Evaluation Shares Lessons Learned from DAI-Led Water Project in Indonesia

July 11, 2018

A recent report that evaluated the sustainability of a DAI-led water resources and natural resource management program in Indonesia from 2004 to 2010 has shown that the majority of the partner water utilities continued to experience success after the donor-funded project ended.

The Environmental Services Program (ESP) worked closely with water utilities to help them expand and improve their services by connecting more people to high-quality, piped water in their homes, ultimately reaching 1.8 million people. While ESP was broader in scope than just providing access to water resources and services, the U.S. Agency for International Development commissioned the evaluation for the purpose of “understanding why the outcomes of its completed water, sanitation, and hygiene (WASH) activities have or have not been sustained.”

The evaluation was restricted to utilities that had not benefitted from follow-on WASH interventions—such as the current Urban Water, Sanitation, and Hygiene (IUWASH PLUS) project—and had not been affected by tsunami disaster and relief efforts.

Never Underestimate the Manual

The evaluation includes the following key findings:

• Six of the eight utilities increased the number of households to which they provided a water connection after 2010.
• Seven of the eight utilities were able to show increased management and finance capacity, by using the same performance index that was used throughout the project. (Categories in the performance index include: corporate plan, tariff, nonrevenue water, water quality monitoring, management information system, geographic information system, cost/energy efficiency, finance, human resources policy, staff training, and customer relations.)
• Three of the eight utilities are still regularly using the Standard Operating Procedures manual created by the ESP team. “Accessible tools (such as manuals) appear to be incredibly useful and long-lasting,” the evaluator said.
• Two of the eight utilities are still regularly using the Corporate Plans created by the ESP team.

Not all the findings were positive:

• The evaluation team conducted one-on-one interviews with utility customers and found that many complained about poor water quality and leaky taps. Some customers even chose to bypass the water provided by the utility and use private well water instead.
• Some utilities are still struggling with debt.
• Microcredit loans to help low-income water customers, set up by ESP with local banks, didn’t work out as planned due to onerous paperwork requirements by lenders. That said, the evaluation also noted that the three locations surveyed only accounted for a small percentage of the new connections financed using microcredit, and thus were not necessarily representative of program-wide impact.

Getting Creative

The evaluation team found a few other pieces of evidence that led them to conclude the program did indeed foster sustainability. One struggling utility, looking to obtain a loan some years later, used a credit rating ESP helped them secure. And the performance index that the ESP team used to help utilities measure their progress during the project was adapted for use by the Ministry of Public Works. In 2008, the Ministry created its own index to rank the utilities and even built in an incentive: those utilities that performed the highest would receive debt relief.

Key Recommendations

The evaluation team recommended the following for future USAID water projects:

• Capacity-building efforts with municipal water utilities should seek to assist staff to develop products, such as manuals, corporate plans, and other tools, as ESP did, as these resources can serve as enduring references regardless of utility staff turnover.
• Microcredit programs to expand piped water access to the poor in Indonesia may work best in partnership with smaller banks that are accustomed to smaller loans and have less intensive borrower vetting processes or a stronger prior relationship with the community seeking microcredit. Alternatively, financially stable utilities can engage the poor by offering their own payment installment programs and discount offers.
• USAID should consider ways to facilitate coordination among various government water access efforts to avoid competing programs.
• Annual performance monitoring, particularly when accompanied by incentives for good performance, can help motivate water utilities to continue improving their operating performance.

See the entire report here.