On Building Framework for the Effectiveness Disbursement of Viability Gap Fund for the Umbulan Water Supply Project Workshop in Surabaya

Since early 2017, a series of workshops on Government Facilities and Support in infrastructure provision with Public Private Partnership (PPP) scheme have been conducted in various cities in Indonesia. These workshops served as forums where Government Contracting Agencies (GCAs) can interact directly with the Directorate of Government Support and Infrastructure Financing Management (DGSIFM) as the unit under the Ministry of Finance that assists the operation of the facilities. These workshops were also expected to strengthen the sense of GCAs for projects that they handle as well as the role of DGSIFM in assisting the implementation of PPP project in Indonesia. Previously, the workshops that have been held were discussing Project Development Facility (PDF) proposal submission for five KPBU projects that have passed the Outline Business Case (OBC) stage, this time the theme related to Viability Gap Fund (VGF) became the highlight.

On Thursday, 20 April 2017 the workshop with topic On Building Framework for the Effectiveness Disbursement of Viability Gap Fund for the Umbulan Water Supply Project (WSP) was held in Surabaya, East Java. Umbulan WSP is a PPP project that can provide great benefits for the community, especially for low income people. Umbulan WSP allows citizens of Pasuruan, Sidoarjo, Surabaya, and Gresik to get clean water supply that’s ready to drink. In 2014, SPAM Umbulan was awarded the Finance Project of The Year at the Global Infrastructure Leadership Forum in New York, USA. The workshop discussed the development of Umbulan WSP project as well as the VGF Disbursement Mechanism by DGSIFM. VGF is a government support in the form of contribution of some of the construction cost, given in cash to a PPP project that already economically viable but has not had a financial feasibility.

One of the benefits of VGF is to deliver public services at affordable rates for the community. The workshop was attended by representatives of DGSIFM, representatives of East Java Provincial Government as the GCA, representatives of the Java Provincial Investment Agency and representatives of PT Meta Adhya Tirta Umbulan. Representatives from the Directorate General of Budget also attended this workshop.