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