Drinking water project: Jatiluhur SPAM could be delayed
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia: Proyek air minum SPAM Jatiluhur terancam mandek
20 November 2019
By: Rivki Maulana
Jakarta – Jatiluhur Drinking Water Supply System (SPAM) project is potentially delayed as the request for proposal stage has not been carried out, despite four participants passing prequalification last year.
This water treatment project is crucial as it will be relied upon to fulfil the drinking water demand of Jakarta.
Water Supply Development Supporting Agency (BPPSPAM) of the Public Works and Public Housing (PUPR) Ministry announced that the bidding stage should had been carried out as Jatiluhur SPAM was already listed as a national strategic project (PSN).
BPPSPAM Administrating Element Member Henry M. Limbong said that the progress of the SPAM, which has a capacity of 5,000 litres per second, was delayed as there had not been any certainty from the company in charge of the partnership project, Jasa Tirta II.
Henry mentioned that the financial capability of Jasa Tirta II as the PJPK was suspected to not be able to bear the risks of Jatiluhur SPAM project. Moreover, the Finance Ministry provided guarantee only for the risk of termination.
“[The project] is supposed to be in the RfP (request for proposal) stage, but the PJPK is still uncertain. Financially, they do not meet the required standard [to bear the risk of the project],” Henry explained to Bisnis on Tuesday (19/11).
Four participants passed prequalification since 21 March 2018. The four participants are PT Adaro Turta Mandiri, PT PP Tbk – PT Jakarta Propertindo consortium, PT Jaya Konstruksi Manggala Pratama Tbk – PT Wijaya Karya Tbk – PT Gemah Ripah consortium, and PT Aetra Air Jakarta – PT Moya Indonesia consortium.
Jasa Tirta II Finance Director Haris Zulkarnain did not respond to the questions regarding the project’s progress that were asked by Bisnis. Previously, he mentioned that the bidding stage could be carried out if the cooperation agreement with the regional government that is the off-taker had been signed.
The cooperation agreement shows the government’s commitment as the owner of the local government-owned water company (PDAM) in building an infrastructure for distribution to the customers.
There are four off-takers in Jatiluhur SPAM project, namely PAM Jaya, PDAM Tirta Patriot Bekasi, PDAM Tirta Bhagasasi Bekasi, and PDAM Tirta Tarum Karawang. PAM Jaya is the largest off-taker that absorbs 4,000 litres per second from the total capacity that will be built.
Henry said that, until now, Jasa Tirta II was still assigned as the PJPK, based on PUPR Minister Decision Number 561/KPTS/M/2017.
He hopes that this project can continue with Jasa Tirta II as the project owner. “Hopefully there will be a way out because it is difficult to change the regulation, [as we would also have to] change the regulation that is higher in hierarchy,” he explained.
Second Time
Based on Bisnis records, if Jatiluhur SPAM project is delayed, this will be the second time that it has been delayed. In 2017, Jasa Tirta II and other shareholders stop PT Air Minum Indonesia (AMI) operation, as the Constitutional Court has annulled Law Number 7 of 2007 on Water Resources.
When the company was established in 2015, AMI was said to be the entity that would build Jatiluhur SPAM project. In 2013, Jasa Tirta II was assigned by the PUPR Ministry to be the PJPK and to tap strategic partners.
Based on Bisnis records, the PUPR Ministry targets the water supply per capita to be 60 cubic metres per year through the revitalisation of 45 dams and the construction of 15 new dams until 2024. Besides that, 10 million customer service lines for drinking water will be built to increase drinking water access.
Until now, there are at least 10 drinking water projects that are ready to be implemented using the Public-Private Partnership (PPP) scheme or the business to business (b2b) scheme. The ten projects are Sarbagikung SPAM, Karian-Serpong SPAM, Ciawi SPAM, Kamijoro SPAM, Tangerang SPAM, Pekanbaru SPAM, Gresik Regency SPAM, Makassar SPAM, Jatigede Regional SPAM, and Jatiluhur SPAM.
Based on BPPSPAM data, the total capacity of the ten projects reaches 18,050 litres per second.
Jatiluhur Drinking Water Supply System (SPAM)
Project Name: Jatiluhur I SPAM
Company in Charge: Jasa Tirta II
Investment Estimation: Rp1.92 trillion
Capacity: 5,000 litres per second
Off-taker:
PAM Jaya (4,000 litres per second)
PDAM Tirta Patriot (300 litres per second)
PDAM Tirta Bhagasasi (350 litres per second)
PDAM Tirta Tarum
Next article: Komodo Airport tender winner to be announced soon
