Bisnis Indonesia, 6 March, 2017, Page 7, Section: Infrastruktur
By Deandra Syarizka
JAKARTA - The government will conduct the first stone laying of the Umbulan Water Supply System (SPAM) project in East Java in the middle of this month.
Corporate Communications [Officer/Manager] of PT Penjaminan Infrastruktur Indonesia (PII), Intan Octora, said that the plan is for President Joko Widodo to directly lead the ceremony.
This is because the Umbulan project is considered to be one of the icons of the scheme of government cooperation with business enterprises (KPBU); it is a project that has resumed after being stalled for 40 years.
"The plan is the groundbreaking of Umbulan SPAM to take place in the third week of this month. President Jokowi is scheduled to attend," she said last weekend.
In the project, PT PII provides a guarantee worth Rp 1.06 trillion of the total Rp 2.30 trillion. Meanwhile, the types of risk being guaranteed for include a default of the responsible party in cooperation project (PJPK) - i.e. East Java Provincial Government, and also the risk of termination.
The groundbreaking ceremony is to be conducted shortly after PT Meta Adhya Tirta Umbulan, a subsidiary formed by the consortium between PT Medco Energi Internasional Tbk. and PT Bangun Cipta Contractors, has received funding worth Rp 890 billion.
That amount has been obtained from PT Indonesia Infrastructure Finance (IIF) with Rp 550 billion and PT Sarana Multi Infrastruktur and PT Bank Negara Indonesia Tbk. with Rp 290 billion, to meet the project’s investment needs. Meanwhile, the remaining investment requirement for this national strategic project is secured from the company’s equity capital.
Earlier, Technical Director of PT Meta Adhya Tirta Umbulan, Djoko Sarwono, said that, after signing an investment contract, the company has accelerated the fulfillment of the financing agreement (financial closing).
Under the contract, he said, completion of the technical permits until financial closing is targeted for completion at the latest by July 2017, but the company already reached that phase in December 2016.
He assessed that the acceleration has been pursued because the national government wants expedition for the Umbulan springs to be immediately utilised by the people of East Java, especially in the dry season. He said the company is targeting the construction to begin in the first quarter of 2017 and it will last for two years until 2019.
The Umbulan SPAM project has been planned since 1973, but it was only defined in 2010 by the National Development Planning Agency (Bappenas) and the Ministry of Public Works and Housing (PUPR) as one of the projects with KPBU scheme. The project has thus become a KPBU project, with East Java Provincial Government serving as its PJPK.
The raw water that will be taken from the Umbulan springs in Pasuruan Regency is planned to be distributed through transmission pipelines along the 93.70km to PDAMs [regional water supply companies] in five regencies/cities, namely City of Surabaya (1,000 litres/second), Pasuruan Regency (410 litres/second), City of Pasuruan (110 litres/second), Sidoarjo Regency (1,200 litres/second), and Gresik Regency (1,000 litres/second).
NOT ATTRACTIVE ENOUGH
The project is believed to be able to supply clean water for the benefit 1.30 million people in East Java, with clean water spending cuts worth Rp 1.20 trillion and savings on health care costs at around Rp 100 billion/year.
Meanwhile, the Ministry of PUPR plans to offer a number of infrastructure projects, such as dams and SPAMs, to local companies.
PUPR Minister, Basoeki Hadimoeljono, said that, all this time, the KPBU scheme for the construction of dams and SPAMs has not been attractive enough.
"For toll roads, the KPBU system is already in demand, but for dams and SPAMs it has been less desirable," he said recently.
The plan to give KPBU projects with few interested parties to local companies has been discussed with the Coordinating Ministry for Economic Affairs and the Ministry of Finance.
One of the projects to be given to the local companies is the development of West Semarang SPAM.
"In total, the [investment cost] of this SPAM is around Rp 900 billion; if later the government provides support worth Rp 500 billion, there remains Rp 400 billion of government investment. This project has attracted few parties, so perhaps we will offer it to local companies," said Basoeki.
Meanwhile, Chief of Executive Team of the Committee for Acceleration of Priority Infrastructure Provision (KPPIP), Wahyu Utomo, is still reviewing the planned development of West Semarang SPAM with the KPBU scheme.
"We are still reviewing West Semarang SPAM. Currently, it is not yet identified, awaiting the results of the review," he said.
His office targets this study to be completed within a period of three months before the project is offered to local companies. (Yanita Petriella)
Profile of Umbulan SPAM Project
- PJPK*: East Java Provincial Government
- Contractor: Consortium of PT Medco Energi Internasional Tbk. & PT Bangun Cipta Kontraktor
- Partnership scheme: BOT (built, operate & transfer)
- Capacity: 4,000 litres per second
- Estimated investment: Rp 2.05 trillion
- Beneficiaries: 1.3 million people, or 260,000 house connections
- Construction of intake 4,000 litres per second
- Procurement and installation of raw water transmission pipeline along 97km
- Construction of two pump houses of 4,000 litres per second, along with their equipment
- 16 units offtake system and reservoirs in five regencies/cities
- East Java PDAM: 100 litres per second
- Pasuruan Regency PDAM: 420 litres per second
- Pasuruan City PDAM: 110 litres per second
- Sidoarjo City PDAM: 1,370 litres per second
- Surabaya City PDAM: 1,000 litres per second
- Gresik Regency PDAM: 1.000 litres per second
Note. *) Responsible Party for Cooperation Project
Sources: BPP SPAM, Ministry of PUPR, 2015, processed