Bitung Water Supply Project

Business Review
2 December 2022

© 2022 PT Nusantara Infrastructure Tbk.

 Executive Summary
The objective of the proposal :
 This Proposal is submitted for PT Nusantara Infrastructure
Tbk (NI) Board of Directors (BOD) approval to develop and
invest in a Non-Chemical (Eco Green) Water Treatment Plant
and its piping distribution project exclusively for supplying
treated/clean water to Non-Domestic Customers (Factories,
Ports & Bitung Economic Industrial Zone) in Bitung City,
North Sulawesi Province.
 Initial installation of the proposed WTP will have a total
capacity of 150 lps and to be built in two areas at WTP
Indofood for 50 lps and WTP Girian River for 100 lps. Based
on the RDS (Real Demand Survey), 28 Industries are willing
to take our water, and the other 14 Industries have not
committed to using the water due to their doubtful
experience with PDAM Bitung City. On top of the Industries,
there are 3 Ports and a Special Economic Zone of Industrial
Estate (KEK) in Bitung which will need high demand for
quality treated water. However, they were unwilling to share
their commitments due to their experience with PDAM
Bitung.
 Currently PDAM Bitung produces treated water with a total
capacity of 245 lps which is not sufficient for serving
Households (Domestic) and Industries & Ports (Non-
Domestic) in terms of quality, quantity, and continuity.
Therefore, our Potum-AWK is expected to support PDAM
© 2020 PT Potum Mundi Infranusantara
Bitung in increasing its quantity, quality & continuity of
clean water supply, especially for Industries with Non-
Chemical Technology Water Treatment Plants.
 Commercially Bitung WTP & Total Capex for 150 lps this
Non-Chemical WTP Bitung Project is Rp.93,375 Billion with
25 years term of contract and Tariff of Rp.10.000,- per M3.
Based on the Finacial Projection with positive NPV and good
IRR.
 Collection will be executed and the responsibility of PDAM
Bitung but the proceed of payments to be transferred to an
escrow account controlled by the bank through standing
instruction issued by POTUM AWK and PDAM Bitung.
 In implementing the non-chemical (Membran) WTP project,
POTUM has a consortium with AWK (PT Alam Wiratama
Kencana) which has the technology / know – how and
marketing / connection access to the project owners.
 The stakeholders of Bitung projects including the Mayor of
Bitung city, the directors of PDAM (Perumdam) and the
community in Bitung based on RDS (Real Demand Survey)
have shown their enthusiasm response to this water project
to be implemented as soon as possible.
2
 Bitung City Overview & Project Descriptions

Bitung City
 Location: North Sulawesi Province
 Total Area: 31,350 Ha – Bitung City
 Population (2020): 225,134 people (718 /km2)
 District with highest population: Matuari (17.99% or
1,192/km2)
 Gross Domestic Product (Pendapatan per kapita) : IDR
76.88 mio / year / capita
 PDAM/PERUMDAM : Dua saudara – Kota Bitung
 PDAM Service Coverage: 50.47%
 Average tariff/m3 non-domestic: IDR 13,339
 Average tariff/m3 domestic: IDR 7,351
 Installed capacity: 245 Lps
 NRW: 51,40%
 Walikota (Mayor Bitung City): Maurits Mantiri
 Director PDAM : Mr Alfred Salindeho

Current issues :
PDAM has not been able to produce and supply sufficient
treated water in terms of quantity, quality, & continuity to
both domestic & non-domestic customers.

© 2020 PT Potum Mundi Infranusantara 3

 Bitung City Overview & Project Descriptions

Why Potum AWK should invest in Bitung?

 We are developing to support PDAM Bitung by supplying non-domestic customers consisting of 3 ports
(International port, domestic port and fishery port) and 41 fishery industries, as well special economic zone
(Kawasan Ekonomi Khusus/KEK).
 Bitung has a strategic location because it is in the utmost eastern part of Indonesia mostly for fishery & marine
products. Moreover, Bitung is located on an International shipping lines, between Australia & far eastern Asia
(Philippines, Taiwan, China, Hongkong & Japan).
 It is informed that the government of Indonesia is focusing to develop Bitung City to become a business hub due to
its strategic location therefore special economic zone is located.
 To support industries business in Bitung City, high quality, quantity, and continuity of water supply is required.
Therefore, Potum AWK Consortium will take the opportunity in developing business growth in Bitung City in
particular and North Sulawesi in general by supplying quality and quantity of water continuously.

How Potum AWK will develop it?

 Potum AWK will join the tender process as project initiator.
 Potum AWK will develop WTP 150 lps, and distribution piping system

© 2020 PT Potum Mundi Infranusantara 4

 Bitung City Overview & Project Descriptions

SUMMARY PENDAPATAN
INVESTASI Volume Penjualan Air Tahun Pertama 2.247 000 M3
Tingkat Bunga (I) 12.00% %/Thn Pendapatan Penjualan tahun Pertama 22.469 Rp Juta
Discount Rate (r) 11.88% %/Thn Volume Penjualan Air Tahun Penuh 2.696 000 M3
Escalation Rate (e) 5 %/Thn Pendapatan Penjualan tahun Penuh 29.660 Rp Juta
Debt Equity Ratio ( DER ) 70% 30% Periode Kerjasama 25 Tahun
Total Pendapatan Periode Kerjama 1.406.045 Rp Juta
Base Cost at Year 2022
Tahun Investasi 2023 RETURN
Tahun Pertama Operasi 2024 150 lps Discount Factor 11.88% %
Tahun Operasional Penuh 2024 150 lps IRR on Project 25.4 %
Periode Konstruksi & Komersial 1 Tahun Net Present Value Project 114.310 Rp Juta
Pekerjaan Civil 61.519 Rp Juta Payback Period 6 Tahun
Upfront + Commitment Fee 1.564 Rp Juta IRR on Equity 38.7 %
Persiapan, Study, Supervisi, Kontigensi 11.401 Rp Juta Net Present Value Equity 783.293 Rp Juta
Tanah 1.818 Rp Juta DSCR minimum 1.5 x
Pajak 7.474 Rp Juta Average DCR 1.9 x
Bunga Masa Konsutruksi 7.120 Rp Juta
DED 1.393 Rp Juta
Total Biaya Investasi 92.289 Rp Juta
Equity (30%) Rp 27.687 Bio
HARGA AIR
Harga Air Awal Operasi Tahun 2023 10.000 Rp/M3
Loan (70%) Rp 64.403 Bio
Periode Kenaikan Harga Air setiap
% Kenaikan Harga Air
3.0 Tahun
10.0 %
Total Project Rp 92.3 Bio
Estimasi OPEX Tahun 2023 2.154 Rp/M3

 This project is considered viable in terms of its Project IRR of 25.4% and Equity IRR of 38.7%
Note : The real demand survey has not included the data from the three ports due to reluctancy of the
port authorities to disclose their data which is believed to have requiring big volume of water.
© 2020 PT Potum Mundi Infranusantara 5
CAPEX

*note : No. 6 & 7 digabung

© 2020 PT Potum Mundi Infranusantara 6

 Conclusion & Recommendation

Conclusion :
 The project has a good return and it is a profitable WTP & Distribution project to supply high-
quality treated water to Non-Domestic Customers (Industries, Ports, etc).
 This Bitung WTP Project will increase Potum Group Revenues, a part of its water projects
portfolio.
 Promoting Non-Chemical Eco-Green WTP project through the Port of Bitung which is the
center of exporting fresh fish overseas.
 Strong support from the Stakeholders; Mayor of Bitung, PDAM Bitung, Governor of North
Sulawesi, and most likely will also get support from the Central Government – Ministry
Forestration and Environment for supporting Eco Green campaign.

Recommendation :
 Approval to proceed with the Bitung Project Proposal is strongly recommended.

© 2020 PT Potum Mundi Infranusantara 7