Access to clean water and sanitation are underlying human basic needs. UNICEF recorded that globally around 663 million people had lived without easy access to clean water and about 2.4 billion people lacked of basic sanitation facilities. Unfortunately, Indonesia is no exception, with poor-quality water often contaminated by fecal bacteria in certain parts of the country. To tackle these challenges, the Indonesian government has been putting tremendous efforts to increase the access to clean water, from around 74% (BPS report in 2018) to 100%, under the 2019’s national program of “100% Universal Access to Water and Sanitation”. Nonetheless, the problem of providing clean water and basic sanitation remains a work in progress and this can only be solved by forming strong collaboration among all stakeholders: both central and regional governments, residents, PDAMs (i.e. local water utility companies) and private investors.
This collaboration will bring mutual benefits to all stakeholders: to the end customers who will have clean water supply at an affordable price, to the PDAMs who will get the support to improve its service areas and capacities with lower capital spending for infrastructure, and to the private sector investors who will get reasonable returns from a sustainable business model.
To respond to the opportunity for private sector investments in Indonesian water sector, the Adaro Group extended its business into this sector by establishing Adaro Water through PT Adaro Tirta Mandiri (ATM). Together with its subsidiaries, ATM aims to provide drinking water, distribution channels, waste water management services and water solution services under cooperation agreements with the regional governments.
As at the end of 2019, ATM Group owned and operated more than 1,200 liters per second of drinking water facilities through its subsidiaries operating in Banjarbaru (South Kalimantan), Sampit (East Kotawaringin, Central Kalimantan) and Gresik (East Java). As part of its expansion strategy, in 2019, ATM explored the opportunities to acquire more water supply projects to be added to its investment portfolio. ATM subsequently teamed up with PT Adhi Karya Tbk in a joint-venture company to work out a plan to supply drinking water to PDAM in Dumai, with a target to produce drinking water up to 450 liters per second. ATM also established another joint venture company in 2019, i.e. PT Adaro Wamco Prima, which currently operates to handle activities involved in the slurry management of PT Adaro Indonesia.
ATM will continue to focus on undertaking business activities that will add value to the Adaro Group. To support its operations, ATM has set a target to reach a total capacity of 4,000 liters per second in the medium term, through acquisition, PPP, and B2B, while continuing to participate in selected tenders. In addition, ATM plans to penetrate other water related businesses and implement new technology such as non-revenue water (NRW) management, waste water treatment, potable water treatment and water recycling.