14 March 2014

Industry briefing ahead of Request for Tender

Prospective bidders are invited to attend a briefing on the concept and indicative scope of services for a managing contractor (MC) to complement DFAT's existing programme of support to the Government of Indonesia's National Program for Community Empowerment (PNPM). The MC will work alongside the PNPM Support Facility (PSF), a World Bank managed multi-donor trust fund to which DFAT also contributes. The proposed value of the investment is $50 million over three years, with a two year extension subject to program performance. Release of the RFT is currently scheduled for April 2014.

Wednesday 19 March, 3pm

Marquee, 17th Floor Cyber 2

Jl. HR Rasuna Said Kav. C15-16, Jakarta 12940, INDONESIA

Background

Indonesia's National Program for Community Empowerment (PNPM) is the Government of Indonesia's (GOI) flagship program for poverty reduction. In 2007, President Yudhoyono launched the national scale up of the program, and requested donor support to manage and implement the expanded program. The PNPM Support Facility, a World Bank-managed Multi Donor Trust Fund, was established to this end. The Australian Government has supported PNPM through the PSF since 2010, to a value of AUD 186 million to date.

Today, PNPM reaches 73,000 communities across Indonesia, benefiting close to 40 million people. PNPM provides block grants to communities for social and economic infrastructure. Community decision-making and management, supported by technical facilitation and systems for transparency, monitoring and oversight, produce local investments that are productive and more efficient and effective than through other forms of planning, resulting in improved local and household economies. Initially funded primarily from international loans, more than 75 per cent of PNPM's budget now comes from national sources. By 2015, 100 per cent of PNPM's $1.7 billion in annual financing will originate entirely in the national budget.

Managing Contractor

At the request of GoI, DFAT plans to establish a new Managing Contractor (MC)-administered facility to support and complement the work of the PSF. The proposed value of the investment is $50 million over three years, with a two year extension subject to program performance. The MC will work with the PSF under the direction of a Joint Management Committee, chaired by Bappenas.

Future considerations

PNPM is now halfway through a 10 year agenda, with the first phase consisting of the national scale-up and placement into the budget and the second phase mainstreaming PNPM into normal government operations. In late 2013, the Indonesian Parliament passed a national law on village development that puts PNPM on a solid legal footing that will extend past the end of the current administration.

The new Village Law marks a significant change to PNPM and the rationale for continued Australian support. In particular, the total budget allocated to community block grants in principle rises to 10 per cent of the total development budget, some AUD10-12 billion per year. The Law also unifies village planning and makes use of village plans binding on all government ministries. The next three to five years of Australian support will assist GOI navigate this transitional phase from PNPM to the Village Law.

The following public information may be of interest to prospective bidders:

• PNPM Road Map [external link] (Bahasa Indonesia, English translation can be provided on request)
• DFAT's 2009 Proposed Strategy for Support to PNPM and 2013 Proposal for Scale up and extension (PNPM)