environments, sophistication of land use, urban development, and promotion of industrialization.
(c) Agricultural Production and Irrigation Agriculture is the key industry in the Brantas Basin and, reflecting the serious economic conditions of the country, the Government of Indonesia stipulated self- sufficiency of rice production as the country’s top priority development objective in the first 25 year long-term development plan (PJP I 1969/70 ~ 1993/94). The basin has prospered as Java’s granary since the 1800s, largely due to the then-advanced irrigation system established by the Dutch colonials. The irrigation facilities, however, deteriorated during World War II and for subsequent years of political and economic disorder after the war. In addition, Brantas irrigation depended on the natural runoff of rivers, as there were no large reservoirs in the basin.
In view of the above, irrigation work was planned and implemented under the following three basic principles: 1) rehabilitation of the existing irrigation system, 2) development of new paddy fields where possible, and 3) supply of sufficient irrigation water through the construction of multipurpose dams in the upper reaches.
Thanks to the irrigation projects, the irrigated paddy fields increased 77,000 ha
10 11 or 25% of the total paddy fields in 1970 to a total of 324,000 ha or 100% in 1993. (Table 2.8) Trends in rice and unit yields are shown for the years 1970-93 in Table 2.9. During these 23 years, the paddy field area increased only 3% (10,000 ha), but the rice production jumped by 87% and the yield per ha by 81%. This was partially due to the use of fertilizers and improved rice species. However, the major factor was the improved dry season runoff. As a matter of fact, cropping intensity increased from 80-90% in the 1960s to 130% by 1993. In addition, the top priority objective of self- sufficiency of rice production stipulated in the 25 year development plan (PJP I) was accomplished in the basin in 1978, six years earlier than the target year of 1984.
Table 2.8: Agricultural Land Use and Irrigation
Table 2.9: Rice Yields in Brantas Basin
(d) Sabo (Volcanic Disaster Prevention) Mt. Kelud erupts every 15 years on an average. The eruption damage falls broadly into two steps. Firstly, an eruption causes the water pooled in the crater’s lake to run down rivers mixed with ejecta, and the resultant mudflow hits agricultural fields and houses, causing direct damage (primary damage). Secondly, volcanic ash accumulates on mountainsides and is then washed down by rainfall. This causes a rise in the riverbeds of the lower reaches over time, eventually causing floods (secondary damage).
To prevent this damage, two kinds of measures were undertaken: 1) to construct a diversion tunnel to reduce the amount of water pooled in Mt. Kelud’s crater lake, and
12 13 2) to construct sand pockets to check erupted earth.
The lake had 40 million m3 and 20 million m3 of water at the time of the 1919 and 1966 eruptions, respectively. Following the vast primary damage, ejecta flowed into the main stream of the Brantas River, raising the riverbeds to as high as 1 ~ 2 m in some places, which consequently caused floods in the Brantas mainstream and the Polong River. The years between 1951 and 1990 saw less primary damage since the lake was being drained through a diversion tunnel before the eruptions, reducing the water to 1.8 million m3 and 2.5 million m3, respectively. The 1990 eruption occurred after sand pockets and the Sabo dams had been completed at the foot of Mt. Kelud, which checked successfully the flow of ejecta into the main stream of Brantas which gave only a slight rise to the river beds.
(e) Domestic and Industrial Water Supply to Surabaya Domestic and industrial water supply to Surabaya urban area increased rapidly thanks to the Brantas Project. Water supply for domestic and industrial uses in 1970 was 123 million m3 per year and 335 million m3 in 2000. Demand for domestic water increased in accordance with the population growth and improvement of the living standard of the residents of Surabaya. Water supply of domestic use, thus, increased from less than 100 million m3 in 1970 to more than 200 million m3.
Owing partly to the reliable supply of industrial water, impressive industrial development was recorded. Industrial production increased from Rp 41.9 billion in 1970 to Rp 7,723 billion in 2000, which occupied 58% and 77% of East Java’s total production, respectively. In terms of the of the number of employees, it increased 30,000 in 1970 to 959,000 in 2000, which shared 9% and 45% of total employees in East Java, respectively.
(iii) Contribution to Brantas Economy and National Development Objectives The Indonesian Government historically has three basic priority development objectives; namely, development of human resources, enhancement of national life, and equitable distribution of income and eradication of poverty.
(a) Human Resource Development The first few Brantas projects commenced under the jurisdiction of different government offices such as the Irrigation Service of the Ministry of Public Works, Surabaya Municipal Irrigation Service, or the State Electric Power Corporation (PLN). It was, however, soon recognized that the Brantas Project, being a multipurpose Project, would be difficult to carry out within the framework of a single project. Thus, the Brantas River Basin Development Executing Office (the Brantas Office)
12 13 was created in 1965 as a body under the direct supervision of the Ministry of Public Works, with Mr. Suryono appointed as the first General Manager. The Brantas Office was vested two years later in 1967 with the authority broadly covering the office operations and the project execution including hiring of staff and laborers, the decision of their treatment, and budget administration. Since then, the Brantas Project has been pursued literally under the “One Management” philosophy.
The trends in the number of staff at the Brantas Office are shown in Table 2.10 (excluding general laborers). The Brantas Project employed in its 1970s peak a large number of staff, up to 7,300. Almost all 7,000 were technical staff. In other words, the Brantas Project trained and fostered, mostly through On-the-Job-Training (OJT), 7,000 engineers and technicians. During this period, it was estimated that there existed almost 30,000 engineers and technicians in Indonesia at large. Of these, 7,000 were from the Brantas Project, which accounts for over 20% of the national total of engineers and technicians.
The Faculty of Engineering of Brawijaya University in Malang City, where the Brantas Office was located, was established in 1963 in close collaboration with the Brantas Office or Prof. Ir. Suryono, in particular, who was appointed as the Dean of the Faculty from 1963 through 1982. During the early stages, the Brantas Project was the cradle of the Faculty of Engineering and later the Faculty became a foreground of education for the young engineers of the Brantas Project. Thanks to the close and continuous relationship between them, the Faculty produced 498 graduates by 1983, and 72 of them (14%) joined the Brantas Office. From Table 2.10 below, it is obvious that most of the staff with the university degree were recruited from the Faculty of Engineering of Brawijaya University.
The Brantas Office, in addition, delivered various types of lectures based on the practical fieldwork experiences of the Brantas Project to engineering students of other Universities such as ITB (Institute of Technology Bandung), Institute of Technology Surabaya and Meurdeka University of Malang.
14 15 Table 2.10: Number of Brantas Office Staff
During the early stages of the Brantas Project (between the early 1960s and the mid-1970s), nearly 50 expatriate consultants per annum on an average were assigned to a number of on-going projects. However, the number reduced gradually and toward the end of the 1990s, down to four or five. The number of foreign consultants assigned to projects varies as they differed a lot in scope and characteristics. The Karangkates Dam project implemented from 1962 to 1973 involved 318 foreign consultants and construction guidance engineers in total, or 32 per annum on an average, while the Wlingi Dam from 1972 to 1977 required 44 foreign consultants in total, or 4.4 per annum on an average. The reduction of expatriate consultants implies that the local consultants and/or engineers and planners of the Brantas Office acquired considerable technical skills and replaced the foreign consultants. Needless to say, the role of Indonesian engineers and planners as well as Indonesian consultants in formulating the M/P II, III and IV increasingly and acceleratingly expanded.
(b) Sprouted-out Private/Semi-private Companies As a result of the human resource development, the Brantas Office sprouted out three independent organizations with a substantial number of its staff during 1980s. Namely, P.T. Indra Karya (a consulting company) was practically re-established with 500 employees in 1981, P.T. Brantas Abipraya (a construction company) was newly established with 519 employees in 1985 and Perum Jasa Tirta (a water resources management public corporation) with 439 employees in 1990, and the Brantas Office was squeezed into a smaller entity as shown in Table 2.11. Thus, the Brantas Office was directly involved in expanding the private sector of the country.
14 15 Table 2.11: Number of Staff Distributed to Each Organization
(c) Development of Economic Welfare The primary objective of the Brantas Project was to develop basic economic infrastructure related to water resource development, which in turn accelerated agricultural development and industrialization through private investment and which raised the regional economic welfare of the area often measured in GDP. In this sequence the Brantas Project contributed to the improvement of the economic conditions of the people residing within the entire Brantas Basin.
The Indonesian GDP per capita of 1993 was US$674, with that for Java coming near to the national per capita GDP. In comparison, the GDP per capita for the Brantas Basin was $884, well above the national average. And in the same year, it is recorded that the GDP per capita of Surabaya City was $1,464 which is close to that of Jakarta, the most developed city in Indonesia. These facts prove that the Brantas Project contributed considerably to lifting up the level of economic welfare of the people residing in the basin.
In terms of farmer household income, a similar fact was observed. In 1993, the average annual income per farming household was Rp 1.63 million for Indonesia as a whole, while it was Rp 1.52 million for East Java and Rp 1.76 million for the Brantas Basin. As can be seen, the annual growth rate in the 1970s was 0.1% for Indonesia, 1.0% for East Java and 4.5% for the Brantas Basin. This fact as well as figures shown in Table 2.12 lay a sufficient foundation to believe that the Brantas Project substantially impacted the income of farming household.
Table 2.12: Average Annual Income per Farming Household
16 17 (d) Poverty Reduction and Income Distribution The second long-term development plan (PJP II 1994/95~2018/19) was aimed at balanced development of the entire nation with a focus on future regional development of the eastern part of Indonesia as well as poverty reduction. The Master Plan III (1985/86~2002/03) pre-fetched this national development thinking. The M/P, as a matter of course, paid special attention to the balanced development of the basin. Development projects implemented under the M/P I and M/P II focused on the economic efficiency and priority needs, based on the review of the previous master plan and the development conditions to date. Over a 25-year period, many local residents benefited from the projects implemented under the M/P I and II. During this period, however, it was impossible to achieve a perfectly balanced development; disparity in development level and living standards of the people in the Brantas Basin was created. Against this background, M/P III was formulated in such a way as to develop the lagging regions such as Ngrowo, Widas basin, the upper regions of Lesti, and the surrounding areas too. Thus, the Brantas Project would thereby contribute to poverty reduction and equitable income distribution to a wider degree.
In addition to the above, some other development impacts were recognized. First, the people’s mindset in the basin changed considerably. The local residents not only accepted the value of modern living but also motivated themselves to access modern amenities and facilities. They also accepted the modern way of work customs and ethics. Second, as the reputation of the Brantas Project prevailed internationally, several LDCs who were interested in developing their own river basins sent official missions to Indonesia to study the Brantas Project. Bangladesh, Egypt, Viet Nam and Ghana are the countries in point. Third but not the last, the projects constructed in the Brantas Project were replicated as national projects in other parts of Indonesia by Brantas-men and Brantas School graduates who were invited and transferred to those projects. Those projects include, among others, Klara Irrigation Project (Sulawesi), Tajun and Nawangan Dam (Central Java), Rora Besar Dam (West Nusa Tenggara), Batujai Dam (Lombok Island) and Juran Sate Irrigation (Lombok Island).
2.2 Institutions Developed during the Course of the Brantas Project by Stakeholders
In this sub-section, institutions developed during the course of the Brantas River Basin development, which are believed to have had direct and indirect impacts on the Brantas Project, are identified on a stakeholder-by-stakeholder basis. There are 3 stakeholders on the Japanese donor side; namely, the Japanese Government, JICA and JBIC, and 4 stakeholders on the Indonesian recipient side; namely, the Indonesian Government, BAPPENAS, DGWRD of Ministry of Public Works and the Brantas Office. All the stakeholders made their best efforts to carry out their roles and
16 17 responsibilities in a more efficient and effective way or to reduce transaction costs in the North’s terminology, and, to this end, developed a variety of institutions.
(1) Japanese Government (i) Coordinated Procedure between Planning Assistance (Technical Assistance by ODA Grants) and Implementation Assistance (Financial Assistance by ODA Loans) The Government of Japan developed a sequential procedure between technical and financial assistance at an early stage of its aid to Indonesia. The case of Brantas fits in this formula. As a result, the Brantas Project lasted over 40 years until almost all priority projects recommended in the 4 Master Plans were implemented. In a way, the commitment of the first M/P assistance seems to have meant unwritten commitments for the following technical assistance and financial assistance for a number of projects. Consequently the way Japan assisted the development of the Brantas River Basin proved to be more effective, and more efficient with more benefits accruing.
(ii) High Level ODA Dialogue Mission to Indonesia Prior to starting every 5-year development plan (REPLITA), the Government of Japan made it a rule to send a high-level policy dialogue mission on ODA to Indonesia and to reach a fundamental understanding on development policies and strategies of the country for the coming 5 years. The results were readily reflected in Japan’s ODA policies and the actual ODA itself to Indonesia.
Thus, the dialogue between the Japanese Government and the Indonesian Government was an important ceremony to deepen the understanding on their respective roles and responsibilities for the succeeding 5 years.
(iii) Continuous and Annual Commitment of ODA/AID at CGI/IGGI In 1966, the governments of 14 countries, including Japan, the United States, West Germany and the Netherlands, formed the Inter-Governmental Group on Indonesia (IGGI) and its first conference was held in Tokyo, at the request of Indonesian government for the furtherance of economic assistance. Until 1991, economic cooperation to Indonesia by donor countries and international organizations had been pledged at the annual conference of IGGI. In that year, IGGI was transformed into the “Consultative Group for Indonesia” (CGI) whose fundamental characteristics were to be the same as those of IGGI. Thus, it has been the practice of Japan to make an annual commitment of ODA through the CGI. And Japanese commitment has been based on an “add-up” of specifically identified technical and financial assistance projects. Table 2.13 shows that Japan, IBRD and ADB were the major donors and they jointly aided more than 80% of the total aid to Indonesia, each providing aid almost equally.
18 19 This modality of logistics was used to economize the time and labor of tedious and lengthy commitment procedures that the Japanese Government would, otherwise, have gone through.
(iv) Procurement Conditions of Loans ~Shift from Tying to Untying The Government of Japan, in compliance with DAC resolution of 1974, started to relax its procurement conditions from tying to untying. In Indonesia, the LDC untying condition (procurement is tied to Japan and LDCs) was first introduced in 1973 and applied to a couple of loan projects (one of them was the Karangkates project), and this condition was applied to an increasing number of project loans as the years went by. In 1979, the general untying condition was introduced and applied to several projects, and this condition was applied to more loan projects as time passed by. By 1988, the general untying condition was applied to practically all loan projects.
Thus, most of the Brantas projects committed from 1973 onwards were implemented in a more economical and efficient manner.
Table 2.13: Aid Commitments to Indonesia by Major Donors on CGI Basis
(2) JICA JICA is the sole agency of technical assistance (T/A) of Japanese ODA. JICA provides various kinds of T/A such as Development Studies, Acceptance of Trainees, Dispatch of Experts, Japan Overseas Cooperation Volunteers, Emergency Disaster Relief, and the development studies (or the pre-investment studies) are one of the most important JICA’s T/A activities.
18 19 (i) Pre-Investment Studies for the Brantas Project For the term of over 40 years Japan (JICA) sponsored 4 Master Plans for the Brantas River Basin Development. The first comprehensive master plan commenced in 1961 and it was periodically reviewed in order to update its contents to cope with the changing conditions and needs of the subsequent master plans. The four master plans are listed below.
The First Master Plan covering 1962 to 1973, prepared by NK and sponsored by Japanese reparation fund: Comprehensive Report on the Kali Brantas Overall Project, 1961.
The Second Master Plan covering 1974 to 1985, prepared by NK and sponsored by the Overseas Technical Cooperation Agency of Japan (OTCA): Report on the Brantas River Basin Development Plan, 1973.
The Third Master Plan covering 1986 to 2003, prepared by NK and sponsored by Japan International Cooperation Agency (JICA): Final Report for the Study of Widas Flood Control and Drainage Project Part I & Part II Study, 1985 (I) and 1986 (II).
The Fourth Master Plan covering 2004 to 2015, prepared by NK and Nikken Consultants Co., Ltd. and sponsored by JICA: Operation, Maintenance and Rehabilitation of Brantas River Basin Development, 1998.
In addition, feasibility studies for a few dozen projects identified and prioritized in the M/Ps were carried out by JICA’s assistance and subsequently implemented by Japanese financial assistance under JBIC.
This comprehensive plan making mechanism was considered to be one of the best ways to prepare long-term development plans and feasibility studies.
(3) JBIC JBIC’s ODA wing is the sole agency of the Japanese ODA loan to LDCs. The volume of ODA lending operations of JBIC used to be as large as a half of that of IBRD and International Development Association (IDA) combined and its lending conditions were between of IBRD and IDA.
(i) Annual Cyclical Modality on JBIC Loans Commitment to Indonesia Since the very beginning of Japan’s ODA loan assistance, JBIC in collaboration with the Japanese Government and the Government of Indonesia had developed an annual
20 21 cyclical modality of Yen loan commitment and consolidated it as below during the first few years of CGI.
August to September: Selection of Candidate Projects by Each Executing Agency of the Government of Indonesia November to January: JBIC’s Sector Survey Mission to Indonesia (Policy Dialogue on Sectoral Development and Discussion of Future Priority Projects in All the Sectors) January: Finalization of Candidate Projects for Japan’s ODA Loan Assistance by BAPENAS (vis-à-vis Blue Book) January to February: ODA Loan Request from BAPPENAS to Japanese Government via Embassy of Japan in Jakarta March to April: Mission of Japanese Government (Ministry of Foreign Affairs, Ministry of Finance, Ministry of International Trade and Industry and Economic Planning Agency) to Indonesia March to May: JBIC Appraisal Mission to Indonesia for Final Selection of JBIC’s Loan Projects. June to July: Pledge by Japanese Government at CGI Meeting September to October: Conclusion of Exchange of Notes between Japanese and Indonesian Government September to October: Signing of Loan Agreement between JBIC and Indonesian Government
This annual cycle made the entire lending operations of JBIC ready to stand- by, easy to schedule, effective and efficient in terms of cost and timesaving. All the Brantas basin projects pledged at CGI were processed to the implementation stage in a readily prepared and in a timely fashion.
(ii) Procurement Guidelines and Procedures of JBIC Loan Projects JBIC carried out its project implementation in accordance with two guidelines: “Guidelines for the Employment of Consultants by JBIC Borrowers” and “Guidelines for Procurement under JBIC Loans”. These guidelines laid the foundations for fair, competitive and transparent procurement of consultant services as well as goods and services (contractors) and contributed to the minimization of ill practices of procurement such as those that included corruption, collusion and nepotism. Needless to say, they are quite similar to those of MDBs such as the IBRD and ADB.
Furthermore, they gave positive impacts on the consolidation of Indonesian domestic procurement rules and regulations. The latest Indonesian procurement guidelines (the
20 21 Presidential Decree No. 16 of 1994 and Ministerial Decree No. 158/KDTS/1995) were stipulated in line with the international guidelines.
(iii) Delegation of Procurement Authorities to JBIC Jakarta Office from JBIC HQ In 1988, JBIC shifted its procurement authorities from its HQ to the Jakarta Office. In this way, the chief representative of the JBIC Jakarta Office was given full authority to approve or not all contracts as well as contractual procedures. Accordingly, the Jakarta Office increased its staff by assigning HQ staff and started to employ highly educated Indonesian staff as professionals. Both the Japanese and the Indonesian staff quickly acquired professional knowledge on international procurement through continuous on-the-job-training.
Thus, the transfer of procurement authorities aimed to upgrade quality and speed of procurement works. As a result, for instance, while it took at least two weeks to complete a contract approval before the transfer, it was reduced into a few days after the transfer.
(iv) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion In 1988, JBIC and the Government of Indonesia agreed in the Master Agreement (in the case of Indonesia, common clauses applicable to all loan agreements were extracted and bundled into one agreement which is called “Master Agreement”) that they exchange views with regard to the progress, completion and operation of the project and furnish all such information to each other. As a result, several methods of project monitoring and supervision vis-à-vis disbursement and procurement promotion were stipulated as below.
••Annual Action Program ••Monthly monitoring meeting between JBIC and BAPPENAS ••Regular monitoring meeting between JBIC and Executing Agency ••Daily discussion with Executing Agency, Consultants, etc. ••Analysis of the progress report and the project completion report
In reality, however, JBIC, in collaboration with other stakeholders, established and carried out the following six workshops/meetings to promote project implementation.
(a) Workshop on Procurement and Disbursement In April every year, the JBIC Jakarta Office hosts, with the help of BAPPENAS, a workshop on procurement and disbursement concerning JBIC’s Yen loan projects for newly appointed Indonesian counterpart officers of Executing Agencies (incl.
22 23 DGWRD). The JBIC’s professional staff of Jakarta Office headed by the deputy chief representative gives a series of lectures and they study together with the Indonesian officers problematic cases of past projects.
(b) Annual Action Program Workshop As a method of project monitoring and supervision, the Annual Action Program (AAP) was introduced formally in 1988. The AAP stipulates the detailed and concrete processing schedule for every JBIC project and its target amount of disbursement for the fiscal year which should be realized by the Executing Agencies (incl. DGWRD) and is agreed by JBIC and BAPPENAS who represents the Executing Agencies of all the line ministries. The AAP, then, is an important guiding tool for managing the project during the fiscal year. The Executing Agencies are responsible for keeping the schedule stipulated in the AAP and give daily attention to the progress of project implementation. Monitoring procedures of procurement and making necessary arrangements for achieving the target of project progress and disbursement are the main components of project management. In order to keep track of the APP, a quarterly review meeting is also held between JBIC, BAPPENAS, the Executing Agencies such as DGWRD and Ministry of Finance.
(c) Weekly Issues Meeting between JBIC and BAPPENAS The deputy chief representative of the JBIC Jakarta Office and one of the Indonesian professional staff have weekly meetings with officers of the BAPPENAS Japan desk to discuss issues which require urgent settlement. JBIC’s intention is to cause BAPPENAS to instruct the Executing Agencies to take necessary actions to avoid delay in planned implementation schedules of the project.
(d) Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies and Ministry of Finance On a quarterly basis, all the stakeholders of JBIC project implementation gather together at BAPPENAS and review the progress of all on-going projects in line with the AAP. If there are any problems and/or issues, responsible stakeholders are requested to take necessary actions without delay.
(e) Regular Progress Meeting between JBIC and the Executing Agency on a Staff Basis Staff of the JBIC Jakarta Office meet the officer in charge of the project of the executing agency on a regular basis to monitor progress of project implementation, in addition to day-to-day communication. Issues that can not be solved at the staff level are usually brought to the Weekly Issues Meeting between JBIC and BAPPENAS.
22 23 (f) Quarterly Review Meeting between JBIC and the Executing Agency This is the meeting between the deputy chief representative of the JBIC Jakarta and the Director General of DGWRD. Its aim is to share the knowledge about the state of affairs of project implementation with the Director General and confirm issues and problems that need to be solved under his initiatives.
All these meetings and workshops were programmed to avoid delays in procurement and fund disbursement vis-à-vis prompt and timely project monitoring and supervision.
(v) Local Cost Financing Schemes JBIC provides loans primarily for foreign currency procurement of goods and services needed for the implementation of a project, while the local currency portion for local procurement is, in principle, financed by the recipient countries. Over the years, however, cases of developing countries requesting local cost financing has increased, reflecting their tight budgetary situation.
In view that the expansion of the local cost financing makes it probable not only to prevent new and on-going projects from being delayed or interrupted due to shortages of local currency funds, but also to assist high priority projects with a high local cost component, which had not been implemented because of budgetary constraints on the part of the recipient government, JBIC evolved its local financing scheme in three separate stages.
The first is the “local cost financing loan” that JBIC introduced for Indonesia in 1971, 72 and 73 for the projects committed for assistance in each respective year. This assistance was initiated to cope with Indonesian budgetary shortage caused by high inflation which took place during 1962-67. Five Brantas projects committed in 1970 and one Brantas project committed in 1973 benefited by this scheme. After more than 10 years of absence, the local cost financing loan assistance was revived once again. In 1986, 87 and 88, the Government of Indonesia suffered an acute shortage of local currency funds due to the sharp drop in oil prices and the subsequent decrease of budgetary revenue. To assist the government during this short fall in revenues, JBIC revived the local cost financing loan scheme to assist the then on-going JBIC projects. Seven Brantas projects were benefited by this scheme. Further, the same type of loans for IBRD- and ADB-assisted projects were separately extended to Indonesia in 1988 by JBIC.
On reflection of the experience of the early 1970s, JBIC gradually developed another local financing scheme which entailed a certain percentage of the local currency
24 25 portion of each project cost to be assisted. Towards the latter half of the 1980s, JBIC solidified its policy and internally established a “30% Financing Scheme” which implies that 30% of local currency component, in addition to full foreign currency component, of the project is entitled to be covered by a JBIC loan.
Taking the 30% policy further, in 1989 JBIC introduced a new scheme called the “Pro-rated Local Cost Financing Scheme”. This scheme determines the total amount of JBIC loan by multiplying the total project cost by a certain percentage (presumably larger than 70%), without determining which procurement component is to be financed as a foreign or local currency portion. As of March 1993, for instance, the upper limit of the total loan amount was set at 85% of the total project cost or the total foreign exchange cost, whichever is larger.
These innovative schemes were invented, to a large extent, to cope with the Indonesian budget difficulties which seriously hampered project implementation at times.
(vi) Post-Evaluation and Post-Monitoring As the last step in a project cycle (Project Identification, Preparation, Appraisal, L/ A Negotiation and Board Presentation, Implementation and Supervision, and Post- Evaluation), JBIC post-evaluates and post-monitors all projects and judges how successful they are and extracts lessons learned for future projects. The few dozen projects implemented in the Brantas Project are no exceptions. Generally speaking, those individual projects were proved to have produced more or less satisfactory benefits and returns. A bundle of projects implemented under each M/P were all reviewed carefully and all the lessons learned were integrated into the successive M/P based on the “One Plan” philosophy.
This integration of lessons of post-evaluation and post-monitoring was expected to offer solutions and precautions to various problems to be envisaged throughout the project cycle.
(vii) Technical Assistance Schemes of JBIC JBIC created three kinds of T/A facilities on a grant basis, namely, SAPROF (Special Assistance for Project Formation), SAPI (Special Assistance for Project Implementation) and SAPS (Special Assistance for Project Sustainability). These facilities are implemented in up-stream, middle-stream and down-stream phases of the project cycle, respectively. JBIC employs consultants/experts, using its own budget fund, to carry out the T/As. These 3-facilities are briefly described below.
24 25 (a) SAPROF Adequate project preparation is an essential prerequisite for successful implementation of any development project. Even where a feasibility study has been completed, JBIC sometimes learns that the results are not fully adequate as a basis for a decision concerning JBIC financing. The cause is often that the borrowing country/government (Borrower) had difficulties in completing sufficient project preparation because of such factors as time constraints and/or lack of the necessary resources. In 1988, JBIC introduced the SAPROF scheme to assist prospective Borrowers in drawing up a complete implementation program for each project.
(b) SAPI While responsibility for project implementation rests with the Borrower, JBIC keeps track of progress, through its own project supervision making appropriate recommendations for attainment of smoother implementation of the project. JBIC monitors the overall schedule of the project, procedure required by the loan agreement and disbursement of loan fund. JBIC also pays attention to such matters affecting the project as socio-cultural factors, the environment, institution-building and technology transfer. These are, in fact, sometimes too complex and diverse to deal with completely at the stage of project implementation. To deal with these complex issues satisfactorily, JBIC introduced the SAPI scheme in 1992. SAPI studies and identifies problems which may hinder effective implementation of a particular project and proposes remedial measures to solve those problems on an as- needed basis.
(c) SAPS Operation, maintenance and management (OMM) have a crucial role to play in achieving the objectives of a development project, once physical implementation has been completed. The primary role of JBIC is to make loan funds available, while OMM are primarily the Borrower’s responsibility. Nevertheless, to the extent permitted, JBIC endeavors to keep track of project performance after completion in order to ascertain whether the project actually attains the targets, as JBIC feels a continuing interest in the project as the development finance institution assisting it.
In the course of such endeavors, JBIC sometimes finds that a project is showing poor performance. In such a case, JBIC has usually done what it could, if so requested, in collaboration with the Borrower or Executing Agency, to help to solve the problems facing the project. As a vehicle for bringing such collaboration into being, JBIC introduced in 1986 a scheme, called SAPS, specially designed for projects whose physical implementation has been completed but have yet to yield the intended benefits because of OMM problems.
26 27 While these three facilities were meant to supplement project preparation (i.e. feasibility study), project implementation (i.e. physical construction) and post- implementation performance (i.e. benefits), respectively, the Brantas Project utilized 5 SAPSs in 1987, 1991, 2000 (2 cases) and 2001.
(4) Indonesian Government (i) Request for ODA Projects to Japan and CGI Indonesian Government made it a rule to prepare a Blue Book annually in which all the priority development projects were listed. Based on the Blue Book, as discussed in 2.2-(1)-(iii) above, the Government requested the international donor community to help implement the listed projects at CGI. The major donors have been Japan, IBRD and ADB. Each of these institutions traditionally shared approximately 1/3 of the total annual commitment. The projects financed by Japan (JICA and JBIC) were all committed at CGI in one way or another. Needless to say, the Brantas region projects were all included in the commitment statement at CGI.
This modality of logistics was meant to save the time and labor to fill the annual resource gap for Indonesia. At the same time, the Government of Indonesia could envision the picture of Japanese ODA for the following fiscal year in advance.
(ii) Indonesian Budgetary System for Foreign-Assisted Projects The Government of Indonesia has tried hard to secure and allocate a budget to foreign-assisted projects. The Indonesian budget was composed of “Recurrent Budget” and “Development Budget”. BAPPENAS was responsible for the development budget and the Ministry of Finance for the recurrent budget. BAPPENAS, primarily a planning ministry, thus, controlled both the development planning and the development budgeting. Over the years, BAPPENAS in collaboration with the Ministry of Finance and the line ministries developed the fiscal discipline, the allocation discipline and the operational discipline. Under this system, the Government developed more systematic budgetary discipline to manage the “Development Budget”. Those budgetary disciplines were consolidated over time thanks to disciplined foreign development assistance as well as relatively successful long-term economic growth.
All in all, this budgetary system was introduced to secure efficient and effective budget appropriation for national development projects including the Brantas Project.
(iii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion As stated in 2.2-(3)-(iv), in 1988, the Government of Indonesia and JBIC agreed to hold, in the Master Agreement, the following six workshops and meetings on a regular
26 27 basis: “Workshop on Procurement and Disbursement”, “Annual Action Program Workshop”, “Weekly Issues Meeting between JBIC and BAPPENAS”, “Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies and Ministry of Finance”, “Regular Progress Meeting between JBIC and the Executing Agency on a Staff Basis”, and “Quarterly Review Meeting between JBIC and the Executing Agency”.
These meetings and workshops were programmed to avoid delays in procurement and disbursement vis-à-vis prompt and timely project monitoring and supervision.
(5) BAPPENAS (i) Political Commitment vis-à-vis Priority Projects on the Blue Book The Blue Book is the state of the art institution in the history of Indonesian socio-economic development. BAPPENAS was solely responsible for the national development planning as well as development budgeting and, therefore, played a most important role in preparing the Blue Book. The Blue Book is a book which is prepared annually and contains a list of priority candidate projects to be assisted by foreign donors. The Blue Book is compiled through a particular inter-ministerial procedure. First, the line ministries prepare a list of high priority projects and send it to BAPPENAS. BAPPENAS, then, scrutinizes all those projects and selects the top priority projects from the national developmental point of view. It is, therefore, believed that the projects listed in the Blue Book themselves are proved to be a reflection of the political commitment. It is interesting to learn that in Indonesia there are no foreign-assisted projects which were cancelled totally by the Indonesian Government once the implementation started, which implies that the Blue Book is the authoritative document.
Thus, the Blue Book system equaled the efficient and effective selection procedure of national priority development projects.
(ii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion Similarly as discussed in 2.2-(3)-(iv), BAPPENAS as the representative and window ministry of foreign aid projects in Indonesia took part in 4 higher level meetings and workshops for project monitoring and supervision as well as disbursement and procurement promotion; namely, “Workshop on Procurement and Disbursement”, “Annual Action Program Workshop”, “Weekly Issues Meeting between JBIC and BAPPENAS” and “Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies and Ministry of Finance”, and practiced a strong supervisory role over the line ministries. It is understood that the reason why BAPPENAS had such influential
28 29 power on each project was that it had budgetary authority over national development planning and the projects therein.
These meetings and workshops were held to avoid delays in procurement and disbursement vis-à-vis prompt and timely project monitoring and supervision.
(6) Ministry of Public Works -Directorate General of Water Resources Development: DGWRD- (i) Sectoral Development Planning Exercises by DGWRD One of the DGWRD’s roles in water resources development is to formulate development plans in which policies, strategies and projects/programs are spelled out, and to provide infrastructure facilities for water resources development.
The executing agencies of line ministries, regardless of their intention, seem to have consolidated a unique method of plan making over time. They, instead of making the development plan from scratch, usually made the most use of various development studies such as master plans and sector plans, which were often supported by foreign assistance. They then made it a rule to scrutinize those plans and select their own appropriate policies, strategies and projects/programs for REPELITAs and the Blue Book.
(ii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion Similarly as discussed in 2.2-(3)-(iv) and 2.2-(5)-(ii), DGWRD as the Executing Agency participated in all the related workshops and meetings often together with other stakeholders such as CIPTA KARYA, JBIC, BAPPENAS, and other Executing Agencies for the sake of project monitoring and supervision as well as disbursement and procurement promotion. Out of 6 workshops and meetings listed in 2.2-(3)-(iv), DGWRD attended 5 except “Weekly Issues Meeting between JBIC and BAPPENAS”.
(7) Brantas Office (i) The Brantas Office and Relationship between the Brantas Office and Individual Project Site Offices During the first several years, the Brantas Project was managed under a few government bodies. While water resources development projects were under control of the Ministry of Public Works, the Karangkates Project belonged to PLN (State Electricity Corporation) and the Selorejo Project was under control of the East Java Provincial Irrigation Office. In view that the Brantas Project was too complex to be governed and executed by various different government bodies, the Brantas River Basin Executing Office was newly established in 1965 as the unified executing office to
28 29 execute all Brantas related projects.
During 1970s, the organizational structure of the Brantas Office as the Project Management Unit (PMU) shaped its form which resembles Figure 2.1.
When the Brantas Project started in 1961, the core staff and engineers were seconded from the Ministry of Public Works. And as the development of the Brantas River Basin proceeded, the Brantas Office was formally opened in 1965 and started in 1967 to recruit its staff and engineers directly.
The Brantas Office hired a large number of staff (7,300) during its heyday in 1970s. As the peak period elapsed, the Brantas Office faced a problem of overstaffing. It quickly and successively coped with this problem by transferring its staff to other national development projects in the country, local governments, private sector companies, terminating the contracts and so forth. One of the remarkable events is that three offshoot organizations; P.T. Indra Karya (a consulting company), P.T. Brantas Abipraya (a construction company) and Perum Jasa Tirta (established in 1990 as a nation wide river basin management corporation) were borne in the practical sense from this practice. P.T. Indra Karya in 1981 and P.T. Brantas Abipraya in 1985 accepted 500 staff and 519 staff, respectively, and in 1990 Perum Jasa Tirta accepted 439 staff from the Brantas Office.
During the course of the Brantas Project, the PMU established individual project site offices (Sub-PMUs) to manage on-going projects. Each project site office had its own Indonesian project manager and the PMU supervised the on-going projects by hosting weekly meeting with all the project managers in Malang.
The appropriately organized independent PMU was essential to control and manage the Brantas Project. And as described above, the organizational structure of the PMU was continuously adjusted in a timely and flexible manner in accordance with the rise and fall of the workload and the volume of the Brantas Project over time.
30 31 Figure 2.1: Organization of Brantas River Basin Development Executing Office
(ii) Political Commitment to the Brantas Office One of the distinct policies employed in the execution of the Brantas Project was called “Direct Force”, meaning that the Brantas Office as PMU could directly recruit, hire, train and supervise the workforce and be responsible for the policies governing the wages and conditions of work. In other words, the central Government gave such authority to the Brantas Office soon after its operation started. How could it be possible that such authority be given to the Brantas Office? There must have been various reasons behind this policy, which are not well known. Our interviews, however, revealed some of the reasons. First, the Brantas Project was a national top priority project which aimed to feed the starving population of the country. Second, the Project was located in East Java where President Soekarno (and President Soeharto as well) was from. Third, the country had a limited number of leaders and they were often friends and comrades who had been united in high spirit to save the country. Fourth but not the last, Indonesian bureaucracy among the ministries was not rigidly consolidated yet.
As a matter of fact, the first General Manager of the Brantas Office, Mr. Suryono was a close friend of then Minister of Public Works, Mr. Sutami. They graduated from the Institute of Technology Bandung in the same year and entered the government services together. It is said that both of them, who were blue-ribbon students, were summoned by the rector and told to serve the nation together. There was nothing surprising even if they had decisive dialogues concerning the Brantas Project whenever necessary. It is also easy to think that these two leaders had a high moral to lead Indonesia.
30 31 The special treatment or commitment for the Brantas Project was thought to be a prerequisite condition to successfully realize the Brantas Project and at the same time was the expression of the Government that the Project was not allowed to fail.
(iii) Sprouted-out Organizations As the heyday of 1970s receded, the Brantas Office became increasingly overstaffed with skilled and experienced employees. The management of the Brantas Office encouraged them to discuss their future options and arrived at a conclusion that they would establish three independent organizations; two private sector companies and one parastatal corporation.
During the1980s, three organizations were spun out of the Brantas Office; namely, P.T. Indra Karya as the consulting company, P.T. Brantas Abipraya as the construction company and the Perum Jasa Tirta as the water resources management public corporation, absorbing 500, 519 and 439 employees from the Brantas Office, respectively. The total employees (approx. 3,000) in 1985 decreased to 1,048 by 1990 as shown in Table 2.11 above. Needless to say, these organizations primarily intended to sustain the Brantas Project.
In addition, the Faculty of Engineering of Brawijaya University in Malang City, where the Brantas Office was located, was established in 1963 in close collaboration with the Brantas Office. Prof. Ir. Suryono played the central role for this and he himself was appointed as the Dean of the Faculty from 1963 through 1982. Further, in 1976, after many years attempting to do so, the Water Resources Engineering Department in the Faculty of Engineering of Brawijaya University was established, whose first head, Ir. Husni Sabar, worked for the Brantas Project as the Planning Department manager. The Brantas Project contributed to foster the Faculty of Engineering considerably. During early days, the Brantas Project was the cradle of the Faculty of Engineering, which means that Brantas engineers gave lectures to supplement the shortage of the University lecturers and Faculty lectures received field experiences from the Brantas Project, and later the Faculty became a ground of education for young engineers of the Brantas Project, which means that the Faculty of Engineering was used as a place to upgrade the level of education for employees of the Brantas Project. In addition, the Brantas Project provided students of the University with valuable opportunities such as a place for student’s field practice, a place for student’s fieldwork, and as the subject of the student’s thesis. Because of this close relationship between the Brantas Office and the University, a substantial number of graduates joined the Brantas Office over time. According to the data available up to 1983, 14% of graduates (72 out of 498) worked for the Brantas Project.
32 33 The first three organizations were borne in order to solve the overstaffing problem of the Brantas Office as well as to promote the private sector business. The Faculty of Engineering of Brawijaya University was created to supply the lack of engineers in the field of water resources development in the country at large.
(iv) Contracting Systems for Manpower Development and Technology Transfer The management of the PMU employed unique contracting systems. They evolved over time in 4 phases as follows.
(a) Phase I (1961 ~ 1964) This was the period of “to see” how the foreign consultants and contractors do the work. The first couple of projects were, therefore, constructed by foreign consultants and contractors on a full contract basis.
(b) Phase II (1965 ~ 1969) During this phase, the contracting philosophy was changed to “assistance concept” for consulting services and “guidance engineer concept” for construction works. This was, therefore, the period of “to try” to do the work by themselves (Indonesians) with the assistance of a limited of number of foreign consultants and guidance engineers.
(c) Phase III (1970 ~ 1990) This was the period of “to do” design and construction work almost fully by Indonesians with a minimum assistance by foreign consultants and engineers.
(d) Phase IV (1991~ Present) Upon confirming that technology was transferred to the Indonesian staff, the PMU changed its contracting policy to a contract system just like the one employed in Phase I. But this time it was no longer the period of “to see”, but of “to oversee or supervise” the entire works of consultants and contractors.
The sequential phases above can be summarized as the “contract-out system to see by Indonesians” (Phase I), the “force account system to try and to do by Indonesians themselves” (Phase II and III) and the “contract-out system to oversee by Indonesians” (Phase IV).
The sequence aimed to have Indonesian workers acquire technologies in an efficient and effective way. The “force account” system in particular played a remarkable role in producing 7,000 qualified and well-trained engineers and technicians.
32 33 (v) Leadership of Prof. Ir. Suryono as an Institution For 14 years from 1961 to 75 (or for 10 years since the Brantas Office formally opened in 1965), Prof. Ir. Suryono, a man of complete integrity and the first general manager of the Brantas Office, devoted all his energy and efforts to the Brantas Project. He spoke about the spirit of the Brantas Project and exercised it himself. He introduced innovative management methods such as a participatory management which encouraged upper, middle and lower level employees to participate in discussions and be involved in the decision making processes, modern accounting which improved office budget control considerably, incentive-oriented compensation (“Please do your work best, let me think to look for the source for your compensation…”, he used to say), an internal control unit which aimed to ensure that “everybody works correctly and appropriately”, and a “what is good is what is to be implemented at once” policy which encouraged young employees with innovative ideas to work in a positive manner. In addition, Mr. Suryono originated the “One River, One Plan and One Management” philosophy which guided the fundamental direction and execution of the Brantas Project. In this way, Mr. Suryono led the employees of the Brantas Office to create a culture to value had work, innovative and creative workmanship, willingness to learn and handing out experiences.
Further, thanks to Prof. Ir. Suryono’s exercising his political leverage at the Ministry of Public Works, the “Direct Force”, which is the independent and exclusive authority to recruit, hire, train and supervise the workforce and be responsible for the policies governing the wages and condition of work, was given to the Brantas Office/ PMU.
The leadership of Prof. Ir. Suryono happened to be a given condition at the time, but soon proved to be an indispensable institution in uniting minds and mobilizing efforts of all the Brantas employees towards the successful realization of the Brantas Project.
(vi) “One River, One Plan and One Management” Philosophy The “One River, One Plan and One Management” philosophy was originated by Prof. Ir. Suryono as soon as he became the managing director of the Brantas Office. In mid-1950s, at the Massachusetts Institute of Technology in Boston, Mr. Suryono had an opportunity to study the Tennessee Valley Development Project under the Tennessee Valley Authority, which played a decisive role in America’s re-emergence from the Great Depression in 1930s.
Based on this experience, Mr. Suryono recognized an invaluable need to formulate a development philosophy for any comprehensive and sector-wide project like the Brantas Project, against a piece-meal project. In other words, he knew that make or
34 35 break of the Brantas Project depended on the development philosophy. As a matter of fact, the “One River, One Plan and One Management” philosophy became the backbone of the Brantas Project and hence determined “When and Where, Who does How and What to Whom?” in executing the Project throughout its development process.
(vii) Mutual Trust among the Parties Concerned The mutual trust between the Japanese consultants, the employees of the Brantas Project and the local people in the basin was consolidated during the early stages of the Brantas Project. There are various reasons for this. First, the Japanese consultant, NK, successfully completed the difficult first project, Neyama Tunnel project as promised, surprising the Indonesian authorities greatly and the consulting services of the Japanese consultant were thereafter highly regarded. Second, Prof. Ir. Suryono quickly recognized the Japanese resident consultants’ quality and capacity and believed in them. Third, the Japanese consultants worked hard together, discussed together, ate together and relaxed together with their Indonesian counterparts, through which the Indonesians learned Japanese work ethics and shaped comradeship feeling towards the Japanese consultants. Fourth, the Brantas Office often hosted local gatherings to explain what it was doing and planning to do and listened to the residents’ opinions and requests to which it responded sincerely. Fifth, a large number of local people joined the Brantas Project as general laborers and learned the modern Japanese way of thinking, living and working directly and indirectly.
How the trust was formulated may be sensed from Mr. Suryono’s memoirs in which he states “On site, the Japanese and Indonesian parties willingly lived in below- standard environment and houses. They did not complain; they worked driven by the desire that available resources should be invested in the main works as much as possible. At the time, it was possibly due to their office regulations that the Japanese did not bring their families. Through personal contacts, it was understood that the Japanese staff missed their families and their environment. Some efforts were done to make them feel at home such as, efforts to import Japanese food, and through joint effort, a Japanese clubhouse was built in Karangkates with its Japanese garden. A golf course was also created for use during leisure time; land was available, heavy equipment and operators could be used to make hazards and hills, etc.”
The trust thus consolidated was an intangible element of the tri-party relationship on site. Yet, without it, the Brantas Office could have confronted enormous difficulties in managing the Brantas Project: It could not have settled social and economic conflicts between the parties concerned, and it could not have solved the issues and problems all the individual projects faced or it could not have secured the expected
34 35 productivity of the local people involved in the Brantas Project. The trust among the people concerned was in fact the driving force of the successful development of the Brantas River Basin.
(viii) Manpower Training for Transfer of Technology and Knowledge It is evident that transfer of technology took place in a large scale. And transfer of technology could be recognized in terms of manpower development and actual training executed vis-à-vis its training methods.
(a) Training at the Brantas School Those who were trained under the Brantas Project are called graduates of the Brantas School. The Project produced more than 7,000 well-trained engineers and technicians. They, then, spread all over the country and took part in development projects in one way or another. It is envisaged that the Brantas Project fulfilled 1/3 of total demand for technical manpower in the country over 3 decades from the 1960s. Several of the graduates climbed the ladder as high as the top posts of the government sector and the private sector. In fact, the former Minister of Public Works, Dr. Ing. Soenarno is the graduate of the Brantas School.
Human resource development cannot be achieved unless the management offers work incentives and serious-minded responsibility is felt and put into effect by the employee, it is said. It was fortunate that the Brantas Project could satisfy these conditions. The Brantas Office paid much higher salaries on a job evaluation and merit basis to its employees than those of other project offices in the country, thanks partly to the “Direct Force” system and partly by cash income obtained from raw water sale. And the employees were educated and guided by Prof. Ir. Suryono, a man of character and moral strength, in such a way that they could perceive a pleasure and pride as a part of the nation building efforts.
The major method of training was the OJT. The Japanese consultants devoted themselves to transfer technologies to Indonesian counterparts. To do so, they exercised a man-to-man approach of “work-together, discuss-together, eat-together and relax-together”, which was supported by the Force Account system. This approach contributed not only to accelerate transfer of technology, but also to create a strong trust between them. It was fortunate that the Brantas Project could assign the local engineers to similar types of projects repeatedly, by which the technology was solidly transferred to them. In this respect, the one and only consultant, NK, played an important role in training the local engineers.
36 37 (b) Training at the Universities Another method of training took place at educational institutions abroad and in the country. Those who needed sophisticated technical knowledge were sent to study at the master degree level to Japan, Holland, U.K., France and Canada. Training at Indonesian universities was also carried out. The Faculty of Engineering of Brawijaya University provided educational opportunities for the technical employees of the Brantas Office.
Thus, manpower training at the Brantas School and Brawijaya University as well as at universities abroad was intended to transfer solid and practicable technologies to Indonesian workers as quickly as possible.
(ix) Coordinator Consultant System Generally speaking, the consultant provides its services in accordance with their Terms-of-Reference (TOR). In other words, the consultant’s as well as the client’s main concerns are to complete the project in an efficient and economical manner. Thus, consulting services are usually directly related to the project and provided on a project-by-project basis. In the Brantas Project too, the same approach was employed. However, the Brantas Project was far more complex in that it encompassed a few dozen and different types of projects over such a long period – 40 + years. Due to this complexity, the Brantas Office appointed in 1967 the Japanese consultant, NK, as a coordinator consultant, to carry out coordinating services for the entire Brantas Project. The consultant started its services immediately by establishing a consultant office within the Brantas Office. The coordinator consultant method lasted for 26 years, through 1993, when the Middle Reach River Improvement project was completed.
The TOR of the coordinator consultant included coordination services with respect to technical matters, personnel/staffing and funding among the Brantas Office, the consultants and the contractors for many on-going, new and completed projects. The coordinator consultant sometimes worked as advisor to the General Manager of the Brantas Office in negotiations with third parties and other consultants. It should be appreciated that part of this task helped the Brantas Office in negotiations with the central Government. Further, during the early stages of development, the coordinator consultant helped to introduce modern accounting to the staff of the Brantas Office. The Japanese consultant’s accounting staff for the first 15 years or so engaged in transferring knowledge on ways and means of modern accounting in a meticulous manner. The Brantas Office quickly acquired its expertise and modernized its accounting system. As a matter of fact, this knowledge laid the indispensable foundation for strengthening managerial capacity of the three sprouted-out
36 37 organizations.
As described above, soon after the needs for consulting services of coordination were recognized, the coordinator consultant system was introduced.
2.3 Institutional Development and Development Performance of the Brantas Project
The Brantas Project produced quite a number of institutions during its 40 years of development as discussed in Sub-section 2.2 above. These institutions contributed to the performances of the Project. Those performances can be divided into three types. One is the regular project cycle performances (shown in the rectangle at the center of Figure 2.2) that include the planning performance which implies more efficient and effective planning capacity building, the implementation performance which implies more efficient and effective implementation capacity building and the direct project performance which is composed of project outputs such as electricity generation, flood control, rice production, Sabo (volcanic disaster prevention), and domestic and industrial water supply. Another is the indirect performance (shown in the rectangle in the upper right hand corner of Figure 2.2) which can be termed region-wide and nation-wide benefits or project outcomes such as human resource development, economic growth/welfare, poverty reduction and income distribution, people’s mindset, replication of similar projects all over Indonesia, and the transfer of the Brantas experience to LDCs such as Viet Nam, Bangladesh and Egypt. And the other is a group of four organizations borne out of the Brantas Project: P.T. Indra Karya, P.T. Brantas Abipraya, Perum Jasa Tirta and the Faculty of Engineering of Brawijaya University (shown in the square in the upper center of Figure 2.2). Although they were spun out during the course of the Brantas Development, they were not mere results of the Development. They not only contributed to developing new projects but also sustaining the completed projects.
(1) Institutions and Regular Project Cycle Performances In pursuing institutional impacts on the development performances of the project cycle, it is naturally expected that they can be measured quantitatively. However, it is rather difficult to specify their degree or magnitude of contribution to the performances. In the following sub-sections, we, therefore, concentrate on clarifying “which institution contributed to what performance of which phase of the project cycle” without forgetting qualitative and quantitative measurements wherever possible.
In order to do so, all those institutions identified on a stakeholder-by-stakeholder basis in Sub-section 2.2 were bundled into nine groups on a common role-cum- function basis under the following titles: (i) “Four Comprehensive Master Plans”, (ii)
38 39 “Coordination between Master Plans and Implementation of Projects”, (iii) “Cyclical Pre-Investment Modality”, (iv) “Rules and Systems for Effective and Efficient Project Implementation”, (v) “Phased Contracting Systems”, (vi) “Manpower Training Methods”, (vii) “One and Only Consultant Policy”, (viii) “Mutual Trust between Japanese Resident Consultants, Employees of the Brantas Office and Local People” and (ix) “Management of the Brantas Office as PMU” (shown in the shaded rectangles above and below the central rectangle of the project cycle of Figure 2.2).
(i) Four Comprehensive Master Plans Comprehensive water resources development in the Brantas River Basin was carried out based on “One River, One Plan and One Management” philosophy. In line with this One Plan in the philosophy, the four master plans were prepared. The first comprehensive master plan was prepared in 1961 (Maser Plan I) and reviewed at 10-year intervals to update the plan into a new one adjusting to the changing needs and requirements. The second master plan (Master Plan II) was prepared in 1973, the third master plan (Master Plan III) in 1985 and the fourth master plan (Master Plan IV) in 1998. Formulation of those master plans was supported by Japanese Government aid and carried out by the same Japanese consulting company, NK, with ever increasing involvement of the Indonesian planners and engineers of the Brantas Office. Thus, the One Plan philosophy was well practiced. As NK consultants together with Indonesian counterparts participated in the formulation of the M/P repeatedly by inputting updated data and information on site, the quality of the M/Ps was increasingly improved and consolidated.
(ii) Coordination between Master Plans and Implementation of Projects Systematic coordination between the four master plans and subsequent implementation of 32 projects (9 dam-cum-hydropower projects, 6 barrage projects, 8 irrigation projects, 7 river improvement projects and 2 debris control and Sabo projects), which were mostly implemented under Japanese technical and financial assistance, was harmoniously made. Since the coordination system functioned in such a way that all the preceding lessons learned were integrated into the following M/ P, it is believed to have contributed, increasingly as time passed by, to creative plan- making, planned individual project implementation/construction and an accruing of the expected project benefits/outcomes.
(iii) Cyclical Pre-investment Modality The cyclical pre-investment modality encompasses three institutions as discussed in Sub-section 2.2: the Blue Book of BAPPENAS, IGGI/CGI and the annual cyclical modality of Yen loan project processing. This modality streamlined and regulated the commitment procedures and processes of the loan project. In other words, it
38 39 contributed to bridging the pre-implementation stage and the implementation stage in the most effective and efficient way.
(iv) Rules and Systems for Effective and Efficient Project Implementation The rules and systems for efficient project implementation or construction consist of various institutions identified in Sub-section 2.2 such as local cost financing schemes, the delegation of decision making authority on procurement to JBIC’s Jakarta Office, JBIC’s T/A facilities such as SAPROF, SAPI and SAPS, the procurement guidelines, the shift from tied aid to untied aid, the meetings and workshops for project implementation and the “Development Budget” system of Indonesia. These rules and systems are recognized to have alleviated the financial, procedural, technical, economic, social and political problems envisaged during project implementation/ construction.
(v) Phased Contracting Systems There were three unique contracting systems employed in sequence at the Brantas Office as discussed in 2.2-(7)-(iv). The first system is called the “contracting-out to see by Indonesians” system which was practiced from 1961 to 1964. The second system is called the “force account to try and do by Indonesians” system which was carried out from 1965 to 1990 for 25 years. The third system is called the “contracting-out to oversee by Indonesians” system which replaced the second system in 1991. The force account system, in particular, played a crucial role in fostering more than 7,000 engineers, technicians and planners through the training on the Brantas project site, which was the major contribution to human resource development, one of the long-term national development objectives. Those trained Brantas-men engaged in planning and construction works of physical structures of the Brantas Project as well as those in other parts of Indonesia. Their contribution to nation building lasted for a decade or so after the third system was introduced in 1991.
(vi) Manpower Training Methods For the sake of human resource development, the Brantas Office employed two kinds of training method; the OJT method and the higher education methods as discussed in 2.2-(7)-(viii) above. The OJT method functioned remarkably well owing to unique incentives (higher salaries, fair promotion in relation to work performance, and sense of attainment and participation), attentiveness of Japanese consultants and engineers which was practiced through the man-to-man approach and the leadership of Mr. Suryono who showed charismatic integrity. The higher education method provided training opportunities for employees who needed specialized technical and technological knowledge to study at various universities abroad (Japan, Holland, U.K., France and Canada) and at the Faculty of Engineering of Brawijaya University.
40 41 Actual training through the means of the force account system had more than 7,000 employees acquire various practicable technologies.
(vii) Mutual Trust between the Japanese Resident Consultant, Employees of the Brantas Project and Local People The mutual trust between the Japanese resident consultants, the employees of the Brantas Project and the local people in the basin was consolidated during the early stages of the Brantas Development, thanks to the invaluable efforts of the Japanese resident consultants, Mr. Suryono and his management staff, and local temporary employees and leaders.
As discussed in 2.2-(7)-(vii), the trust formulated among the people concerned, though intangible, could be a source of success of the Brantas project, and may have contributed to effective and efficient project planning and implementation on a scale far more than one can imagine. Further, it gave a positive impact on local people’s mindset in relation to, for instance, work spirit, ethics and customs.
(viii) One and Only Consultant Policy It is questionable if there was the ex ante policy of “one and only consultant” at the beginning of the Brantas Project. But NK became the one and only consultant throughout the Brantas Development for 40 years. NK started its consulting services by preparing the first master plan of the Brantas Development and completed the very first and difficult Neyama Tunnel project, which led to the Indonesian authorities to have strong appreciation for their technical abilities. As Japanese T/A and F/A continued, NK became a kind of go-between between the governments and happened to continue to serve the entire Brantas Development. In addition to the regular consulting services of planning and implementation, NK worked as a Coordinator Consultant for miscellaneous coordinating works that arose from the multiplicity and complexity of the Brantas Project from 1967 through 1993. While one may question if this policy was justifiable or not, it was compatible with the “One River, One Plan and One Management” philosophy. And it is observed that this policy had a positive contributing relationship with grouped institutions such as “Four Comprehensive Master Plans”, “Coordination between the M/Ps and Implementation of Projects”, “Manpower Training Methods”, “Mutual Trust between Three Parties Concerned” and “Management of Brantas Office”.
(ix) Management of the Brantas Office as PMU As the Brantas Office/PMU is the control center of the Brantas Development, it managed every aspect of the development. The adoption of the unified executing system, the Brantas Office, in 1965 contributed to diversifying role sharing among
40 41 projects and their relationship. It also gave flexibility to the operation of human resources such as workers and engineers, materials and equipment including heavy construction machinery, and construction funds. This facilitated the implementation of projects, thereby reducing overall construction costs.
Here, however, two distinct managerial aspects are highlighted. One is Prof. Ir. Suryono’s leadership and development philosophy, and the other is the Direct Force.
Mr. Suryono as the first general manager of the Brantas Office showed and practiced his integrity for 14 years from 1961 to 75, which formed a spiritual guiding post for all the employees of the Brantas Office. As a part of his integrated leadership, he originated the “One River, One Plan and One Management” philosophy which supported the workings of the management of the Brantas Office. In addition, he made every effort to improve the various conditions of the employees and introduced various incentive measures as described in 2.2-(7)-(v).
Further, the “Direct Force” policy discussed in 2.2-(7)-(ii) was an exclusive and independent authority set-up to manage the Brantas Office, which was bestowed upon the Brantas Office by the Government from the very beginning of the Brantas Development, and played a crucial role as a management infrastructure in managing the Brantas Office.
The leadership of Prof. Ir. Suryono, backed-up by the “Direct Force” policy, contributed to the ever more efficient and effective realization of the Brantas Project in totality.
(2) Institutions and Indirect Project Performance The indirect performance consists of, at least, six outcomes: human resource development, economic growth and welfare, poverty reduction and equitable income distribution, people’s mindset, replication of the Brantas projects all over Indonesia and transfer of the Brantas experiences to other LDCs as discussed in 2.1-(4)-(iii). The indirect performance is attributed to the comprehensive Brantas Basin Development (i.e. 4 Master Plans, 32 feasibility studies and 32 infrastructure projects) which the institutions discussed in Su-section 2.2 were created and developed. However, a couple of factors are observed to have had some specific cause-and-effect relationship with two grouped institutions, namely, the “Phased Contracting System” and “Mutual Trust between Three Parties Concerned”.
Indirect and direct cause-and-effect relationships between the indirect performance and the institutions identified in Sub-section 2.2 and re-bundled in 2.3-(1) can be
42 43 viewed below and depicted in Figure 2.2.
Human resource development took place thanks to the unique OJT whose effects were multiplied in the “Force Account” System and the higher education training by the Faculty of Engineering of Brawijaya University and universities abroad. The Brantas Project fostered more than 7,000 engineers and technicians.
Experiences of the Brantas School graduates had an additional impact on replication of the Brantas infrastructure projects. Quite a number of the graduates had spread out all over the country since the middle of 1970s and duplicated the Brantas projects successfully in different locations of the country. They contributed to laying the foundations for economic development of the country.
The success of the Brantas Project promoted economic growth and welfare of the region as well as the country as a whole. In terms of per capita GDP, the GDP per capita of the Brantas Basin reached $884 in 1993, while that of the national average was $674. In terms of household income of farmers, the average annual income of per farming household of the Brantas Basin reached Rp 1.76 million in 1993, while that of East Java and Indonesia was Rp 1.53 million and Rp 1.63 million, respectively.
Impacts of the Brantas Project on poverty reduction and equitable income distribution are very difficult to grasp in quantitative terms. However, the fact of successful economic growth explained above and the careful master plan making of the M/P III (1985/86～) must have contributed to reducing poverty and achieving more equitable income distribution in the Brantas Basin.
The mutual trust fermented between Japanese resident consultants and engineers, employees of the Brantas Office and local people of the Brantas Basin penetrated modern way of thinking and behavior into the mind of local people. The economic and social modernization must have expedited owing to this change of people’s mindset.
As the success of the Brantas Project prevailed out of the boundary of Indonesia, quite a few LDC governments showed strong interests in learning its secrets. Viet Nam, Bangladesh, Egypt and Ghana sent an official mission to the Brantas Project. It is not known if their visit had any positive impacts to their river basin development. However, the very fact the Brantas Project attracted those countries describes the success of the Brantas Project.
(3) Sprouted-out Organizations There are four organizations spun out of the Brantas Project as discussed in
42 43 2.2-(7)-(ii). They are P.T. Indra Karya (re-borne in 1981), P.T. Brantas Abipraya (established newly in 1985), Perum Jasa Tirta (established newly in 1990) and the Faculty of Engineering of Brawijaya University (established newly in 1963).
The first three organizations, in particular, engaged in not only O&M works of the completed Brantas projects but also other new projects undertaken on a contract basis since their respective establishment, thus contributing to and guaranteeing the sustainability of the Brantas Project to date.
Further, the Faculty of Engineering of Brawijaya University continuously supplied its graduates to the Brantas Project. As of 1983, 72 out of 492 graduates joined the Brantas Office.
Four organizations were spun out of the Brantas Project. In this sense, they may not be regarded as a grouped institution. However, the first three organizations contributed to the sustainability of the Brantas Project and the last to the human resource development. In this sense, they can be regarded as the 10th grouped institutions in addition to 9 institutions sorted out in 2.3-(1).
Through review above, quite a number of institutions as well as relationships between the institutions and the project performances were identified and are shown in Figure 2-2. It is also clearly observed that many institutions developed by the stakeholders during the Brantas Project caused to, more than one could imagine, bring about the successful, efficient and effective development of the Brantas Basin. The Brantas Project could not have been possible if all the stakeholders had not created those institutions discussed above individually and/or jointly.
Finally, it should be pointed out that the Brantas Project is the flag symbol of successful cooperation between Japan and Indonesia on water resources development and its success was attributed to the fact that the following three basic conditions were mutually fulfilled. First, the Brantas Project was not a piecemeal project but the comprehensive, multifaceted and sector-wide project and, therefore, needed a long period to complete. Second, there existed the coherent, solid and continuous commitment to complete the Project on the part of the recipient country, Indonesia. Third, there was the sufficient, continuous and flexible assistance from the donor country, Japan. These conditions were also the foundations on which the institutions discussed in Sub-section 2.2 were built. Each condition is, therefore, elaborated hereunder a little more in view of institution building in relation to the Brantas Project.
44 45 Fulfillment of the first basic condition was self-explanatory. It was known from the very beginning that the Brantas Project had to cover the huge area along the Brantas River and needed to be developed in sequence over a long period of time. There were, therefore, ample time and scope for all the stakeholders involved to develop various institutions. The comprehensive master plan approach, the “One River, One Plan and One Management” philosophy, the phased contracting system and so forth are the institutions in point. As a matter of fact, the 9 plus 1 grouped institutions were all sprouted out in one way or another from this condition.
The second condition was fulfilled primarily by the Indonesian authorities. They had a clear commitment from the outset to develop the Brantas River Basin as the national top priority project and, in turn, supported the Project to the best of their ability. The Brantas Project was the first river basin development project in the country and was expected to feed the people of Brantas and Indonesia at large so that the project was not allowed to fail. When, for example, NK proposed the Asahan Project to the Indonesian authorities in 1957, they, instead, requested NK to undertake a pre-investment study for the Brantas Project which had the highest priority. The Brantas Project received various supports, which were often developed into new institutions, from the government such as priority appropriation of budget even during the period of political and economic difficulties from 1961 through 1967, allocation of quality manpower like Mr. Suryono as the first general manager, possible independency to manage the Brantas Office, securing of Japanese ODA funds and so forth.
The third condition was satisfied by Japan in an ex-post manner. The Government of Japan was never in a position to make a long-term aid commitment nor provide massive assistance at a time as Japanese Government employed the single year budget system. While this is true, however, the Brantas Project resultingly received continuous and sufficient ODA from Japan. The major cause of this must have been the Master Plan approach. The Brantas Project was carried out based on the four Master Plans formulated at 10-year intervals. The first M/P in which priority projects were recommended to be implemented within the plan period (1962 ~ 73) was formulated in 1961 by the Japanese war reparation. After several years of Japanese financial assistance to the Brantas projects, the system of T/A to M/P making and F/A to priority projects quickly became the rule of the road, which was further strengthened by the establishment of IGGI in 1966. It was also fortunate that Japanese assistance to the Brantas Project coincided with the rapid ODA expansion policy which lasted, backed by the sound economic growth and expansion of Japan, from around 1960 through the latter half of 1990s. As Indonesia was the largest recipient of Japanese ODA, its volume to the Brantas Project expanded accordingly.
44 45 Consequently, Japan could respond almost fully to the Indonesian request for financial and technical assistance for the Brantas Project for over 40 years. The expansion of ODA to the Brantas Project forced the Japanese stakeholders to accelerate to develop such institutions as discussed in 2.2-(1) ~ (3) to cope with overflowing workload.
Figure 2.2: Linkages between Institutions and Development Performances of the Brantas Project
46 47 3. A COMPARATIVE VIEW ON THE BRANTAS RIVER BASIN DEVELOPMENT PROJECT AND THE CITARUM RIVER BASIN DEVELOPMENT PROJECT
This section aims to compare the experiences of the Brantas River Basin Development Project (Brantas Project) with those of the Citarum River Basin Development Project (Citarum Project). In an attempt to find better ways of carrying out river basin development, various differences between the two Projects are comparatively reviewed with institutional development in mind. (Table 3.1)
3.1 Development Area
The Brantas Project is located in East Java whose economic center is Surabaya on the Java Sea coast (the second largest city in Java, Indonesia). The Citarum Project is located in West Java whose economic center is Jakarta, the capital city of Indonesia, also on the Java Sea coast. The catchment area of the Brantas River is 12,000 km2 with the Brantas River Basin paddy fields covering some 320,000 ha. Similarly, the Citarum River’s catchment area covers 13,000 km2 with a paddy field area of 320,000 ha (the lower Citarum paddy field area covers 240,000 ha). In addition, the climatic conditions for both rivers are more or less the same. Thus, the geographical conditions for both Projects are quite similar.
This similarity lays the foundation for identifying distinctive differences in the course of development between the Brantas Project and the Citarum Project as discussed below.
3.2 Development Principle
It is observed that the Brantas River Basin was developed in line with the development principle, “One River, One Plan and One Management”. The principle contributed greatly to the entire project cycle of the development for 40 years. It also paved the way to systematically coordinate development efforts between planning and project implementation. In other words, in a ten-year sequence the four comprehensive Master Plans were formulated in accordance with the changing social, economic and natural conditions of the Brantas Basin. And the projects prioritized and recommended in each Master Plan were constructed accordingly.
On the other hand, the Citarum Project started its development without a particular principle. This might have caused the developing processes of the Citarum Basin to be rather complicated. There was little sequential and coherent coordination between planning and physical project implementation. In other words, the Citarum
46 47 River Basin was developed on a best-choice-at-the-time basis. As a matter of fact, the authorities (of West Java Province) adopted in 2000 a principle “One Resource, One Plan and One Integrated Management” in a kind of integrated development Master Plan called “Pola Induk 2000” (The West Java Provincial Water Resources Policy 2000). In other words, the Citarum Project had to wait for 40 years before the introduction of a developmental philosophy like the one that was established at the outset of the Brantas Project.
3.3 Development History
The Citarum Project was inaugurated when the late-prime minister, Ir. H. Djuanda, declared in 1956 the commencement of the Jatiluhur Multipurpose Project which was recommended within the development plan, Integrated Water Resources Development in Citarum River Basin 1956. The main aim of the Citarum Project was to achieve self- sufficiency in the national staple food (rice) supply through the increase in production.
The Brantas Project started in 1959 when a Japanese consulting company, by the request of the Government of Indonesia, completed a part of first Master Plan and construction of the South Tulungagung Irrigation Project (Neyama Diversion Tunnel Project) began. The main purpose of the Brantas Project was also to increase the staple food production, rice, to achieve regional as well as national self-sufficiency.
The Jatiluhur Multipurpose Project consisted of the Jatiluhur Dam with a reservoir capacity of 3.0 billion m3 and hydro electric power plant of 150 MW, Bekasi Weir, Curug Weir (Barrage), West Tarum Canal (WTC), East Tarum Canal (ETC) and North Tarum Canal (NTC). During the Dutch colonial period, the Dutch constructed irrigation facilities such as Walahar Weir, Cikarang Weir, Salamadarma Weir, Macan Weir and Beet Weir. All of these structures constitute the Citarum Irrigation System. Besides, it should be noted that there are two huge hydroelectric power dams (Saguling and Cirata) located at the upper stream of the Jatiluhur Dam, which were constructed by the National Power Company (PLN) with the primary objective to increase the electric power generation. These structures also constitute indirectly a part of the Citarum Irrigation System. The Citarum Project did not involve large physical facility projects after the Jatiluhur Multipurpose Project. Instead, it tended to renovate and rehabilitate the old Dutch irrigation facilities. (Table 3.2)
The Brantas Project took quite a different course. Based on the four Master Plans, the old Dutch structures were replaced by new ones and newly identified projects were also constructed. As the Brantas River is characterized by a steeper contour and an active volcanic mountain, Mt. Kelud, the Brantas Project involved several kinds of and
48 49 quite a number of projects such as Dam and Hydropower Projects, Barrage Projects, Irrigation Projects, River Improvement Projects and Debris Control/Sabo Projects.
Thus, in the Citarum Project, newly identified large scale structures have not been developed since 1967 (See Table 3.2), while in the Brantas Project, new large scale projects have been formulated and implemented continuously into the 21st century.
3.4 Coordination between Planning and Project Implementation
In the case of the Brantas Project, systematic coordination between the four Master Plans and subsequent implementation of 32 projects (9 dam and hydropower projects, 6 barrage projects, 8 irrigation projects, 7 river improvement projects and 2 debris control/Sabo projects) was harmoniously made. In the case of the Citarum Project, the first project, the Jatiluhur Multipurpose Project was coordinated with the first Master Plan, “Integrated Water Resources Development in Citarum River Basin 1956 ”. However, after this initial coordination, it was not possible to coordinate the efforts because no new comprehensive Master Plans were formulated and, accordingly, no subsequent physical projects were proposed in a sequential manner. During the course, however, several development studies were carried out for particular development objectives such as “Cisadane-Jakarta-Cibeet Study”, “Cibeet Irrigation-Flood Control- Water Supply Study”, “Upper Jatiluhur Irrigation and Coastal Strip Development Study”, “Pola Induk” and “Integrated Citarum Water Resources Management”. Among those, however, the last two studies could be regarded as a comprehensive Master Plan, which were formulated quite recently in 2000 and 2007, respectively. (Table 3.2) This implies that there was no comprehensive Master Plan for the Citarum Project between 1956 and 2000. It appears that the stakeholders concerned eventually realized the importance of the coordination between the comprehensive Master Plan and project implementation.
3.5 Project Management Unit
The Brantas Office as the unified Project Management Unit (PMU) of the Brantas Project was established in 1965 and obtained independent and exclusive authority to manage and operate the Brantas Project in 1967 soon after construction of the first couple of projects (Neyama Drainage Tunnel Project and a part of Karangkates Multipurpose Dam Project) was completed. The Brantas Office was entitled to exercise the “Direct Force” authority, which meant that it could directly recruit, hire, train, and supervise the workmen and also be responsible for the policies governing the wages and conditions of work. This status has not changed for 40 years. The Brantas Office was part of the Ministry of Public Works and yet almost an independent private
48 49 company in the way of operation. The Brantas Office made the most use of this status by leaving the entire funding responsibility for development projects and office administration to the Ministry of Public Works.
The Citarum Project has a different picture. The PMU of the Citarum Project changed over time. The first PMU was the Jatiluhur State Own Company who was responsible for the O&M of the Jatiluhur dam and hydroelectric power plant, and the Jatiluhur irrigation system (1967-70). The company was obliged to run the completed Jatiluhur Multipurpose Project profitably by law. It tired to keep this obligation in tact and realized that the profit making approach was not compatible with optimizing the use of the water resources and achieving the aims of the Citarum Development. Subsequently, in 1970 a new PMU called Jatiluhur Authority Public Corporation (the Corporation) was established. The Corporation received the authority to administer all the existing facilities related to water resources development in the Citarum River Basin. As a matter of fact, the Corporation was an amalgamation of the Jatiluhur Irrigation Project (Ministry of Public Works), the Jatiluhur Tertiary Irrigation Project (Ministry of Home Affairs) and the Jatiluhur State Own Company (Ministry of Industry). The Corporation, thus, could put itself in a position to pursue the development objectives of the Basin in a comprehensive manner. The Corporation is quite similar to the Brantas Office as the PMU. However, the decisive difference between the two is that the Corporation was not a part of the Ministry of Public Works, but an independent public corporation outside the Ministry. This probably meant that the Corporation was in a more difficult position in securing development funds for new projects for the Citarum Development.
It should be added that in 1999 the PMU of the Citarum Project was again transformed from the Jatiluhur Authority Public Corporation to Jasa Tirta II Public Corpoartion (PJT II). And PJT II turned into simply an O&M organization of the Citarum Project and, therefore, could no longer be responsible for the development of the Basin. Owing partly to the decentralization policy recommended by the World Bank, the development authority was split over various stakeholders such as the Ministry of Public Works (Balai Besar), the Ministry of Home Affaires, the Ministry of Forest and the West Java Province. As for the Brantas Project, Perum Jasa Tirta Public Corporation (PJT) as water resources management corporation for the Brantas River as well as Indonesia as a whole spun out spontaneously from the Brantas Project as early as in 1990. Since then, it has been managing the water resources mostly for the Brantas River. PJT was transformed into Jasa Tirta I Public Corporation (PJT I) in 1999 without much change in its functions and responsibilities. In fact, it is said that the policy to establish several Jasa Tirta Public Corporation for major river basins in Indonesia stemmed from the old Perum Jasa Tirta Public Corporation of the
50 51 Brantas Project.
3.6 Projects (Master Plans/Studies and Physical Projects) Implemented and External Assistance
In the Brantas Development, projects were constructed steadily based on four Master Plans which were formulated in 1961, 1973, 1985/86 and 1998 under a 10 year review basis. Each Master Plan contained several to a dozen feasibility studies. And all together, 32 projects were constructed in the Brantas Basin. In detail, 7 projects (mostly irrigation projects) were supported by the Asian Development Bank (ADB), 1 (one) by the World Bank, 2 by Austria (1 overlapping with ADB) and 1 by the Government of Indonesia. Japan supported the remaining 22 projects. Japanese contractors engaged in constructing the first couple of projects and most of the projects after 1991. During the period between 1965 and 1990, the Brantas Office by way of the Force Account Method constructed all the projects by itself. In spite of the fact that various financiers were involved, all the consulting/engineering services for the four Master Plans and the 32 projects were provided practically by the sole Japanese consulting company, Nippon Koei Co., Ltd.
In this connection, the Citarum Project has quite a different picture. The first Master Plan (Integrated Water Resources Development in Citarum River Basin) was formulated in 1956 by the help of the Dutch Government, in which the Jatiluhur Multipurpose Project was recommended. The developing projects implemented in the Citarum Project were the Jatiluhur Multipurpose Project (Bekasi Weir, Jatiluhur Dam and Hydro Electric Power Plant, Curug Barrage and Pumping Station, WTC, ETC and NTC), a little less than a dozen irrigation projects (incl. extension and rehabilitation) and a few other projects. All the projects except the Jatiluhur Project were implemented on a needs-as-arisen and individual piecemeal basis without any comprehensive Master Plan foundation. France supported the Jatiluhur Project, and the World Bank, the Netherlands, France and ADB supported other projects including plans/studies and physical structures. (Table 3.2) As a natural consequence, various European contractors and consultants were involved on a project-by-project basis in the implementation of the Citarum Project. Take the Jatiluhur Dam, for example, Coyne et Bellier Consultant (COB) of France designed and supervised and Compagnie Francaise d’Enterprise (CFE) of France constructed the facility.
All in all, it can be said that the Brantas Project is the Japanese Aid Project and the Citarum Project is the Euro-World Bank Aid Project.
50 51 3.7 Performance (Output and Outcome)
The Brantas Project accrued various kinds of outputs such as electric power (268 MW), flood control (area of coverage of 60,000 ha), rice production (irrigated field of 304,000 ha), volcanic disaster prevention and industrial/domestic water supply (129/206 million m3 in 2000). In addition, it also produced other various kinds of outcomes. They include human resource development (more than 7,000 engineers and technicians), the economic growth and welfare as well as poverty reduction of the Brantas Basin, the modern and contemporary mindset of the people, the replication of various Brantas projects at other locations in the country and an international reference (the Brantas Project is regarded by other LDCs as one of “best practices” in the river basin development).
The Citarum Project also produced various kinds of outputs such as rice production (irrigated field of 240,000 ha), flood control (coverage area of 20,000 ha) and industrial/ domestic water supply (164/428 million m3 in 2000). But it is not known if the Citarum Project accrued such other outcomes as did the Brantas Project. If it is the case, the difference between the Projects occurred partly due to a difference in the development approach between the Brantas Project and the Citarum Project. The Brantas Development was well planned and implemented in a sequential, harmonious and optimizing manner, while the Citarum Project was promoted in a discrete manner without a comprehensive long-term vision.
3.8 Institutions Created and Developed
During the course of the Branas Development, nine institutions were formed and developed, and contributed to efficient and effective realization of the Brantas Project. They are the “Four Comprehensive Master Plans”, the “Systematic Coordination between Master Plans and Implementation of Projects”, the “Cyclical Pre-Investment Modality”, the “Rules and Systems for Effective and Efficient Project Implementation”, the “Phased Contracting System”, the “Manpower Training Methods”, the “Mutual Trust between Japanese Resident Consultants, Employees of the Brantas Office and Local People”, the “One and Only Consultant Policy” and the “Management of the Brantas Office”.
In the case of the Citarum Project, it is questionable whether similar institutions as developed in the Brantas Project were formed or not. There are ample observations that the institutional development must have been limited in quantity and quality during the development of the Citarum Project. Comprehensive master plans were not formulated in sequence. There was no coordination between master planning
52 53 and project implementation. Manpower training was not continuously taken place in a sequential manner over the course of the 30 to 40 years of the project. The PMU had quite different characteristics from that of the Brantas Project. The fact that the Citarum Project resulted in limited institutional development must mean, in turn, that it could have produced more output and outcome than we can perceive today if such institutional development took place.
The above comparative review reveals that the Japanese approach was the comprehensive, coherent and sequential approach and the Euro-World Bank approach was the individualistic, needs-as-arisen and discrete approach. As far as these two cases are concerned, the Japanese approach would suggest that it is more productive to the growth and prosperity of the target area in particular and the nation of Indonesia in general than the Euro-World Bank approach.
52 53 Table 3.1: Comparison between Brantas River Basin Development Project and Citarum River Basin Development Project
54 55 Table 3.2: Summary of External Assistance to the Citarum River Basin Development
54 55 4. JAKARTA WATER SUPPLY SYSTEM DEVELOPMENT PROJECT (The JWSSD Project)
4.1 The JWSSD Project and its Development Performance
(1) Prelude to Jakarta Water Supply Development vis-à-vis Japanese Assistance Japan assisted the JWSSD Project for 35 years. The Project was not necessarily completed. However, the Project was implemented in its own right. In this sub-section we review the entire picture of the JWSSD Project and Japanese assistance to it together with its performances.
(i) Historic review of water supply of Jakarta until the first ODA project loan commitment by the Japanese government Jakarta, a Metropolitan city, became the capital of Indonesia by Presidential Decree in 1961. Jakarta as a metropolitan city was not only the capital but also the city of trade, industry, culture, tourism and others. Ever since that time, Jakarta never stopped expanding its economic, social, cultural and political activities. As a logical result, most public utilities became increasing less sufficient to meet the demand of the readily growing population. The shortage of drinking water (together with surface water pollution) in particular became increasingly serious in the city of Jakarta.
The history of Jakarta water supply dated to 1843, when clean water supply was available from ground water wells which were built in several places within the city. In accordance with the expansion of Jakarta, the demand for clean water increased. In 1917, Jakarta started to seek potential sources of a clean water supply and found several springs near Bogor (60 km south of Jakarta). These springs were developed in due course and in 1922 a transmission pipe was constructed, making 500~600 l/ s of clean water available to the people of Bogor, the Bogor-Jakarta area, and some parts of Jakarta. In spite of the fact that the population of Jakarta increased rapidly after the independence of 1945, this capacity remained unchanged until 1957 with the completion of a new water treatment plant.
(ii) Early Achievement of the Central Government In order to cope with the serious shortage of water supply, the Central Government decided in 1953 to build a new Water Treatment Plant (WTP) - Pejompongan I with a capacity of 2,000 l/s, and with the help of French technical and financial assistance construction was completed in 1957. In 1962, serious shortage of clean water supply was projected again and as a result in 1963 the government started to formulate a new water supply development plan for not only the Jakarta area but also for other
56 57 medium to large cities located throughout Indonesia. In 1964, the construction of the WTP of Pejompongan II with the capacity of 3,000 l/s started, once again with French assistance. The WTP -- Pejompongan II was constructed in the following steps:
-1970: the first stage of Pejompongan II was completed with a capacity of 1,000 l/s. -1974: the second stage of Pejompongan II as completed with an additional capacity of 1,000 l/s. -1975: the final stage of Pejompongan was completed with an additional capacity of 1,000 l/s.
Along with Pejompongan II development, the Jakarta Water Supply Cooperation of Jakarta City (PAM JAYA) developed a small number of deep wells, and small-scale water plants such as Cilandak, Suntar, Muara Karang and Cakun.
(2) Jakarta Water Supply System Development and Japanese Assistance over 35 Years The Government of Japan under grant aid implemented the technical assistance through the Overseas Technical Cooperation Agency (OTCA, presently called JICA [Japan International Cooperation Agency]) against the pre-investment studies (Master Plans and Feasibility Studies), while the implementation of project was carried out through the Overseas Economic Cooperation Fund (OECF, presently caked JBIC [Japan Bank for International Cooperation]) loan fund under Yen loan aid. The Japanese Governmental assistance to the JWSSD Project has amounted to approximately \40 billion over 35 years, which excludes local costs financed by the Government of Indonesia. Out of the \40 billion, JBIC’s loan assistance occupies an excess of 95%.
Japanese assistance for the JWSSD Project started in 1963 and lasted for 35 years until 1997 when the Jakarta Water Supply System (JWSS) was privatized. The entire picture of this Japanese Official Development Assistance (ODA) is summarized in Table 4.1 and Table 4.2. In Table 4.1, the entire picture of the relationship between the four M/Ps in which the priority projects were listed and the specific projects implemented or unimplemented is shown. In Table 4.2, all the Japanese ODA (T/A and F/A) projects provided for the JWSSD Project are listed in chronological order.
(i) Japanese Assistance in Project Planning (Master Plans and Feasibility Studies) The assistance of the Government of Japan for the JWSSD Project began in 1963 with the technical assistance study of the Jakarta Water Supply System Extension (Report on the Water Supply Extension Project for the City of Djakarta, Indonesia, Aug. 1963) through the Overseas Technical Cooperation Agency of Japan (OTCA: present JICA). This study can be regarded as the first Master Plan (M/P I) for the JWSSD
56 57 Project. Although the study did not lead to immediate Japanese financial assistance (project loan assistance) for the construction of water supply facilities in Jakarta, it did lay the foundation for future related assistance.
After a little less than ten years of absence, in 1972, JBIC supported the formulation of the second Master Plan (M/P II) on a loan basis: Extension Project of Djakarta Water Supply System and Master Plan for Djakarta Water Supply System, 1972. Under this master plan, the Stage I Development Program (S-I-DP) started. S-I-DP was comprised of an Emergency Phase Project (I-EPP), Phase 1 Project (I-P1P) and Phase 2 Project (I-P2P). I-EPP included pipe laying works of 54 km to distribute the total output of Pejompongan II to 3,000 l/s. I-P1P included the construction of Pulo Gadung WTP at 1,000 l/s with pipe laying works of 30 km and upgrading works of Pejompongan II WTP with pipe laying works for a pre-designated area. I-P2P was composed of pipe laying works to distribute the entire output of the Pejompongan II plant to West Jakarta, expansion of the Pulo Gadung Treatment Plant (additional capacity of 3,000 l/s) with 15 km of pipe laying works, and pipe laying works to distribute the total output of Pejompongan (5,600 l/s) and Pulo Gadung (4,000 l/s) within the service area (280km2) of the Stage I Program.
In 1985, the third Master Plan (M/P III): Jakarta Water Supply Development Project (Master Plan Report and Feasibility Study Report), March 1985, was formulated under JICA’s grant assistance. Under this master plan, the Stage II Development Program (S-II-DP), which would, preceded Stage III Development Program (S-III-DP) within the same master plan, commenced. S-II-DP comprised the Immediate Phase Project (II-IPP), Phase 1 Project (II-P1P) and Phase 2 Project (II-P2P). II-IPP included the construction of Buaran I WTP (2,000 l/s), a Distribution Pump Station in the same premises and the Distribution Trunk Mains connected to the existing primary main. II-P1P included the construction of Buaran II WTP (3,000 l/s), a 14 km Transmission Main from the plant to the distribution center, construction of said Distribution Center and Distribution Trunk Main, and the Lebakbulus I WTP. II-P2P included Cakung I WTP, and Transmission and Distribution (T/D) Mains.
Under the same Master Plan, the Stage III Development Program (S-III-DP) was scheduled. S-III-DP was composed of Phase 1 Project (III-P1P) and Phase 2 Project (III-P2P). III-P1P included Lebakbulus II WTP, Cakung II WTP and T/D Mains, while III-P2P included Lebakbulus III WTP, Cakung III WTP and T/D Mains.
In 1997, the fourth Master Plan (M/P IV): The Study on the Revise of Jakarta Water Supply Development Projects (Master Plan Report and Feasibility Study Report), May 1997, was prepared under a J ICA T/A grant. Under this Master Plan, the Stage IV
58 59 Development Program (S-IV-DP) was formulated. S-IV-DP was comprised of Phase 1 Project (IV-P1P), Phase 2 Project (IV-P2P), Phase 3 Project (IV-P3P), Phase 4 Project (IV-P4P) and Phase 5 Project (IV-P5P). IV-P1P included Buaran III WTP and T/D Mains, while IV-P2P, IV-P3P, IV-P4P and IV-P5P included Cipayung I WTP and T/D Mains, Cisadane II WTP and T/D Mains, Cipayung II and T/D Mains, and Cisadane III and T/D Mains, respectively.
In addition to the above four mentioned M/Ps, in 1990 JBIC assisted in the preparation of a pre-investment study for the PAM JAYA System Improvement Project (PJSIP) by its grant facility, “Special Assistance for Project Formation”. (SAPROF)
It should be noted that all these studies were carried out by the Japanese consultant, Nihon Suido Consultants Co., Ltd. (Nihon Suido)
Table 4.1: Japanese ODA Assistance and Development of Jakarta Water Supply System
58 59 (ii) Japanese Assistance in Project Implementation (Physical Structures) Master Plan II, III and IV together proposed quite a number of investment projects. However, all the projects proposed in those M/Ps were not necessarily implemented. Specifically, those projects which were proposed in I-EPP, I-P1P and I-P2P under Stage I Development Program (S-I-DP) of Master Plan II and in II-IPP and II-P1P under Stage II Development Program (S-II-DP) of Master Plan III were implemented by the Japanese loan assistance except the Cisadane I WTP (originally planned at Lebakbulus as Lebakbulus I WTP) which was lastly constructed by French assistance in 1996. (Table 4.7) The other remaining projects proposed in II-P2P under S-II-DP, III-P1P and III-P2P under S-III-DP of Master Plan III, and in IV-P1P, IV-P2P, IV- P3P, IV-P4P and IV-P5P under S-IV-DP of Master Plan IV were not implemented.
In terms of WTP, 16 WTPs were recommended all together in ‘72 M/P II (Pejompongan II Expansion, Pulo Gadung I and Pulo Gadung II), ’85 M/P III (Buaran I, Buaran II, Cisadane I -in place of Lubakbulus I-, Lebakbulus II, Lebakbulus III, Cakung I, Cakung II and Cakung III), and ’97 M/P IV (Buaran III, Cipayung I, Cisadane II, Cipayung II and Cisadane III). Out of these 16, the first 6 WTPs were constructed and the remaining 10 were not implemented.
There seem to be at least three reasons why those 10 projects were not implemented. First, the projects under S-II-DP were significantly delayed, which was partly attributed to the delayed S-I-DP. Second, the central government as well as the city government of Jakarta including PAM JAYA could not arrange or generate sufficient investment funds for these projects. Third, in 1997 when the M/P IV was completed PAM JAYA was privatized rather abruptly on a concession basis.
60 61 Table 4.2: Summary of Japanese Assistance to JWSSD
(3) Performance of Japanese Assistance over 35 Years Performance of project assistance can be reviewed from various viewpoints such as physical implementation, internal rate of return, availability of treated water, human resource development and local enterprise development.
(i) Physical Implementation The physical implementation is usually evaluated from three aspects; namely, implementation period, costs and scope of work.
(a) Implementation Period Performance of project implementation is summarized in Table 4.3. Difference between the target year in the M/P and the completion year varies from 2 to 10 years. Besides, individual projects which suffered from long delays in the construction period, ranging from 22 to 98 months, it is reported that there were a variety of reasons for the delays, such as prolonged project initiation, slow preparatory processing on the
60 61 part of local authorities, insufficient knowledge of Indonesian implementing agencies on procurement practices and procedures, particular political considerations, shortage in local cost financing, and limited capacity and capability of the local contractors.
It should be noted that JBIC financed, in principle, only the foreign currency component of all these projects and that the local currency component was financed by the Indonesian Government. In general, the foreign currency component was implemented more or less without delay, while the local currency component experienced delay in receipt.
Table 4.3: Performances in Project Implementation
(b) Cost Comparison between planned costs and actual costs spent on individual projects are sorted out in Table 4.4. As far as foreign costs are concerned, there were no cost overruns. For local costs, however, all the projects experienced cost overruns. Chronic local inflation throughout the implementation terms is the major cause. The government of Indonesia struggled to appropriate sufficient budget for local cost requirements, resulting in payment delay to local contractors, which in turn caused delay in project implementation.
(c) Scope Whether or not any change in project scope took place during project implementation is shown in Table 4.5. All in all, the projects did not experience a substantial change in project scope. In other words, they were implemented as planned. This suggests that the JICA’s pre-investment planning exercises, which often determine success or failure of project implementation, were quite satisfactory.
(ii) Internal Rate of Return (IRR) Financial Internal Rate of Return (FIRR) is one of the most important indicators
62 63 to judge “benefitability” of the public investment project. For several JBIC-financed projects, FIRRs in the pre-investment study and its appraisal as well as in post- evaluation are available and are shown in Table 4.6. Their level ranges from 3.5% to 14.5%. However, the FIRR values were relatively low or lower than 10% which is known as a “generally acceptable level for public investment”. In the case of Jakarta water supply, however, there was no other option than to invest continuously in water supply projects. Safe water supply is, after all, the issue of life or death and a rationale for the existence of a central government. In addition, demand for water in Jakarta has continued to be great so that it seemed to be impossible to keep up with, which implies much higher returns in terms of “Economic Internal Rate of Return (EIRR)”.
(iii) Water Treatment Plant Capacity, Served Population and Service Ratio The supply capacity of treated water is shown in Table 4.7. The total output of treated water reached 18,535 l/s in 1996 and has not increased since then. The first two WTPs (Pejompongan I and Pejompoingan II) and the last WTP (Cisadane) were constructed by French assistance whose total production capacity was 9,000 l/s, while Japan helped to construct 5 WTPs with the total capacity reaching 10,600 l/s.
The fact that the JWSSD Project has never succeeded in satisfying its water demand is clearly shown in Table 4.8. M /P II targeted to satisfy 4.7 million people in the Jakarta area or to achieve 77% of service ratio by 1980. In reality, however, it was only in 1997, right before the privatization, when the served population and the service ratio reached their highest levels of 4.6 million people and 53%, respectively. “The demand for water in Jakarta is so high and the supply of water so low” has long been the fact and issue, and will continue to be the case.
(iv) Human Resource Development and Local Enterprise Development Through the implementation of several projects, manpower training and transfer of technology were undertaken by the Japanese consultant and various contractors. It is believed that “three training schools”, namely, the On-the-Job-Training (OJT) at the Sub-PMU level, overseas training in Japan as a part of Japanese consultant’s TOR, and the handover training at each WTP site for operation and maintenance, contributed to both human resource development and local enterprise development. It is not easy to measure their contribution quantitatively. However, it can be said that more than a few hundred engineers and technicians, and other staff of PAM JAYA as well as Indonesian consulting companies and construction companies (contractors) were benefited in terms of capability and capacity upgrading by various Japanese aid programs. Several cases in point are a few Indonesian consulting companies such as P.T. Dacrea and P.T. Sangkuriang who worked for the Project as sub-contractors to the Japanese consulting company and a few dozen Indonesian construction companies
62 63 such as P.T. Bumi Mangun’s Karya, P.T.Biro Irata and P.T. Adhi Karya who worked as independent civil work contractors. As mentioned above, as far as the Japanese assistance to the JWSSD Project is concerned, Nihon Suido served the entire Project (over 35 years) in both planning and project implementation, which is similar to the case of Nippon Koei Co., Ltd. for the Brantas River Basin Development Project.
In addition to the above, it was recognized that the mindset of the Indonesian staff and the engineers of counterpart government organizations, contractors and consultants changed considerably. For instance, the Japanese work customs and ethics were introduced, practiced and eventually consolidated as Indonesians’. Another outcome was that the JWSSD Project upgraded the level of sanitation over time. Although the served population lagged behind the target, it increased from 1.2 million in 1970 to 4.6 mullion in 1997. And, therefore, it can be said that 3.4 million people were benefited in one way or another in terms of sanitary upgrading over 27 years.
64 65 Table 4.4: Planned Costs and Actual Costs
64 65 Table 4.5: Changes in Project Scope
66 67 Table 4.6: Financial Internal Rate of Return (FIRR)
Table 4.7: Water Treatment Plant
Table 4.8: Served Population and Service Ratio
66 67 4.2 Institutions Developed during the Course of the JWSSD Project by Stakeholders
In this sub-section, institutions developed during the course of the JWSSD, which are believed to have direct and indirect impacts on the JWSSD Project, are identified on a stakeholder-by-stakeholder basis. There are three stakeholders on the donor side; the Japanese Government, JICA and JBIC, and four stakeholders on the recipient side; the Indonesian Government, BAPPENAS, CIPTA KARYA and the Project Office.
(1) Japanese Government (i) Coordinated Procedure between Planning Assistance (JICA’s Technical Assistance under ODA Grants) and Implementation Assistance (JBIC’s Financial Assistance under ODA Loans) The Government of Japan has gradually developed a sequential procedure between planning and implementation assistance for certain types of comprehensive projects. The case of the JWSSD Project fits into this formula well. As a result, the JWSSD Project lasted over 35 years from 1963 to 1997 and the major priority projects recommended in the second and third Master Plan together with the PAM JAYA System Improvement Project (PJSIP) were implemented. In a way, the first study undertaken in 1963 (M/P I) seems to have meant an unwritten commitment for planning assistance by JICA for M/P II, III and IV and project implementation assistance by JBIC for several projects as well. This sense of commitment and attentiveness, though not stipulated anywhere, is something we should reckon with in reviewing Japan’s ODA performance.
(ii) High Level ODA Dialogue Mission to Indonesia Prior to starting of every 5 year development plan (REPLITA), the Government of Japan made it a rule to send a high level policy dialogue mission on ODA to Indonesia and to reach fundamental understanding on development policies and strategies of the country for the coming 5 years. The results of these missions were readily reflected in Japan’s ODA itself and its policies to Indonesia. Needless to say, the JWSSD Project has continually been assisted in line with the framework of the policy dialogue.
Thus, the dialogue between the governments was an important ceremony to deepen the understanding on their respective roles and responsibilities for the subsequent 5 years.
(iii) Continuous and Annual Commitment of ODA at CGI/IGGI In 1966, the governments of 14 countries including Japan, the United States, West Germany, the Netherlands, among others, formed the Inter-Governmental Group on Indonesia (IGGI). IGGI’s first conference was held in Tokyo, at the request of the
68 69 Indonesian Government for the furtherance of economic assistance. In 1991, IGGI was transformed into the Consultative Group for Indonesia (CGI) whose fundamental characteristics were to be the same as those of IGGI. Thus, it has been the practice of Japan to make an annual commitment of ODA through the CGI. Japanese commitment has been based on an “add-up” of specific projects identified prior to CGI.
This modality of logistics functioned to economize the time and labor of complicated and lengthy commitment procedures that the Japanese Government would, otherwise, have gone through.
(vi) Procurement Conditions of Loans ~Shift from Tying to Untying~ The Government of Japan, in 1974, in compliance with DAC resolution, started to relax its procurement conditions from tying to untying. In 1982, the procurement conditions changed from tied to untied. Therefore, those loans before 1982 under tied conditions (JBIC’s loan number: IP-39 of 1971, -60 of 72, -75 of 72, -99 of 74, -164 of 77, -171 of 77, -226 of 80 and -238 of 81) were allowed to procure goods and services from Japan and LDCs, while those under untied conditions from 1982 (IP-245 of 82, -290 of 85, -306 of 85 and -365 of 90) were allowed to procure from any country of the West. In other words, Buaran I and II as well as PJSIP received the full benefit of the untied procurement condition.
(2) JICA JICA is the sole agency for technical assistance (T/A) of Japanese ODA. JICA provides various kinds of T/A such as Development Studies, Acceptance of Trainees, Dispatch of Experts, Japan Overseas Cooperation Volunteers, and Emergency Disaster Relief. The development studies (or the pre-investment studies) are one of the major forms of JICA’s T/A activities.
(i) Pre-Investment Studies for the JWSSD Project JICA and JBIC provided 4 Master Plans for the JWSSD Project in a harmonious manner at nearly 10-year intervals for a period of over 35 years. The first Master Plan (M/P I) was formulated in 1963 on a grant basis by JICA, which is one of the earliest T/A of Japan and, therefore, the contents of the Plan were more of a general nature than in the contemporary sense. The second Master Plan (M/P II) was carried out by JBIC in 1972 on a loan basis. JBIC usually does not finance pre-investment studies like M/P and the Feasibility Study (F/S) -- pre-investment study is within the jurisdiction of T/A of JICA. Therefore, this must have been an exceptional case. The third Master Plan (M/P III) was formulated in 1985, while the fourth Master Plan (M/ P IV) was formulated in 1997 on a grant basis by JICA. These M/Ps except for the first one were prepared on a review basis against the preceding M/P. The year 1997 when
68 69 the M/P IV was completed coincided with the year when PAM JAYA was privatized on a concession basis.
The M/P I covering the years from 1963 through 1971 was prepared by Nihon Suido, and sponsored by OTCA (present JICA) on a grant basis: Report on the Water Supply Extension Project for the City of Djakarta, Indonesia, Aug. 1963 The M/P II covering the years from 1972 through 1980 was prepared by Nihon Suido, and sponsored by JBIC on a loan basis: Preparation of the Master Plan in the Year 2000 and the Feasibility Study for the 1st Stage Project, 1972 The M/P III covering the years from 1985 through 2005 was prepared by Nihon Suido, and sponsored by JICA on a grant basis: Jakarta Water Supply Development Project (Master Plan Report and Feasibility Study Report), March 1985 The M/P IV covering the years from 1997 through 2019 was prepared by Nihon Suido and Nippon Koei Co. Ltd., and sponsored by JICA on a grant basis: The Study on the Revise of Jakarta Water Supply Development Projects (Master Plan Report and Feasibility Study Report), May 1997
In addition, feasibility studies for the recommended projects in the M/Ps were generally carried out, separately or within prior to the JBIC’s loan commitment, by JICA assistance. The 5 WTPs recommended in the M/P II and the M/P III, together with PJSIP (a parallel co-financing project with the World Bank) whose pre- investment study was undertaken by JBIC’s SAPROF, were implemented by JBIC loans. (See 4.1-(2)-(ii))
The above sequential planning procedure was meant to optimize the JWSSD Project and maximize the benefits the Project could yield.
(3) JBIC JBIC’s ODA wing is the sole agency of Japanese ODA loans. The volume of ODA lending operations of JBIC used to be as large as a half of that of the IBRD and IDA combined, and its lending conditions were in-between of IBRD and IDA.
(i) Annual Cyclical Modality on JBIC Loan Commitment to Indonesia Since the very beginning of Japan’s ODA loan assistance, JBIC in collaboration with the Japanese Government and the Government of Indonesia established an annual cyclical modality from “Selection of Candidate Projects by Each Executing
70 71 Agency in August ~ September” to “Signing of Loan Agreement between JBIC and the Indonesian Government in September ~ October of the Following Year” as explained in detail in the Brantas Project Study. (See 2.2-(3)-(i) of the Brantas Project)
This annual cycle made the entire lending operations ready to stand-by, easy to schedule, and effective and efficient in terms of cost and time-saving. All the projects in the JWSSD Project were processed to the stage of implementation in a readily prepared and timely fashion.
(ii) Procurement Guidelines and Procedures of JBIC Loan Projects JBIC carried out its project implementation in accordance with two guidelines: “Guidelines for the Employment of Consultants by JBIC Borrowers” and “Guidelines for Procurement under JBIC Loans”. These guidelines laid the foundations for fair, competitive and transparent procurement of consultant services as well as goods and services and contributed to the minimization of ill practices of procurement such as corruption, collusion and nepotism. Needless to say, these guidelines are quite similar to those of the Multilateral Development Banks (MDBs) such as IBRD and Asian Development Bank (ADB).
Furthermore, these guidelines gave positive impacts on the consolidation of Indonesian domestic procurement rules and regulations. The latest Indonesian domestic procurement guidelines (the Presidential Decree No. 16 (KEPRES No. 16) of 1994 and the Ministerial Decree No. 158/KDTS/1995) were stipulated in line with the international guidelines.
(iii) Delegation of Procurement Authorities to the JBIC Jakarta Office from JBIC HQ In 1988, JBIC transferred its procurement authorities from its HQ to the Jakarta Office. In this way, the chief representative of the JBIC Jakarta Office was given the full authority to approve or not all contracts as well as contractual procedures. Accordingly, the Jakarta Office increased its staff by assigning HQ staff and started to employ highly educated Indonesian staff as professionals. Both the Japanese and the Indonesian staff quickly acquired professional knowledge on international procurement through continuous on-the-job-training.
Thus, JBIC aimed to upgrade the quality and speed of procurement works. As a result, for instance, while it took at least two weeks to complete a contract approval before the transfer, it was reduced into a few days after the transfer.
70 71 (iv) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion In 1988, JBIC and the Government of Indonesia agreed in the Master Agreement (for Indonesia, common clauses applicable to all loan agreements were extracted and bundled into one agreement which is called the “Master Agreement”) that they exchange views with regard to the progress, completion and operation of the project and furnish all such information to each other. As a result, JBIC in collaboration with other stakeholders established and carried out the following six workshops and meetings to promote project implementation.
(a) Workshop on Procurement and Disbursement In April each year, the JBIC Jakarta Office hosts, with the help of BAPPENAS, a workshop on procurement and disbursement concerning JBIC’s Yen loan projects for newly appointed Indonesian counterpart officers of Executing Agencies (incl. CIPTA KARYA and PAM JAYA). At such a time, the JBIC’s professional staff of the Jakarta Office headed by the deputy chief representative gives a series of lectures and study together with the Indonesian officers problematic cases that past projects encountered.
(b) Annual Action Program Workshop As a method of project monitoring and supervision, the Annual Action Program (AAP) was introduced formally in 1988. The AAP stipulates the detailed and concrete processing schedule for each JBIC project and its target amount of disbursement for the fiscal year, which should be realized by Executing Agencies (CIPTA KARYA and PAM JAYA for the JWSSD Project). Each AAP is agreed to by JBIC and BAPPENAS who represented the Executing Agencies of all the line ministries. The AAP, then, becomes an important guiding tool for managing the project during the fiscal year. The Executing Agencies are responsible for keeping the schedule stipulated in the AAP and have to pay daily attention to the progress of project implementation. Monitoring procedures of procurement, and making necessary arrangements for achieving the target of project progress and disbursement are the main components of project management. In order to keep track of the APP, a quarterly review meeting is also held between JBIC, BAPPENAS, the Executing Agencies (CIPTA KARYA and PAM JAYA for the JWSSD Project) and the Ministry of Finance in order to take necessary actions as required.
(c) Weekly Issues Meeting between JBIC and BAPPENAS The deputy chief representative of the JBIC Jakarta Office and one of the Indonesian professional staff hold weekly meetings with officers of the BAPPENAS Japan desk to discuss issues which require urgent settlement. JBIC’s intention is to cause BAPPENAS to instruct the Executing Agencies to take necessary actions to
72 73 avoid delay in planned implementation schedules of the project.
(d) Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies and Ministry of Finance On a quarterly basis, all the stakeholders of a JBIC project implementation gather together at BAPPENAS and review the progress of all the on-going projects in line with the AAP. If there are problems and issues, responsible stakeholders are requested to take necessary actions without delay.
(e) Regular Progress Meeting between JBIC and the Executing Agency on a Staff Basis Staff of the JBIC Jakarta Office meet the officer in charge of the project of the executing agency (CIPTA KARYA and PAM JAYA) on a regular basis to monitor progress of project implementation, in addition to day-to-day communication. Issues that could not be solved at the staff level are usually brought to the Weekly Issues Meeting between JBIC and BAPPENAS.
(f) Quarterly Review Meeting between JBIC and the Executing Agency This is the meeting between the deputy chief representative of the JBIC Jakarta and the Director General of CIPTA KARYA (usually together with PAM JAYA). It aims to share the knowledge about the state of affairs of the project implementation with the Director General of CIPTA KARYA and confirm issues and problems that need to be solved under his initiatives.
All these meetings and workshops were programmed to avoid delays in procurement and fund disbursement vis-à-vis prompt and timely project monitoring and supervision.
(v) Local Cost Financing Schemes JBIC provides loans primarily of foreign currency for a project that requires the importation of goods and services from abroad, while the local currency portion needed for local procurement is, in principle, financed by the recipient countries themselves. Over the years, however, cases of developing countries requesting local cost financing have increased, reflecting their tight budgetary situation.
In view that the expansion of the local cost financing makes it possible not only to help prevent on-going projects from being delayed or interrupted due to shortages of local currency funds, but also to assist high priority projects with a high local cost component which had not been implemented because of budgetary constraints on the part of recipient government, JBIC introduced three types of local cost financing schemes.
72 73 The first is the “local cost financing loan”. JBIC introduced the local cost financing loan for Indonesia in 1971, 72 and 73 for the projects committed in those respective years. The introduction of this scheme was to cope with Indonesian budgetary shortage caused by high inflation which took place during 1962-67. The Pejompongan II (IP-39 of 1971, IP-60 of 1972 and IP-75 of 1972) was benefited by this scheme. After more than 10 years of absence, the local cost financing loan scheme was revived once again in 1986, 87 and 88. During this period, the Government of Indonesia suffered an acute shortage of the local currency fund due to the sharp drop in oil prices and the subsequent decrease of budgetary revenue. In answer to this economic condition, JBIC committed to another local cost financing loan in the years of 1986, 87 and 88 for the then on-going JBIC-assisted projects. Pulo Gadung Expansion, Buaran I and Buaran II were benefited by this scheme as they were all under construction during this period. To be more specific, the first stage projects were post-evaluated by JBIC in 1988. Upon CIPTA KARYA’s receiving the post-evaluation report from JBIC, it could immediately mobilize, as the report recommended, a portion (\1.7 billion out of \12.5 billion) of the Local Cost Financing Loan (88) for piping works related to treated water distribution.
On reflection of the experience of the early 1970s, JBIC gradually developed a scheme to finance a certain percentage of the local currency portion of the project cost. Towards the latter half of the 1980s, JBIC internally established a “30% Financing Scheme” which implies that 30% of local currency component, in addition to full foreign currency component, of the project is entitled to be covered by a JBIC loan. Buaran I and Buaran II were benefited by this scheme, as they were committed in 1980s.
On further reflection of the local cost financing loans of 1986, 87 and 88, in 1989 JBIC introduced a new scheme called “Pro-rated Local Cost Financing Scheme”. This scheme determines the total amount of a JBIC loan by multiplying the total project cost by a certain percentage (presumably larger than 70%), without determining which procurement component is to be financed as a foreign or local currency portion. As of March 1993, for instance, the upper limit of total loan amount was set at 85% of the total project cost or the total foreign exchange cost, whichever is larger. PJSIP which was committed in 1990 was benefited by this scheme.
These innovative schemes were invented to cope with the Indonesian budget difficulties which seriously hampered project implementation at times.
(vi) Post-Evaluation and Post-Monitoring As the last step of the project cycle (Project Identification, Preparation, Appraisal,
74 75 L/A Negotiation and Board Presentation, Implementation and Supervision, and Post- Evaluation), JBIC post-evaluates and post-monitors all projects and judges how successful they are and extracts lessons learned for future projects. The case of the JWSSD Project is no exception. Projects undertaken by JBIC loans have produced more or less satisfactory benefits and returns Table( 4.6). It should also be noted that the water supply project is the life line project and, therefore, possesses quite a high social value which should be taken into consideration in post-evaluation.
One of the special issues, which should draw attention to, is that the government or CIPTA KARYA cannot financially afford to construct water supply facilities that would serve 100% of population of the city of Jakarta. In other words, water demand has been growing faster than CIPTA KARYA and PAM JAYA can increase water supply through expansion, economization, rehabilitation and modernization of facilities. After all, it is extremely difficult to distribute water to the whole population of the city, as the government cannot secure needed investment funds with its own budget and/or with foreign assistance.
An important point stressed here is that several projects implemented under M/P II and M/P III were reviewed carefully, and all the lessons learned together with the changing situation and demand of the city were integrated into the following M/P. In other words, the performance review of the JWSSD Project was carried out regularly every ten years or so.
Thus, post-evaluation and post-monitoring was meant to provide solutions and precautions to various problems faced throughout the project cycle.
(vii) Technical Assistance Schemes of JBIC JBIC created three kinds of T/A schemes on a grant basis: SAPROF (Special Assistance for Project Formation) in 1988, SAPI (Special Assistance for Project Implementation) in 1992 and SAPS (Special Assistance for Project Sustainability) in 1986. These facilities are implemented in up-stream (Preparation), middle-stream (Implementation and Supervision) and down-stream (Post-evaluation) phases of the project cycle, respectively. JBIC employs consultants/experts, using its own budget fund, for these T/As. (For detailed explanation on these facilities, refer to 2.2-(3)-(vii) of the Brantas Study)
While these three schemes were meant to supplement project preparation, project implementation and post-implementation, respectively, the JWSSD Project carried out a SAPROF study for PJSIP in 1989-90.
74 75 (4) Indonesian Government (i) Request for ODA Projects and CGI The Indonesian Government made it a rule to prepare a Blue Book annually in which all priority development projects were listed. Based on the Blue Book, the Government requested the international donor community to help implement the listed projects during CGI. Major donors have been Japan, IBRD and ADB. Each of these agencies has traditionally shared approximately 1/3 of the total commitment. The projects financed by Japan (JICA and JBIC) were all committed at CGI in one way or another. Needless to say, the JWSSD projects were all included in the commitment statement at CGI.
This modality of logistics was meant to save the time and labor to fill the annual resource gap for Indonesia. At the same time, the Government of Indonesia could envision the picture of Japanese ODA for the following fiscal year.
(ii) Indonesian Budgetary System for Foreign-Assisted Projects The Government of Indonesia has tried hard to secure and allocate a budget to each foreign-assisted project. The Indonesian budget is made up of “Recurrent Budget” and “Development Budget”. BAPPENAS is responsible for the development budget and the Ministry of Finance is responsible for the recurrent budget. BAPPENAS primarily as the planning ministry, thus, controlled both the development planning and the development budgeting. Over the years, BAPPENAS in collaboration with the Ministry of Finance and the line ministries developed the fiscal discipline, the allocation discipline and the operational discipline to manage the “Development Budget”. Those budgetary disciplines were consolidated over time due to disciplined foreign development assistance as well as a relatively successful long-term economic growth.
(iii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion As stated in 4.2-(3)-(iv), in 1988, the Government of Indonesia and JBIC agreed in the Master Agreement to hold the following workshops and meetings on a regular basis: “Workshop on Procurement and Disbursement”, “Annual Action Program Workshop”, “Weekly Issues Meeting between JBIC and BAPPENAS”, “Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies and Ministry of Finance”, “Regular Progress Meeting between JBIC and the Executing Agency on a Staff Basis” and “Quarterly Review Meeting between JBIC and the Executing Agency”.
These meetings and workshops were, in fact, problem-shooting mechanisms of project implementation and organized to avoid delays in procurement and
76 77 disbursement vis-à-vis project monitoring and supervision.
(5) BAPPENAS (i) Political Commitment vis-à-vis Priority Projects in the Blue Book The Blue Book is the state of the art institution in the history of Indonesia socio- economic development. BAPPENAS was solely responsible for national development plan making and, therefore, played the most important role in preparing the Blue Book. The Blue Book was prepared annually and contained a list of priority candidate projects to be implemented with the help of foreign assistance. The Blue Book was compiled through a particular inter-ministerial procedure. First, the line ministries prepared a list of high priority projects within the ministries concerned and then they sent it to BAPPENAS. BAPPENAS, then, scrutinized all those projects and selected the top priority projects from the national developmental point of view. Thus, the projects listed in the Blue Book were themselves proved to be a reflection of the political commitment of the Indonesian Government. As a matter of fact, in Indonesia there were no foreign-assisted projects which were fully cancelled by the Indonesian Government once their implementation started, which proved that the Blue Book was the authoritative document.
Thus, the Blue Book system equaled the efficient and effective selection procedure of national top priority development projects.
(ii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion Similarly as discussed in 4.2-(3)-(iv) and 4.2-(4)-(iii), BAPPENAS as the representative and coordinating ministry of foreign aid projects held four higher level meetings and workshops; namely, “Workshop on Procurement and Disbursement”, “Annual Action Program Workshop”, “Weekly Issues Meeting between JBIC and BAPPENAS” and “Quarterly Review Meeting between JBIC, BAPPENAS, Executing Agencies (incl. CIPTA KARYA) and Ministry of Finance”, and exercised a strong supervisory role over the line ministries. It is understood that the reason why BAPPENAS had such influential power on each project was that it had budgetary authority over national development planning and the programs/projects therein.
(6) Ministry of Public Works -Directorate General of Human Settlements: CIPTA KARYA- (i) Sectoral Development Planning Exercises by CIPTA KARYA CIPTA KARYA’s role in the water supply system development in major cities of Indonesia is to formulate development plans in which policies, strategies and projects/ programs are spelled out and to provide infrastructural facilities of water supply.
76 77 The executing agencies of the line ministries seem to have consolidated a unique method of plan making over time. They, instead of making the development plan from scratch, usually made the most use of various development studies such as master plans and sector plans which were often undertaken by foreign assistance. They then made it a rule to scrutinize those plans and select their own appropriate policies, strategies and projects/programs for REPELITAs and the Blue Book.
In the case of CIPTA KARYA, once the facilities were constructed, they were immediately transferred to the Water Supply Public Corporation (PDAM) of each city and the actual supply and distribution of the treated water was then handled by PDAM. In the city of Jakarta, PDAM was called PAM JAYA which had been a part of the city government and was responsible for running the water supply business as a public corporation. PAM JAYA was established on a municipal basis in 1968 and lasted until 1997 when it was privatized.
(ii) Meetings and Workshops for Project Monitoring and Supervision as well as Disbursement and Procurement Promotion Similarly as discussed in 4.2-(3)-(iv) and 4.2-(4)-(iii) and 4.2-(5)-(ii) above, CIPTA KARYA as the Executing Agency took part in all the related workshops and meetings often together with other stakeholders such as PAM JAYA, DGWRD, JBIC, BAPPENAS, and other Executing Agencies. Out of the 6 workshops and meetings listed above (4.2-(3)-(iv)), CIPTA KARYA attended 5 except “Weekly Issues Meeting between JBIC and BAPPENAS”.
(7) The Project Management Office on Site as Sub-PMU and The Jakarta Project Office as PMU (i) Organization of Project Management As far as the Jakarta Water Supply System Development (JWSSD) was concerned, CIPTA KARYA used to establish a project management office on site to implement an individual project. As the number of projects increased, the stakeholders concerned (CIPTA KARYA, PAM JAYA, BAPPENAS, Jakarta Metropolitan Government, Ministry of Home Affairs and Ministry of Finance) recognized a need for an institution to coordinate mutual interests and conflict of interests and to supervise the JWSSD as a whole. They, therefore, established the Jakarta Project Office as the PMU to oversee the JWSSD Project in 1991. By that time, the five JBIC-assisted WTP projects had established their own project management offices on site (Sub-PMUs) in accordance with their implementation schedules and had already been under construction or operation. The organizational structure of the Jakarta Project Office (PMU) is shown in Figure 4.1 in which the three project management site-offices (Sub-PMUs) of JBIC- assisted projects are included.
78 79 During the early years of the JWSSD Project, the Project Manager as well as other staff of the top management of the JWSSD Project were appointed from CIPTA KARYA. From the Pulo Gadung Expansion project onwards, the top management of Sub-PMUs (mid 1980s) were replaced by those of PAM JAYA.
Figure 4.1: Organization of the Jakarta Project Office -PMU-
Figure 4.2: Organization of Pulogadong Project Site Office (Sub-PMU)
Figure 4.3: Organization of Buaran Project Site Office (Sub-PMU)
78 79 Figure 4.4: Organization of PJSIP Project Site Office (Sub-PMU)
Incidentally, the Directorate of Water Supply (DWS), one of the directorates of CIPTA KARYA, the Ministry of Public Works, was directly and specifically responsible for the designing and construction of projects. (Figure 4.5)
Under the direction of BAPPENAS, CIPTA KARYA was responsible for project funding. CIPTA KARYA also had a close relationship with PAM JAYA which was the sole water supply enterprise in Jakarta with its own accounts and funds.
The Sub-PMU was headed by the Chief Site-Manager from PAM JAYA and staffed with small number of engineers/technicians and office staff. Figure 4.2, 4.3 and 4.4 show the structure of Sub-PMU organization at its peak when the Pulogadong Expansion Project (Phase 2 Project under S-I-DP), the Buaran I and Buaran II Project (Immediate Phase Project and Phase 1 Project under S-II-DP) and PJSIP were under implementation.
80 81 Figure 4.5: Organization of Ministry of Public Works
(ii) Steering Committee Above the Project Manager of the Project Office, there existed the Steering Committee as a governing body of the Jakarta Project Office (PMU). Members of the steering committee consisted of the Project Manager, Jakarta City ment (Vice Governor), BAPPENAS (Under-secretary), CIPTA KARYA (Director General), PAM JAYA (President Director and Technical Director), the Ministry of Home Affairs and the Ministry of Finance. They met twice or three times a year to oversee the general status of the JWSSD in relation to overall on-going project implementation as well as to discuss inter-ministerial issues such as division of labor among the stakeholders concerned, local fund shortage, project implementation processes and privatization.
(iii) Contract-Out and Sub-Contracting vis-à-vis Tied Loan and Untied Loan Unlike the Brantas Project, the JWSSD Project did not employ the “Force Account” method. The JWSSD Project was implemented by way of the contract-out method. Until 1983 the procurement condition of JBIC loans to Indonesia were tied to Japan and LDCs including Indonesia. Under this condition, as a natural consequence, the
80 81 foreign contractors were mostly Japanese for the foreign currency component and local contractors were Indonesia for the local currency component. The foreign consultant was also the Japanese consulting company, Nihon Suido. The Japanese contractors and the consultant usually sub-contracted part of their work to the Indonesian contractors and consultants. In this way, the JWSSD Project was implemented.
After 1983, the procurement condition of JBIC loans to Indonesia became untied, which implied that international contractors and consultants were eligible to participate in JBIC-financed projects. Although several of international contractors were awarded the contracts, the Japanese contractors played a major role in project implementation, while the consultant role was played by Nihon Suido alone. The change in procurement conditions did not affect the contract-out method itself. More contractors /sub-contractors and local consultants participated in the JWSSD Projects.
As a matter of fact, the contract-out system, favorably supported by the untying condition, was expected to compensate the shortcomings of domestic contractors and consultants and to accelerate technology transfer from expatriate contractors and consultants to Indonesian counterparts.
Local contractors and sub-contractors counted for more than a few dozen, and local subcontracting consultants counted for only a few. The contract-out method gave the opportunity to acquire technologies and skills for quite a number of sub-contractors and sometimes contractors, fostering local engineers and technicians.
(iv) Roles and Relationship of CIPTA KARYA and PAM JAYA As stated elsewhere, CIPTA KARYA was responsible for sectoral development planning and designing and the physical construction of projects. Upon their completion, all facilities are transferred to PAM JAYA on an on-lending condition. PAM JAYA as municipal public corporation was, then, responsible for operation, maintenance and management of the facilities (OMM). PAM JAYA was also obliged to repay project costs to CIPTA KARYA through a scheme called “Two Step Loan” which was applied to the JBIC loan No. IP-164 of 1977 onwards. (See 4.2-(7)-(vi) below)
This particular relationship was deemed in Indonesia a better way to develop the water supply sub-sector.
(v) Political Commitment to the JWSSD Project Due to the rapid expansion of the capital city of Jakarta, the city encountered very serious water shortages in 1962. The central government, in an attempt to cope with
82 83 this situation, started to formulate a water supply development plan for Jakarta as well as for other medium and large cities in Indonesia. The provision of water supply facilities to urban communities soon became an imperative development objective of the Government which was then stipulated in the first REPELITA in 1969.
The Government, thus, committed itself to expand Jakarta’s water supply capacity to meet the ever-expanding demand. In consequence of this, the first M/P, Report on the Water Supply Extension Project for the City of Djakarta, Indonesia, was formulated by JICA in Aug. 1963 in compliance with the request of the Government of Indonesia and the metropolitan government of Jakarta. Over 10 years, no physical structures were developed by the assistance of Japan. The Indonesian Government, then, adopted almost the same approach as that of the Brantas Project in realizing the JWSSD Project; namely, Japan as the sole donor and the method of “comprehensive M/Ps and subsequent project implementation therein”.
In this way, the government applied its determination to achieve the national objective to develop the Jakarta Water Supply System (JWSS) for many years to come.
(vi) Two Step Loan In 1977, JBIC enthusiastically approved the introduction of an onlending scheme to its loan -- “Two Step Loan (TSL)” into the JWSSD Project. Before 1977, JBIC loans to the JWSSD Project were lent to CIPTA KARYA with little to do with PAM JAYA. But in 1977, CIPTA KARYA decided to onlend JBIC loans to PAM JAYA. Therefore, all the JBIC loans committed in 1977 and onwards were on-lent to PAM JAYA through CIPTA KARYA.
Lending conditions of the first step from JBIC to CIPTA KARYA were in Japanese Yen at an interest rate of 2.5% per annum with a 30-year repayment period including a 10-year grace period. Lending conditions of the second step from CIPTA KARYA to PAM JAYA were in Indonesian Rupiah at an interest rate of 9% per annum with a 30-year repayment period including a 6-year grace period.
The gap between the two rates (2.5% and 9%) was insisted upon by the Indonesian authorities in order to hedge any foreign exchange fluctuation risk of Rupiah. On the other hand, JBIC recommended that Yen loan cocessionality should be transferred to PAM JAYA to help foster it as a financially and managerially self-sustainable corporation.
In any case, the TSL scheme was created to inspire a spirit of market orientation into both CIPTA KARYA and PAM JAYA.
82 83 (vii) Role of Japanese Consultant The JWSSD Project was developed with the assistance of the Japanese Government for about 35 years. Throughout this period, only one Japanese consultant in the practical sense engaged in consulting services which covered the entire project cycle; during project preparation stage as a planning consultant for M/Ps and F/Ss, during project implementation stage as a monitoring and supervision consultant and during post-implementation stage as a post-evaluation consultant. It is debatable if it was appropriate to employ the same consultant for the same project for such a long time. There may be pros and cons. However, it should be pointed out that the stakeholders concerned had continuously assessed the consultant’s performance, which in turn tightened work ethics and the spirit of “noblesse oblige” as the sole consultant. The Japanese consultant, thus, did satisfactorily carry out its TOR. Further, the Japanese consultant provided unpaid yet quite important services. To list a few, it helped to promote mutual communication not only between the Japanese authorities and Indonesian authorities, but also between CIPTA KARYA and PAM JAYA. It played the role of the quantity surveyor on JBIC procurement guidelines. It assisted the weak areas of the local contractors. This role resembles that of the Coordinator Consultant of the Brantas Project. Thus, the attentiveness of the Japanese consultant resolved various niche obstacles that lay among the stakeholders concerned, which was only possible most probably because Nihon Suido was engaged in the JWSSD Project as the one and only consultant throughout the Project.
(viii) Mutual Trust between Japanese Consultants/Contractors and Indonesian Counterpart Organizations The mutual trust between the Japanese resident consultants and guidance engineers, the staff of the Sub-PMU, the staff of CIPTA KARYA and PAM JAYA and the employees of the local contractors is not so clearly observed as in the case of the Brantas Project. But in this case, too, the attitude of the Japanese consultants and engineers as a part of the Sub-PMU was “to work hard together, discussed together and relax together with the Indonesian counterparts”, through which Indonesians learned Japanese work ethics and customs, and shaped a kind of comradeship feeling in their minds. This approach contributed to consolidating mutual trust between the Japanese consultants/engineers and the people of Indonesian counterpart organizations.
And it was learned that mutual trust improved the working atmosphere and smoothed out communication difficulties from time to time among the parties concerned.
84 85 (ix) Project Supervision and Monitoring during Implementation Prior to the start of project implementation, the Sub-PMU prepared a project implementation schedule as a guidepost, often in a form of one large chart. As the project implementation proceeded, the Sub-PMU regularly compiled a progress report and, upon completion of the project, a project completion report (PCR) was prepared.
The progress report is one of the most important tools or effective ways to monitor the progress of the project for both CIPTA KARYA and JBIC. It is agreed in each Loan Agreement that CIPTA KARYA (or Executing Agency, in general) should submit quarterly progress reports to JBIC. And the PCR, which marks the end of the monitoring activities of project implementation, is submitted by CIPTA KARYA to JBIC not later than 6 months after the completion of the project.
In case of Stage II projects (Buaran I and Buaran II) of the JWSSD Project, the Sub- PMU intensified its monitoring activities by preparing monthly progress reports (not quarterly), the final report (in addition to monthly report, not stipulated in the L/A) and the PCR, which appears to have resulted in better implementation than that of Stage I projects (Pulo Gadung and Pejompongan).
Needless to say, these reports were prepared by the consultant and reviewed by the Sub-PMU, the PMU and CIPTA KARYA and submitted to JBIC via CIPTA KARYA.
Thus, the intensified method of supervision and monitoring was introduced upon reflection of the past experiences.
(x) Manpower Training vis-à-vis Transfer of Technology In order to carry out the JWSSD Project implementation, three parties were directly involved; namely, the foreign (Japanese) consultant with sub-contracted local consultants, the foreign suppliers for machines and equipment and the local contractors for civil work. Manpower development through manpower training and technology transfer to local engineers/technicians and consultants took place at least in three forms.
The first is the On-the-Job-Training (OJT), which was practiced almost daily at Sub- PMU level; the Pulo Gadung Sub-PMU, the Buaran Sub-PMU and the PJSIP Sub- PMU. As Figure 4.2, 4.3 and 4.4 show, a little less than 100 PAM JAYA engineers and technicians and local consultants were under OJT at the peak period of the JWSSD Project implementation. In other words, Japanese experts and consultants transferred technologies to Indonesian engineers/technicians.
84 85 Another is the Overseas Training as a part of consulting services of the Japanese consultant. Take, Buaran I, for instance, a team of 11 engineers and administrators were dispatched to Japan for overseas training in October through November 1989. The training program entailed class-room lectures, field trips to on-going projects of local municipalities in Japan, water treatment plants and other facilities, visits to various manufacturers of pipes, valves, water meters, mechanical equipment and electrical instrumentation. Lecture topics included Planning, Designing, Construction Management, Water Quality Control, Instrumentation, and Operation and Maintenance of the Water Supply System.
Other form of knowledge transfer is the Hand-over Training. Prior to commissioning each WTP, the foreign consultant organized and conducted the hand-over training. Towards the completion of the WTP of Buaran I, the consultant carried out intensive training for the workers of the PAM JAYA operation unit for about 3 months from September through November 1992. The training was given in accordance with the System Operation Manual for Buaran Plan prepared by the consultant with the help of the foreign (Japanese) plant manufactures. The training at the plant site included monitoring qualities of raw and treated water, a routine operation, countermeasures to such irregularities as unexpected raw water quality change due to weather conditions and accidents and/or power failure.
Thus, manpower training at the Sub-PMU was intended to transfer practical and practicable technologies to the Indonesian counterparts as quickly as possible.
4.3 Institutional Development and Development Performance of the JWSSD Project
The JWSSD Project created quite a number of institutions in the broadest sense during 35 years of Japanese assistance as discussed in Sub-section 4.2. These institutions contributed to promoting the performances of the JWSSD Project. Those performances could be divided into two types. One is the regular project cycle performances (shown in the rectangle at the center of Figure 4.6) which include the planning performance implying effective and efficient planning, the implementation performance implying effective and efficient construction and the direct project performance which can be termed individual project-oriented benefits or project outputs such as effectiveness of physical facilities (IRRs), clean water output and its service level. The other is the indirect project performance (shown in the rectangle in the upper right hand corner of Figure 4.6) which can be termed spillover economic and social outcomes such as human resource development, fostering local contractors and consulting companies, people’s mindset and improvement of sanitation.
86 87 (1) Institutions and Regular Project Cycle Performances Impacts of institutional development are difficult to measure. It is even more difficult when one wants to measure them quantitatively. In the following sub- sections, we, therefore, concentrate on clarifying “which institutions contributed to what performance of which stage of the project cycle” without forgetting quantitative and qualitative measurements wherever possible. (Figure 4.6)
In order to do so, all those institutions identified in Sub-section 4.2. were bundled into nine groups under the following titles: (i) “Four Comprehensive Master Plans”, (ii) “Systematic Coordination between Master Plans and Implementation of Projects”, (iii) “Cyclical Pre-Investment Modality”, (iv) “Rules and Systems for Effective and Efficient Project Implementation”, (v) “Contract-Out and Sub-Contracting System”, (vi) “Manpower Training Methods”, (vii) “One Sole Consulting Company”, (viii) “Mutual Trust between Japanese Consultants/Contractors and Indonesian Counterpart Organizations” and (ix) “Management of the JWSSD Project”.
(i) Four Comprehensive Master Plans The JWSSD Project was carried out basing on four comprehensive M/Ps. The first master plan was prepared in 1963 (Master Plan I) and reviewed at 10-year intervals to update the plan into a new master plan thereby adjusting itself to the changing needs and requirements. The second master plan (Master Plan II) was prepared in 1972, the third master plan (Master Plan III) in 1985 and the fourth master plan (Master Plan IV) in 1997, each including “lessons learned” in the preceding M/P. Formulation of those master plans was supported by Japanese ODA and carried out by a Japanese consulting company, Nihon Suido, and supported by local consultants and engineers. As Nihon Suido consultants together with the Indonesian counterpart consultants formulated the M/P repeatedly by inputting updated data and information on site, the quality of the M/Ps was increasingly improved as time passed by.
The four master plans formulated in the manner described above must have contributed to promoting the planning performance of the pre-implementation stage.
(ii) Systematic Coordination between Master Plans and Implementation of Projects Systematic coordination between the four master plans and subsequent project implementation of Pejompongan II Expansion, Pulo Gadung I, Pulo Gadung II, Buaran I and Buaran II which were financed by Japanese ODA was harmoniously undertaken. Since the coordination system was practiced repeatedly, it is recognized that it increasingly contributed to quality plan-making, planned implementation/ construction and the accruing of the expected benefits/outputs.
86 87 (iii) Cyclical Pre-investment Modality The cyclical pre-investment modality encompasses three institutions identified in Sub-section 4.2: the Blue Book System of BAPPENAS, CGI and the annual cyclical modality of Yen loan project processing. This modality streamlined and regulated the commitment procedures and the processes of the loan project. In other words, it played an important role in clearing irregularities and disturbances which would have existed between the pre-implementation stage and the implementation stage.
(iv) Rules and Systems for Effective and Efficient Project Implementation The rules and systems for efficient project implementation or construction consist of various institutions identified in Sub-section 4.2 such as local cost financing schemes, the delegation of decision making authority on procurement to the JBIC’s Jakarta Office, JBIC’s T/A facilities such as SAPROF, SAPI and SAPS, procurement guidelines, the shift from tied loan to untied loan, the meetings and workshops for project implementation and “Development Budget” system of the Indonesian Government. These rules and systems are recognized to have contributed to alleviating or lessening the financial, procedural, technical, economic, social and political problems encountered during project implementation.
(v) Contract-Out and Sub-Contracting System The “Force Account” system did not make up part of the JWSSD Project. Therefore, this captioned system is nothing new. However, a few dozen local contractors and a few consulting companies were involved in the JWSSD Project as contactors and sub- contractors for over 35 years. The history of the JWSSD Project is compatible with that of the development of private business sector of Indonesia. Through the JWSSD Project, the contractors and consultants acquired and accumulated technical expertise and practical experiences. Thus, the JWSSD Project contributed to not only fostering the development of the private business sector but also Indonesian contractors and consultants who in turn sustained the JWSSD Project directly and/or indirectly.
(vi) Manpower Training Methods As discussed in 4.2-(7)-(x), for the purpose of human resource development, the JWSSD Project pursued three training methods. One method was the OJT at each Sub-PMU. As Figure 4.2, 4.3 and 4.4 show, a few hundred engineers and technicians are likely to have been trained on the OJT basis. Another method was the Overseas Training. JBIC loans usually provided a T/A component for a study tour abroad for Indonesian project staff. Such training benefited more than a few dozen technical as well as administrative people. The other method was the Hand-over Training. The Japanese consultant made it a rule to spend a few months to train local site-operators (engineers and technicians) before the WTP was completed by means of operation
88 89 manuals prepared by the Japanese consultant in collaboration of expatriate suppliers/ contractors and local counterpart engineers of the Sub-PMU.
These methods functioned well and successfully caused Indonesian counterpart engineers and consultants to acquire practical as well as practicable technologies and skills.
(vii) Sole Japanese Consultant Just like the case of NK for the Brantas Project, for 35 years the JWSSD Project employed only one Japanese consulting company, Nihon Suido, for both planning and implementation services. While it is arguable if the sole consultant policy is more beneficial than other policies, it should be pointed out that Nihon Suido satisfied the stakeholders concerned with regard to its regular paid consulting services. In addition, Nihon Suido, being a quantity surveyor for CIPTA KARYA and PAM JAYA on JBIC’s procurement guidelines and so forth which were deemed unpaid coordination services just like those of the Coordinator Consultant of the Brantas Project, played an important role in bridging Indonesian authorities and Japanese authorities as well as CIPTA KARYA and PAM JAYA authorities.
Thus, it is observed that this system had a positive contributing relationship with grouped institutions such as “Four Comprehensive Master Plans”, “Systematic Coordination between Master Plans and Implementation of Projects”, “Manpower Training Methods”, “Management of PMU and Sub-PMU” and “Mutual Trust between Japanese Contractors/Consultants and Indonesian Counterpart Organizations”.
(viii) Mutual Trust between Japanese Consultants/Contactors and Indonesian Counterpart Organizations As discussed in 4.2-(7)-(viii), mutual trust between the Japanese resident consultants and guidance engineers, the staff of the Sub-PMU, the staff of CIPTA KARYA and PAM JAYA and the employees of the local contractors was formed, though not so clearly observed as in the case of the Brantas Project. The Japanese consultants and engineers employed the approach of “work together, discuss together and relax together with the Indonesian counterparts”, through which Indonesians learned Japanese work ethics and customs, and shaped a kind of comradeship sense in their minds. The trust thus formed upgraded productivity in planning and implementation as well as Indonesian counterparts’ mindset.
(ix) Management of PMU and Sub-PMU As reviewed in 4.2-(7)-(i), the PMU (the Jakarta Project Office), headed by the Project Manager, monitored and coordinated overall implementation of on-going
88 89 projects, while individual projects were under the supervision of the Directorate of Water Supply (DWS) and the Sub-PMU (the project management office on site). The steering committee as the governing body of the PMU, which was composed of the Project Manager, Jakarta City Government (Vice Governor), BAPPENS (Under Secretary), CIPTA KARYA (Director General), PAM JAYA (President Director and Technical Director), the Ministry of Home Affairs and the Ministry of Finance, met twice or three times a year to oversee the progress of the entire JWSSD Project and to coordinate inter-ministerial issues vis-à-vis the general workings of the JWSSD Project as a whole. The role of the Sub-PMU was to construct the project as planned in as a responsible way as possible.
Thus, in practice, the role of the PMU was of a more general nature while the Sub- PMU played the central role of project implementation, which is quite different from the PMU-controlled Brantas Project. The Sub-PMU also functioned as a ground of technology transfer to Indonesian staff, engineers and consultants.
(2) Institutions and Indirect Performance The indirect performance is attributed to the incorporative JWSSD which includes the institutions discussed in Sub-section 4.2. The indirect performance consists of, at least, four outcomes: human resource development, fosterage of local contractors and consultants, change in people’s mindset towards work ethics and customs, and improvement of sanitation.
Human resource development took place at the Sub-PMU on the OJT basis between the Japanese consultants/engineers and Indonesian counterparts. More than a few hundred Indonesian engineers and technicians were trained during the course of the JWSSD Project. The manpower training methods practiced during the JWSSD Project assisted in the development of the human resources of Indonesia.
The regular sub-contacting system employed throughout the JWSSD Project fostered a few dozen local contractors as well as a few consulting companies. This may be regarded as an output of collaborative work between the Japanese consultants/ contractors and Indonesian consultants/contractors.
Owing partly to the expatriate resident consultants, the mindset towards work ethics and workmanship of the Indonesian counterparts changed considerably. The spirit and virtue of work ethics were instituted in the heart of the Indonesians.
Over the years, the JWSS was developed considerably including upgrading level of sanitation through water quality upgrading and the increased number of beneficiaries
90 91 in the city of Jakarta, though its magnitude might be quite limited due to the old and, therefore, seriously deteriorated, distribution network.
During the course of the JWSSD Project, quite a number of institutions were created by the stakeholders to support the efficient and effective realization of projects over the entire project cycle. And as reviewed above, relationships between the institutions and the project performances were identified and are shown in Figure 4-6. The JWSSD Project could not have been possible if all the stakeholders had not created the institutions individually and/or jointly.
Finally, it should be noted that the JWSSD Project had been the top priority lifeline project of the Indonesian Government and, during the period between 1963 and 1997, the JWSS was developed to the level where it was privatized. Although the Project could not succeed in fulfilling the ever-expanding clean water demand fully, the JWSSD took place in its own right. Or, in other words, we can only imagine the horrendous condition in the state of water supply IF the JWSSD Project had not been undertaken. This very development of the JWSS was attributed to the fact that the following three basic conditions were mutually fulfilled. The first condition was the existence of long-term comprehensive development plan. The JWSSD Project was not a short-term piecemeal project but was composed of long-lasting and sector-wide projects. The second was the long-term commitment on the part of Indonesia. The Government of Indonesia continued to place high priority on the JWSSD Project in REPELITA I (1969/70 ~ 1973/74) through REPELITA VI (1994/95 ~ 1998/99). Besides, the Government was not allowed to fail the development of the water supply system of the capital city. The third was the long-term continuous assistance from Japan. The Japanese Government never made any long term aid commitment. But the Japanese Government recognized that the Master Plan approach was a kind of unwritten consent to answer future Indonesian requests to the maximum. The Japanese Government resultingly continued to help develop the JWSSD Project until 1997. These conditions were, in fact, the foundations on which the institutions discussed in Sub-section 4.2 were built.
90 91 Figure 4.6: Linkages between Institutions and Development Performances of JWSSD Project
92 93 5. CONCLUSION
In line with the Framework Paper (Jerve and Nissanke, 2008), the Indonesian case selected the Brantas Project and the JWSSD Project. Both Projects are analyzed by the same token in terms of analytical method and procedure. Analytically, all the infrastructure projects in the Projects are reviewed in an aggregate manner in accordance with the project cycle (planning stage, implementation stage and post-evaluation stage), and the institutions developed over time by the Indonesian stakeholders as the recipient as well as the Japanese stakeholders as the donor are identified on a stakeholder-by-stakeholder basis. Procedure-wise, first, the big picture of the Project is described with special attention to the Project origin and its surrounding economic and social conditions. Second, Project performances are sorted out in terms of project outputs and outcomes. Third, the varieties of institutions developed during the course of the Project’s realization are identified on a stakeholder- by-stakeholder basis. Fourth, the institutions identified are bundled into 9 groups in accordance with their characteristics. Then, the relative relationships between the grouped institutions and the project performances achieved at each stage of project cycle are clarified. In the last step, therefore, an attempt to answer the question both qualitatively and quantitatively of “what institution contributed to what performance of which phase of the project cycle?” is tried.
Further, between the Brantas Case Study (Section 2) and the JWSSD Case Study (Section 4), a comparative view on the Brantas River Basin Development Project and the Citarum River Basin Development Project (Section 3) has been made. This study in its entirety aimed to highlight and characterize aid effectiveness of the Brantas Project against the Citarum Project, within the analytical framework of the Brantas and JWSSD Studies.
5.1 Stakeholders and Institutions Created/Developed
It was revealed that all the stakeholders tried very hard to develop new institutions in an attempt to carry out their responsibilities in a more efficient and effective manner whenever and wherever possible over a period of 30 to 40 years. Owing to their efforts, the Projects developed a few dozen institutions of which a considerable number of them are common to each other.
On the part of the donor country Japan, the Japanese Government created 4 institutions, JICA one institution and JBIC 7 institutions. On the part of the recipient country Indonesia, the Indonesian Government developed 3 institutions, BAPPENAS
92 93 2 institutions, Ministry of Public Works 2 institutions, and the Brantas Office 9 institutions and the JWSSD Office 10 institutions. Table( 5.1 for greater details)
5.2 Performances within the Project Cycle and Spillover Performance outside the Project Cycle
As shown in the rectangle at the center of Figure 2.2 of the Brantas Study and Figure 4-6 of the JWSSD Study, there are three kinds of performances. One is the planning performance at the pre-implementation stage, which implies efficient and effective plan making. Another is the implementation performance at the project implementation stage, which means efficient and effective construction. The other is the direct project performance at the post-implementation stage, which implies project outputs such as physical structures constructed, power generation, flood control, rice production and domestic/industrial raw water supply in the case of the Brantas Project, and such as physical structures constructed and treated water supply for the JWSSD Project.
In addition, as shown in the rectangle in the upper right hand corner of Figure 2.2 of the Brantas Study and of Figure 4.6 of the JWSSD Study, the indirect project performance or the spillover performance is clearly apparent. In the case of the Brantas Project, the spillover performance consists of 6 outcomes (or spillover impacts); “human resource development (more than 7,000 Brantas-men)”, “economic growth and welfare (farming household’s income was tripled in 1993 from 1965 level)”, “people’s mindset (such as Brantas Spirit which is termed as a work culture of professional pride and responsibility)”, “replication of Brantas projects in other parts of Indonesia (Klara Irrigation Project in Sulawesi, Tajun and Nawangan Dam in Central Java, Rora Besar Dam in West Tenggara and so forth)”, “international reference to river basin development in other developing countries (Viet Nam, Bangladesh, Egypt and Ghana)” and “poverty reduction and equity through processes of M/P making”, and in the case of the JWSSD Project 4 outcomes; “human resource development (a few hundred engineers, technicians and WTP operators)”, “fostering of local contractors and consultants through the contract-out method (a few dozen contractors and a few consultants)”, “people’s mindset (Japanese way of doing business, and work ethics and customs) and “improved level of sanitation (treated water beneficiaries increased from 1.2 million in 1970 to 4.6 million in 1997)”.
5.3 Contributions of Institutions to Performances
As analyzed in the last step of both Projects, each of “9 plus 1” re-bundled institutions for the Brantas Project and 9 institutions for the JWSSD Project, was
94 95 linked to specific performances. By doing so, efforts were made to measure their contribution qualitatively and quantitatively. While the quantity and quality of contribution was difficult to evaluate fully, this paper may claim that it succeeded in over-viewing and exhausting all major institutions which would be developed or created in one way or another in any donor-assisted infrastructure project.
It was fortunate that we could find various forms of and quite a number of institutions and that we could analyze their relationships with project performances. It can be said that this would not have been possible if the following two prerequisite conditions had not been fulfilled simultaneously. The first is “continuity” of the Project. If the Project did not last long, there would not have been time and incentives for the stakeholders concerned to devote their efforts to create and develop institutions. The other is “multiplicity” of the Project. Both Projects were composed of similar and/or different kinds of multiple projects. The stakeholders concerned had multiple opportunities to develop institutions upon reflection of the past experiences. Thus, “continuity” and “multiplicity” are the sources of institutional development in terms of quantity and quality.
Finally, it should be pointed out that the institutions created by the stakeholders involved in the long development process of the Brantas Project and the JWSSD Project could be useful for similar projects yet to be implemented elsewhere in the world, when and only when they are adjusted to the local conditions. “Scan Globally and Reinvent Locally”.
94 95 Table 5.1: Stakeholders and Institutions Identified
96 97 REFERENCES
1. References for the Brantas Project and the Citarum Project
Koei Research Institute of Nippon Koei Co., Ltd. 1997. Burantasu-Gawa-no-Kaihatu (Development of the Brantas River). Tokyo: San-Kai-Do Publishing Company.
Japan International Cooperation Agency (JICA). 1998. Development of the Brantas River Basin -Cooperation of Japan and Indonesia-. Tokyo: JICA.
Overseas Economic Cooperation Fund (OECF). 1992. Kaigai-Keizi-Kyoryoku-Kikin Sanjyuunen-shi (30 Years of OECF). Tokyo: OECF.
Baum, C. Warren, and Stokes M. Tolbert. Investing in Development -Lessons of World Bank Experience-. New York: Oxford University Press, 1985.
North, C. Douglass. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press, 2006.
Association for Promotion of International Cooperation. 1991. A Guide to Japan’s Aid. Tokyo: Association for Promotion of International cooperation.
Japan Bank for International Cooperation (JBIC). 1999. Japan’s Contribution to Economic Development in Indonesia through JBIC Official Development Assistance. Jakarta: JBIC Jakarta Office.
Jerve, A.M. Nissanke (2008) “Framework Paper” in JBIC Institute, Aid Effectiveness to Infrastructure: A Comprative Study of East Asia and Sub-Saharan Africa, JBICI Research Paper No. 36, Tokyo:JBIC.
OECF Jakarta Office. 1993.OECF Loan Hand Book. Jakarta: OECF Jakarta Office.
Government of Japan (GOJ). 1961. Comprehensive Report on The Kali Brantas Overall Project. Tokyo: GOJ.
Overseas Technical Cooperation Agency (OTCA). 1973. Report on the Brantas Development Plan. Tokyo: OTCA.
Japan International Cooperation Agency (JICA). 1985/86. Final Report for the Study of Widas Flood Control and Drainage Project Part I and Part II, 1985(I) and 1986 (II). Tokyo: JICA.
Japan International Cooperation Agency (JICA). 1998. Operation, Maintenance and Rehabilitation of Brantas River Basin Development. Tokyo: JICA.
Nippon Koei Co., Ltd. 2001. Indonesia-Japan 40 Years’ Cooperation in Brantas River Basin. (A Pamphlet prepared for the Brantas Project’s 40 Years Anniversary Workshop held in Jakarta)
Kerukunan Keluarga Eks Proyek Brantas di Jakarta and Sekitarnya. 2004. Smangat Brantas (Brantas Spirt). Jakarta: Pt Gramedia Pustaka Utama.
96 97 Asian Development Bank (ADB). 2007. Integrated Citarum Water Resources Management. Manila: ADB.
Suguura, Masahiro and Ochii Yasuhiro. 2007. “Indonesia-Kyowakoku Chitarumu- Gawa ni okeru PJT II no Mizusigen-Knnri (Water Resources Management of the Citarum River by PJT II)”, Damu Gijyutu, No. 246 [March]: 23-31.
2. References for the JWSSD Project
Overseas Technical Cooperation Agency (OTCA). 1963. Report on the Water Supply Extension Project for the City of Djakarta. Tokyo: OTCA.
CIPTA KARYA (Directorate General of Ministry of Public Works). 1972. Extension Project on Djakarta Water Supply System and Master Plan for Djakarta Water Supply System. Tokyo: CIPTA KARYA.
Japan International Cooperation Agency (JICA). 1985. Jakarta Water Supply Development Project (Master Plan Report and Feasibility Report). Tokyo: JICA.
Japan International Cooperation Agency (JICA). 1997. The Study on the Revise of Jakarta Water Supply Development Projects (Master Plan Report and Feasibility Study Report). Tokyo：JICA.
North, C. Douglass. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press, 2006.
Association for Promotion of International Cooperation. 1991. A Guide to Japan’s Aid. Tokyo: Association for Promotion of International cooperation.
Japan Bank for International Cooperation (JBIC). 1999. Japan’s Contribution to Economic Development in Indonesia through JBIC Official Development Assistance. Jakarta: JBIC Jakarta Office.
Overseas Economic Cooperation Fund (OECF). 1992. Kaigai-Keizi-Kyoryoku-Kikin Sanjyuunen-shi (30 Years of OECF). Tokyo: OECF.
OECF Jakarta Office. 1993. OECFLoan Hand Book. Jakarta: OECF Jakarta Office.
Nihon Suido Consultants Co., Ltd. (Jakarta Office). 1997. Project Digest -Jakarta Water Supply Project-. Jakarta: Nihon Suido Jakarta Office.
Nihon Suido Consultants Co., Ltd. in association with PT. Dacrea and PT. Sangkuriang. 1992. Inception Report -PAM JAYA System Improvement Project Design and Supervision of Zone 3 and 6-. Jakarta: Nihon Suido Jakarta Office.
Nihon Suido Consulting Co., Ltd in association with PT. Dacrea and PT. Sangkuriang. 1998. Final Report on Design and Construction Supervision Services -PAM JAYA System Improvement Project Zones 3 and 6-. Jakarta: Nihon Suido Jakarta Office.
98 99 INTERVIEWEES
In pursuing this research, Ms. Nadia Yovani and Mr. Tirta N. Mursitama, both of them are lectures of the University of Indonesia, worked as field research assistants in Indonesia. The author appreciates their help in collecting data and information by interviewing most of the Indonesian interviewees listed in the tables below.
1. List of Interviewees on the Brantas Project and the Citarum Project
98 99 2. List of Interviewees on the JWSSD Project
100 ISSN 1347-5703 JBICI Research Paper No. 36-1
JBICI Research Paper No. 36-1 Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa, Framework Paper
Aid Effectiveness to Infrastructure: A Comparative Study of East Asia and Sub-Saharan Africa
Framework Paper
July 2008 July 2008
JBIC Institute Japan Bank for International Cooperation
4-1, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8144, Japan Tel: 03-5218-9720 （ JBIC Institute） Internet: http://www.jbic.go.jp/ Recycled paper