AEI, through its subsidiary PT Adaro Tirta Mandiri, which was founded in 2012, focuses on water management and processing business sector, specifically managing water resulting from mining activities and in collaboration with the government through the Regional Drinking Water Company (PDAM/PERUMDA) in an effort to accelerate access to drinking water service to communities. The concept of increasing access to drinking water services for the community through projects to increase production capacity is by building Water Treatment Plants (IPA/WTP) and through projects attempting to reduce water loss rates (NRW Non Revenue Water).
Clean Water Treatment
Currently, ATM’s subsidiaries in water treatment business collaborate with several regional drinking water public enterprises (Perumda) have obtained the concessions to build, operate and transfer water treatment facilities with a period of 17-25 years. In these projects, ATM’s subsidiaries have been serving clean water distribution to households, social establishments, as well as commercial and industrial establishments across various Indonesian cities. This concession generates revenues calculated based on the minimum clean water volume taken by the water perumda multiplied by the contractual rate.
Up to the end of 2023, the total concessions capacity of AEI’s subsidiaries for operating and maintaining clean drinking water with several perumda in Indonesia amounted to 2,382 liters per second (lps) out of which 1,482 lps had commenced operations while the remaining 900 lps were still in the development stage.
In addition to supporting the state water companies, through PT Adaro Tirta Sarana (ATS), Adaro Water also supplies clean water to the North Kalimantan industrial park. Until the end of 2023, ATS had supplied a total capacity of 12 lps to the industrial park, which will be followed by additional of 100 lps in year 2024.
Management of Mud and Mine Water
ATM and its subsidiaries provide mine mud and mine water treatment operations to support AEI’s subsidiaries in the mining business. Mine mud must be treated properly to ensure environmental compliance, post-mining land rehabilitation, cost efficiency and safety improvement. The expansion of ATM’s business in the mining business is expected to unlock additional values by providing coal dust and road dust control services so to maintain and Adaro Group’s coal distribution activities and provide positive impact on the work environment.
ATM through its subsidiaries also treat mine water through dewatering activities. The dewatering business aims to maintain existing water levels so that floods do not occur during wet or rainy season, and water level remains at sufficient level during the dry season. Revenues obtained from this dewatering business are calculated based on the volumes handled multiplied by the agreed base rate. In 2023, the two businesses contributed around 72% of ATM’s consolidated revenue.
Non-Revenue Water Management
In 2022, PT Adaro Tirta Wening (ATW) was established to handle non-revenue water (NRW) reduction project in Bandung city – northern area, with total capacity to save of 211.5 liters per second. To ensure the success of this project, ATM is developing an innovation called Smart Water Meter and Adaro Water Solution. Smart Water Meter is a device designed to transform analog meter readings to electronic reading enabling real-time transmission of reading. Smart Water Meter aims to reduce errors in water meter recording, provide real-time information on water usage by customers and as a tool to indicate if there is an anomaly in water usage by customers. Adaro Water Solution is a software developed to monitor and analyze data, and functions as early detector of leakage, reminder system, and reporting system for preventive actions and repair works. Adaro Water Solution is being integrated into the non-revenue water project of Bandung city.
In the same year, ATW completed the installation of 55 inlet District Meter Areas (DMA) to monitor pipe leaks in the North Bandung Area. The performance-based cooperation model in reducing NRW (Non-Revenue Water) is the first of its kind in Indonesia. The performance-based cooperation concept is expected to significantly contribute in reducing clean water distribution leakage and serve as a reference for other clean water utilities in Indonesia.
Business Outlooks
AEI will continue to increase clean water treatment capacity through acquisitions, public private partnerships, B-to-B partnerships and tender processes selected carefully. In 2023, the company added chemical automation into its businesses, to serve Adaro Indonesia’s wastewater treatment activities at the settling ponds.
Going forward, through subsidiaries, ATM will also take part in the Adaro Group’s projects in the industrial park in North Kalimantan by providing clean drinking water supply according to demand.