The Government Gives Guarantee Of Drinking Water Supply Projects In Bogor And Palembang

Photo: Doc. Ministry of Finance

The Ministry of Finance (Kemenkeu) is said to have submitted three central government guarantee letters to support the provision of investment credit for drinking water supply in Bogor City and Pelembang.

The facility was given directly to PT Air Drinking Giri Wins (Perseroda), Perumda Tirta Pakuan Bogor City, and Perumda Tirta Musi Palembang.

The Director General of Financing and Risk Management of the Ministry of Finance, Suminto, said that this step is the government's commitment to providing basic services for the community.

drinking water is one of the basic needs of the population that is sought to be available in sufficient quantities, feasible, safe, even, and of good quality. Therefore, the provision of drinking water for the community is a shared responsibility," he said as reported by the official website, Thursday, February 23.

According to Suminto, the government targets that by 2024 there will be access to drinking piping for 10 million house connections. The target is stated in the 2020-2024 PERIOD National Medium Term Development Plan (RPJMN). Thus, the goal of achieving access to drinking water worth 100 percent next year can be achieved.

"The government has rolled out a guarantee and subsidy program to be given to banks that have signed credit agreement documents before December 31, 2022," he said.

Through the issuance of this guarantee letter, the risk of defaulting on a transfer loan from PDAM as a secure debtor (assisted party) to the Ministry of Finance as a guarantor.

This scheme itself stipulates that the guarantor will bear 70 percent of the lack of payment of principal loan obligations in the event that the debtor does not pay due obligations according to the credit agreement.

Even though with this guarantee there is a risk transfer, mitigation to keep guarantees from being claimed to be a shared responsibility between the guarantor, guaranteed, and the guarantee recipient. On that basis, the Guarantee and interest subsidy programs in the context of accelerating the provision of drinking water must be managed properly, prudently, transparently and accountably," said Suminto.