increased several times and, according to the international benchmarking network for water and sanitation utilities, reached us$0.77/m3. as in many other countries, those not connected to water supply networks pay the most for water. a survey in north jakarta found the price of water in the early 1990s was $2.62/m3 for vendor customers, $1.26/m3 for standpipe customers, $1.08/m3 for household resales customers, and only $0.18/m3 for connected households. investment and financing the water and sanitation sector is not given a high priority at the national or sub-national level, partly because of competing priorities from other sectors such as health and education. few local governments use their own resources to implement water and sanitation activities and when given funding through open-menu infrastructure programs, local governments and communities rarely choose water and sanitation as the main activity. most funding for the sector comes from the national level and the level of sub-national funding is often hidden as it occurs in several government departments. funding estimates for the sector in 2008 were around one to two per cent of local government budgets. public investment total infrastructure spending in indonesia was rp 55 trillion in 2005 (us$5.7 billion). these expenditures were financed mainly by the local (rp 23 trillion) and central government (also rp 23 trillion), followed by the provincial government (rp 9 trillion). infrastructure investment stood at 10% of total government expenditures, as shown in the table below: central province district total infrastructure 23 9 23 55 total 357 38 141 536 share of infrastructure 6.4% 23.7% 16.3% 10.3% source: calculations based on . all figures are in current trillion rupiah for 2005. while it is not entirely clear how much of this sum has been invested in water supply and sanitation, the adb estimates that only us$124m per year (average of 2004-2005) from the regular national budget were allocated to water supply and sanitation. since decentralization in the year 2001, local governments have typically invested less than 2% of their annual budgets on water supply, even less on sanitation and almost nothing on improving hygiene practices. assuming that 2% of local government (provincial and district) budgets are spent on water and sanitation, local government investments in water and sanitation were rp 3.6 trillion or us$375m or about three times higher than the us$124m financed through the central budget. total investments thus can be very tentatively estimated at about us$500m, or slightly more than what has been estimated by one source as the required investments to meet the mdgs, or us$450 million per year at about us$2 per capita and year these investments still remain far lower than investments in water and sanitation in other middle-income countries. the economic crisis of the late 1990s had severely curtailed investment in infrastructure. central government spending on development dropped from us$14 billion in 1994 to us$5 billion in 2002, within which the share of infrastructure spending further declined from 57% to 30% over the same period. moreover, according to the world bank, poor institutional and regulatory frameworks and rampant corruption in the infrastructure sector, which were prevalent even before the crisis, continued without serious sector reform efforts by the government until today. utility financing loan financing to pdams faces numerous challenges. for example, the ministry of finance requires its loans to be channeled through regional governments whose legislatures have to pledge future central government transfers as collateral. since regional legislatures are reluctant to do so, central government lending to utilities is not likely to re-emerge even after the issue of old debt would be settled. two efforts at promoting the issuing of corporate bonds by creditworthy utilities, one supported by partial guarantees by usaid and the other by kfw, have failed "because of the risk-averse culture which is so pervasive in indonesian central and regional governments", according to a usaid report. under a 2009 presidential decree, however, state banks can provide partial credit guarantees of 70% of loans to creditworthy pdams plus an interest subsidy. as for direct lending by the ministry of finance, regional governments have to provide partial guarantees for these loans, which they are reluctant to provide. thus pdams are likely to be limited in their access to finance largely to grants, which are scarce. in 2009 there were three primary sources of national government grant funding for water supply: matching grants (hibah) to regional governments. water supply is expected to receive rp 3 trillion of hibah from the national budget between 2010 and 2014, complemented by funds from external donors. a special allocations fund (dak), which accounted for 2.4% of the national budget in 2009, of which about 5% were directed towards the water supply sector, especially village community-based systems. grants by the ministry of public works for raw water supply and treatment. microfinance bank negara indonesia provides small loans to community-based organizations (cbos) engaged in water supply in java. the pilot project is part of a national program called kredit usaha rakyat that provides loans for community and small scale enterprises. the world bank's water and sanitation program in collaboration with the ausaid-funded indonesia infrastructure initiative (indii), the ministry of public works, and directorate of public private partnership development of the national development planning agency provide technical assistance to the cbos. external cooperation external support to the water and sanitation sector in indonesia is provided through multilateral (world bank, asian development bank and un) as well as bilateral cooperation with individual countries. most external partners have focused their cooperation on rural areas, or work exclusively there. most of the support for urban areas comes from japan, the netherlands and the united states. multilateral cooperation the community water services and health project by the asian development bank, approved in 2005, aimed at providing clean water and sanitation facilities to about 1,500 communities of rural indonesia, including tsunami-affected areas. the directorate general of communicable disease control and environmental health of the ministry of health is the executing agency of the project. unicef supports the indonesian government in developing and implementing strategies that improve drinking water and sanitation conditions across the country. unicef also assists the government in improving relevant planning mechanisms, monitoring systems and databases. the world bank's third water supply and sanitation for low income communities project, approved in 2006, aims to increase the number of low-income rural and peri-urban populations accessing improved water and sanitation facilities and practicing improved hygiene behaviors. the project supports community driven development (cdd) planning and management of water, sanitation and hygiene improvement programs, builds stakeholder commitment and aims to expand the capacity of central, provincial and district government agencies. it provides participating communities with a menu of technical options for rural water supply and public sanitation infrastructure. the project is implemented by the ministry of health. the world bank's water and sanitation program (wsp) focuses particularly on knowledge management and strategy development in sanitation. between 2006 and 2010 wsp, with funding from sweden and the netherlands, generated increased political commitment for sanitation and increased the national government's capacity for sanitation planning through the "indonesia sanitation sector development program" (issdp). this led to a coherent policy framework for urban sanitation, under which substantial investments are being undertaken from 2010 onwards. bilateral cooperation australia has supported efforts to improve rural water supply and sanitation in indonesia, particularly eastern indonesia, for almost 30 years. ausaid's support is in the form of grants for technical assistance to the water supply and sanitation policy formulation and action planning project (waspol) of the world bank's water and sanitation program (wsp), as well as to the second water and sanitation for low-income communities program (wslic2), also funded mainly by the world bank. a 2009 evaluation by the australian government concluded that australian aid to the water sector "has been strategic, flexible and appropriate" and has assisted in "providing sustainable piped-water supply to some 4.6 million people and has dramatically improved sector coordination at national and sub national levels." the evaluation also noted that there has been much less focus on sanitation, although the government has begun to replicate the innovative community-led total sanitation approach in an attempt to achieve open defecation free (odf) communities. the report also noted that a "national working group established through waspola has strengthened government capacity in research, communications, marketing and public relations", but that these approaches are less well integrated at the sub-national level. it also notes that "despite its relatively low funding for this sector compared to that of some other donors and multilateral agencies, australia is seen as a lead donor." it also notes that ausaid-supported technical assistance has "relied heavily on external consultants and have not built enough technical capacity into government to ensure sustainability." female participation at the local level was mandatory in the project, but once project handover occurred women's participation often dropped. the community-managed approach "enhanced transparency and accountability", but districts are not using this model in their own projects due to lack of capacity and political will. care canada and the canadian international development agency (cida) support the care-sulawesi rural community development project (srcd). care uses the "community management approach", by which communities are heavily involved right from the very beginning, from the design through construction, implementation, operation and maintenance. the approach works by establishing a village water committee and a series of sub-committees: for example, sanitation, construction and finance. the village itself decides how it will raise the amount of money needed for its contribution to the project. this is usually done by monthly levy whereby each family contributes a small amount of money over the course of four to six months. the village construction committee also organizes the labour to install the system. all the labour is done manually without the use of heavy machinery, which means a low environmental impact and lower cost. with water close at hand, most households are also building their own simple latrines. in november 1994, jbic provided a loan for the "denpasar sewerage development project" (phase i, october 2004-december 2008) supporting the construction of sewer pipes, pump stations, and wastewater treatment facilities in districts where the urgency for development of a sewerage system was particularly high (the denpasar, sanur, legian and seminyak districts, covering 1,145 ha). jbic also provided indirect support in 2007 for the establishment of a model for the provision of a sewerage service by local government. the project covers 1,145 ha of urgently required areas of sewerage system identified in the denpasar sewerage development master plan (dsdmp) prepared by jica in 1993. the government of bali desired to establish a new organization for management and operation of the sewerage system including wastewater treatment plant. and then, governor of bali province, mayor of denpasar and regent of badung signed joint agreement regarding the establishment of operation body named wastewater management body (upt pal). however, the operation body was later decided to be established as public service organization of wastewater management (blupal) instead of bpal based on the government regulation on financial management of public service agency (blu) promulgated in 2005. and finally, blupal was established in december 2006. though dsdp-i completed the construction in august 2008, some urgently required areas of sewerage development in denpasar and kuta identified in the master plan were not covered by dsdp-i. some communities in kuta and sanur also strongly requested to develop sewerage system immediately. furthermore, blupal intended to start tariff collection by the end of 2009, since revenue from service areas of the project would contribute to improve blupal's financial situation. in response to the above conditions, jica conducted special assistance for project implementation (sapi) to start sewerage system expansion works of dsdp-ii and to suggest and support the tariff system and financial plan of blupal. the public dutch water company water supply company drenthe (wmd) and dutch development aid support various water companies in eastern indonesia. joint venture contracts have been concluded with four companies (ambon, bacau (maluku), biak, sorong (irian jaya/papua). negotiations are going on with seven other companies in north sulawesi, maluku and papua. the wmd has reserved 3.4 million euros for the project. since early 2005 usaid has provided technical assistance to water utilities (pdams) in java and sumatra on issues related to full cost recovery tariffs and improved technical operation, with the objective of improving their creditworthiness and ability to borrow to meet network expansion needs. usaid