The Indonesian government is preparing the tender for the construction of the West Semarang Drinking Water Supply System worth IDR 1.10 trillion (approx. USD $83 million). Sri Hartoyo, Director General of Human Settlements of the Ministry of Public Works and Housing, said the winner of the project is targeted to be announced before the end of 2017. Hartoyo added that authorities are now still in preparation for the procurement of business entities.
The West Semarang drinking water supply system is designed to have a capacity of approximately 750 liters per second, to provide drinking water in 31 urban villages in 3 sub-districts where an estimated 60,000 families are not yet connected to a drinking water supply system network in West Semarang. Semarang is a city on the north coast of the island of Java (in the Central Java province).
The project, a public-private partnership, will be executed under a build, operate & transfer (BOT) scheme with a working period of 25 years that commences after the project starts commercial operations.
Development of the West Semarang drinking water supply system is estimated to cost IDR 1.10 trillion which will be divided into three funding portions: (1) the central government's state budget, (2) the regional government's state budget, and (3) PDAM Tirta Moedal Semarang's budget. Regarding the latter (PDAM Tirta Semarang): in Indonesia local government-owned regional water utility companies, known in Indonesian as Perusuhaan Daerah Air Minum (PDAM), comprise the bulk of a highly-fragmented water industry. PDAM Tirta Moedal Semarang is a local government-owned water utility company in Semarang.
Provided the winner of the tender is announced later this year, then construction of the West Semarang drinking water supply system should start early next year.
The West Semarang drinking water supply system project is included in a list of National Strategic Projects through Presidential Regulation no. 3/2016. A National Strategic Project can count on a high degree of political support as regional governments are forced to safeguard rapid development of the project. Projects that do not have this status can be burdened by local regulations that oppose central regulations.