Goals

• To show that urban drinking water companies in developing countries are able to pay off external investments in new equipment from the cost savings made possible by the investment.
• To gain experience with setting up a Special Purpose Company (SPC) that can supply knowledge and financing to a water supply company.
• To use pumps that deliver more water with less energy.

Details of project plan

The project includes the following activities:
• Setting up an investment fund to provide interest-free advances to buy new pumps. 50% of the investment in the demonstration project is financed from this fund. At the end of the project this advance will be returned to the fund.
• Analysing and specifying in detail the various possibilities for saving energy that can be achieved by replacing the pumps and pumping equipment.
• Signing a contract with a local bank for a loan for 50% of the amount needed for the investment.
• Signing a lease contract with the PDAM Surabaya for the delivery and maintenance of new pumps and the related equipment.
• Contracting out, ordering, delivery and installation of pumps and related equipment.
• Installing apparatus for measuring capacity and energy used, and the flow and pressure of the pumps. In this way the efficiency of the old and new pumps can be calculated.
• Establishing the monthly rent for use of a new pump. This will be based on the difference in output between the old and the new pumps.
• Maintaining and managing the new pumps and training PDAM staff to do the same.
• Administration of the rent and loan repayments, and safeguarding operational costs.
• Organising work visits for ten other water supply companies in Surabaya.
• Diffusing the rental concept though advertisements.

Impact

Better operatoinal management will allow more houses to be connected to the water supply network, which will eventually result in improved public health.

Spin off and market impact

The improved situation for the water company will generate more work for, for example, small contractors who connect houses to the supply network. Local suppliers will also have the opportunity to supply new pumps and opportunities will be created for service providers in the local financial sector. PDAM Surabaya and other cities are expected to submit applications for new investments to the Special Purpose Company.

For the Netherlands the project means a strengthening of its position in providing advice and managing drinking water supply installations and systems, and financing new investments in the sector. Dutch companies will also be able to do more advisory work on the operational management of drinking water systems.