Critical Risk Factors of PPP Water Supply Project in Indonesia (Case Study: West Semarang Drinking Water Supply Project)

David Raymond Parlindungan; Rukuh Setiadi; Marcela López

doi:10.14710/ijpd.7.1.21-32

DOI: https://doi.org/10.14710/ijpd.7.1.21-32

Critical Risk Factors of PPP Water Supply Project in Indonesia (Case Study: West Semarang Drinking Water Supply Project)

*David Raymond Parlindungan - Ministry of Investment/ BKPM, Indonesia

Rukuh Setiadi

- Department of Urban and Regional Planning, Universitas Diponegoro, Indonesia

Marcela López - Department of Urban Management, Technische Universität Berlin, Germany

Received: 14 Jan 2022; Published: 28 Feb 2022.

Editor(s): Ninik Suhartini, Ph.D

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

BibTex Citation Data :

@article{IJPD13412,
    author = {David Raymond Parlindungan and Rukuh Setiadi and Marcela López},
    title = {Critical Risk Factors of PPP Water Supply Project in Indonesia (Case Study: West Semarang Drinking Water Supply Project)},
    journal = {The Indonesian Journal of Planning and Development},
  volume = {7},
    number = {1},
    year = {2022},
    keywords = {critical risk factors; public-private partnership; risk perception; Semarang; water supply},
    abstract = { The increasing need for water cannot be denied, given the growing population and standard of living. Therefore, the Government seeks to involve the private sector through the Public-Private Partnership (PPP) scheme in the West Semarang Drinking Water System project to overcome the cost of providing a significant investment. In 2012 the West Semarang Drinking Water Supply Project (WS-DWSS) was developed by the Government. But in 2015, the project was stopped due to changes in the Law of the Republic of Indonesia Number 7 of 2004 concerning Water Resources. PPP schemes in the water sector are relatively new in Indonesia and often face many challenges in their implementation. Through the lens of a theoretical framework and by taking a qualitative and quantitative approach based on primary and secondary data, this thesis assesses the critical risk factors during project implementation in the perception of the public and private sectors. This thesis shows that the both sectors agree that there are 3 most critical risks for drinking water projects: availability of raw water (continuity/quantity), natural disasters, tariff setting & demand projection error. However, the two sectors also have different perceptions of critical risk factors. This difference shows that the two sectors have distinct views and goals as part of a collaborative project. By knowing the similarities and differences, mitigation efforts can be made to minimize the risk of drinking water projects with the PPP scheme. },
   issn = {2442-983X},   pages = {21--32}  doi = {10.14710/ijpd.7.1.21-32},
    url = {https://ejournal2.undip.ac.id/index.php/ijpd/article/view/13412}
}

Citation Format:

Abstract

The increasing need for water cannot be denied, given the growing population and standard of living. Therefore, the Government seeks to involve the private sector through the Public-Private Partnership (PPP) scheme in the West Semarang Drinking Water System project to overcome the cost of providing a significant investment. In 2012 the West Semarang Drinking Water Supply Project (WS-DWSS) was developed by the Government. But in 2015, the project was stopped due to changes in the Law of the Republic of Indonesia Number 7 of 2004 concerning Water Resources. PPP schemes in the water sector are relatively new in Indonesia and often face many challenges in their implementation. Through the lens of a theoretical framework and by taking a qualitative and quantitative approach based on primary and secondary data, this thesis assesses the critical risk factors during project implementation in the perception of the public and private sectors. This thesis shows that the both sectors agree that there are 3 most critical risks for drinking water projects: availability of raw water (continuity/quantity), natural disasters, tariff setting & demand projection error. However, the two sectors also have different perceptions of critical risk factors. This difference shows that the two sectors have distinct views and goals as part of a collaborative project. By knowing the similarities and differences, mitigation efforts can be made to minimize the risk of drinking water projects with the PPP scheme.

Fulltext View|Download

Keywords: critical risk factors; public-private partnership; risk perception; Semarang; water supply

Article Metrics:

Article Info

Section: Articles

Language : EN

In Vol 7, No 1 (2022): February 2022

Recent articles

Decision Analysis of Alternative River Debris to Landfill Transportation Systems in Jakarta Sectoral Potential Analysis For Development Planning In Binjai, Deli Serdang, Karo (Bidangro) Metropolitan Area Assessing The Role of Water-Related Regulations and Actors in The Operation of PDAM (Local Drinking Water Company) More recent articles

ADB. (2021). Public–private partnership monitor: Indonesia. Asian Development Bank. doi: 10.22617/SGP210069-2
Adiyanti, N., & Fathurrahman, R. (2021). Assessing critical success factors for PPP water project in Indonesia: Lessons from West Semarang. Policy & Governance Review, 5(2), 164. doi: 10.30589/pgr.v5i2.372
Ameyaw, E., & Chan, A. (2015). Evaluating key risk factors for PPP water projects in Ghana: A delphi study. Journal of Facilities Management, 13(2), 133–155. doi: 10.1108/JFM-10-2013-0051
Anasiru, T., & Tahir, S. (2020). The impact of the earthquake on the PDAM Donggala pipeline network in Tanamodindi Village, Palu City [Dampak gempa bumi terhadap jaringan pipa PDAM Donggala di Kelurahan Tanamodindi Kota Palu]. Siimo Engineering, 4(I), 8
Anhari, I. (2021). The KPK's impetus for regional asset management resulted in 12,310 land certificates belonging to the local government [Dorongan KPK pada tata kelola aset daerah berbuah 12.310 sertifikat tanah jadi milik Pemda]. RMOL.ID, p. 4
BPS Provinsi Jawa Tengah. (2019). Statistics of clean water in Central Java Province [Statistik air bersih Provinsi Jawa Tengah]. Badan Pusat Statistik
Chan, A. P. C., Lam, P. T. I., Wen, Y., Ameyaw, E. E., Wang, S., & Ke, Y. (2015). Cross-sectional analysis of critical risk factors for PPP water projects in China. Journal of Infrastructure Systems, 21(1), 04014031. doi: 10.1061/(ASCE)IS.1943-555X.0000214
Chendra, F., & Chandra, H. (2014). Model of the causes and effects of delays in construction projects in Surabaya [Model faktor-faktor penyebab dan dampak keterlambatan proyek konstruksi di Surabaya]. 3(1), 7
Cooper, D. (2005). Project risk management guidelines: Managing risk in large projects and complex procurements. West Sussex, England ; Hoboken, NJ: J. Wiley
Diskominfo Jateng. (2017). Study landslide mitigation in Manyaran Semarang, this is a recommendation from the Central Java Provincial Government [Kaji mitigasi longsor di Manyaran Semarang, ini rekomendasi Pemprov Jateng]
Ditjen PI PUPR. (2010). Risk profile drinking water supply system Patimban [Profil risiko SPAM Patimban]. Kementerian Pekerjaan Umum
Dwi Hatmoko, J. U., & Susanti, R. (2017). Risk management of West Semarang water supply PPP project: Public sector perspective. IPTEK Journal of Proceedings Series, 0(1), 48. doi: 10.12962/j23546026.y2017i1.2191
Enggraini, F. (2021). Governance of the operation of the drinking water supply system through cooperation between the government and business entities [Tata kelola penyelenggaraan sistem penyediaan air minum melalui kerja sama pemerintah dan badan usaha]. 174
Grimsey, D., & Lewis, M. (2002). Evaluating the risks of public private partnerships for infrastructure projects. International Journal of Project Management, 20(2), 107–118. doi: 10.1016/S0263-7863(00)00040-5
Hadipuro, W. (2010). Indonesia’s water supply regulatory framework: Between commercialisation and public service? 3(3), 17
Hansen, R. (2019). Development of the planning and preparation stages of the project in the process of the government cooperation scheme with business entities (Case study on drinking water supply system projects) [Pengembangan tahap perencanaan dan penyiapan proyek pada proses skema kerjasama pemerintah dengan badan usaha (Studi kasus pada proyek sistem penyediaan air minum)]
Husnullah, P., & Suryanto, P. (2010). A comparative review of quantitative VFM methodology for PPP infrastructure project in Indonesia and Australia
Likhitruangsilp, V., Do, S. T., & Onishi, M. (2017). A comparative study on the risk perceptions of the public and private sectors in public-private partnership (PPP) transportation projects in Vietnam. Engineering Journal, 21(7), 213–231. doi: 10.4186/ej.2017.21.7.213
Martanti, A. (2019). Analysis of the causes of contract change orders and their impact on contractor performance in government construction projects [Analisis faktor penyebab contract change order dan pengaruhnya terhadap kinerja kontraktor pada proyek konstruksi pemerintah]. Rekayasa Sipil, 7(1), 32. doi: 10.22441/jrs.2018.v07.i1.03
Melinda, F. S., Rudiyanti, S., & Haeruddin, H. (2019). Water pollution status of Jatibarang Reservoir, Semarang City in various activities allocation [Status pencemaran perairan Waduk Jatibarang Kota Semarang pada berbagai kegiatan peruntukan]. Management of Aquatic Resources Journal (MAQUARES), 8(3), 118–125. doi: 10.14710/marj.v8i3.24245
Naviandri. (2021). PDAM Tirtawening Bandung is starting to have trouble supplying clean water [PDAM Tirtawening Bandung mulai kesulitan suplai air bersih]. Media Indonesia
Nemoto, T., & Beglar, D. (2014). Developing likert-scale questionnaires
Pangeran, H. (2012). Risk management practices in drinking water service providers: Survey in several places in Indonesia [Praktek manajemen risiko pada penyedia layanan air minum: Survey di beberapa tempat di Indonesia]. Prosiding Seminar Nasional Aplikasi Teknologi Prasarana Wilayah (ATPW), 12
PMI. (2013). A Guide to the project management body of knowledge (PMBOK® Guide) Fifth Edition
Pribadi, S., & Pangeran, M. H. (2007). Important risks on public-private partnership scheme in water supply investment in Indonesia
PT PII. (2020). Acuan Alokasi Risiko
Qian, N., House, S., Wu, A., & Wu, X. (2020). Public–private partnerships in the water sector in China: A comparative analysis. International Journal of Water Resources Development, 36(4), 631–650. doi: 10.1080/07900627.2019.1685951
Rafaat, R., Osman, H., Georgy, M., & Elsaid, M. (2020). Preferred risk allocation in Egypt’s water sector PPPs. International Journal of Construction Management, 20(6), 585–597. doi: 10.1080/15623599.2019.1703087
Sigijateng. (2019). On an inspection to PDAM Tirta Moedal, Commission B questioned the progress of the West Semarang SPAM project [Sidak ke PDAM Tirta Moedal, Komisi B pertanyakan progres proyek SPAM Semarang Barat]. Retrieved from https://sigijateng.id/2019/sidak-ke-pdam-tirta-moedal-komisi-b-pertanyakan-progres-proyek-spam-semarang-barat/
Sutantiningrum, K., & Utami, S. (2019). Risk analysis of the Wosusokas Regional SPAM PPP Project, Central Java Province—The government's perspective [Analisis risiko proyek KPBU SPAM Regional Wosusokas Provinsi Jawa Tengah—Perspektif pemerintah]. 16(3), 10
Sy, D. T., Likhitruangsilp, V., Onishi, M., & Nguyen, P. T. (2017). Impacts of risk factors on the performance of public-private partnership transportation projects in Vietnam. ASEAN Engineering Journal, 7(2), 30–52. doi: 10.11113/aej.v7.15520
Wibowo, A., & Mohamed, S. (2008). Perceived risk allocation in public-private-partnered (PPP) water supply projects in Indonesia
Wibowo, A., & Mohamed, S. (2010). Risk criticality and allocation in privatised water supply projects in Indonesia. International Journal of Project Management, 28(5), 504–513. doi: 10.1016/j.ijproman.2009.08.003
Wibowo, R. (2021). Government contracts: Concepts, types, developments in regulations and review of decisions [Kontrak pemerintah: Konsep, ragam, perkembangan regulasi dan kajian putusan]. Prenada Media Group
Yolandha, F. (2021). Adjustment of toll rates gives certainty to investors [Penyesuaian tarif tol beri kepastian pada investor]. Retrieved from https://republika.co.id/berita/ekonomi/korporasi/qn0fey370/penyesuaian-tarif-tol-beri-kepastian-pada-investor

Last update:

No citation recorded.

Last update:

No citation recorded.

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

The authors submitting a manuscript do so on the understanding that if accepted for publication, copyright of the article shall be assigned to The Indonesian Journal of Planning and Development (IJPD). Copyright encompasses rights to reproduce and deliver the article in all form and media, including reprints, photographs, microfilms and any other similar reproductions, as well as translations.

As an article writer, the author has the right to use their articles for various purposes, including use by institutions that employ authors or institutions that provide funding for research. Author rights are granted without special permission.

Author who publishes a paper at IJPD has the broad right to use their work for teaching and scientific purposes without the need to ask permission, including: used for (i) teaching in the author's class or institution, (ii) presentation at meetings or conferences and distributing copies to participants ; (iii) training conducted by the author or author's institution; (iv) distribution to colleagues for research use; (v) use in the compilation of subsequent authors' works; (vi) inclusion in a thesis or dissertation; (vi) reuse of part of the article in another work (with citation); (vii) preparation of derivative works (with citation); (viii) voluntary posting on open websites operated by authors or author institutions for scientific purposes (follow the CC BY-NC-SA 4.0 License).

Authors and readers can copy and redistribute material in any media or format, and mix, modify, and build material for any purpose but they must provide appropriate credit (provide article citation or content), providing links to the license, and indicate if there are changes.

Reproduce any part of this journal, its storage in the database or its transmission by all forms or media is permitted does not need for written permission from IJPD. However, it should be cited as an honor in academic manners

IJPD and the Department of Urban and Regional Planning of Diponegoro University and the Editor make every effort to ensure that there are no data, opinions, or false or misleading statements published in IJPD. However, the content of the article is the sole and exclusive responsibility of each author.