WATER AND SANITATION PROGRAM: TECHNICAL PAPER 85194 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia Economic Assessment of Interventions to Improve Water Quality October 2013 © 2013 Asian Development Bank and The International Bank for Reconstruction and Development/The World Bank The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent, or of The World Bank, its Board of Executive Directors, or the governments they represent. ADB and The World Bank do not guarantee the accuracy of the data included in this publication and accept no responsibility for any consequence of their use. 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The nical Assistance undertaken for the benefit of the Ministry Ministry of Public Works, Directorate General of Water of Public Works, Directorate General of Water Resources Resources, has worked with DHV to implement the Tech- in Indonesia, financed by the Kingdom of the Netherlands nical Assistance by providing valuable input and guidance. under the project “Institutional Strengthening for Inte- grated Water Resources Management in the 6 Ci’s1 River In parallel, DHV worked with the World Bank’s Water and Basin Territory (package B)”. It is a summary report of Sanitation Program (WSP) to conduct economic analysis “Water quality in Citarum River. Planning interventions to of the interventions. Guy Hutton designed the economic improve river water quality in upper Citarum river (No- analysis and oversaw data gathering, and wrote the eco- vember 2012).” The ADB project officers for the technical nomic sections of the report. Isabel Blackett was the task assistance are Thomas Panella and Helena Lawira, who are team leader and Almud Weitz, Enrico Rahadi Djonoputro, responsible for the pre-publication review. The Technical and Deviariandy Setiawan provided inputs to the study. Assistance was implemented by DHV, a company under Peer reviewers were Michael Peter Steen Jacobsen, Paulus the Royal Haskoning DHV group of companies, and the Van Hofwegen, and Ilham Abla. The economics work was project team consisted of Aart van Nes, Indra Firmansyah, funded through WSP’s Multi-Donor Trust Fund for WSP and Sjoerd Kerstens in cooperation with Deltares (in par- East Asia and the Pacific, supported by the Government of ticular Wil van der Krogt) and Mitra Lingkungan Dutacon- Australia. 1 6 Ci’s means 6 rivers in the provinces of Banten, DKI Jakarta and West Java. Citarum is one of the rivers originating in West Java. www.wsp.org iii Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia Executive Summary The Economics of Sanitation Initiative (ESI) of the World indicate a favorable benefit-cost ratio of greater than two, Bank’s Water and Sanitation Program (WSP) commenced meaning Rp2 of economic return for each rupiah spent. in East Asia and the Pacific region in 2006 to generate and disseminate economic evidence on sanitation. A Phase 1 Analysis of the sources of water pollution indicates that study in five countries of the region, including Indonesia, 64% of biological oxygen demand in the Citarum River assessed the economic costs of inadequate sanitation to raise is produced by domestic and municipal activities, com- the profile of sanitation nationally. A Phase 2 study com- pared with 36% from industrial or agricultural activities pared the costs with the benefits of a range of sanitation in- combined. The significant number of people lacking access tervention options in five physical locations in Indonesia, to to improved sanitation in the upper Citarum River basin assist decision makers in their choice of sanitation technol- explains the relatively high contribution of domestic and ogy and delivery method. Since the demonstrated successes municipal activities: 60% in rural areas and 35% in urban of ESI in the East Asia and Pacific region, ESI has become a areas. The available improved sanitation facilities comprise global flagship program of WSP. However, some economic mainly of “septic tanks,” or cubluks,2 installed at the house- benefits have not been fully evaluated in monetary terms hold level, whereas centralized sewerage systems are avail- because of methodological difficulties in valuing nonmar- able to only 5% of the population in the upper Citarum ket impacts, the paucity of underlying data sets, and the River basin. Most of the larger-scale industries have some difficulties inherent in attributing observed impacts to poor form of wastewater treatment plant, but treatment efficacy sanitation. Among these hard-to-measure benefits are the is known to be low, and for smaller industries, the avail- impacts of poor sanitation on water resources. Hence, the ability and performance of wastewater treatment plants are purpose of this study was to develop and pilot test a specific worse. methodology for valuing a wider range of impacts related to water resource pollution in Indonesia. If effective interventions are not taken, water quality will further deteriorate in the upper Citarum River, resulting The Citarum River is of vital importance for water supply in an increased threat to public health and affecting the to both the Bandung metropolitan area, where almost 10 general welfare of the population. On the other hand, with million people reside, and the greater Jakarta region, which improved water quality, financial benefits can be realized, houses 25 million people. However, over the past 20 years, related to reduced costs of drinking water production, in- water quality in the upper Citarum River has been decreas- creased yields from fish farming, enhanced real estate and ing dramatically, and essential parameters are far outside associated opportunities for tourism, and biodiversity. The mandatory limits with more than nine times for biologi- corresponding financial benefits of improved water quality cal oxygen demand and more than 5,000 times for fecal amount to a total of Rp2.1 trillion (US$226 million) an- coliform in some locations (Royal Haskoning DHV 2012). nually.3 Further benefits can be gained by introducing ad- This report describes the origin of the pollution, its effect ditional measures that aim to recover resources from waste- on water quality, and the economic losses resulting from the water and solid waste. Examples are production of biogas deteriorating water quality. This report also identifies fea- (energy), production of compost, recovery of plastics and sible interventions for improving water quality and predicts papers of solid waste, and promotion of effluent reuse by the effect of these measures on water quality. The imple- industries. These additional measures increase the benefits mentation costs and economic benefits of the interventions by Rp500 billion (US$54 million) annually. 2 These are brick or block-lined, open bottomed tanks, meaning they are effectively leach pits because of the lack of openings in the side walls. 3 An exchange rate of Rp9,440 per United States dollar (US$) was used. iv Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Executive Summary Improvement of water quality to mandatory standards is The roadmap required to bring about improved water qual- feasible. This requires interventions in both domestic- ity in the upper Citarum River comprises several steps, municipal levels (by increasing access to improved basic starting with the simple ones and leaving the more com- sanitation and sewerage or wastewater management) and plicated ones for the future. The recommended approach addressing industrial pollution. Implementation requires starts with setting up the local organizations to manage systematic planning, with long-term actions on multiple sanitation development, including implementation of rela- fronts, comprising establishment and improvement of in- tively simple interventions such as promotion and incen- stitutions, allocation of adequate funds, and the construc- tives for effective septic tanks, community-based wastewa- tion, operation, and maintenance of sanitation facilities to ter treatment systems, and improved solid waste collection, isolate and/or treat wastewater. The following table provides transport, and disposal. It is also recommended to address the estimated costs and benefits for treating both domestic pollution caused by larger industries at an early stage. How- and industrial wastewater, including resource recycling and ever, reducing industrial pollution requires both more effec- reuse. These are values that would pertain in 2030, after tive enforcement of present regulation and improvements the required interventions have been scaled up, presented to the legal framework. More complicated and larger in- in 2010 prices. The annualized benefits outweigh the annu- frastructure, such as off-site wastewater treatment systems, alized costs by a factor of 2.3. The major share of costs are solid waste infrastructure (sanitary landfills), and resource for improving access to domestic sanitation and wastewater recovery facilities, require more time to successfully imple- treatment (Rp13.7 trillion, or US$1.5 billion) compared ment and are recommended for the medium to long term. with industrial interventions (Rp1.6 trillion, or US$172 The introduction and support of resource recovery through million) over a 20-year period. Hence, the sanitation in- government and private sector actions are highly recom- terventions not only improve the water quality but also are mended because of its economic attractiveness and pres- economically attractive. Moreover, some benefits have been ervation of scarce resources. It is therefore recommended excluded because they could not easily be monetized, so the to start planning for resource recovery infrastructure at an ratio of benefits to costs could be significantly greater. early stage. Domestic wastewater treatment and industrial wastewater Variable treatment and reuse Rp (billion) US$ (million) Investment cost (over 20 years) 15,794 1,670 Annualized costs, including recurrent costs 1,164 129 Annual benefits 2,631 280 Benefit-cost ratio 2.3 2.3 Note: Values refer to when interventions are scaled up in the year 2030, presented in 2010 prices. Rp9,440 = US$1. www.wsp.org v Abbreviations BMA Baku Mutu Air (Water supply standard) BOD Biological Oxygen Demand BPLHD Badan Pengendalian Lingkungan Hidup Daerah (Regional Control Agency of the Living Environment) BWRP Basin Water Resources Project, component of the Java Irrigation and Water Resources Management Project (JIWMP) under World Bank assistance (1995-2004) COD Chemical Oxygen Demand ESDM Energi dan Sumber Daya Mineral (Ministry of Energy and Mineral Resources); the same name is used for the provincial agency for Energy and Mineral Resources IPLT Instalasi Pengolahan Lumpur Tinja (sludge treatment installation) MLD Mitra Lingkungan Duta Consult PSDA Pengelolaan Sumber Daya Air (Water Resources Management, under Ministry of Public Works); the same name is used for the provincial agency for Water Resources Management PUSAIR Pusat Penelitian Pengembangan Sumber Daya Air (Research and Development Center for Water Resources); under the Ministry of Public Works; located in Bandung Rp Rupiah US$ United States dollar USDP Urban Sanitation Development Program (funded by the Royal Netherlands Embassy) WWTP Wastewater treatment plant vi Economic Assessment of Interventions to Improve Water Quality Contents Acknowledgments ................................................................................................................................... iii Executive Summary................................................................................................................................. iv Abbreviations ........................................................................................................................................... vi Content ....................................................................................................................................................vii 1. Introduction....................................................................................................................................... 1 2. Methodology .................................................................................................................................... 3 2.1 Water Quality in the Upper Citarum River .................................................................................... 3 2.2 Pollution Discharge ..................................................................................................................... 4 2.3 Interventions to Reduce Pollution ................................................................................................ 6 2.4 Water Quality Modeling and Scenarios ........................................................................................ 9 2.5 Benefit Estimation ...................................................................................................................... 11 3. Results ............................................................................................................................................ 17 3.1 Water Quality ............................................................................................................................. 17 3.2 Sources of Water Pollution ......................................................................................................... 18 3.3 Impact of Interventions ............................................................................................................... 19 3.4 Cost of Interventions .................................................................................................................. 22 3.5 Economic Benefits of Improved Water Quality ............................................................................ 25 3.6 Cost-benefit Assessment ........................................................................................................... 28 4. Conclusions .................................................................................................................................... 30 References ............................................................................................................................................. 31 www.wsp.org vii I. Introduction FIGURE 1.1: THE CATCHMENT OF THE CITARUM RIVER IN RELATION TO THE OTHER FIVE “CI” RIVERS 6 Cis Study Area Kepulauan Seribu Kota Cilegon Kota Serang Kab. Tangerang Kota Adm. Jakarta Utara Kota Adm. Jakarta Barat Kota Tangerang DKI JAKARTA Kab. Bekasi Kab. Serang Kota Adm. Jakarta Pusat Kota Adm. Jakarta Timur Kota Adm. Jakarta Selatan BBWS 3C Kota Tangerang Selatan Kota Bekasi Kab. Karawang (Cidanau-Ciujung-Cidurian) Kab. Pandeglang Kota Depok BANTEN BBWS CIL-CIS Kab. Indramayu (Ciliwung-Cisadane) Kab. Subang Kota Bogor Kab. Purwakarta Kab. Bogor BBWS CIT Kab. Majalengka Kab. Lebak (Citarum) JAWA BARAT Kab. Sumedang Kab. Cianjur Kota Cimahi Kota Bandung Kab. Bandung Barat Kab. Bandung Kab. Garut Kab Tasikmalaya Safe water resources are essential to support a healthy en- metropolitan area, with some 10 million people and many vironment. Jakarta, the capital of Indonesia, and its con- industries located in the upstream catchments of Citarum, glomeration houses some 25 million people, and receives causes serious pollution that is the result of domestic, mu- presently 40% of its domestic, municipal and industrial nicipal, industrial and agricultural-related wastewater flows. water from a cascade of three large reservoirs in the Cita- rum River, east of Jakarta, envisaged to increase to 75% to A wide range of economic and social benefits is associated replace current over-exploitation of groundwater in North- with improved sanitation and wastewater management. In ern Jakarta. Sufficient water is available, but the Bandung 2008, a study under the Water and Sanitation Program’s www.wsp.org 1 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Introduction Economics of Sanitation Initiative (ESI) estimated that improving sanitation. The report presents an economic poor sanitation led to an economic impact of Rp56 tril- assessment of interventions to improve water quality in lion (US$6 billion) annually in Indonesia, or the equiva- the upper Citarum River, thereby not only improving the lent of 2.3% of national GDP (Napitupulu and Hutton, quality of life of the people in the greater Bandung area, 2008). A second phase of the ESI demonstrated in five field but ultimately of all people downstream depending on sites across Indonesia that sanitation interventions offer this important water source, including Jakarta. The eco- good value for money, including for urban solutions with nomic assessment draws on previous economic studies higher unit investment costs (Winara, Hutton et al, 2011). conducted under the ESI4, and analyses conducted by the Benefits included health, water, and access time; also in the 6 Ci’s Project on the level of water pollution, the origin Phase I study, tourism and fishery impacts were assessed. of pollution, and the impact on water quality of possible interventions. An additional objective of this study was to This report is a follow-up to the two previous ESI stud- develop and pilot test a specific methodology for valuing a ies, examining in greater detail the environmental impacts wide range of economic impacts related to water resource of poor sanitation and associated economic benefits of pollution in Indonesia. 4 The Economics of Sanitation Initiative (ESI) was initiated in the East Asia & the Pacific (EAP) region in 2006 to generate and disseminate economic evidence on sanitation. However, in the studies to date, economic benefits of reducing the pollution of water resources have not been fully evaluated in monetary terms due to methodological difficulties in valuing non-market impacts, the paucity of underlying data sets, and the difficulties inherent in attributing observed impacts to poor sanitation. 2 Economic Assessment of Interventions to Improve Water Quality II. Methodology The methodology follows six steps, presented in Figure a wide variety of parameters at different locations several 2.1, and described in the following sections.The water times per year. Data from 2001-2009 were used for the fol- quality model used was the River Basin Simulation Model lowing parameters: COD (Chemical Oxygen Demand), (RIBASIM), developed by Deltares (Deltares 2009). BOD (Biological Oxygen Demand), Nitrogen components (NH3, NO2 and NO3), Total Phosphate (PO4-P) and Fecal 2.1 WATER QUALITY IN THE UPPER CITARUM and Total Coliforms. In addition, DO (Dissolved Oxygen) RIVER and COD profiles were obtained from Pusat Penelitihan Water quality data in the Citarum River were obtained Pengembangan Sumber Daya Air, the research and develop- through the Badan Pengendalian Lingkungan Hidup Dae- ment center for water resources of the Ministry of Public rah (BPLHD), the Regional Control Agency of the Liv- Works, based in Bandung. The locations that are monitored ing Environment, which measures the water quality on by BPLHD are presented in Figure 2.2. FIGURE 2.1: SEQUENCE OF METHODOLOGY APPLIED TO ESTIMATE ECONOMIC BENEFITS AND EFFICIENCY 1 Determination of Water Quality 2 Determination of Pollution Discharge from Different Sources 3 Formulation of Interventions and their Cost 4 Assessment of Impact of Interventions on Water Quality 5 Assessment of Economic Benefit Resulting 6 Conduct of Cost-Benefit Analysis of Different Interventions www.wsp.org 3 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology FIGURE 2.2: CITARUM RIVER BASIN AND UPPER CITARUM RIVER BASIN (ENLARGED BOX) In this study the focal point is the upper Citarum River For specific pollution loads per person, data from Almy basin, which is the area draining into Saguling reservoir, (2008) were used, shown in table 2.2. In the current study, but excluding the catchment draining into the Citarum- it was assumed that presented data were typical for class 1 river downstream of Saguling Dam. Pollution discharges (Metropolitan) users. Assuming a similar discharge of pol- from agricultural, domestic and industrial sources in this lutants for blackwater (wastewater with fecal contamination area have been assessed, as well as potential investments in from a toilet) per person in areas with different urban status- this area to reduce the pollution discharges, and the im- es, the amount of pollutant discharge via gray water (waste- pact of these investments on the water quality of the river water from washing and cleaning) was based on the decreas- stretches in this area. The area covers the cities of Bandung ing amount of water used by the defined water consumption and Cimahi, as well as the districts of Bandung and West categories. In more rural areas, a considerable part of pollut- Bandung. Most people are living in the cities, while most ants—assumed to be 60%—will not enter the surface water industries are located in Bandung district. body because people use pit latrines, plastic bags, or open defecation in fields/forests. 2.2 POLLUTION DISCHARGE Wastewater pollution loads were determined from do- Both water consumption parameters and pollution loads mestic and municipal, industrial and agricultural sources. were processed using the 2010 population and expected From domestic and municipal activities, water consump- population development (Scenario C, sustainable growth, tion (and hence discharge) levels were based on guidelines and 5% economic growth) in RIBASIM. Data on the pop- from the Ministry of Public Works, shown in Table 2.1. ulation that currently has access to sanitation are based on It is assumed that 80% of intake water is returned to the Napitupulu and Hutton (2008). These data were adjusted water system. depending on specific data availability. 4 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology TABLE 2.1: WATER CONSUMPTION PARAMETERS BY TYPE OF URBAN STATUS Urban status Description Unit domestic water demand (liter/capita/day) Metropolitan More than 1 million people 190 Large town 500,000–999,999 people 170 Medium town 100,000–499,999 people 150 Small town 20,000–99,999 people 130 Village 3,000–19,999 people 100 Rural <3,000 people 30 Source: Ministry of Public Works 1989. TABLE 2.2: POLLUTANTS DISCHARGED TO SURFACE WATER BODIES (GRAMS PER PERSON PER DAY) Parameter Urban status COD (g/p/d) BOD (g/p/d) TN (g/p/d) TP (g/p/d) Total fecal coliforma (units/100 mL) Metropolitan 78.1 39.0 11.7 2.0 1.0E+08 Large town 70.8 35.4 11.1 1.8 1.0E+08 Medium town 60.1 30.0 9.8 1.6 1.0E+08 Small town 50.1 25.0 8.5 1.4 1.0E+08 Village 39.7 19.9 7.3 1.2 1.0E+08 Rural 26.9 13.5 6.0 0.9 1.0E+08 Source: Almy 2008. Note: COD = Chemical Oxygen Demand; BOD = Biological Oxygen Demand; TN = total nitrogen; TP = total phosphate; g/p/d = grams per person per day; mL - milliliters. a No correction factor for fecal coliforms is applied because the presence and impact of these are represented in log scale. Adjustment (like done for the other pollutants) influences the parameter only to a very limited extent. TABLE 2.3: TYPICAL EFFLUENT CONCENTRATIONS OF INDUSTRIES Parameter Type COD (mg/L) BOD (mg/L) TN (mg/L) TP (mg/L) Total fecal coliforms (units/100 mL) a Food and beverage 5,000 3,000 80 30 0 b Paper 4,000 1,500 20 10 0 c Pharmaceutical 5,000 1,500 127 25 0 Rubberc 7,340 4,400 1,100 220 0 Textiled 1,350 450 60 20 0 c Others, electronic, and metal 280 168 42 8 0 Note: COD = Chemical Oxygen Demand; BOD = Biological Oxygen Demand; TN = total nitrogen; TP = total phosphate; mg/L = milligrams per liter; mL - milliliters. a Based on the experience of a consultant for food & beverage (dairy, brewery) in Indonesia. b Based on the experience of a consultant for pulp and paper in the People’s Republic of China (20 projects). c BWRP 2000. d Textile industry data were determined based on actual measurements of 21 textile industries in the project area (values from BPLHD) and compared with literature (Ohron et al. 2009). For industrial activities, the water consumption data of all ber Daya Air, under the Ministry of Public Works) for industries located in the upper Citarum River basin were surface water consumption. Industries were categorized gathered from the provincial agency for Energy and Min- based on type of industry and amount of water consump- eral Resources (2009) (Energi dan Sumber Daya Mineral tion, and pollution loads were determined by multiplica- [Ministry of Energy and Mineral Resources]) for ground- tion of effluent flow (for all industries, assumed to be 80% water consumption and from the provincial agency for of the demand) and an effluent concentration, shown in Water Resources Management (2010) (Pengelolaan Sum- table 2.3. www.wsp.org 5 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology on the land (SNV, 2013). Therefore, in this analysis we have assumed that only run-off of rice and palawija fields, on which collected manure is applied, contributes to pollution discharged to the water bodies. The impact of municipal solid waste discharged into wa- terways is from direct water pollution of organic and nu- trient loads, blockage of water ways, negative aesthetic impact, and loss of materials that have value, such as or- ganic wastes and plastics. This study ignored the COD, BOD, N, P, and pathogen content of such waste because the water pollution load from municipal solid waste is known to be small compared with that from other sourc- es. However, the required costs to prevent solid waste en- Municipal solid waste accumulating on the Citarum River bank (Photo credit: Aart van Nes) tering the water bodies, and the associated benefits, are part of the study. Agricultural water demand was based on RIBASIM data 2.3 INTERVENTIONS TO REDUCE POLLUTION (2010 and 2030) for technical and nontechnical irriga- Given the small contribution of agriculture to the overall pol- tion. Pollution discharge was based on the Basin Water Re- lution of water resources5 and the challenge of finding imple- sources Planning (2000) study (a component of the Java mentable interventions to reduce pollution, the focus of this Irrigation and Water Resources Management Project under study was on interventions to reduce domestic and municipal World Bank assistance [1995-2004]), shown in table 2.4. wastewater, industrial wastewater and solid waste, and inter- ventions to increase the rate of resource recycling. West Java has a considerable number of beef and dairy live- stock farms. According to the livestock statistical year book For domestic and municipal interventions, three types of of the Ministry of Agriculture, about 125,000 dairy cows main system were distinguished, that is, on-site systems, and 325,000 beef cattle are kept in the whole of West Java. community-based systems, and off-site systems. The features Discussion with representatives of the dairy industry and of each of these systems are summarized in table 2.5 and livestock experts show that typically farmers keep about are described in detail elsewhere (Urban Sanitation Devel- 2-4 cows per household. Manure is generally collected in opment Program 2012). Following the approach developed stables and dried or composted and applied on the land under the Urban Sanitation Development Project (funded twice a year as a fertilizer for crop production. Occasion- by the Royal Netherlands Embassy), the feasibility for appli- ally the manure is collected and digested, producing biogas cation depends on the combination of residential population used for cooking after which the remaining slurry is applied density, urban functions as well as groundwater problems. TABLE 2.4: POLLUTANTS DISCHARGED TO SURFACE WATER BODIES Pollutant (g/yield/ha) Crop COD BOD TN TP Total fecal coliforms Rice 45 22.5 21.5 6.5 0 Palawijaa 34 17.0 4.6 0 0 Source: BWRP 2000. Note: COD = Chemical Oxygen Demand; BOD = Biological Oxygen Demand; TN = total nitrogen; TP = total phosphate. a Nonrice food crops such as corn (maize) and soy beans. 5 Overall, agriculture contributes 8% of BOD, 6% of COD, 15% of nitrogen, and 18% of phosphorous (Royal Haskoning DHV 2012). 6 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology TABLE 2.5: OVERVIEW AND FEATURES OF APPLICABLE SANITATION OPTIONS IN THE INDONESIAN CONTEXT Main category On-site systems Hybrid: Community-based systems Off-site systems - Shared - Communal septic tank - Medium: decentralized Sub-division - Individual (Ind.) - WWTP communal - Centralized - MCK++ with connections User interface No running water required Running water/pour flush toilets preferred Running (tap) water required No sewer system Community sewer system Simplified/sanitary/conventional Transport system sewer system Containment via septic Septic tank/ABR + filter MCK+: digester + Anaerobic, aerobic or pond Treatment system tank ABR + filter systems Final disposal Centralized septage treatment system (IPLT) Sludge treatment at site of WWTP Sample picture Note: MCK = Mandi Cuci Kakus (public bathing, washing and toilet facility); ABR = Anaerobic baffled reactor; WWTP = Wastewater treatment plant. TABLE 2.6: ASSUMED REMOVAL EFFICIENCIES IN WATER TREATMENT SYSTEMS System Removal (percent) a On-site Community-basedb Off-site 2010c Off-site 2030d COD 30 60 65 85 BOD 40 70 65 90 TN 5 5 80 80 TP 5 5 55 70 Fecal Coliforms 75 95 99.990 99.999 Note: COD = Chemical Oxygen Demand; BOD = Biological Oxygen Demand; TN = total nitrogen; TP = total phosphate. a Mgana 2003; Tchobanoglous et al. 2004. b Kerstens et al. 2012; Tchobanoglous et al. 2004; Ulrich et al. 2009. c Bojong Soang data (2010). d Author’s estimate. The Urban Sanitation Development Program has developed (b) textile makers producing other types of textile (no reac- tools that allow for rapid assessment of required budget and tive dyes), and (c) food & beverage, paper & pulp, and other time to install each type of intervention. Figure 2.3 shows the industries. Note that the design of the wastewater treatment typical prices per person served.6 The main industries operat- plant (WWTP) treating this type of wastewater is based on ing along the upper Citarum River include electronics, food the design of a typical dairy industry WWTP.7 & beverage, metal, paper, pharmaceutical, rubber, and tex- tile. To determine the type and costs of industrial wastewa- For each of these types of “uniform” wastewater treatment ter interventions, three types of design for each typical scale plant construction, capital expenditure, operational expen- were prepared. Designs were based on treating wastewater diture, and total running costs have been determined based from (a) textile makers producing batik (with reactive dyes), on the quotation of suppliers, contractors, and the author’s 6 Prices vary for selected types of sewer and treatment systems and land features. 7 Royal HaskoningDHV has visited several dairy producing industries in Indonesia including Ultra Jaya, Frisian Flag Indonesia and Nestle. The proposed wastewater treatment process flow diagram in the current analysis is based on the typically applied systems by these industries. www.wsp.org 7 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology estimate. Based on the expected life span of investments, very high quality, and all water that cannot be reused and is annualized costs are estimated for the year 2030, applying a discharged in the system will directly result in improvement discount rate of 10%. For cost determination, it is assumed of water quality. that 70% of the textile industry is typically batik industry (applying system 1) and 30% produces a different type of Recycling of municipal solid waste is assumed to be pro- textile. In addition, it is assumed that 50% of all indus- cessed at two regional sites for the whole of the upper tries that already have a treatment system need to upgrade Citarum River basin, following the 3R principles (reduce, their system before 2030. Note that the costs for treatment reuse, recycle). At each regional facility, solid waste is first of chromium (for example, used in leather/tannery indus- sorted, both manually and mechanically. Plastic, papers, tries), phenols (certain types of textile industries), and met- and other recoverable materials are put aside and sold for als such as fluoride (electronic industries) have not been local market prices. Separated organic waste is first di- calculated separately. gested, which results in the production of biogas. Biogas contains a high (roughly 65%) methane content that can In these treatment schemes, the treated effluent is dis- be converted in a combined heat power unit; the diges- charged (back) into the surface water. However, the Band- tate (outgoing mixture) is then composted (possibly with ung area is known for its severe subsidence as a result of some park and garden waste to add structure), resulting overabstraction of groundwater, with approximately half of in the production of compost that can be sold. Finally, the industries using groundwater. Minimizing groundwa- all matter that cannot be treated biologically or have no ter use can reduce land subsidence; however, reliance on direct value are sent to a landfill. Because the major part surface water will increase only if its quality is improved. of organics has been removed, landfill gas treatment and In that case, effluent reuse, following a subsequent treat- leachate treatment require only limited work. Figure 2.4 ment process, can be considered. “Produced” water is of illustrates the process. FIGURE 2.3: TYPICAL COSTS OF WASTEWATER TREATMENT SYSTEMS PER PERSON SERVED, BY URBAN AND RURAL CLASSIFICATION AND POPULATION DENSITY 6.0 Investments: million Rp per new person served Centralized 5.0 Medium Decentralized 4.0 3.0 2.0 On-site 1.0 Community-based System - <25 pp/ha 25-100 pp/ha 100-175 pp/ha 175-250 pp/ha 250 pp/ha + + sanitary sanitary sewer rural urban Key: pp/ha = population per hectare 8 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology FIGURE 2.4: SOLID WASTE PROCESSING AND FINAL DISPOSAL Biogas to electricity 1. SORTING 1. SORTING 2A. ELECTRICITY PRODUCTION IN (Manual + Mechanical) CHP (Combined (Manual Heat Power) UNIT + Mechanical) Plastic and paper Mixed Solid Waste Organic Digestate waste 1. 1. SORTING SORTING 1. SORTING 1. SORTING 2. DIGESTION 3. COMPOSTING (Manual + (Manual Mechanical) + Mechanical) (Manual + Mechanical) (Manual + Mechanical) Non-recoverable material 1. SORTING 4. SANITARY (Manual LANDFILL + Mechanical) 2.4 WATER QUALITY MODELING AND Table 2.7 presents the effluent requirements. SCENARIOS • Scenario 1: Current situation (2010) RIBASIM was developed for the whole 6 Ci’s area. The small- • Scenario 2: Reference case for 2030, assuming con- est unit captured in RIBASIM is the water district. A water dis- tinuing current trend with no interventions trict is hydrologically defined and is different from an admin- • Scenario 3: Treat domestic wastewater istrative area. It can cover multiple kelurahan or kecamatan8; • Scenario 4: Treat industrial wastewater, differentiat- moreover, in one kecamatan, more than one water district may ing all industries (4A) or large industries only (4B) be present. In this study, nine water districts in the upper Cita- • Scenario 5: Treat domestic and industrial wastewater rum or Bandung catchment were taken into consideration. • Scenario 6: Treat domestic and industrial wastewater Figure 2.5 presents the tool that was developed for these water and recycle industrial wastewater. districts. The model is used for simulation of various interven- tions to analyze the impacts. Pink stars indicate locations with Table 2.7 presents the requirements for the effluent from in- simulations reported on in the current study. dividual industries as established by the environmental man- agement board BPLHD for 2010 and stricter requirements To set priorities, the effect of different interventions needs assumed for 2030, as well as the requirements for the river to be analyzed and compared with each other. For this pur- flows (effluent diluted by river discharges) or Baku Mutu Air pose, six scenarios were developed. Annex 2 provides fur- (water supply standard; BMA) as specified in general (class II ther detail on these scenarios. rivers) by the Ministry of Environment in Indonesia. 8 In Indonesia, a province is composed of cities (kota) and regencies (kabupaten). These are, in turn, divided in subdistricts (kecamatan), which are further divided into administrative villages (kelurahan or desa). www.wsp.org 9 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology FIGURE 2.5: RIBASIM AND LOCATIONS WITH SIMULATIONS IN THE UPPER CITARUM TABLE 2.7: EFFLUENT REQUIREMENT AND CURRENTLY APPLICABLE WATER QUALITY STANDARDS Effluent requirements Currently required water quality Domestic Industrial Parameter Unit standard in Citarum River No. 112 (2003) by values class II (BMA)b BPLHD (2010)a Assumed (2030) Ministry of Environment BOD mg/L 100 60 20 3 COD mg/L - 150 100 25 TSS mg/L 100 50 50 50 Phosphate mg/L - - 10 0.2 Ammonia mg/L - 8 5 - Total nitrogen mg/L - - 10 - Sulfide mg/L - 0.3 0.3 0.002 Oil and grease mg/L 10 3 3 1 Phenol mg/L - 0.5 0.5 0.001 Chromium mg/L - 1.0 1.0 0.05 pH - 6-9 6-9 6-9 6-9 Note: BOD = Biological Oxygen Demand; COD = Chemical Oxygen Demand; TSS = Total suspended solids; mg/L = milligrams per liter a BPLHD standards refer to the effluent an industrial WWTP has to comply with. b BMA refers to the water quality standards of the receiving water body as per Government Regulation PP 82/2001. 10 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology Current legislation for domestic wastewater treatment only garding access time, water treatment costs, environment, requires removal of BOD, TSS, and grease. In comparison and reuse costs will be achieved if water quality is improved with legislation in neighboring countries, the Indonesian re- accordingly (see next section). With respect to public health quirements are not very stringent. For example, the BOD re- improvements, a major benefit is already expected by mov- quirements in the Philippines (No. 35, Series of 1990), Ma- ing from unimproved or open defecation to improved laysia (PU(A) 398/2000), Viet Nam (TCVN 6772-2000), sanitation. This will drastically reduce the chance of direct and the People’s Republic of China (GB18918-2002) are contamination for humans. In addition, note that the mod- 30-80 mg/L, 20-50 mg/L, 30-40 mg/L (levels 1-3), and 10- eled fecal coliforms value (1,000 units/100 mL) will not be 40 mg/L, respectively. In addition, most of these also refer to reached in the upper Citarum River, where values will be maximum coliform values in the effluent, whereas no such approximately 100 times higher. However, it must be noted standard is present in the Indonesian guidelines. The World that in the analysis, the kinetic die-off10 of pathogens is not Health Organization (2006) has defined several standards included, whereas this is likely to happen as a result of ex- for reuse in agriculture or aquaculture, which are 103–104 posure to sunlight. The Indonesian drinking water regula- units coliforms/100 mL (depending on the type of applica- tion (no. 492) for 2010 requires the complete removal of all tion). However, in the water quality standard (Value Class coliforms, which will further limit direct contamination of II) of these guidelines, the maximum total and fecal coli- water obtained from the Upper Citarum River. Please note form values are, respectively 5,000 and 1,000 units/100 mL. that the usual practice in Indonesia is to boil the drink- The Indonesian industrial standards are much more strin- ing water to remove fecal contamination, which the cost is gent than the domestic standards and are comparable with borne by every household the standards in neighboring countries. In the analysis of this study, removal efficiencies for modeled parameters have 2.5 BENEFIT ESTIMATION been assumed that result in better quality than the domestic Following the methodology for cost-benefit assessment de- requirements (see table 2.6). veloped under the Economics of Sanitation Initiative (Wi- nara et al. 2011), for this study, in the Citarum River basin, Although data on BOD and COD are plentiful,9 limited the range of impacts of poor river water quality were as- data are routinely reported on heavy metals. To fill this gap, sessed to decide which were the most important and quan- Mott MacDonald (2011) conducted surveys, where ad- tifiable for valuation in monetary terms. Because the aim ditional water quality parameters are reported. The study of this study was to assess the efficiency of sanitation inter- concluded that the heavy metals causing the main potential ventions, the study compared the estimated costs with the risks are iron, manganese and nickel. Concerning pesti- estimated economic benefits of the sanitation and waste- cides, the study concluded that these are not traceable. An- water management interventions under the six scenarios. other study by DHV in 2011 examined the availability and The annual equivalent costs and benefits are both estimated application of pesticides in the project area (upper Citarum for the year 2030, when the interventions have been scaled basin) and concluded these do not pose a serious hazard up and are operating at their planned level. Because it is in this area. Internationally banned pesticides were not difficult to estimate benefits separately for municipal and found in the shops in the project area. The only pesticide industrial water management, these were assessed as one with some hazard is Carbofuran, but it mostly represents a group in scenario 5 and were then attributed to each sub- health risk for farmers in the application of the pesticide if component (scenarios 3 and 4) based on the pollution re- personal protection measures are not taken. duction (biochemical oxygen demand and Escherichia coli) arising from each intervention. In scenario 6, the benefits of With reference to the assumed benefits of treating the reusing the various products of wastewater and solid waste wastewater, it is expected that all anticipated benefits re- were calculated. 9 As reported by PJT II, the agency responsible for water management of the Jatiluhur reservoir and the Citarum River. 10 Pathogens die off because of sunlight and heat. www.wsp.org 11 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology TABLE 2.8: BENEFITS OF IMPROVED SANITATION AND WASTEWATER MANAGEMENT Benefit Monetized benefits Other benefits (described) Scenario 5 Health Averted fecal-oral disease from improved on-site sanitation Reduced cases of food poisoning from and wastewater management - Individual (Ind.) consumption of fish infected by algal blooms or heavy metal Averted health impacts of less exposure during flooding events Access time Value of time savings from reduced travel time and/or Increased convenience associated with having queuing for meeting sanitation needs a nearby and available toilet Water Reduced water treatment costs to households and Increased business investment due to industries availability of cheap, clean water Improved fish yields from farming in downstream lakes Reduced frequency and costs of flood events due to preventing further land subsidence from excessive groundwater extractiona Reduced frequency of river and reservoir dredging due to Improved quality of life for riverside Environment sludge extraction before wastewater release communities Conservation: preserved biodiversity Rise in land prices due to improved aesthetics of riverside Tourism opportunities due to improved and lakeside real estate aesthetics of riverside and lakeside locations Scenario 6 Compost reuse from sludge and organic municipal solid Reuse waste Biogas generation from wastewater and organic municipal solid waste Recycling of municipal solid waste (plastics, papers) Effluent reuse for industries Averted maintenance costs of hydroelectric facilities becoming clogged with solid waste a The assumption is that surface water can be sourced more easily and cheaply for municipal and industrial uses, hence reducing reliance on groundwater. Table 2.8 shows which benefits were monetized and which coverage increase from 54-86%.11 Total health costs include were described or quantified but could not be monetized. health care costs, health-related losses in productivity (mainly The estimation methodology is described for each impact. adults), and premature mortality. These costs were estimated For benefits valued in monetary terms, algorithms were cre- by multiplying the average disease reduction of 36% from ated detailing the physical benefits and their unit value (see baseline by the average annual health cost per five-mem- Annex 3). An exchange rate of Rp9,440 per United States ber family from unimproved sanitation of Rp3.16 million dollar (US$) was used. (US$334), taken from the ESI study in the nearby Tangerang District (Winara et al. 2011). These costs are made up of Health. Improved on-site sanitation is a part and precon- health care costs (Rp2.2 million, or US$231), health-related dition of reduced discharge of human excreta to the envi- productivity losses (Rp782,000, or US$83), and mortality ronment. The health benefits of improved on-site sanitation (Rp182,000, or US$19). Added to the benefits of basic (on- were estimated based on the number of households expect- site) sanitation are the incremental benefits of reducing envi- ed to gain sanitation access from 2010 until 2030, under a ronmental exposure to pathogens through improved waste- 11 Ninety percent in urban areas and 80% in rural areas. 12 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology water management,12 leading to a further disease reduction of scaled to reflect all the flooded communities in the Citarum 20% age points (that is, total disease reduction of 56%). Tar- River basin. This method gave an estimated 15,000 averted get coverage for wastewater management options was 70% of cases per year. The economic value was estimated by mul- households, from a baseline of 6%. tiplying the average number of additional cases per year by the unit cost of inpatient and outpatient services, including Figure 2.6 shows a clear decreasing trend of occurrences of productivity losses. diarrhea with improved access to sanitation, demonstrated using SUSENAS data (BPS 2010). The occurrence of di- Access time. When using a latrine in the home or plot arrhea in cities and districts with less than 20% access to instead of outside, time is saved. ESI in Indonesia showed improved sanitation is almost three times higher than those significant time savings for different household members with over 80% of improved access to sanitation. across five sites, based on over 1,000 interviewed house- holds. In the Tangerang site, which most closely reflects For communities who suffer flooding and exposure to con- the Bandung area, an average of 115 minutes per house- taminated water, there will be health benefits of improved hold was gained per day,13 giving an annual value of river water quality. This is limited to communities that ex- Rp953,000 (US$101) per household. Only the time of perience flooding. The number of additional health cases adults and school-aged children was included, valued at was estimated by comparing reported health cases (infec- 30 and 15% of the hourly rate implied by the GDP per tious diseases and skin complaints) during a period of sev- capita, respectively. This figure was applied to the access eral flooding events (January-March 2009) to the same pe- gain of 32% of households for the period from 2010 until riod in a nonflood year (January-March 2010). This figure 2030 (54% coverage to 86% coverage of access to own was adjusted to reflect an average year of flooding and was latrine). FIGURE 2.6: OCCURRENCE OF DIARRHEA AND ACCESS TO SANITATION 40% % incidence of diarrhea in all household 35% 30% 25% 20% 15% 10% 5% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % access to improved wastewater system % households with diarrhea at time of survey - each dot represents a Kota (City) or Kabupaten Average for each 20% category Source: BPS 2010. 12 This includes septage sludge (septic sludge to be regularly removed from septic tanks) management. 13 This was based on an average of three minutes per trip (journey and waiting time) for off-plot sanitation options in rural areas and eight minutes in urban areas. www.wsp.org 13 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology Water. Improved river and lake water quality will have a the fish capture could increase by 8,000 metric tons per range of benefits for households and the local communi- year, resulting solely from improving the DO levels. The ties as well as the wider economy. Some effects are indirect increasing levels of DO from the modeled interventions are but are potentially very significant. One benefit that can assumed to account for one-third in this expected annual be easily quantified is the impact of river water quality on gain of farmed fish in the Citarum basin. Current market the costs of water treatment for use by households, busi- prices of fish of Rp15,000 per kilo are used. This calculation nesses and industries. Because of the decreasing ground- ignores the contribution of the polluted Citarum River to water levels and the related issue of land subsidence, water the water quality in the Jakarta Bay area and reductions in supplies will have to increasingly rely on surface water. fish catch and impacts on livelihoods (Arifin 2004). Currently, the cost of water treatment using surface water sources is Rp1,270 per cubic meter. The unit production A further linked benefit of improved surface water quality is costs of using polluted surface water are higher than those that, over time, water suppliers will rely less on groundwa- of clean surface water. This is the result of less investment ter sources. In Bandung, as in other locations in Java, there and corresponding capital expenditure (for example, few- is serious land subsidence in some locations.16 Residential er treatment steps) as well as lower operational costs (less and other real estate in and around Bandung has subsided energy and chemicals required). Hence, under scenario 5, by as much as 0.7 meters in the last decade, leading to more it is estimated that water supply from surface water can be common and more severe flooding events, infrastructure provided with an average production cost of Rp600 per damage, and corresponding decrease in land prices. Studies cubic meter, including both capital and operating costs. have estimated how much these areas will continue to sub- This saving is multiplied by the estimated annual con- side under a business-as-usual scenario. The Master Plan for sumption of water from surface water sources of 207 mil- the Citarum River Territory (DHV et al. 2012) indicates lion cubic meters for municipal consumers and 70 million that alternative surface water sources have to be identified cubic meters for industrial consumers in the year 2030. to the extent of approximately 10-15 cubic meters per sec- Under this scenario, 54% of water is still sourced from ond. Reuse of water from domestic and industrial sources groundwater in 2030. will contribute only 20%, or approximately two to three cubic meters per second, and alternative sources have to A second impact of improved water quality is that fish be found, such as pumping from the Saguling reservoir or stocks and production in rivers and lakes will be increased. interbasin transfer from the south of Bandung basin. How- Although it is difficult to estimate wild capture because of ever, realistically, groundwater will continue to be extracted, lack of data, the production information on farmed fish in although it is expected that its rate will reduce over time.17 the Citarum River is more accurate. In recent years, the volume of farmed fish has reduced by 5,000 metric tons Environment. In future years, a reduction in untreated per year.14 This is thought to have two main causes: dete- wastewater release and dumping of fecal and septage sludge rioration of overall water quality flowing into the Saguling into rivers will lead to a slower rate of sedimentation in the reservoir (leading to lower DO levels) and overuse of fish Citarum River. Less sediment means that less regular dredg- feed,15 which causes fish kills. This latter impact is ignored ing is needed. Sediment from erosion flowing into Saguling in this study because it is outside the control of sanitation is estimated at 1.3 million cubic meters per year (6 Ci’s Proj- interventions. It is conservatively estimated that by 2030, ect). However, untreated municipal wastewater is likely to 14 Based on interviews and data from the Fisheries Office. 15 During cooler weather spells, the change in water currents brings to the surface deoxygenated water caused by overuse of fish feed. This, in turn, leads to suffocation of the fish, causing mass fish kills, which are often reported in the local press. 16 Land subsidence is caused mainly by extracting water from deep aquifers, which are insufficiently replenished in the wet season. This phenomenon is prevalent where many industries, big malls, housing estates, and hotels extract excessive deep groundwater. Outside these areas, the groundwater basin still has potential to provide extra deep groundwater. 17 This is an assumption, but it is likely as the problem becomes more serious and politicized, and also, with falling groundwater levels, it becomes more expensive to extract. 14 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology account for only a small proportion of total sediment, com- These benefits do not fully reflect the impact on the quality pared with other land-based sources such as run-off from ag- of life of residents who come into regular contact with the ricultural land and due to deforestation. It is estimated that river, as well as biodiversity. The current state of contami- 10% of sediment is from municipal and industrial sources, nation of the Citarum River has a massive impact on both or approximately 0.13 million cubic meters per year.18 With aspects, but this is difficult to quantify—although attempts the cost of dredging estimated at Rp37,760 per ton of sedi- have been made (see results section). Additional field re- ment,19 the total annual cost averted is estimated. search would be necessary to verify this. A second major potential environmental benefit is the im- Reuse. The costs of wastewater reuse are estimated in sce- pact on the price of riverside land. At present, riverside land nario 6, and hence, this section describes how the bene- is not well developed because of the poor water quality and fits were estimated. There are various potential markets in flood risk. One of the reasons why riverside property can- products of sanitation and wastewater. These include sludge not be developed and used is that protection is needed for for fertilizer, biogas for energy, and recovered water for pro- the river from being further polluted. However, pollution ductive uses. In addition, by recovering these resources, occurs because wastewater management and regulation are the costs of safe disposal of the original waste products are not practiced. Under scenario 5, it is expected that the riv- averted. Table 2. 9 shows the parameters used. erside would be a place where inhabitants, small businesses, and tourist facilities could be situated. It is expected that the Two other economic benefits are expected. By reducing the government might allow riverside construction if the reasons solid waste disposal in water resources, the expensive dam- for the current rules (risk of water pollution from riverside age and management of solid waste in hydropower installa- properties) no longer apply because wastewater management tions are reduced. Furthermore, application of 3R (reduce, practices have improved. Hence, with significantly improved reuse, recycle) prevents waste from being deposed in land- river water quality, the price of land could increase for both fills, which results in averted landfill costs and savings, typi- land acquisition and final selling of developed properties. cally around 50% of the land required. Currently, agricultural land in the vicinity of Bandung aver- ages Rp107,000 per square meter. The current market sug- This study conducted a sensitivity analysis to assess the im- gests that land prices can climb to Rp713,000 per square pact of uncertainty in input parameters on the benefit-cost meter in highly desirable locations. This rate refers to land ratios (BCRs). It should be noted that the study assessed acquisition. There will be further price increases for property only more pessimistic scenarios—to explore whether eco- that has been developed.20 Inclusion of the latter margin will nomic return would fall below the breakeven point (BCR fully reflect the eventual benefits of developed land, includ- >1). Because of lack of evidence on ranges for the param- ing use for tourism. Improved river water quality is assumed eters, lower bounds selected were arbitrary, as follows: to account for 50% of the differential of Rp606,000 per • Disease rates and mortality were reduced to half the square meter between agricultural land value and prime real baseline value. estate before development. The resulting value increment of • Infrastructure remained functioning for 15 years in- Rp303,000 is multiplied by an estimate for the amount of stead of 20 years. land developed per year after 2030, which is 50 hectares per • Value of time gained was zero for all children and year, or 500,000 square meters.21 15% of GDP per capita for adults. 18 Estimated using 40 L of sediment per person per year, 10 million people in Bandung basin, of which 50% are not connected to proper sludge processing. 19 The cost of river dredging is Rp18,880 (US$2) per cubic meter. However, the cost of dredging the Saguling reservoir will be much more because it comes from deeper parts; hence, the costs estimated are conservative. The cost of disposal for a distance of 1 kilometer is assumed to double the dredging cost, hence an all-inclusive cost of Rp37,760. 20 Adjusted downward for the investment made by the property developer. 21 Fifty hectares (ha) per year converted to developed land is justified as follows. Currently, the estimated land area within 100 meters of the Citarum river is 2070 ha (excluding tributaries), distributed as follows: water resources (135 ha), housing and Industry (730 ha), cropland (irrigated ricefield and horticulture) (825 ha), and dry land (380 ha). In a seven-year period, 380 ha were converted from cropland to housing and industry, or roughly 50 ha per year. There is still considerable potential in the future for conversion of riverside land currently used as cropland or dry land, as well as land on the banks of the tributaries. www.wsp.org 15 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Methodology • Water supply costs (per cubic meter) were reduced • Value of undeveloped real estate was reduced to half by half, hence reducing the size of benefit from im- the baseline value. proving water quality. • Value of recycled resources was reduced to half the baseline value. TABLE 2.9: DATA SOURCES TO ESTIMATE REUSE VALUES IN SCENARIO 6 Resource Source Amount produced Source of value • Compost production from sludge from on-site and Compost value based On-site and community- Compost (from community-based sludge management systems (IPLT) on nutrient content based wastewater options, sludge) and • Wastewater volume x sludge per cubic meter wastewater (Rp400/kg) centralized wastewater organic solid based on yield for anaerobic centralized options options, and organic solid waste • Compost production from organic solid waste, assuming waste management 60% as organic waste present (Kool 2010) Biogas Centralized sewerage plus Wastewater volume x energy per cubic meter of wastewater, Energy value (Rp975/ organic solid waste as well as organic solid waste digestion KWh) Recoverable Increased recycling rate of Amount produced per household per year x number of Current price for solid waste plastic and paper households x % waste recycled recycled plastic and products paper (Rp2,000/kg)a Recovered water Industrial wastewater treated Water recovery per cubic meter of wastewater x total Cost of groundwater wastewater produced x percentage of industries practicing extraction (Rp600/m3) wastewater recovery Note: x indicates multiplication; KWh = kilowatt hour. a In September 2012, a mission to Banjarmasin was conducted, which showed the following prices for recovered waste products: plastic bottle = Rp2,400/kg; white plastic bottle = Rp3,400/kg; other plastic bottle = Rp1,800/kg; aqua bottles = Rp4,000/kg; cardboard = Rp1,100/kg; thick paper = Rp500/kg; glass bottle = Rp400/kg. 16 Economic Assessment of Interventions to Improve Water Quality III. Results 3.1 WATER QUALITY loss of biodiversity, foul smells, and black water. Nutrients Water quality deteriorates substantially while passing (nitrogen and phosphorus) are high, and measures should through the upper Citarum River basin. Figure 3.1 presents be taken to reduce these to minimize eutrophication and the average values for the different locations between 2001 subsequent algal blooms and mentioned effects such as fish- and 2009. In Bandung City, COD, BOD, and E. Coli con- kills. Coliform values exceed the limit by a large margin. centrations are alarmingly high. Indeed, all major param- eters require attention and most of the time do not comply Figure 3.2 presents the DO (mg/L) and COD (mg/L) val- with applicable standards. Organic pollutants (COD and ues throughout the whole Citarum River basin for 1990, BOD) are exceeding the limits typically by a factor of three 2000, and 2010 (Yusuf 2011). These cross-tabulations in- to ten. These high levels will result in oxygen depletion and dicate a clear inverse relationship between two parameters. anaerobic conditions of the water body, which results in High COD is associated with low DO, and vice versa. FIGURE 3.1: AVERAGE WATER QUALITY DATA AT INDICATED LOCATIONS (2001–2009) 6. Burujul (2001-2009) 5. Dayeuh Kolot (2001-2009) BOD 24.7 mg/l BOD 24.2 mg/l COD 59.7 mg/l COD 60.2 mg/l PO4 - P 0.7 mg/l - P PO4 - P 0.6 mg/l - P NH3 + N03,2 5.4 mg/I -N NH3 + N03,2 4.6 mg/I -N 6 5 Fec. CF 1.3 x 10 U/100ml Fec. CF 3.5 x 10 U/100ml 7. Nanjung (2001-2009) 4. Cijeruk (2001-2009) BOD 27.3 mg/l BOD 26.0 mg/l COD 70.1 mg/l COD 64.4 mg/l PO4 - P 0.8 mg/l - P PO4 - P 0.5 mg/l - P NH3 + N03,2 5.6 mg/I -N NH3 + N03,2 4.1 mg/I -N Fec. CF 1.3 x 106 U/100ml Fec. CF 1.4 x 107 U/100ml 1. Wangisagara (2001-2009) 2. Majalaya (2001-2009) 3. Sapan (2001-2009) BOD 2.9 mg/l BOD 7.7 mg/l BOD 27.8 mg/l COD 10.1 mg/l COD 19.7 mg/l COD 78.8 mg/l PO4 - P 0.2 mg/l - P PO4 - P 0.3 mg/l - P PO4 - P 0.6 mg/l - P NH3 + N03,2 0.8 mg/I -N NH3 + N03,2 1.8 mg/I -N NH3 + N03,2 4.2 mg/I -N 5 5 6 Fec. CF 5.8 x 10 U/100ml Fec. CF 5.3 x 10 U/100ml Fec. CF 1.5 x 10 U/100ml www.wsp.org 17 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.2: COD AND DO PROFILES IN THE CITARUM RIVER BASIN 160 2010 140 2000 COD (mg/L) 120 1990 100 80 60 40 20 Hulu Tengah Hillir 0 7 2010 DO (mg/L) 6 2000 5 1990 4 3 2 Kaskade 3 Waduk 1 0 aja ra a n uh uk lot nju n ng G TA DA g r a ha lay ur pa Na auli ru LIN M aga RA ye ijer ko AN ala p Cu Sa ng r GU CI Da C Da gis JU W nju SA an Ta W Source: Yusuf 2011. TABLE 3.1: CURRENT WATER DEMAND OF DOMESTIC-MUNICIPAL AND INDUSTRIAL USERS PER WATER SOURCE Source User Surface water Groundwater Total m3/d m3/s m3/d m3/s m3/d m3/s a b Domestic-municipal 125,500 1.45 827,100 9.57 952,600 11.0 c Industrial 111,300 1.29 101,900 1.18 213,200 2.5 Total 236,800 2.74 929,000 10.75 1,165,800 13.5d Note: m3/d = cubic meters per day; m3/s = cubic meter per second a Estimated based on urban water demand of population living in various types of urban area and served by PDAM. The actual water abstraction is about 30% higher as a result of losses in the distribution network. b Estimated based on population not covered by PDAM with water needs of 30 L/capita/d. c It is estimated that this is only a fraction of the actual water extracted by industries. Including illegal water intake by industries, this value might be higher by a factor of three. d Taking the previous two points in consideration, the water extracted from the system amounts to 16.5 m3/s. 3.2 SOURCES OF WATER POLLUTION Textile industries are known for discharge of a wide variety The major share of organic pollutants is from domestic- of pollutants if no sufficient treatment is available. Among municipal sources, whereas for heavy metals, it is from in- others, these are phenols and chromium. Studies refer to dustrial sources. Table 3.1 shows current water use between chromium levels exceeding the World Health Organiza- domestic-municipal and industrial users, by water source. tion’s recommended limit by a factor of three (Mott Mac- The data show that the major part of withdrawal for these Donald 2012). It should be noted that pollution loads for two users is for domestic-municipal use, at over 80%. There industries are based on formal water consumptions. It is is variation per city or district (not shown). Inside the city estimated that illegal water use (from deep wells) may be of Bandung, for instance, the industrial percentage is far a factor of three higher than reported values, and conse- lower than in Cimahi City. The major part of industrial quently, the pollution caused by industries might be higher. water use, on average, is 84% by textile industries. In this report, the official values are applied. 18 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.3: POLLUTANT DISCHARGE PER WATER USE (DOMESTIC-MUNICIPAL, INDUSTRY, AND AGRICULTURE) 600 Tons per day of COD, BOD, Nitrogen and Phosphate 500 400 300 200 100 0 COD BOD N P Domestic-Municipal Industry Agriculture 3.3 IMPACT OF INTERVENTIONS variation in rainfall, which results in different “dilution” If no interventions are implemented (i.e. scenario 2), pol- factors of more concentrated waste flows from domestic- lution will increase by approximately 50% from 2010 to municipal and industrial activities. High levels of COD 2030. Intervention will reduce pollution, but the impacts correspond with the dry season, and low levels, with the will vary by scenario. Reducing domestic and municipal rainy season. pollution (scenario 3) will have a larger impact than re- ducing industrial pollution (scenarios 4A and 4B). Inter- Based on the calculated water quality in each location and ventions in both pollutant sources (scenarios 5 and 6) can the proposed investment planning, the development of the bring pollution below the mandatory levels (BMA as shown water quality in Saguling was modeled over the coming 30 in table 2.7). Figures 3.4 to 3.7 show the impact of imple- years. In this model, the point at 20 years presents scenario menting interventions as defined in the different scenarios 2 (for no intervention scenario), shown in figure 3.8, and for discharge of, respectively, COD, BOD, nitrogen, and scenario 6 for intervention scenario, shown in figure 3.9. It phosphorus. can be seen that without intervention, all concentrations of pollutants will continue to increase to levels as high as 3 The additional pollutant removal from industrial wastewa- times the acceptable levels. If interventions are implement- ter in scenario 6 is minimal compared with that in scenario ed, the concentrations will initially continue to increase but 5. However, in scenario 6, approximately 120,000 m3/d less will eventually drop. After 20 years, the COD concentra- is extracted from the water source, which corresponds with tions are within the limits as expected and will, based on the total current amount of groundwater extraction. On the follow-up actions, continue to decrease. The dashed red total water balance as simulated by RIBASIM, this effect is, line shows the period for which quantified measures (in- again, minimum because in scenarios 1–5, 80% of indus- vestment as well as operations and maintenance costs) are trial water use is returned to the water system. Gains are described in this report. predominantly found in (1) less groundwater abstraction, which results in less subsidence, and (2) more reliable water The results show that implementation of both domestic- supply for industries. municipal and industrial interventions can lead to improve- ment in water quality in the Citarum River to the required The pollution discharge and water demands of domestic- values. It must be noted that in RIBASIM, no biodegra- municipal and industrial activities are assumed to be con- dation effects are included. To a large extent, this is valid, stant over a year, whereas agricultural pollution discharge because the time in the basin is limited. However, for all and water demands depend on the amount of area being parameters, additional reduction is expected, which will re- irrigated. Variations in concentrations are the result of sult in further improvement in water quality. www.wsp.org 19 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.4: COD DISCHARGE PER SCENARIO 800 700 Tons per day of COD 600 500 400 300 200 100 0 Scenario 1 Scenario 2 Scenario 3 Scenario 4A Scenario 4B Scenario 5 Scenario 6 Domestic-Municipal Industry Agriculture FIGURE 3.5: BOD DISCHARGE PER SCENARIO 400 350 Tons per day of BOD 300 250 200 150 100 50 0 Scenario 1 Scenario 2 Scenario 3 Scenario 4A Scenario 4B Scenario 5 Scenario 6 Domestic-Municipal Industry Agriculture FIGURE 3.6: NITROGEN DISCHARGE PER SCENARIO 180 Tons per day of Nitrogen 160 140 120 100 80 60 40 20 0 Scenario 1 Scenario 2 Scenario 3 Scenario 4A Scenario 4B Scenario 5 Scenario 6 Domestic-Municipal Industry Agriculture 20 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.7: PHOSPHOROUS DISCHARGE PER SCENARIO 35 30 Tons per day of Total 25 Phosporous 20 15 10 5 0 Scenario 1 Scenario 2 Scenario 3 Scenario 4A Scenario 4B Scenario 5 Scenario 6 Domestic-Municipal Industry Agriculture FIGURE 3.8: DEVELOPMENT OF POLLUTANTS AT SAGULING IF NO INTERVENTION TAKES PLACE 90 Concentration of COD, BOD, 80 70 N, P (mg/l) 60 COD 50 BOD 40 N 30 P 20 10 0 0 5 10 15 20 time (years from present) Note: Currently required water quality standard in the Citarum River (values class II): COD = 20; BOD = 3; P = 0.2. See table 2.7. FIGURE 3.9: DEVELOPMENT OF POLLUTANTS AT SAGULING IF INTERVENTIONS ARE IMPLEMENTED 60 Concentration of COD, BOD, 50 N, P (mg/l) 40 COD 30 BOD N 20 P 10 0 0 5 10 15 20 time (years from present) Note: Currently required water quality standard in the Citarum River (values class II): COD = 20; BOD = 3; P = 0.2. See table 2.7. www.wsp.org 21 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results 3.4 COSTS OF INTERVENTIONS ment with the application of 3R in all residential areas in The interventions over a 20-year period require Rp20 tril- the upper Citarum River basin. lion22 (US$2.11 billion). The types of domestic-municipal interventions applied depend on the typical features of the Figure 3.12 shows the required budget per type of industry area, with significant variations by district. Figure 3.10 and size of district (including the reuse option for larger shows how the total required investments over 20 years of industries). The total required investment (scenario 4A) approximately Rp14 trillion (US$1.48 billion) per type of is Rp1.1 trillion (US$117 million), but for big industries wastewater treatment system are divided to reach the stated only (scenario 4B), it is Rp0.47 trillion (US$50 million). levels of access and corresponding levels in water quality per In scenario 6, effluent reuse is promoted for big- (80%) and city and district. medium-sized (50%) industries, costing Rp1.57 trillion (US$166 million). The expected investments for municipal solid waste in- frastructure to prevent disposal of solid waste in the wa- Table 3.2 presents the overall costs per city and district and terways are approximately Rp0.75 trillion. This includes per user over different periods. In this analysis, short-term the costs for the collection, transfer, and transport system interventions reflect setting up governmental institutions as well as costs for landfill. Following the policy of the and constructing “simple” infrastructure (septic tanks, government of Indonesia, in which 3R is promoted, ad- community-based systems, and waste collection systems) ditional measures can be taken that aim to recover biogas and interventions to control pollution caused by big indus- and compost (from organic waste), as well as plastics and tries, which are considered easier to implement. More com- paper. In that case, investment cost will increase to ap- plex systems (off-site WWTPs and sewer systems and solid proximately Rp0.8 trillion. Figure 3.11 shows the devel- waste treatment and landfill facilities) and introduction of opment of costs (including operations and maintenance resource recovery systems are assumed to take place in the as well as benefits) for the municipal solid waste manage- mid- to long-term. FIGURE 3.10: INVESTMENTS PER TYPE OF WASTEWATER TREATMENT SYSTEM PER CITY AND DISTRICT 7,000 6,000 5,000 Rp billion 4,000 3,000 2,000 1,000 0 Kota Bandung Kab. Bandung Bandung Barat Cimahi Sumedang On-site systems Hybrid: Community-based systems Semi-centralized Centralized IPLT Note: IPLT = Instalasi Pengolahan Lumpur Tinja (sludge treatment installation). 22 This value represents the discounted costs. 22 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.11: DEVELOPMENT OF MUNICIPAL SOLID WASTE BUDGET UNDER 3R (REDUCE, REUSE, RECYCLE) 250,000 200,000 150,000 Million Rp per year 100,000 50,000 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -50,000 -100,000 -150,000 studies and design advocacy campaign and socialization site preparation construction and handing over operation and maintenance QHWRSHUDWLQJEHQHĺWV TABLE 3.2: INVESTMENT SCHEME OF UPPER CITARUM RIVER BASIN Interval (Rp billion) Grand total District or city Sector Short term Mid term Long term (Rp billion) Bandung District Domestic MSW 37 158 121 316 Domestic WWT 278 2,348 1,837 4,463 Industrial WWT 215 242 216 673 West Bandung District Domestic MSW 5 40 35 80 Domestic WWT 63 279 391 732 Industrial WWT 62 95 73 231 Bandung City Domestic MSW 19 131 112 262 Domestic WWT 641 2,272 3,718 6,631 Industrial WWT 37 114 29 180 Cimahi City Domestic MSW 8 34 25 67 Domestic WWT 233 675 729 1,638 Industrial WWT 68 114 54 236 Sumedang District Domestic MSW 6 15 9 30 Domestic WWT 25 67 57 149 Industrial WWT 86 38 122 246 Total 1,782 6,622 7,530 15,935 Note: Rp9,440 = US$1. MSW = municipal solid waste; WWT = wastewater treatment. www.wsp.org 23 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results FIGURE 3.12: BUDGET REQUIRED PER CONSUMPTION LEVEL AND DISTRICT 0-100 m³/d 100-500 m³/d Bandung District 500-1000 m³/d 1000-2000 m³/d >2000 m³/d 0-100 m³/d 100-500 m³/d West Bandung 500-1000 m³/d District 1000-2000 m³/d >2000 m³/d 0-100 m³/d 100-500 m³/d Bandung 500-1000 m³/d City 1000-2000 m³/d >2000 m³/d 0-100 m³/d 100-500 m³/d Cimahi 500-1000 m³/d City 1000-2000 m³/d >2000 m³/d 0-100 m³/d 100-500 m³/d Sumedang 500-1000 m³/d District 1000-2000 m³/d >2000 m³/d 0 50 100 150 200 250 300 Rp Billion 24 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results 3.5 ECONOMIC BENEFITS OF IMPROVED WATER QUALITY The total quantified economic benefits are estimated at greatest economic impact is basic sanitation and treatment Rp2.6 trillion per year (US$279 million/year). This equates of municipal wastewater (scenario 3), attributable to the with 0.89% of GDP for the Bandung area at 2011 prices.23 large volumes of waste and the significant associated health Forty-five percent of the quantified benefits are from health and time benefits. The economic value associated with this gains; 21% from time gains; 19% from reuse; 9% from re- intervention is Rp2 trillion (US$214 million). The exclu- duced treatment costs; and 6% from land value increases. sion of health impacts from scenario 4 partly caused the low- Table 3.3 provides the breakdowns. er value for treatment of industrial wastewater, whereas, in fact, there may be some health benefits to the population. In Table 3.4 shows the attribution of the economic gains to addition, the overall gains in scenario 5 are allocated based the different intervention breakdowns, and the sections fol- on the proportion of biochemical oxygen demand. Scenario lowing the table present a more detailed analysis of each of 6—including the value of resource reuse—adds a further the impacts outlined in table 3.4. The intervention with the Rp0.5 trillion (US$54 million) to the value of scenario 5. TABLE 3.3: OVERALL ECONOMIC BENEFITS OF INTERVENTIONS (SCENARIO 6) Impact Rp (billion) US$ (million) % Health 1,195 126.6 45 Welfare (access time) 546 57.8 21 Reduced treatment cost 225 23.8 9 Sedimentation 5 0.5 0 Land value 151 16.0 6 Reuse 507 53.7 19 Dam maintenance 1 0.1 0 Total 2,631 278.7 100 Note: Values in 2010 prices, for the year 2030. TABLE 3.4: OVERALL ANNUAL ECONOMIC BENEFITS, ALLOCATED ACROSS INTERVENTION SCENARIOS Impact (Rp billion) Scenario 3 Scenario 4 Scenario 5a Scenario 6 Totalb Health 1,195 0 1,195 0 1,195 Welfare (access time) 546 0 546 0 546 Reduced treatment cost 167 59 225 0 225 Sedimentation 3 1 5 0 5 Land value 107 45 151 0 151 Reuse 0 0 0 507 507 Dam maintenance 0 0 0 1 1 Total 2,018 105 2,123 508 2,631 Note: Values in 2010 prices, for the year 2030. a Scenarios 3 and 4 sum to scenario 5. Scenarios 3 and 4 are estimated from apportioning the combined benefits based on E. coli (for health benefits) and BOD (for water and land benefits). b Total=scenarios 5 and 6. 23 Using the average Indonesian GDP per capita of US$3,500 in 2011. www.wsp.org 25 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results The estimated health benefits are largely from reductions Access time for sanitation facilities is a hidden cost and has in fecal-oral diseases from improvements in both on-site been little researched. However, for new latrine users, con- excreta management and off-site wastewater and sewage venience and time savings are among the top five reasons management (table 3.5). The economic benefit of increas- for having a latrine in the home area (Winara et al. 2011). ing on-site sanitation access to 80% of the rural population Convenient latrine access is especially important for those and 90% of urban population is Rp651 billion (US$68.9 household members who spend most of the day at home: million). Improved off-site wastewater management, which for women caring for small children, for people with spe- has a smaller disease risk reduction but a higher targeted cial needs (sick people, people with a disability), and for population than the on-site option does, has an economic evening or nighttime use, especially for girls and women. benefit of Rp543 billion (US$57.4 million). Reduced dis- ESI in Indonesia asked household members how much ease due to irregular flooding events is considerably smaller time they spent accessing off-plot options while at home, at Rp3 billion (US$0.3 million). whether using shared facilities or practicing open defeca- tion. The results showed that household members (in an av- In addition, there are health impacts that were not quanti- erage household of five members) in the Tangerang District fied in this study. There exists a considerable international used as much as 115 minutes per day (Winara et al. 2011). literature on the health impacts of consuming fish that are Translated to the population of Bandung, for an additional raised in or exposed to polluted water from municipal and 32% of the population in 2030 having access to own latrine industrial discharges (Alabaster 1986), especially the impacts facility, this would mean an annual gain of Rp546 billion of mercury on pregnant women (NRC 2000; Rasmussen et (US$58 million). This estimate is relatively conservative be- al. 2005). Other health risks occur when fish are exposed cause it excludes travel needs for urination purposes, and to algal blooms and other heavy metal such as cadmium. time is valued at 30% of the GDP per capita, which, for the However, the health impacts for individuals consuming working population, is well below the income that would contaminated fish in the Citarum River basin could not be be earned with the time savings. However, given that it is estimated because of the lack of local data on key variables.24 not clear how the time savings would be used, the monetary It is expected that the socioeconomic costs of a single case value reflects more closely economic (welfare) rather than can be considerable because of the long-term and debilitat- expected financial gains. ing nature of associated diseases. On the other hand, it is expected that the number of cases would be relatively small. Table 3.6 shows the benefits from reduced water treat- ment cost. A large share of these benefits will accrue to the The population groups affected by these health impacts are PDAM and the users of PDAM water, who will pay a lower those without improved sanitation and those who are ex- cost for their piped water supply. Benefits are expected to be posed to river pollution such as fishermen and families who Rp139 billion (US$14.7 million) in cost savings to PDAM use surface water for domestic water needs. These popula- water users, whereas industries are expected to benefit Rp46 tion groups tend to be poor. The priority groups to target billion (US$4.9 million) annually. The value of farmed fish would be those whose current (unimproved) sanitation op- yields is expected to be in excess of Rp40 billion (US$4.2 tion leads to the greatest environmental pollution. million). TABLE 3.5: ANNUAL HEALTH BENEFITS, DISAGGREGATED BY TYPE Health impact Rp (billion) US$ (million) % On-site sanitation 651 68.9 54.4 Off-site wastewater management 542 57.4 45.4 Flooding events 3 0.3 0.2 Total 1,196 126.6 100.0 24 These include levels of contamination of fish, rates of toxic poisoning and birth defects, associated socioeconomic costs, and the links of the health impacts with actual consumption of contaminated fish. 26 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results TABLE 3.6: ANNUAL BENEFITS FROM REDUCED WATER TREATMENT COST, DISAGGREGATED BY TYPE Water impact Rp (billion) US$ (million) % Municipal water treatment 139 14.7 61.6 Industrial water treatment 46 4.9 20.6 Farmed fish yields 40 4.2 17.8 Total 225 23.8 100.0 TABLE 3.7: ANNUAL ENVIRONMENTAL BENEFITS DISAGGREGATED BY TYPE Environmental impact Rp (billion) US$ (million) % Sediment dredging 5 0.5 3.1 Land value 151 16.0 96.9 Total 156 16.5 100.0 A potential important economic benefit that was not quan- Higher-income groups can afford to modify their houses by tified in this study is the reduced land subsidence, which is raising the floor level or moving to a better location. How- closely linked to the excessive extraction of groundwater. ever, flooding of community areas still occurs frequently. Furthermore, the benefit from reduced flooding caused by less land subsidence and less sediment in the river might Table 3.7 shows the environmental benefits that were quan- need to be added as well. In the Citarum River basin, flood- tified in this study, with (a) the avoided sediment dredging ing is occurring with increasing frequency as land areas at Rp5 billion (US$0.5 million) per year and (b) increases bordering the Citarum River are subsiding at faster rates in land value based on annual land sales at Rp151 billion than the river itself. Land subsidence is a direct cause of (US$16 million). excessive groundwater extraction by industries, municipal- ity, farmers, and households. There is evidence of land sub- In addition to these quantified estimates, there are other sidence being significant (seven centimeters per year), and benefits not estimated in this study. One important ben- measurements have been made (Deltares and MLD 2011). efit is the quality of life of local residents of improved Currently, it is estimated that 1.1 million people live in a river water quality, which has been shown in international flood-prone area of the Citarum River. An Asian Develop- studies to be potentially significant. For example, a study ment Bank (2011) study for Java puts economic damages from the People’s Republic of China in the 1990s shows at US$800 million per year (damage costs to houses and the various cited uses of improved river water quality for crop impacts) (TA 7364). If allocated to the Citarum River residents, including the pleasures of walking (54%), re- basin using the proportion of population at risk, the study laxing and enjoying the scenery (45%), enjoying while resulted in an estimate of US$90 million flood damages in traveling (35%), letting children play in or around the Citarum. By putting a stop to groundwater extraction, or river (21%), swimming (20%), fishing (18%), boating or by replenishing groundwater with treated wastewater, land canoeing (17%), and watching wildlife (11%) (Day and subsidence would cease. However, groundwater will con- Mourato 1998). A recent World Bank paper reports an tinue to be used if an alternative is not available. The cur- economic valuation study conducted in Yunnan, the Peo- rent levels of river pollution are too high for this to be a ple’s Republic of China, which estimated the total value of realistic alternative. The river water has to be less polluted a real investment project to improve the water quality of and better distributed throughout a network, to provide an Lake Puzhehei by one grade level (Wang et al. 2011). The alternative. study conservatively estimated that, on average, a house- hold located in Qiubei County is willing to pay about Population groups affected are those living in low-lying areas, CNY30 (US$4.5) per month continuously for five years who tend to be poor and who lack options to move or adapt. for water quality improvement, equivalent roughly to 3% www.wsp.org 27 Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results of household income. Another study from India showed been included as a quantified benefit of industrial waste that the average willingness to pay to improve the water management. quality of the Pavana River (Pune City) was estimated at Rs17.6 (US$0.4) per family per month. If the infrastructure is expected to last for 40 years25 instead of 20 years, the BCRs increase to 3.4 (for scenarios 5+6). Table 3.8 shows the annual economic values associated with Taken separately, the BCR increases significantly for both reuse options, including compost production from organic scenario 5 (to a BCR of 3.1) and scenario 6 (to a BCR of solid waste processing and improved sludge management of 5.7) because of the important proportion of capital cost in Rp22 billion (US$2.3 million), biogas production of Rp224 annualized costs (table 3.9). billion (US$23.7 million), solid waste reuse of Rp236 bil- lion (US$25 million), and industrial wastewater reuse of Table 3.10 shows the impacts of changes in the input val- Rp26 billion. It is also expected that improved solid waste ues of key parameters. Only more pessimistic scenarios are management would avert the current costs of Rp1 billion explored, to assess how close the BCR comes to the thresh- (US$0.1 million) to evacuate the waste to avoid equipment old value of one, where net benefits become net costs. For damage in the hydroelectric facility. scenarios 3, 5, and 6, none of the changes in assumption result in a BCR of less than 1.44. Hence, the conclusions 3.6 COST-BENEFIT ASSESSMENT of interventions being economically viable are not changed The cost-benefit assessment compares the annualized costs when each assumption is examined in turn. The two most of the interventions with the annualized benefits of the critical variables are when the health benefits are reduced by interventions in the year 2030. Overall, implementing half and when the opportunity cost of time (that is, implicit scenarios 5 and 6 together produces a BCR of 2.0. This value of time) is reduced by half for adults and to a value means that there is an economic return of at least Rp2 for of zero for children. Even when these input values change, every rupiah invested. The actual value will be greater than the BCR for the overall intervention (scenarios 5 and 6) this because several benefits were omitted from the calcu- does not reduce beyond a value of 1.75 from a baseline of lations because of data limitations. Scenario 5 has a BCR 2.25. However, if several input values were simultaneously of 4.9, whereas the incremental BCR of adding scenario 6 changed, it is likely that the BCRs would reduce toward is 2.3. When scenario 5 is split into scenarios 3 and 4, it one and even cross the threshold. However, this was not appears that scenario 4 has a lower ratio, at 0.6. However, explored further because there are no data that indicate the this is because the main benefit—health gain—has not probability of multiple pessimistic values occurring. TABLE 3.8: ANNUAL RESOURCE REUSE BENEFITS AND AVERTED DAM MAINTENANCE, DISAGGREGATED BY TYPE Reuse benefits Rp (billion) US$ (million) % Compost production 22 2.3 4.2 Biogas production 224 23.7 44.1 Solid waste reuse 236 25.0 46.4 Wastewater reuse (industrial) 26 2.7 5.0 Dam maintenance 1 0.1 0.2 Total 508 53.8 100.0 25 Forty years was selected as an alternative period because sewer systems can last 40 years or considerably longer. This is balanced by probably shorter maximum lengths of life of wastewater treatment plants and landfills of 20 to 40 years. 28 Economic Assessment of Interventions to Improve Water Quality Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia | Results TABLE 3.9: BENEFIT-COST ESTIMATION Benefit Scenario 3 Scenario 4 Scenario 5 Scenario 6 Total (scenarios 5+6) Total annualized costs 888 172 1,060 105 1,164 a Investment cost 14,111 1,071 15,182 611 15,794 Annualized investment costs (20 years) 706 54 759 31 790 Annual recurrent costs 182 118 300 74 374 Total annual benefits 2,018 105 2,123 508 2,631 BCR 2.3 0.6 2.0 4.9 2.3 BCR with 40-year duration of capital stock 3.8 0.7 3.1 5.7 3.4 Note: All values in Rp billion in 2010 prices, for the year 2030. a Total investment costs have been discounted. TABLE 3.10: RESULTS OF THE SENSITIVITY ANALYSIS Parameter Scenario 3 Scenario 4 Scenario 5 Scenario 6 Total (scenarios 5+6) Baseline 2.27 0.61 2.00 4.86 2.26 Health costs halveda 1.60 0.61 1.44 4.86 1.75 b Capital stock 15 years 1.80 0.55 1.62 4.43 1.84 c Lower bound time value 1.64 0.61 1.47 4.86 1.78 Water supply costs reduced by half 2.19 0.47 1.92 4.86 2.18 Undeveloped real estate valued at half baseline 2.19 0.44 1.91 4.86 2.17 Recycled resources value reduced by half 2.27 0.61 2.00 2.56 2.05 a Disease rates and mortality were reduced to half the baseline value. b Infrastructure remained functioning for 15 years instead of 20 years. c Value of time gained was zero for all children and 15% of GDP per capita for adults. www.wsp.org 29 IV. Conclusion Water quality in most locations in the upper Citarum Riv- This study shows that there is a wide range of benefits as- er basin is poor, and pollution levels far exceed the maxi- sociated with cleaning up the Citarum River. These benefits mum allowable levels. Water quality has been deteriorat- are significant compared with the intervention costs, giv- ing in the past 20 years and is likely to continue to do so if ing very favorable BCRs. Benefit-cost ratios exceeding two no considerable effort is made to reverse it. Furthermore, means that the benefits of implementing sanitation facilities there is a clear deterioration in water quality on all pa- outweigh the total costs by more than a factor of two. Most rameters going from upstream areas to downstream areas. economic benefits are gained because of improving pub- Domestic-municipal activities produce at least two-thirds lic health. Resource reuse is an important component in of pollution, followed by industrial and agricultural-irri- making the river cleanup economically attractive. The range gation activities. of economic beneficiaries suggests that sufficient financing can be obtained for the river cleanup program. However, Improving the water quality in the upper Citarum River given the large investment costs, government and external basin (and with that of downstream areas as well) to levels partners play an important role in advocating for proposed in line with the standard values class II (BMA) is possible interventions and providing support for upfront financing but requires interventions in both domestic-municipal and needs. Involvement of private sector to facilitate resource industrial sectors. Focusing on one of these segments alone recovery should be promoted. will most probably not result in reaching the desired quality improvements. Corresponding costs for domestic-munic- Initial interventions should be based on what is achievable ipal and industrial wastewater interventions are approxi- and realistic in the short and medium terms. Preparation mately Rp14 trillion and Rp1.6 trillion, respectively, over of city sanitation strategies is key for making budgets avail- a period of 20 years. Further, an approximate investment able for wastewater and municipal solid waste budgets. For of Rp0.8 trillion for municipal solid waste infrastructure is industrial interventions, the focus should be on the bigger expected. industries to start with, after which the smaller industries should be addressed. 30 Economic Assessment of Interventions to Improve Water Quality References ADB (Asian Development Bank). 2011. Flood Management Day, B. and S. Mourato. 1998. “Willingness to Pay for in Selected River Basins. TA 7364. Water Quality Maintenance in Chinese Rivers.” CSERGE Working Paper GEC 98, Centre for Social and Economic ADB (Asian Development Bank). 2012. 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