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Australian – Indonesian knowledge exchange for economic regulation and water sector reform

Author: Bronwyn Powell, WASH and Water Specialist, IWC Senior Project Manager

Through 2025 International Water Centre Griffith University had the pleasure of facilitating knowledge exchange and learning between Australia and Indonesia on the topics of water sector economic regulation and transformation. As Indonesia’s economy grows quickly, the desire to provide safe water and sanitation for all of it’s people is getting stronger. The sector is currently typified by having many small and often financially unsustainable utilities, with reducing service areas and associated income.

Indonesia is facing some similar challenges to what Australia has faced in aspects of the water and wastewater management including:  a lack of financial sustainability amongst utilities, water scarcity in some areas, rapidly growing urban population and a need for improved regulatory oversight over service provision. Improving economic regulation was an important step in how Australia addressed these water service challenges. Australia’s reform journey provides valuable lessons in governance, sustainability, and regulatory design.

The timing of the knowledge exchange was well aligned with national priorities, which include:

1) Establishment of an economic regulator for water for the first time.  Four national ministries have signed an agreement to establish an economic regulator for water at the 2024 World Water Forum . How this occurs, at what level of government, and the roles and responsibilities of different entities is in discussion.

2) Ambitious targets for water coverage, in line with The Golden Indonesia 2045 Vision (Indonesia Emas 2045): Indonesia has an intention to reach 100% safe water coverage by 2045, and to reach 100%  urban piped coverage by 2030 (up from 38% in 2025).

3) Indonesia aims to join the Organisation for Economic Co-operation and Development (OECD) in the coming decade. Accession to OECD requires certain standards of public service provision be met, including regulation of the water and wastewater sector

The knowledge exchange consisted of an Australian Awards Indonesia Short Course, Water Utility Regulatory Approaches, for 25 participants from national ministries, utilities, associations, provincial government and associations. It also included a Masterclass for 8 national government Executive Level participants, including three Directors from the Ministry of Public Works and Housing, Ministry of Planning (BAPPENAS) and Ministry of Home Affairs. A policy brief was prepared for BAPPENAS.

Through the course the participants gained an in-depth understanding of:

  • How major water reform in Australia took time, and was staged over many decades, aided by specifically established entities at state and national levels (e.g. Queensland Water Commission, National Water Commission);
  • The setup and role of independent regulatory commissions in Australia to set tariff structures and monitor utility performance;
  • The separation and delineation of policy making, regulatory and service delivery functions;
  • Service efficiencies and standards of utilities, and building capacity to ensure compliance with standards;
  • How economies of scale were achieved through consolidation of local councils in some areas, and of utilities in Southeast Queensland (SEQ);
  • How the separation of bulk and retail utilities, and alignment of asset ownership and service delivery responsibilities to this structure has had benefits in clarifying roles and providing efficiencies in SEQ.

Numerous knowledgeable and experienced colleagues from across Southeast Queensland and New South Wales shared their expertise with the senior leaders and course participants. Organisations involved included: Queensland Competition Authority,  seqwater, Sutton and Koala Farms, Queensland Department for Regional Development, Manufacturing and Water, Redland City Council, Urban Utilities, Sydney Water, Altogether Group, Australian Water Association, World Bank Group, Independent Pricing and Regulatory Tribunal (NSW), Aurecon, Queensland Water Directorate, Unitywater, SunWater. IWC is very grateful to all of them for their time and generosity, and particularly to seqwater and Sydney Water for hosting field visits.

The core technical project team included : Course Leader and Designer Bronwyn Powell, Co-lead and Co-designer A/Prof. Brian McIntosh, Executive Facilitator Daniel Lambert, Water Regulatory Specialist Matt Bradbury and Course Coordinator Xue Wen Lee.