Thanks to micro credit, PDAM Delta Tirta Sidoarjo is now enjoying healthy customer growth and profit. Most importantly, more people are benefitting from the affordable tap water service.

Jakarta. While expecting her third child, Lia, 40, a school teacher in Sidoarjo, East Java, received a special gift she didn’t get when she was pregnant with her other two children. After years of waiting, in July 2007, tap water provided by the Delta Tirta Municipal Water Company (PDAM) finally flowed into her house at the Jenggolo Asri residential complex.

“I consider this a gift from God to my baby. His diapers won’t be yellowish like those of his elder brother and sister,” says Lia, adding that a high concentration of iron has caused ground water in Jenggolo to be unsafe for drinking, and, if used to wash clothes, it will turn white garments yellowish.

The new water service is the result of relentless efforts by the residents of the Jenggolo Asri, Puri Teratai and Mekarindang housing areas, who had been longing for clean water for years. Several meetings among the residents led to the election of Jenggolo resident, Suhardi, as head of the Clean Water Provision Committee, which was responsible for negotiating with PDAM to begin service in their residential areas.

On July 31, the organization signed an agreement on clean water provision with PDAM, and Suhardi formed a team to collect funds from residents to be used to develop a 4,665-square-meter piping network. In addition, 200 residents, from a total of 500 houses connectable with the new network, have registered to become new PDAM consumers.

In line with the total investment of Rp. 428,808,000 (around 46,000 U.S. dollars) to develop the pipe network, PDAM is charging each new customer Rp. 2,150,000, which includes
a household connection fee of Rp. 790,000, for starting up
the service.

Most residents who are unable to pay the fee in cash, are using the Kupedes (Kredit Usaha Pedesaan) micro credit facility from the BRI bank Buduran Unit Office, which allows them to pay monthly installments of Rp. 108.000 in a 24-month scheme.

”The new program by PDAM helps us, too. Because we don’t have to sweat to look for new customers for our Kupedes, as most new PDAM customers also become credit facility customers,” says head of BRI Buduran Sutarko.

It has turned out that the local communities and BRI are not the only parties who benefit from the new water service mechanism. Since it was first introduced by ESP in August 2006, the micro credit initiative has helped PDAM Delta Tirta Sidoarjo rake in Rp.2,103,976,000 from BRI and the communities. The money is invested in the development of new piping systems and 1,237 residential water connections in nine residential areas in five sub-districts in Sidoarjo.

The micro credit program has also contributed significant growth in customer base and profit to the water company. In January, PDAM’s average income per month was Rp 5 million, with a consumer base of 72,855 connections. By September, the figure rose to Rp 7 million due to an increase in the number of subscribers to 75,805 connections.

Gusril Bahar, ESP Jakarta