Cleaning the Citarum could boost investment returns

Cited as one of the 10 worst polluted places on earth, the Citarum River remains a significant yet toxic source of water for both the West Java capital of Bandung and Greater Jakarta, home to nearly 35 million people.

While work to clean up the river is ongoing, a new report from the World Bank’s Water and Sanitation Program (WSP) and the Asian Development Bank (ADB) could boost those efforts, showing that long-term investments could improve the river’s water quality and bring significant returns for investors.

The technical paper, Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, presents an economic assessment of interventions to improve the river’s water quality.

It found that by investing in improved domestic sanitation, municipal wastewater, industrial wastewater management, solid waste management and resource reuse over 20 years, the annual benefits of US$280 million (Rp 3.4 trillion) outweighed the annual equivalent costs of $123 million (Rp 1.5 trillion).

“Although we’ve long known the benefits of investing in water and sanitation, what’s surprising here is the significance of the return on investment when it comes to cleaning up the Citarum River,” Guy Hutton, senior economist with the World Bank’s WSP, said recently.

The report — written by a consortium led by Royal Haskoning DHV and Guy Hutton — highlights that with over two-thirds of water pollution from domestic and municipal activities, economic and financial benefits associated with improved sanitation and wastewater management in this river basin would be significant: a Rp 2.3 economic return for each rupiah spent, $226 million (Rp 2.7 trillion) annually from improved water quality and $54 million (Rp 659 billion) annually from the recycling of wastewater and solid waste.

The cost of interventions modeled from 2010 to 2030 amounts to $1.67 billion (Rp 20.3 trillion) for infrastructure and $40 million (Rp 488 billion) per year for operation and maintenance, giving a total annual value of $129 million (Rp 1.5 trillion per year).