USAID IUWASH PLUS and PDAM Kota Salatiga conducted an online discussion on the PDAM’s financial projections on April 15 2020. This discussion is a part of the series of activities of the 2020-2024 PDAM’s business plan development.
The Director of PDAM Kota Salatiga, Mr. Samino, the PDAM business plan team, and the representative for CV Indera Cipta—a consultant that USAID IUWASH PLUS has recruited to assist PDAM Kota Salatiga developing the business plan, participated in the discussion.
During the discussion, the participants agreed on the financial projection assumptions. Those assumptions included projection on the customer acquisition for 2020-204, inflation rate; tariff adjustment plan; financial sources for five years program and investment, and cost increase.
The projection of the PDAM’s customer acquisition for 2020-2014 is 6,000 house connections or equivalent with 1,200 house connections per year. However, the target of 1,200 new customers might not be achieved in 2020 due to the Covid-19 crisis, Thus, this target will be revisited based on the analysis of the customer increase in March and April 2020.
The agreed inflation rate 3.5 percent, which is calculated based on the historical data of Salatiga city’s inflation rate in the last five years. The PDAM plans to adjust its tariff by 10 percent increase in 2021 and 2023. The tariff adjustment was initially planned to occur in 2020. Yet, the plan moves to 2021 due to the Covid-19 crisis.
In addition, it is expected that Rp66.66 billion is secured from APBN, APBD, and PDAM’s internal cash to finance the PDAM five year programs and investments. The PDAM also plans to use its internal cash to finance its five year program and investment to anticipate if the funding from APBN and APBD are not realized
During the discussion, the participants also agree that the cost is subject to escalation of the annual inflation rate of 3.5 percent.
The Director of PDAM Kota Salatiga, Mr. Samino, explaines that “the financial projection of the PDAMs business plan for the period of 2020-2024 will be used a reference for the company to develop its annual work and budget plan. “Thanks to USAID IUWASH PLUS for assisting the PDAM in developing the business plan despite the Covid-19 crisis,” said the Director.
After this discussion, the financial projections will be revised based on the assumptions agreed in the discussion and sent to PDAM Salatiga to be reviewed by the Director and the team; the financial projections will become the substance of Chapter 9 as the final chapter of the business plan. A document that covers all of the discussion results will be officially submitted to PDAM for final review.
