UNDP-World BankWater andSanitationProgram

by Dale WhittingtonJennifer DavisHarry MiarsonoRichard Pollard

These Urban Environmental Sanitation Working Papers have not been formally published and this is an opportunity toshare this information more widely to:

• stimulate discussion and to broaden thinking within the sector, and in particular, to encourage dialogue withinand among our clients in developing countries; and

• build more awareness of the Program among UES clients.

Working Paper produced in December 1997

Urban Sewer Planning inDeveloping Countries and“The Neighborhood Deal”:

A Case Study of Semarang, Indonesia

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Urban Sewer Planning in DevelopingCountries andThe Neighborhood Deal:A Case Study of Semarang, Indonesia

Human waste management is a burgeoning issuethat is given insufficient attention by municipalgovernments in most cities in Indonesia, as wellas higher level authorities. Current nationalpolicy is not clearly defined in this sector.However, it is evident that for most urban areas,on-site sanitation options such as septic tanks orpour-flush latrines, in large part financed by thefamilies and communities being served, arepreferred. Public investment in off-site services,ranging from communal septic tanks toconventional sewerage, must be weighed againstthe near-term benefits of investments in otherinfrastructure, such as housing and roads.Nonetheless, off-site alternatives with increasedallocations of government resources will, in theforeseeable future, become a necessity. Tentativeguidelines, currently loosely applied, are beingestablished. For example, The Ministry of PublicWorks recommends that sewerage systems beconsidered for areas with population densitieshigher than 300 people per hectare 1.

Investment in sewerage is generally considered tobe expensive, and conventional approachestypically cost in the range of US$1,500 perhousehold2. However, global experiencesuggests that a demand-focused, process-orientedapproach that attempts to address the needs ofall stakeholders can lead to significant costsavings and a balanced sharing of financialresponsibility for both capital investment andoperation and maintenance.

The World Bank has encouraged investment inhuman waste management in most of theintegrated urban development projects it hassupported. The Semarang-Surakarta UrbanDevelopment Project initially included financingfor a pilot sewerage component that envisagedconstruction of a trunk sewer for part of the city, a

1Ref. Sasaran Lima Tahun (SARLITA) for Repelita V, Min. Public Works, andBAPPENAS, Govt. of Indonesia.

2Water Supply, Sanitation, and Environmental Sustainability: The Financing Challenge ,Ismail Serageldin, The World Bank, 1994

treatment plant, and a feeder sewer network inone pilot sub-district 3. Further dialogue betweenthe Bank and the Municipal and ProvincialGovernments led to the conclusion that the pilotcomponent must demonstrate a viable strategy forthe gradual development of improved humanwaste management for the entire city. Afundamental step in this process was to assesscurrent demand for improved sanitation amongservice consumers in order to help determine whowould pay for what portions of sanitationservices, and to prioritize areas of the city fordifferent levels of service on the basis of demand.

The feasibility study described in this report wasconducted to test a contingent valuationmethodology for assessing consumer demand forsewer services. In essence, households andneighborhood groups were offered differenttheoretical pricing arrangements for houseconnections and feeder sewer networks, and theresults analyzed to determine the dealpreferred by each of the three sub-districtsincluded in the study. While not acomprehensive assessment of willingness to payfor sanitation systems and services in Semarang,the data do provide some interesting and usefulinsights into consumer priorities for public andprivate investment in sanitation infrastructure.Although sanitation presents a more complicatedmix of public and private responsibilities forhouseholds and communities than does drinkingwater supply, the study demonstrates thatcontingent valuation can be an effectiveapproach for assessing demand for sanitationservices.

The study was financed by a World BankJapanese Grant facility through the InfrastructureDivision of the East Asia & Pacific CountryDepartment for Indonesia. The UNDP/WorldBank Water & Sanitation Programs RegionalWater & Sanitation Group for East Asia & ThePacific (RWSG-EAP) provided advisory supportand facilitated implementation of the study inSemarang and Jakarta.

Richard Pollard, Jakarta, September, 1997

3Staff Appraisal Report: Semarang-Surakarta Urban Development Project , Report No.12656-IND, The World Bank

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1. Introduction

In most large cities in developing countries, onlya small minority of households are connected to asewer system. A tiny fraction of the wastewaterfrom those households connected to sewers istreated effectively at primary or secondarywastewater treatment plants. The reality, then, isthat cities in developing countries are awash inhuman sewage. Groundwater is contaminatedfrom pit latrines and septic tanks; drainageditches and canals are full of human waste; andsurface water bodies such as lakes, streams,rivers, and nearby bays are heavily polluted.

Many observers assume that, becauseconventional technological solutions to theseproblems are well understood ( e.g., water-sealedtoilets, sewerage systems, and wastewatertreatment plants), what is needed is simply moremoney. There is great uncertainty, however,regarding how to spend more on effectivesolutions to urban sanitation problems indeveloping countries. The first step toward asolution is not higher levels of externally-suppliedfunding, but rather a new policy framework thatwill ensure that available funds are used wisely.

Sanitation planning in developing countries hasall the characteristics of what policy analystshave termed "wicked problems." There areseveral reasons why improving sanitation serviceposes such a complicated policy and planningproblem. First, the costs of conventional water-borne sewerage solutions ( e.g., on-site facilitiessuch as water-sealed toilets, sewerage networks,and wastewater treatment) are expensive--on theorder of US$25-35 per household per month(Lauria et al, 1995). This is equal to the totalmonthly income of many poor households inurban areas of some developing countries.Because the capital investments required forsewers and wastewater treatment facilities are solarge, implementation of construction plans takesa long time and almost always involves cities incapital financing arrangements with higher-levelgovernment authorities and capital markets. Suchlong-term planning is problematic in low-incomecountries because poor households typically havehigh rates of time preference (McClelland et al,1994).

Second, sanitation improvements result in publichealth benefits that have a public goodscharacter: the benefits received by oneindividual do not diminish the benefits availableto another. Standard public goods theoryindicates that collective action is often requiredfor the efficient provision of such goods in orderto avoid free riding. But household sanitationimprovements such as the installation of water-sealed toilets are not pure public goods; they alsoyield important private benefits, includingconvenience, time savings, and aesthetics. Ifhousing markets are functioning reasonably well,the value of such improvements will becapitalized into housing and rental values.Households respond to these market prices andoften sort themselves into neighborhoods bypreferences for environmental quality, includingneighborhood sanitation.

A third challenge to effective sanitation planningis the lack of public awareness of the benefits ofsanitation services. Despite the fact that publichealth benefits ensue from collective solutions tourban sanitation problems, the public may notfully understand or perceive the magnitude ofthese benefits. In this sense, sanitationimprovements resemble what economists term"merit goods," and social marketing and politicalleadership may be required to implement asocially optimal investment program. This line ofargument, however, has often led public healthspecialists, planners, and engineers to rely solelyon their expert opinion and to ignore thepresumably uninformed wishes of households.One manifestation of this attitude is the responseof water and sanitation engineers to the problemof low household connection rates to new sewerlines: "We’ll make them connect!" Suchprofessional arrogance has resulted in manyspectacular sanitation planning failures.

Fourth, planners attempting to increase user feesin order to finance sanitation improvements oftenface a dilemma. Poor households are unableand unwilling to pay for sewer connections orwastewater treatment, while many richerhouseholds have already invested in individualsolutions to their immediate problems. Thus it islikely that neither group will be inclined toparticipate in a collective agreement to improve

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public health conditions. Many poor householdsmay not even have water-sealed toilets oreffective on-site sanitation systems (such as VIPlatrines). Quite reasonably, such households aregenerally unwilling to address community-wideproblems until they have met their immediatehousehold needs and have obtained the privatebenefits associated with improved householdsanitation. There is less justification for the publicsector to subsidize private housing improvementssuch as the construction of water-sealed toilets,yet without such investments neighborhood andcity-wide plans must wait.

Fifth, sewer network design, construction, andoperation are subject to a variety of economies ofscale. Design engineers thus prefer to lay sewerpipe throughout a city and hope that householdsand businesses will connect. This approachrequires that care must be taken to estimatedemand for connections, something that is rarelydone. If connection rates are low, this hasseveral implications. First, public health andenvironmental objectives may not be fullyachieved. Second, revenues will be lower thanexpected. Third, the network design task itselfwill become much more complicated in terms ofsizing and location of interceptor and trunksewers. A conventional sewer system may notfunction properly because of insufficient flows.

Finally, large amounts of money are at stake inthe way water and sanitation projects are nowconstructed and financed. A new policyframework for sewer planning will likely threatenestablished financial relationships and will meetstrenuous opposition from some stakeholders inthe current system (Lovei and Whittington, 1993).

Despite these formidable challenges, policyanalysts, planners, and government officials havebecome increasingly aware of the need for anew policy and planning framework inconfronting the urban sanitation planning andimplementation problem in developing countries.In this paper we argue that this new planningparadigm requires that neighborhoodorganizations and households be involved in anactive partnership with government, donors, andtechnical staff. The problem is simply toocomplex to be left to planners and engineersworking in government agencies, or to the

consulting engineers that work for them. Theessence of our argument is that governmentofficials and technical staff must re-orient theirthinking toward a new scale; rather thanattempting to find an "optimal solution" to a cityssanitation problem, they should focus onstructuring what we term the "neighborhooddeal." This reorientation requires thatgovernment officials study household andneighborhood demand for improved water andsanitation services in order to design a "deal"that municipal and higher-level governments canafford, that is technically feasible, that isattractive to households, and that has publichealth and environmental benefits. Pricingsanitation services involves finding a set of prices(e.g., assessment fees, monthly tariffs, andconnection charges) to be offered in theneighborhood deal. A sewer networkdesigned under this approach will evolve overtime in response to the incentives that governmenthas incorporated in the neighborhood deal. Ifthe incentives are well designed, then both thegovernment and city residents should be satisfiedwith the dynamic evolution of the sanitationnetwork. If not, then the deal may be modifiedas experience is gained.

There are two principal advantages of thinkingabout the sewer planning problem as a dealbetween neighborhoods, households, andgovernment. First, sewers will be built wherepeople actually want them, resulting in highconnection rates and thus in substantial publichealth benefits. Second, with relatively highconnection rates among neighborhoodsparticipating in the deal, increased revenues willbe available for the government to finance itspart of the deal in other neighborhoods. A fasterexpansion of the sewer network will occur than ifsome neighborhoods received a disproportionateshare of available subsidies. On the other hand,disadvantages of this deal making approach tosanitation planning include the complexity ofnetwork design for interceptor and trunk sewersand the slower progress in improving surfacewater quality.

This partnership between neighborhoods andgovernment will not, however, be easy toachieve. It will require that planners andengineers relinquish some of the responsibilities

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and privileges they typically assume for shapingand designing urban sanitation policy. They willalso have to consider households as their clients,not merely passive beneficiaries of a sewerproject. Considerable time and effort will have tobe spent working with local communities andneighborhoods before construction can begin.Moreover, the agencies responsible for waterand sewer planning will need new staff with verydifferent skills than the individuals they currentlyemploy, or they will have to hire privateconsulting firms to provide them with suchservices.

In the next section of this paper we discuss thecomponents of the "neighborhood deal." InSections 3-9 we present a case study of thesanitation situation in Semarang, Indonesia, thatdevelops our concept of a partnership betweenneighborhoods and city government in moredetail. Section 10 summarizes our findings andconclusions. Our vision of a community-orientedsanitation planning process is contrasted withcurrent investment strategies for expanding orinitiating the construction of urban sewer networksin developing countries in Appendix A.

2. A New Sanitation Planning Approach:The Neighborhood Deal

It is our contention that the exclusion ofneighborhood organizations and households fromactive participation in the planning process lies atthe heart of the current sanitation planning crisisin many cities in developing countries. Toappreciate why this is so, it is necessary toconsider (1) what information planners andmunicipal governments need before committing tolay sewer pipe in a neighborhood and (2) whatinformation households need before decidingwhether they want a connection to a sewer line.Sound sewer planning requires that plannersknow both the number of households that willconnect if sewer lines are installed, as well as thecosts of sewering a particular neighborhood,including the implications for the entire seweragenetwork.

If it can be assumed that all households in aparticular neighborhood will freely connect orcan be forced to connect to new sewer lines, thenthis part of the planning problem is simple. If this

cannot be safely assumed, as is typically thecase, then the agency or authority responsible forthe sewerage system needs assurance that, ifsewer pipe is laid in a neighborhood, householdswill pay a predetermined amount for thisinfrastructure improvement. Simply put, a fiscallyresponsible authority cannot bear the financialrisk of installing such expensive infrastructurewithout some form of payment guarantee. Fromthe agencys financial perspective, eachhousehold in the neighborhood should berequired to pay some share of the sewer networkinstallation costs--whether or not that householdobtains a connection--because the value of itsproperty increases simply by having the option toconnect in the future.

In practice, there are two principal means bywhich an agency could receive such assurance.First, individual households could sign a legallybinding agreement with the agency whichobligated them to pay a specified amount for theinstallation of the sewer lines. Under thisapproach, however, transaction costs for theagency are very high. Although 100% ofhouseholds would not necessarily need to agreeto participate, a minority of households couldhold out, refusing to sign the contract with theagency, and delay the project for others.Moreover, once the lines were installed, theagency would have the difficult task of enforcingnumerous contracts with individual households.

Second, the agency could require a financialcommitment from the neighborhood as acollective unit before installing the sewer lines. Aneighborhood organization would "assess" ( i.e.,tax) each household a certain fee for theinstallation of the sewer pipes in theneighborhood. Either the neighborhoodorganization or the agency could determine theamount of the assessment for each household.Such an assessment could take the form of anincrease or surcharge on local property taxes oron local community improvement taxes. The keypoint is that the neighborhood as a collective unitwould be required to make a decision aboutwhether or not to have sewer lines installed. If aneighborhood decided to proceed with theinstallation, then every household would have to

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pay--even those against the plan. 4

The neighborhood organization would beresponsible for financial transactions with theagency and for enforcing its collective decisionon its members. This approach has the importantadvantages of (1) substantially reducingtransaction costs to the agency, and (2) leavingthe responsibility for a collective decision at thelowest possible administrative and political level,thus increasing the probability that the decision isresponsive to local needs and desires.

Regardless of which of these two approaches isused to arrange for household financing of theneighborhood sewer network installation, there isstill a household decision about whether or not toconnect to the new sewer line. Clearly thecollective, neighborhood-level decision regardingthe installation of sewer lines and the household-level decision regarding a private sewerconnection are interdependent. If a householddoes not want to connect to the sewer line, it maynot want to pay for its neighborhood to havesewer lines installed. Then again, it may. Byhaving sewer lines installed in the neighborhood,a household receives two benefits even if it doesnot know whether it will connect. First, itpurchases the option to connect at some time inthe future; this option will increase the value of itsproperty whether or not it chooses to connect.Second, other households will likely connect, thusimproving environmental quality in theneighborhood.

It is, however, certainly true that a householdwould need to know the costs of connecting toand using the sewerage system before it made adecision about whether or not it wanted itsneighborhood to have sewer lines installed. Infact, there are many costs a household mustconsider when deciding whether or not itsneighborhood should have sewer lines installedand whether it should connect to a sewer line ifone were installed. First, it must consider theamount of, and financial arrangements availablefor, the assessment fee for the sewer lineinstallation. Second, a connection fee musttypically be paid to the water and sanitationauthority by each household wanting to connect.

4 Neighborhood organizations could, however, agree to make special

arrangements for the poor and other special cases.

Third, additional plumbing costs are associatedwith actually connecting the water-sealed toilet(and perhaps household "gray water"discharges) to the sewer pipe. The latter costsare likely to vary significantly from household tohousehold. Fourth, if a household does notalready have a water-sealed toilet, it must incurthe costs of installing one. Finally, householdswith a sewer connection must typically pay amonthly tariff. For those who already have ametered private water connection, this tariff maybe a surcharge on a monthly water bill. Forthose without service, the monthly charge maysimply be a fixed fee.The different costs and prices that the householdfaces, along with the financial arrangements forpaying them, can be influenced by policies of themunicipal government and the water andsanitation authority. We refer to the bundle of allsuch policies as the "neighborhood deal"because it is useful to consider how the wholepackage of government policies appears to theneighborhood and to the household. There arethus many alternative deal structures" that theagency(ies) responsible for sewerage could offerneighborhoods and households. Each mustsomehow specify, however, the relationshipbetween the collective decision necessary at theneighborhood level and the individual connectiondecision to be made by households.

In this context, it is perhaps easier to understandwhy investment strategies that excludeneighborhoods and households from thesanitation planning process have had such a highrate of failure. First, such approaches precludeneighborhood organizations and households fromproviding the water and sanitation agency withessential feedback about household demand forinfrastructure improvements before sewer linesare installed and investment mistakes are made.Second, current investment strategies do not askneighborhood organizations to bear thetransactions costs associated with achievingcollective agreements among households, and ithas proven too difficult and expensive forgovernment to shoulder this responsibility. Third,existing investment strategies utilize relativelysimplistic "deal structures" without any empiricalinformation about what households andneighborhoods actually prefer. In other words,government deals are frequently offered without

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any consultation or negotiations withneighborhoods or households. It is hardlysurprising, then, that such deals are commonlyrejected. 5

3. Operationalizing TheNeighborhood Deal Approach InSemarang, Indonesia

3.1 Introduction and historicalperspective

We recently explored the potential forintroducing this new sanitation planningapproach in the rapidly industrializing Republicof Indonesia. Despite strong economic growthand urbanization, Indonesia remains under-served with sanitation facilities in both urban andrural areas. 6 Fewer than one million ofIndonesias 190 million citizens have access tosewer service nationwide.

Private investment in on-site sanitation systems,primarily in septic tanks/leaching pits, has beensubstantial. In Jakarta alone there are anestimated 927,000 septic tanks, the vast majorityof which have been privately financed andconstructed. These systems may be effective inremoving human waste from the immediatehousehold environment, but little progress hasbeen made in improving neighborhood sanitationconditions. Moreover, because such on-sitesystems are frequently poorly designed,constructed or maintained, they often contribute tohuman pathogen and BOD loadings in surfaceand groundwater.

The current policy of the Government of Indonesia(GOI) is that sanitation is a householdresponsibility. At same time, recognition of theneed for public intervention is increasing; theGOI is aware that on-site systems are

5 The neighborhood deal may also be rejected because households may not

understand how the technology of sewer pipes and waste watertreatment works, nor the public health benefits likely to ensue. This mayrequire that government initiate a proactive education and socialmarketing program to provide households such information.

6 According to a recent WHO assessment, Indonesia had the lowest percentage inAsia of urban households with adequate sanitation (40%, compared to84% in Thailand and 98% in the Philippines).

increasingly inappropriate in high densitycommunities. Pilot sewerage investments havebeen included (for a limited number of cities) inthe most recent Five Year Development Plan.There is also growing awareness that a revisedstrategy is required for addressing urbansanitation, but as yet no consensus existsregarding an overall approach, includingfinancing strategies or technology selection. Theprevailing view is that (1) consumer demand foroff-site sanitation will very low, (2) the technologyoptions will likely be very expensive, and (3)capital costs will need to be borne largely bycentral government. Hence, the requirement forlarge subsidies is implicit in the pilot sewerageschemes planned thus far.

None of the strategies for providing off-sitesanitation service proposed to date hasconsidered alternative approaches to achievingresidential coverage, especially in low-incomeareas. Nor has a "strategic sanitation planning"approach been proposed that is demand-responsive, that presents a range of technologyoptions, and that develops an institutional andfinancial framework allowing for costs andresponsibilities to be distributed betweenbeneficiaries, local governments andprovincial/central government. Our work in thecity of Semarang represents one effort to assessthe feasibility of such a demand-driven planningapproach.

3.2 Study site

The city of Semarang is the provincial capital ofCentral Java (see Figure 1) and is locatedapproximately 540 kilometers east of Indonesia’scapital, Jakarta. More than 1.3 million residentsmake Semarang Indonesia’s fifth largest city (USCentral Intelligence Agency, 1995), andpopulation density in the city varies between 35and 200 persons per km. 2 Semarang continuesto grow at a rate of approximately 2% eachyear.

Semarang is a coastal city, facing the Java Seato the north. Annual rainfall averages 2,100millimeters. The region around Semarang hasseveral teak forests and rubber plantations; thesecommodities, along with shellfish, coffee,

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hardware, chemicals, and textiles comprise theprincipal products of the city. In addition,Semarang’s port facilities make it an importanttransportation and shipping center. The city’seconomy, like that of Indonesia, is growingrapidly (averaging 7% annually during theperiod 1984-1994). Per capita gross domesticregional product for 1993 was estimated asUS$560. Prices for most goods and services inSemarang are now close to international levels(Table 1).

Table 1: Average prices ofgoods/services in Semarang (July 1995)

Item Averagecost (Rp.)

Averagecost(US$)7

1 kilogram rice 920 0.411 liter cooking oil 1,700 0.761 kilogram fish 6,200 2.76McDonald’s Big Mac 4,000 1.781 liter gasoline 700 0.31One-way bus fare(local)

250 0.11

Cross-town taxi fare 13,000 5.78Cigarettes (12) 1,000 0.44

7

During July 1995, US$1 ≅2250 Rp.

Indonesia is divided into 27 provinces, each ofwhich is further organized into six operationallevels of government: provincial,district/municipal, sub-district, village, community,and neighborhood (see Table 2). As the capitalof the Central Java Province, Semarang plays animportant role in each of these government levels.The Provincial Development Planning Board (orBappeda ) oversees infrastructure developmentprojects such as water supply and sanitationprograms and is located here.

Within Semarang, communities areorganized on several different levels. Between10 and 120 households comprise an "RT" ( RukunTetangga , or neighborhood association) which isheaded by an unpaid, elected Chairman.Roughly 10 RTs are grouped into each RW(Rukun Warga , or community association). RWs,in turn, are grouped into kelurahans , headed byappointed lurahs; there are roughly 20kelurahans in each kecamatan .

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Table 2: Organization of local government in Indonesia

8Governmentlevel

Head Composition Agencies with influence overdevelopment projects

Provincial Assistant governor Indonesia=27 provinces;1 province=10-15 districts

Central government departmentoffices; Provincial Development

Planning Board ( Bappeda );Development Bureau; Bureau of

Finance

District District head 1 district=5-10 kecamatans

Central government representativeoffices; Provincial Technical Offices;District Development Planning Board;

Development Bureau; Bureau ofFinance

Sub-district(Kecamatan )

Sub-district head(Camat)

1 kecamatan≅20 kelurahansSub-district Development

Coordinating Unit; Sub-districtTechnical Offices

Village(Kelurahan )

Village head(Lurah) 1 kelurahan ≅20 RWs None

Community(RW) RW Chairman 1 RW≅10 RTs None

Neighborhood(RT) RT Chairman 1 RT=10-120 households None

8 Adapted from Naur, M. (1995). Indonesia: Urban Upgrading Project, SSUDP loan 3749-IND, Bandarhargo (Semarang) and Mojosong (Surakarta); Participatory and institutional

aspects. Report to the World Bank, EA3IN.

4. Field Work

The objectives of this study were tobegin to assist the Government of Indonesia andthe World Banks East Asian InfrastructureDivision responsible for Indonesia (EA3IN) inthinking strategically about new sewer andwastewater treatment investments in Semarang.The work of this mission was designated as PhaseI of a two-phase project. The purpose of this twoand one-half week mission was essentiallyreconnaissance. Our terms of reference includedthe following tasks:

1. To determine whether it was possible toimplement a large-scale contingentvaluation (willingness-to-pay) survey in

Semarang to estimate householddemand for improved services;

2. To determine whether it was feasible touse local enumerators and computerdata entry and management resources;

3. To develop and pretest a household questionnaire; and

4. To determine whether and how arigorous household sampling protocolcould be implemented.

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Due to a series of fortuitous events, we were ableto accomplish more than anticipated during thisPhase I mission.

As a first step, we needed to gain anunderstanding of current water supply andsanitation practices in selected neighborhoods ofSemarang and to assess residents’ demand forimproved water supply and sanitation services.Over a period of two and one-half weeks in July-August, 1995, we conducted both a householdsurvey and a series of participatory communitymeetings in Semarang. As noted, these datacollection efforts were designed and executed aspretests for a larger, more comprehensive studyto be carried out in the future.

4.1 Sampling and training ofenumerators and community organizers

Time and resource constraints precluded ourdrawing a rigorous random sample of Semaranghouseholds for the study. Instead, threekelurahans were selected purposively, with theintent of representing the range of residents’existing water supply and sanitation services andsocioeconomic characteristics. The kelurahanBugangan (see Figure 2) is a low-lying area nearthe coast; many residents of Bugangan rent theirhomes and do not currently have a private waterconnection. One of the two open canals thatchannel waste from the city to the ocean formsone of the boundaries of the kelurahan. Thekelurahan Sekayu is located in a relativelyaffluent downtown district with a mix of highdensity, low- and middle-income housing andsome business/office areas. Sekayu has beenunder consideration as the pilot area for plannedimprovements to the water supply and sanitationsystem under a World Bank-financed urbanrenewal and sanitation upgrading project.Dadapsari is a middle- to low-income kelurahanin the eastern part of Semarang.

A total of forty-two RTs--fourteen in eachkelurahan--were selected for the study. 9 In eachkelurahan, nine RTs were randomly assigned forinclusion in the household survey, and five forparticipatory community meetings. Household

9 The sample design for the study is presented in Appendix C.

interviews were conducted by fifteen college-educated enumerators from Semarang (6 womenand 9 men) over a six-day period. Half of theenumerators were students, and the rest werestaff from the water supply utility, PDAM, thepublic works department, and Bappeda. Eachcommunity meeting was facilitated by one ofthree pairs of college-educated communityorganizers.

Intensive enumerator and community organizertraining was carried out over a six-day period.This training was especially important to ensurethat our study objectives and methodology werewell understood. Regional and localgovernments in Indonesia often use householdsurveys and community meetings not to elicitinformation about attitudes and preferences fromcitizens, but to educate people toward aparticular point of view. We thus used lectures,role plays, and practice presentations to ensurethat enumerators and community organizersunderstood their responsibility to provide andgather information in an objective, professionalmanner.

4.2 Data collection techniques

Twenty different versions of a householdquestionnaire were developed over a one-weekperiod of intensive pre-testing and revision. Thefour sections of each version were designed tocollect information about respondents’ existingwater supply and sanitation situation; prioritiesand perceptions; willingness to pay for improvedwater supply and sanitation; and socioeconomiccharacteristics. 10 The survey was written andadministered in Bahasa Indonesia, the mostwidely used language in Semarang.

Each questionnaire was administered to a headof household (and occasionally to both heads ofhousehold). Interviews lasted between 30 and70 minutes and were conducted in respondentshomes. A total of 319 questionnaires werecompleted.

10 A copy of one version of the household questionnaire is presented in Appendix

B.

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A series of fifteen participatory communitymeetings was also convened during the studyperiod. As with the household survey, thesemeetings were designed to learn how individualsin these neighborhoods perceive their existingwater and sanitation situation and how they feelabout possible improvements. Each meeting wasconvened by an RT chairman and facilitated by atwo-person team of community organizers. Themeetings lasted one to two hours, and attendancevaried from 10 to 31 people.

5. Socioeconomic profile of sample

Of the 319 respondents interviewed in thehousehold survey, 125 (39%) are female and194 (61%) male. 11 Among survey respondents,the average number of persons per household is5.7, and 15% of the sample households areheaded by females. The mean age ofrespondents is 49 years. Five percent ofrespondents have earned a college degree, 41%have graduated from high school, and 12% havenot completed primary school. Three quarters ofthe respondents are Moslems, while another 21%are Christians and 4% are Buddhists.

Three quarters of the survey respondents and55% of community meeting participants own theirhomes; almost 90% of those interviewed live insingle-family dwellings. Among surveyrespondents, houses have an average of 4.6rooms, and all receive electric service. Theaverage household monthly electric bill is 15,500rupiah (US$7.20). When asked to estimate thecurrent market value of their homes, surveyrespondents provided values ranging from1,000,000 to 100,000,000 Rp., with a mean ofroughly 26,500,000 rupiah (US$12,320). Theaverage market rental prices for homes is 32,245rupiah (US$15.35) 12.

Survey respondents reported household monthly

11 A significantly higher proportion (79%) of males participated in the community

meetings (men frequently represent their households in community eventsin Semarang). The format of the community meetings was not conduciveto the collection of many additional socioeconomic data.

12 This average includes only those respondents living in non-subsidized housing.More than one third of the respondents who rent their homes, however,live in subsidized rental units and pay less than 5000 Rp. (US$2.40) permonth in rent.

incomes ranging between 3,000 and 2,000,000Rp. with a mean of 305,421 rupiah (US$142).More than 80% of households interviewed own atelevision, and 22% have a telephone.Motorcycles are a popular mode of transportationin Semarang; almost one half of the respondentsown a motorcycle (10% own an automobile).

6. Existing water supply

A piped water system operated by the publicwater supply utility, PDAM ( Perusahaan DaerahAir Minum ) delivers water to roughly 25% ofSemarang households. Among the 319 personsinterviewed in the household survey, 88(28%)reported having a working private waterconnection in their homes. 13 Virtually all of theserespondents also have working water meters attheir homes. Average monthly water bills rangefrom 5,000 to 55,000 Rp., with an overall meanof 14,139 Rp. (US$6.28). Only one respondentreported selling water to neighbors. Almost allrespondents with connections use the water fordrinking and cooking (see Figure 3); everyhousehold reported boiling its water prior toconsuming or cooking with it. In general,respondents rated the quality of water from theirconnections highly (see Table 3). Only 8% felt ithad a bad odor and 1% thought it appeareddark or dirty. Nineteen percent reported a strongchlorine taste in their water, while 78%considered it "normal" or "fine."

13 Twenty-one percent of community meeting participants reported having a

household water connection.

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Table 3: Perceptions of water quality from private connections

Percent of respondents with connection whogive good rating to waters... Odor Color Taste

89% 96% 78%

Percent of respondents who boil water fromconnection prior to consuming

100%

Approximately half of survey respondents’households have a private well; another 20% ofrespondents reported collecting water at leastoccasionally from a public well in theirneighborhood. Half of these pay an averagecharge of 150 rupiah (US$.07) per 50-liter pikul,and the other half pay an average monthly fee of9,500 rupiah (US$4.22) for unlimited access tothe public well. Well water is used primarily forbathing and washing; only 3% of those usingprivate wells and 14% of those using public wellsutilize the water they fetch for drinking orcooking. Although respondents using well watergenerally consider its odor to be acceptable,22% feel its taste is "salty" and 25% that itappears "dark" or "dirty."

Reliance on vended water varies dramaticallyamong the three kelurahans. Eighty-one percentof respondents in the Bugangan district reportedpurchasing vended water at least occasionally,whereas only 12% of the Sekayu respondents usevended water. Among all respondents, 11%reported obtaining "all or almost all" of the watertheir households use from vendors. Thesehouseholds purchase, on average, between fourand five jerricans daily. With an average pricefor a jerrican (20 liters) of water of 295 rupiah(US$.13), these households are thus spendingroughly US$18 for vended water each month.

Vended water is primarily used for drinking orcooking, although 10% of respondents alsoreported using water from vendors to washclothes and dishes and to bathe. As with wellwater, vended water was reported to have asalty taste by 20% of respondents who use it.Few respondents, however, said that vendedwater has a poor odor or appearance.

7. Existing sanitation service

Semarang currently has no sanitary sewer system,and wastewater overflows in open combinedsewers/storm drains to the Java Sea withouttreatment. The majority of the city’s householdsare served by private water-sealed toilets (seeFigure 5); approximately three quarters (73%) ofsurvey respondents reported having a toilet forthe exclusive use of their household members.The waste from the vast majority of householdtoilets is deposited into septic tanks without septicfields. Fifty-eight percent of respondents with aprivate toilet and septic tank reported havingemptied the tank at least once; 15% havereplaced their septic tank or installed anadditional tank (Figure 6).

Public latrines are the primary form of sanitationservice for almost all other respondents, primarilyresidents of the relatively lower income kelurahanDadapsari. Approximately half of users arerequired to pay a contribution fee to visit thepublic latrine. A fixed monthly fee is the mostcommon payment arrangement, with an averagefee of 1,040 rupiah (US$.46). Another 40% ofrespondents who use public latrines regularlyreported paying a charge per visit; the averageprice was 85 rupiah (US$.04).

8. Priorities And Perceptions

Respondents in the household survey wereprovided a list of social and environmentalpriorities facing Semarang and asked to selectthe issue they felt was the most important toresolve. As shown in Table 4, one third of allrespondents were concerned foremost about floodwater drainage. Almost half of those living in theBugangan kelurahan--a low-lying area near the

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Java Sea--chose the improvement of flood waterdrainage as the most important issue to resolve.Those in the center city kelurahan of Sekayu weremore concerned about providing a safe andreliable water supply to residents. Overall, the

improvement of sanitation was perceived as a toppriority by only eleven percent of respondents.

Table 4: Respondents’ social and environmental priorities

IPercent of respondents ranking as top priority in...

Bugangan Dadapsari Sekayu OverallDrainage of flood waters 45 39 17 33Safe, adequate water supply 20 29 30 27Improved sanitation services 12 10 11 11Solid waste collection 13 11 8 10Improved hospitals and clinics 5 3 16 8Quality of education and schools 3 2 12 6Improved road conditions 2 6 6 5TOTAL 100 100 100 100

Survey respondents were also asked about theirsatisfaction with the current environmentalconditions in their RT. Specifically, they wereasked whether their household could smell boththe large, combined storm sewers/drains, as wellas the smaller neighborhood drains, from theirhomes, and whether the odors were noisome. Asshown in Table 5, approximately one quarter ofrespondents reported smelling the large canalsfrom inside their homes, and one half wereaware of the odors emanating from their

neighborhood drains. More than 80% of thosewho said that they could smell these odors alsosaid that they were "bothersome." At the sametime, when asked to rate their satisfaction withexisting sanitary and environmental conditions intheir RT, only 10% classified themselves as"unsatisfied." These results reinforce the findingsin Table 4 indicating that sanitation is not viewedas a high priority by many residents of thekelurahans we studied.

Table 5: Survey respondents’ perceptions of environmental conditions

Bugangan Dadapsari Sekayu Total sampleCan smell large canals 9% 48% 7% 23%(If yes), is bothered by odor 87% 86% 57% 84%Can smell local drains 38% 72% 31% 49%(If yes), is bothered by odor 88% 87% 82% 86%Very satisfied with environmental conditions

43% 33% 77% 51%

Somewhat satisfied with environmental conditions

55% 41% 14% 37%

Not satisfied with environmental conditions

2% 22% 4% 10%

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9. The Neighborhood Deal:A Plan To Improve Water SupplyAnd Sanitation Service In Semarang

In order to describe a feasible neighborhooddeal to survey respondents and communitymeeting participants, we used photographs,drawings, and detailed information about theprocess by which an improved water andsanitation system might be installed and operatedin Semarang. 14 Enumerators provided thisinformation to survey respondents in private, one-on-one interviews, while community meetingfacilitators presented and discussed the dealwith groups of participants in an open format.

Only 3% of survey respondents were familiar withthe concept of a sewer system prior to theirinterview. Many respondents devoted significanttime to studying the visual aids and askingquestions about the system, which was describedas having two components. A network ofunderground pipes would deliver potable waterto households and would remove human wastesand waste water; a treatment plant would beconstructed to treat waste water before it wasdischarged into the ocean. Respondents weretold that such a system would provide a reliableand high quality water supply; improvements inneighborhood sanitary conditions; and areduction in some types of water pollution andwell water contamination. They were informed,however, that flood water drainage would notimprove significantly as a result of the proposedimprovements in water supply and sanitationservice.

Once respondents understood how such a systemwould function in Semarang, enumeratorsdescribed the process by which it would beinstalled and financed. Respondents were told toassume that the installation of an improved watersupply and sanitation system would entail a two-stage process. First, RTs that wished toparticipate in the program would be required toraise the funds necessary to pay an assessmentfee. Government would also contribute moneys,and these funds would be used to lay theneighborhood water and sewer lines from the

14 Appendix E presents copies of the photographs used by enumerators to

describe the sewer system, including the wastewater treatment plant.

major (trunk) pipes to each participating RT.Consensus must thus be reached within an RT forparticipation in the project, as every household inthe district would be assessed a share of theinstallation fee, whether or not it decided toconnect to the water and sewer system.

In crafting a credible neighborhood deal forimprovements in Semarang’s water supply andsanitation, we drew on the tradition of "self-help"programs extant in many areas of Javanesesociety. As one example, an influential grass-roots organization dedicated to issues of womenand children’s health and education (called the"PKK") has as one of its "ten principles" the ideaof gotong-royong, or cooperation andempowerment through self-help programs. Wethus developed a hypothetical program in whichRTs that were willing and able to pay for watersupply and sanitation improvements could chooseeither a "full-service" approach or a cost-saving"self-help" strategy in which community memberswould participate in digging trenches, layingpipe, and performing other un- or semi-skilledtasks.

Each RT that elected to participate in the programwould thus decide whether to use an engineeringcontractor ("full-service") or an engineeringconsultant ("self-help"). Under the full-serviceplan, the contractor would design and carry outthe installation of sewers in the neighborhood.With the self-help option, residents of an RTwould share the responsibilities of diggingtrenches, laying pipe, and other un- or semi-skilled tasks, under the supervision of anengineering consultant. The assessment feeassociated with the full-service option would betwice that of the self help plan. Residents of anRT would thus have to weigh the relativeadvantages of expertise, cost savings, andexpediency in deciding whether the full-service orself-help approach were more desirable.

Second, once arrangements for an RT’sparticipation in the program were finalized,individual households would face a choice oftheir own: private water and sewer connectionswould be provided only to those householdsdesiring and able to pay for them. Householdswith existing water connections would have theoption of adding a sewer connection. Those

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without water service could have both a waterand sewer connection installed (a waterconnection without an accompanying sewerconnection was not offered as an option).Respondents were told that the decision toconnect to the new system would be made at thehousehold level, unlike the installation ofneighborhood lines which would have to beperformed for the entire RT. Thus, a respondentmight contribute to his or her RT’s assessment feebut subsequently decide not to pay the additionalfees associated with connecting his or herhousehold to the system.

The different costs and prices of the project werecarefully explained to survey respondents andcommunity meeting participants (see Table 6). Afixed assessment fee--the cost per household ofhaving neighborhood water and sewer linesinstalled--would be charged to each household.Under the "full service" plan, this fee variedrandomly between 50,000, 150,000, 300,000,and 500,000 Rp. for different questionnaireversions; that is, each respondent received onlyone of these four assessment fees. 15

15 It was not possible to vary prices among participants in each community

meeting. All received a full-service assessment fee of 150,000 (and aself-help fee of 75,000).

The respondent was also told that this fee couldbe halved if his or her community elected to usethe "self-help" approach to installing theneighborhood lines. For example, a respondentwho received the full service assessment fee of300,000 Rp. also received a self-help fee of150,000 Rp. The fee could either be paid in fullat the start of the project, or could be financedover a two-year period.

In addition, households that did not currentlyhave indoor plumbing and who wanted to takeadvantage of a household sewer connectionwould have to purchase and install a water-sealed toilet. (These costs were estimated at250,000 Rp. per toilet.) For those householdschoosing to connect to the water and sewersystem, a fixed connection fee would also beassessed. Those needing both water and sewerconnections would pay a fee of 500,000 Rp.,and those with existing water connections wouldonly pay 200,000 Rp. fee for a sewerconnection.

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Table 6: The proposed deals: Prices and costs for a household of improved water supply and sanitation service

Who pays?

Homeowners Renters

Type of fee AmountWith waterconnection

Withoutconnection

With waterconnection

Withoutconnection

Assessmentfee*

50,000, 150,000, 300,000 or500,000 for full service; 25,000,75,000, 150,000 or 250,000 forself help

Yes Yes No No

Connection fee 300,000 Rp. for water;200,000 Rp. for sewer

Yes:200,000

Yes:500,000

Yes:200,000

Yes:500,000

Monthly fee25% or 50% surcharge for HHs withexisting connection; 15,000 or25,000 Rp. average monthly chargefor new connections

Yes Yes Yes Yes

Water-sealedtoilet 250,000 Rp.

Yes, ifneeded

Yes, ifneeded

Yes, ifneeded

Yes, ifneeded

* Could also be paid in 12 equal monthly installments with a 20% service charge. US$1 = 2250 Rp.

A monthly service fee, comprised of a flat rate forsewerage and a use-based water fee, would alsobe billed to every connected household. As theamount of this fee would depend on the quantityof water a household consumed, thequestionnaire was carefully worded to convey theidea that the prices cited represented estimatesfor average household consumption. Forhouseholds with existing water connections, thefee for the improved system was described as asurcharge on their current water bill of either 25%or 50% in different questionnaire versions. Forthose without a household connection, averagemonthly water bills were estimated at either15,000 or 25,000 Rp. As with the assessmentfee, the surcharges and average bills wererandomly assigned to different surveyrespondents. 16 A schematic of the twenty differentquestionnaire versions used for the householdsurvey is presented in Appendix D.

16 All community meeting participants with existing water connections received a

monthly tariff equal to a 25% surcharge on their water bill. Thosewithout connections were told that the average combined monthly billwould be 15,000 Rp.

Respondents were given several opportunities toask for clarification of the project description andthe financing requirements for the system. Oncethe scenario described was well understood bythe respondent, the enumerator asked him or herthe following question:

Suppose that your RT had the option ofparticipating in the improved water supplyand sanitation project I have just described.Would you prefer that your RT notparticipate in this project; that your RTparticipate and hire an engineeringcontractor to carry out the work; or that yourRT participate and people here carry out thework yourselves with the supervision of anengineer? 17

A unique aspect of this part of the householdsurvey was the classification of responses toquestions about respondents’ willingness-to-payfor improved water supply and sanitation.During questionnaire development, enumerators

17 Home owners would be responsible for the assessment fee and, ostensibly, for

the indoor plumbing costs ( i.e., renters were told they would only pay theconnection and monthly service fees).

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felt that some respondents would find it difficult toreject openly the improved water supply andsanitation program described in thequestionnaire. Within the Javanese culture, theyexplained, it is common to provide an ambivalentrather than a negative response, with both thespeaker and listener tacitly understanding the trueintention of the comment. It was thus importantfor enumerators to distinguish this type ofrejection from true uncertainty on the respondent’spart. Working with the team of enumerators, wegenerated a list of ways in which residents ofSemarang tell one another "No," andenumerators were asked to indicate on eachquestionnaire the precise manner in which arespondent provided his or her answer.

Next, respondents were asked to consider whattheir household would do if an improved watersupply and sanitation system were installed intheir RT. The costs of connecting were reviewedwith the respondent, who was then asked thefollowing question:

Now I want you to suppose that householdsin your RT did decide to participate in thisprogram, and that the water and sewerpipes were installed along the street. I wantyou to consider whether your householdwould connect to the pipes or not. Pleaseconsider this question carefully. If you wouldnot be able to afford the connection, or ifyou feel you would have other, moreimportant things to spend your money on,you should tell us that you would not connectto the system.

9.2 Household survey results

The results of the first question, regarding whetheror not the respondent wished for his or herneighborhood to participate in the program foran assessment fee of a specified amount, arepresented in Figure 7. Assuming that our strategyfor classifying responses into yes and nocategories is correct, the proportion of householdsthat wish for their neighborhood to participate isrelatively low at each of the specified assessmentfees. Even with a very low per householdassessment fee of 50,000 Rp. (US$22.22) for thefull-service plan, only 53% of respondents favoredtheir RT’s participation in one of the two service

programs ( i.e., full-service or self-help). Thesewere relatively evenly split between the full-service plan (58%) and the self-help plan (42%).As the assessment fee increases, the proportion ofrespondents favoring their RT’s participation inthe program generally decreases (whichincreases our confidence that respondents arelistening to the questions asked and areattempting to give honest answers). 18 At thehighest assessment fee of 500,000 Rp., only 10%of the respondents wanted the full-service plan,and only about 15% wanted the self-help plan.

Figure 8 shows that households that already havea private water connection were more likely towant their RT to participate than householdswithout a private water connection. This was trueat each of the four assessment fees. For example,at the lowest assessment fee of 50,000 Rp., overhalf of the respondents with private waterconnection wanted their RT to participate,whereas fewer than 20% of households withoutwater connections supported the program. Figure8 also shows that the effect of increasing theassessment fee is both more consistent and morepronounced for households with privateconnections than for households without privateconnections.

The data presented in Figure 8 are difficult tointerpret given the small size of our sample. If itis true that, other things equal, households withprivate water connections have a higher demandfor the neighborhood deal than do householdswithout private water connections, this will haveimportant implications for project design. Itwould suggest that the strategy of trying to getunconnected households to take both water andsewer services might result in many householdstaking neither, and that the attempt to bundlewater and sewer services may be ill-advised.However, this result could simply be due to anincome effect, i.e., households that have privateconnections are richer than households withoutprivate connections, and their greater wealth may

18 This is not, of course, strong evidence that respondents answers to such

hypothetical questions are accurate indications of how they wouldbehave if faced with a real choice. A recent paper by Griffin et al(1995), however, presents a rigorous comparison of respondents ex-antestated intentions in contingent valuation surveys versus their ex-post actualbehavior. The authors found that answers to well-designed, soundlyexecuted contingent valuation surveys provided fairly accuratepredictions of how people would actually behave.

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be the reason why they exhibit stronger demandfor the neighborhood deal. This result could alsobe caused by a price effect; households withprivate water connections would incur lowerconnection costs as compared to those ofhouseholds without private water connections.

Table 7: Proportion of respondentswilling to connect by monthly tariff,questionnaire version and kelurahan

Low tariff Hightariff

Totalsample

Dadapsari39%

(25/64)42%

(24/57)40%

(49/121)

Bugangan20%

(9/45)40%

(17/42)30%

(26/87)

Sekayu32%

(18/56)26%

(13/49)30%

(31/105)

Totalsample

32%(52/165)

36%(54/148

)

34%(106/313)

Table 7 presents the results of the secondvaluation questions concerning whether or not therespondents household would connect to the newwater and sewer system if it were available in theneighborhood. About one third of therespondents in the total sample expressed adesire to connect. This varied from 30% inBugangan to 40% in Dadapsari. The variation inthe monthly tariff did not have a statisticallysignificant effect on respondents demand forconnections. It is important to keep in mind,however, that this is just one of many costs andprices that households must consider in makingthis decision, and we have no reason to believethat it is the most important one. As with the first,collective decision regarding neighborhoodparticipation, households with existing privatewater connections are much more likely to saythat they want to connect to a sewer line than

households without a private water connectionare to indicate that they want water and sewerconnections. For example, 75% of thehomeowners in Sekayu with private waterconnections wanted to connect to sewer lines;only 15% of the homeowners without privateconnections wanted to connect to the water andsewer lines. In Dadapsari, 50% of thehomeowners with private water connectionswanted to connect to sewer lines; only 30% of thehomeowners without private connections wantedto connect to the water and sewer lines.

Figure 9 shows how the results of the secondvaluation question regarding the householdsconnection decision were affected by the fourassessment fees used in the first (neighborhoodparticipation) valuation question. The proportionof households indicating that they wanted toconnect is lower at the highest assessment fee.Since respondents are told that they would haveto pay this assessment fee regardless of whetherthey decided to connect, this reduction in theconnection rate may be the result of an incomeeffect.

Table 8 presents a cross-tabulation of the resultsof the two valuation questions. As indicated,29% of the total sample said that they wantedtheir neighborhood to participate in one of thetwo service plans and that their household wouldconnect (17% preferred the full-service plan and12% the self-help plan). Fully 50% of the samplerespondents said that they would vote againsttheir neighborhoods participation and, if their RTdid participate, that their household would notconnect. Interestingly, about one third of therespondents who voted for their neighborhoodsparticipation in one of the two service plans saidthat their household would, in fact, not connect tothe new water and sewer lines.

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Table 8: Proportion of respondents preferring no participation, full service,or self help by proportion who would connect to new system

Would your householdconnect to the new

water/sewer system?

Would you want your RT to use the full-service plan,to use the self-help plan, or not to participate in the

program to install water and sewer lines?Full-service

planSelf-help

planNo

participationDont know /

Not sure

Yes, would connect 17%(n=54)

12%(n=37)

5%(n=15)

0%(n=0)

No, would not connect 6%(n=19)

9%(n=28)

50%(n=158)

0%(n=1)

Dont know 0%(n=0)

0%(n=1)

0%(n=2)

1%(n=4)

These results would seem to suggest that demandfor improved water and sewer services is low,and that there is little household interest in sewerconnections in Semarang. We believe, however,that such a conclusion is premature, and that thepolicy message from these preliminary surveyresults is more complex. The problem arises fromthe uncertainty involved in interpreting the noresponses. For those answers that we recordedas nos, Table 9 presents information regardingthe frequency with which respondents gave aparticular answer to the household connectiondecision question. As shown, there were 164responses categorized as no. Of these, 32%said that the reason for their no response wasthat they could not afford it. Another 18% saidthey were in favor of the program, but the costsare too high. These responses, which representone half of the nos, seem to be clearlynegative and correctly classified. Another 30%of respondents, however, said they needed to

know what their neighbors opinions about theproject were before they could make a decisionabout their position. During questionnairedevelopment, our enumerators told us that thiswas a polite way of saying no, and that such aresponse should be classified as a rejectionrather than as a not sure or dont knowresponse. It seems to us, however, that assigningsuch responses to the no category is less certainthan the responses related to budget constraints.Similarly, other responses listed in Table 9 alsoseem somewhat ambiguous ( e.g., the currentsituation is satisfactory and I agree ifparticipation is required). For this reason, webelieve that the proportion of respondentsclassified as rejecting the improved water andsanitation service program is likely to be toohigh. That is, we believe that more householdswould favor the service programs than indicatedby our summary of the household survey results.

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Table 9: Description, frequency of No responses

DescriptionNumber of

times recorded% of noresponses

I cannot afford it 52 32%I need to know others’ opinion about program 49 30%I agree, but the costs are too high 30 18%Yes, if costs are reduced 11 7%I have many children, expenses, etc., to worry about 8 5%I agree, but current situation is satisfactory 6 4%I agree, but without advance payment 4 2%Yes, if payment period is extended 2 1%Yes, if participation is required by the government 1 <1%I can pay but I want to avoid rumors (about my wealth) 1 <1%

TOTAL 164 100%

9.3 Community meeting results

All participants in the community meetings facedidentical prices in the hypothetical neighborhooddeal described for Semarang: a full serviceassessment fee of 150,000 Rp. and a self helpassessment fee of 75,000 Rp.; water and sewerline connection fees of 300,000 Rp. and200,000 Rp., respectively; an average monthlytariff of 15,000 Rp. without existing waterconnections and a 25% water bill surcharge forthose with a connection; and installation costs forhouseholds needing to purchase a water-sealedtoilet.

Meeting participants were asked to considerwhat they would do if faced with the choice ofparticipating in this hypothetical new program.

After discussion and debate, the group wasasked if they would prefer their RT to participatein a "full service" arrangement or a "self help"arrangement; if they preferred that their RT notparticipate in the program; or if they were unableto reach consensus on the matter. The results ofthis question are provided in Table 10. Of the316 individuals attending the communitymeetings, 27% were in favor of their RT’sparticipation in the program. Of these, the vastmajority (92%) preferred a "full service"arrangement. Thirty-nine percent were opposedto their RT’s involvement with the program, ascompared to over half of the household surveyrespondents. One third of the community meetingparticipants provided a response of "don’t know"or "not sure" to the facilitators whereas only 2%of survey respondents exhibited such uncertainty.

Table 10: Proportion of community meeting participants preferring full service, self help, or no participation

Full service Self help Noparticipation

Dont know/Unsure

Bugangan 22% 0% 19% 59%Dadapsari 41% 0% 39% 20%Sekayu 9% 7% 60% 24%Total sample 24% 2% 39% 35%

In both the household survey and the communitymeetings, a greater proportion of Semarangresidents oppose their RT’s participation in animproved water supply and sanitation programthan support it. The large percentage of "unsure"responses among community dialogueparticipants make direct comparison of thesefindings difficult. Whereas many different typesof responses were classified by enumerators as"No" answers in the household survey (seeabove), community meeting facilitators wereasked simply to record the responses ofparticipants without interpretation. It might thenbe expected that the majority of 109 "unsure"responses obtained during the communitymeetings would actually indicate opposition to theprogram. At the same time, the open discussionformat of the meetings may have affordedparticipants the opportunity to consider arelatively greater range of issues about theprogram (e.g., the views of their neighbors) andenabled them to consider their decision morethoroughly. This added information may indeedhave left many unsure about their preferences forimproved water supply and sanitation service.

10. Summary And Conclusions

Our work leads us to believe that, if the cityshigh economic growth rates continue, Semarangwill almost certainly be sewered over the next 25-50 years. There is thus little question in ourminds about whether a sewer network willeventually be constructed in Semarang; it is lessclear, however, when and where constructionshould begin or the type of planning process thatshould be employed. This first phase of our studyis an initial step in the process of learning moreabout household demand for improved water andsanitation services in Semarang, but we believe itprovides some important insights into how thecitys water and sewer network might evolve.

Although the sample of households weinterviewed and the number of communitymeetings held were both quite small, the findingsfrom our Phase I case study show that both theexisting water and sanitation situation, as well ashousehold demand for improved services, inSemarang are quite complicated. Only aminority of households have a private water

connection, and many households want one.Some households without private connectionsobtain drinking and cooking water quite cheaplyfrom public taps; others pay high prices to watervendors. Most households, even those withprivate connections, have their own shallow wellsfrom which they obtain water for bathing andwashing.

Regarding sanitation services, it is important torecognize that great strides have already beenmade in Semarang. Most households havewater-sealed toilets for their exclusive use and themajority appear to be quite satisfied with theirhousehold sanitation situation. Nor dohouseholds seem overly concerned aboutneighborhood sanitary conditions, and by andlarge they are unaware of sewerage andwastewater treatment technologies that couldimprove the existing situation. Individuals insome neighborhoods are worried about flooding,and part of this concern is probably related to thespread of human excrement and wastewater thatoccurs during flooding episodes. This problem,however, is localized in specific districts ofSemarang; the citys overall drainage isgenerally adequate. Large investments havealready been made in constructing a system oflarge, lined drainage canals. Although thesesurface drains are heavily polluted, most peopledo not appear very bothered by the odors. Theperceived benefits of surface water qualityimprovements in Semarang are thus likely to below.

The results of both the household interviews andthe community meetings appear to suggest thatwillingness to pay for a connection to a sewersystem is low. Many people questioned whetherthe "neighborhood deal" proposed was a goodidea even at very low prices. Among thosehouseholds interested in having theirneighborhood install new water and sewer lines,a diversity of opinion exists about whether to usean engineering contractor or a self-helpapproach. On the other hand, some householdswere enthusiastic about neighborhood sanitationimprovements, and many survey respondents andcommunity meeting participants were keenlyinterested to learn more about the sewerage andwastewater treatment technologies introduced.

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In general, our results suggest that householddemand for improved sanitation sewers is highlyuncertain; people in Semarang are simply not yetof one mind regarding the need for new sewersin their neighborhood. Although more in-depthfield work (including a survey with a largersample) will help develop a better understandingof household demand, it is likely that a policyframework will have to be designed in thecontext of considerable uncertainty aboutdemand. Our policy message might thus besummarized as: Demand is uncertain, so becareful.

Approaching sanitation planning in Semarang asan effort to design the best "neighborhood deal"has considerable advantages given thisuncertainty in demand. If the municipalgovernment offers neighborhoods the best deal itcan afford and that is technically sound, then itwould not be necessary to estimate demandneighborhood by neighborhood. Planners andengineers would need a rough picture of demandfor improved services in order to anticipate whatneighborhood deal they can offer and to decidewhere to build trunk sewers, but accuratepredictions of connection rates in eachneighborhood would not be required. Someneighborhoods would decide to install sewersnow, others later, and some perhaps not at all.The sewer network in Semarang would thus beginwith the neighborhood and move outward. 19 Iftrunk sewers are built along the existing maincanals, many neighborhoods in Semarang will beable to connect to the larger sewer networkwithout needing long interceptor sewers orwaiting for other neighborhoods to install sewers.

We believe that these conclusions haveten important implications for the focus anddirection of the Phase II Semarang study.

(1) Examine household demand foralternative “deal structures.”

In order to implement a demand-driven planningapproach in Semarang, more needs to belearned about exactly what kind ofneighborhood deal households andneighborhoods would prefer. It is important to

19 This approach would be similar to the Malaysia model (see Appendix A).

emphasize that the Phase I field researchdescribed in this report assessed demand foressentially one deal structure. This deal maywell not be the one households would find mostattractive. More research and discussion areneeded to design the neighborhood deal thatbest serves households in Semarang, given theconstraints faced by government. One issue ofparticular importance is whether it is desirable tooffer different deals in different parts of the city.In Phase I we proposed a single deal to allhouseholds; however, the costs of installingsewers will be higher in some neighborhoodsthan others. Costs for one neighborhood mayalso differ depending on what otherneighborhoods in the area decide to do. Thepossibility of offering different neighborhoodsdifferent deals raises a host of issues, such asfairness and practicality, that need to be carefullyexamined.

(2) Examine government perceptions of andattitudes toward alternative deal structures.

Our focus in Phase I was on households andneighborhoods in Semarang; we had little time todiscuss in depth the concept of a neighborhooddeal or alternative deal structures withgovernment officials. In Phase II this task shouldbe given top priority.

(3) Present respondents and participants incommunity meetings realistic costestimates for different technologicaloptions.

In Phase I we gave respondents hypotheticalprices and costs for improved sanitation services.In Phase II we intend to present households withrealistic cost estimates for different technologicaloptions, based on actual neighborhoodconditions. This will require that somepreliminary engineering designs and costestimates be prepared for the study areasselected in Semarang before the Phase II studybegins.

(4) Estimate demand for private water and sewerconnections separately.

In Phase I, following conventional wisdom, weassumed that new water and sewer services

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should be bundled, i.e., that households currentlywithout a private water connection could notconnect to the new water lines without alsoconnecting to the new sewer lines. This issueneeds to be rethought. Somewhat surprisingly,our preliminary findings suggest that the demandfor the neighborhood deal is strongest amonghouseholds that already have a private waterconnection. It does not seem that bundling waterand sewer services increased demand ofunconnected households for both services. InPhase II we intend to study this issue much moresystematically, and to estimate demand forprivate water and sewer connections separately.

(5) Determine households’ knowledge ofhealth risks, as well as which aspects oftheir current sanitation situation theydislike.

In Phase II we will focus more attention onrespondents perceptions of the health risks theyface from the current sanitation situation, andwhat aspects they would most like to seechanged. This information is necessary to designthe most attractive neighborhood deal forhouseholds; it should also prove valuable for anysocial marketing or publicity effort initiated toexplain the final sanitation program.

(6) Determine the financingarrangements households prefer.

The question of financing arrangements for boththe assessment fee and the connection costsneeds to be thoroughly discussed withhouseholds. In Phase I our neighborhood dealoffered financing of the assessment fee andconnection costs for 1-2 years. This is likely to betoo short a period. Other aspects of thefinancing package also need to be studied, suchas the actual terms of the contract and whathappens if a household defaults. We should alsoinvestigate whether the approach of charging anassessment fee for all households in aneighborhood, regardless of whether ahousehold connects, is workable in Semarang.Are there alternative means of reducing thefinancial risk to the government that would workbetter?

(7) Determine how households andneighborhood leaders prefer to beinvolved with engineeringcontractors.

Much more needs to be learned about howneighborhoods and households would like to seeboth the full-service, engineering contractor andthe self-help program options organized. Forexample, how would the community like to beinvolved in the selection of an engineeringcontractor? Over what time period wouldconstruction occur? Would the neighborhood beinvolved in authorizing payment to the contractorand/or in ensuring quality control?

(8) Determine the appropriate scalefor the neighborhood deal.

In Phase I we assumed that the neighborhooddeal could be offered to the RT, the smallestpossible neighborhood unit. This may well be toosmall a group of households. The neighborhooddeal should certainly be discussed at the RT level,but a collective decision may need to be made ateither the RW or kelurahan level. In other words,a group of RTs may need to agree to participatein the deal before construction begins. The PhaseII study should investigate this issue in detail.

(9) Pay greater attention to thequestion of whether genderdifferences in demand forimproved sanitation services exist .

During the Phase I research it was not possible toorganize community meetings with only women inthe sample neighborhoods. In Phase II we intendto answer the question of whether women arewilling to pay more or less than men for improvedsanitation services, and, if so, why.

(10) Increase the number ofrespondents in the householdsurvey and the number ofcommunity meetings in order toheighten confidence in the results.

Phase I was designed as a pretest; the samplesizes used for both the household survey and thecommunity meetings were not intended to besufficient for rigorous statistical analysis. In Phase

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II we will increase these sample sizes in order toenable us to conduct econometric analyses of thedata and to present results in which we havegreater confidence.

In summary, we propose that Phase II of theSemarang study address these ten issues so that aneighborhood deal can be designed that formsthe basis for implementation of the urbansanitation component of the Semarang urbanredevelopment project. The ultimate design ofthe neighborhood deal will have to balance theinterests of government with those of householdsand neighborhoods. One way that the results ofthe Phase II research might be used is to create aBlue Ribbon Commission of variousstakeholders in Semarang, and to charge thiscommission with the task of designing the deal(s)that will be offered to neighborhoods andhouseholds. The results of our Phase II studycould thus serve as input to the commissionsdeliberations.

A possible alternative to this proposed Phase IIstudy of household demand for improvedsanitation is a series of demonstration projectsthat would presumably install new water andsewer lines in selected neighborhoods inSemarang. In our opinion, however, it would notbe advisable to initiate demonstration projectsindependently of the demand-driven planningapproach suggested by the concept of aneighborhood deal. Unless carefully designedand implemented, demonstration projects couldentail serious undesirable side effects. If someneighborhoods are provided with new services,for example, we believe that information aboutthe deal implicit in such demonstration projectswill quickly spread throughout Semarang; thiscould create difficulties for full-scale projectimplementation.

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For further information please contact:

UNDPWorld Bank Water and Sanitation Program The World Bank 1818 H Street, NW Washington, DC 20433 USA Phone 2024739785 Fax 2025223313 Email: info@wsp.org World Wide Web: www.wsp.org

Or one of the regional water andsanitation groups:

RWSGEast and Southern Africa The World Bank P.O. Box 30577 Nairobi, Kenya Phone 2542260400 Fax 2542260386

RWSGWest and Central Africa The World Bank B.P. 1850 Abidjan 01, Cote d’Ivoire Phone 225442227 Fax 225441687

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RSWGSouth Asia The World Bank 55 Lodi Estate P.O. Box 416 New Delhi, 110003 India Phone 91114690488 Fax 91114628250

RWSGAndean Region The World Bank Casilla 8692 La Paz, Bolivia Phone 5912316718 Fax 5912392769

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