WB may not disburse last trance of Watsal

Muninggar Sri Saraswati The Jakarta Post Jakarta

The World Bank may not disburse the third and last trance of the Water Resources Sector Adjustment Loan (Watsal) worth US$150 million to Indonesia if the controversial water resources bill fails to meet a 1999 commitment on water resource policy reform.

Guy Alaerts, the bank's senior water resources specialist, said on Tuesday that the bank was confused with the development of the water bill deliberation.

"We must discuss it with the government whether to continue the programs (or not). If there is different thought with the policy, the funding may not be proceeded," said Alaerts.

The House of Representatives (DPR) decided to put the bill's deliberation on hold due to strong reactions from the public concerned with moves to privatize the water sector.

The bill had also triggered debates on whether water was a commodity or a human right.

According to Alaerts, the water resources bill was "absolutely not in line with the loan agreement, the on-going projects nor the grant agreement."

"Therefore, the investment would be useless because there may not be interests or benefits," he said.

Confronted with severe economic crisis, the government agreed in 1999 to reform the country's legislation on water to allow the privatization of the water sector, in exchange for loans worth $300 million. The first and second trances were disbursed in June 1999 and 2001 respectively, totaling US$150 million.

Many analysts and non-governmental organizations have expressed opposition to the current draft of the water resource bill as it considers water purely as an economic commodity, threatening people with uncertainty over access to safe and affordable water.

The World Bank sponsored a similar program in Latin American country Bolivia 1999 but the move has led to frequent protests over access to safe and affordable water.

Alaerts claimed that the bank and other donors had invested in Indonesia some $1 billion for various projects, including Watsal, in the reform of water resource management.

"If the Indonesian government and the House do not want to continue it, it would create problems not only to Indonesia, but also to donors," Alaerts warned.

He said the bank and other donors had made initial discussion with the government about the issue.

However, Alaerts rejected allegations that the investment by the bank for water resources policies in Indonesia was a vehicle for multinational water companies to enter the country.

"Some 95 percent of all funding from the World Bank has nothing to do with private companies. We're not interested to help them... no benefit," he said, adding that the World Bank "only hopes for more equitable management of water resources so people would be assured for access to water in the future."

Legislator Amri Husni Siregar of the Reform faction said that the House would not be hasty in deliberating the bill.

"We have no target. We only consider to make a legislation that is good and accepted by the public," he asserted, saying that the House was scheduled to resume the deliberation later this month.

Amri, who is also a member of the House's working committee for the bill's deliberation, said that the House would give time for the public to scrutinize the bill.

Simon L. Himawan, the director of water resources and irrigation with the State Ministry of National Development Planning Agency (Bappenas), said the case had become the government's concern.

"(If they stop the disbursement), Minister Boediono will have a headache as it will affect the state financial balance," he commented, suggesting the bank to understand that the bill deliberation was beyond the government's authority as it was in the hands of the House.