Water Resour Manage (2011) 25:339–356DOI 10.1007/s11269-010-9702-0

Management of Water Reservoirs (Embungs)in West Timor, Indonesia

Deepa Pradhan · Tihomir Ancev ·Ross Drynan · Michael Harris

Received: 29 December 2009 / Accepted: 8 July 2010 /Published online: 12 August 2010© Springer Science+Business Media B.V. 2010

Abstract Communal water storage reservoirs (embungs) that serve many villages inWest Timor, Indonesia, during the prolonged annual dry season are plagued withsedimentation problems. Sedimentation progressively reduces water storage capac-ity, and consequently the benefits that community can derive from embungs. Thispaper investigates four alternative strategies for managing the sedimentation of atypical village embung: (1) current management (a “no management” situation),(2) soil conservation in the embung catchment, (3) periodic sediment removal and(4) a combination of soil conservation and sediment removal. Without periodicsediment removal, an embung has a finite life dependent on the rate of sedimenta-tion. The results indicate that periodic cleaning is worthwhile. Strategy (4) gives thehighest net present value followed by strategy (3). The study shows that the current“no management” strategy is the worst strategy. Sensitivity analyses were conductedto investigate how robust the ranking is to alternative discount rates and to assumedeffectiveness of soil conservation measures in reducing sedimentation.

Keywords Sediment management · Water use · Village dams · Dredging ·Vegetable production

1 Introduction

Demand for water and water related services has increased throughout the worldas a result of growing population, incomes and food demand. Availability of waterresources in a given area is affected to a large extent by the prevailing climate.The occurrence of a distinct seasonal rainfall pattern brings fluctuations in wateravailability: water shortages during dry periods of the year, and excess water avail-ability during wet seasons. Management of this variability in water availability is

D. Pradhan (B) · T. Ancev · R. Drynan · M. HarrisAgricultural and Resource Economics, University of Sydney, Sydney NSW 2006, Australiae-mail: pradhan.deepa@gmail.com

340 D. Pradhan et al.

often crucial for agricultural production. This is even more important in developingcountries that have a large proportion of the population living in poverty or nearpoverty conditions in many rural areas.

Various management approaches have been used to deal with the distribution ofwater availability over time. One of the possibilities, particularly suitable in poorregions of developing countries, is to use small reservoirs (Liebe et al. 2005). Someof the excess water from the wet season can be stored and then be used to grow cropsand support livestock during the dry season.

Sedimentation has been identified as a serious problem of many water storages inboth less developed countries (Andrus 1986; Shakir and Khan 2009) and developedcountries (Kapadia et al. 2002). It is estimated that, on average, around 0.5% to1% of global water storage capacity is lost annually as a result of sedimentation(White 2001).

Sedimentation occurs naturally from erosion of soil in the catchment area, withthe degree of severity depending on the topography, soil type, vegetation cover andintensity of rainfall. Importantly, the presence of human activities such as agriculture,livestock rearing, burning and deforestation within the catchment affects the rate ofsedimentation. The rate of sedimentation can be reduced, at some cost, by changingcatchment management. Alternatively, depleted storage capacity can be regained, ata cost, by periodically cleaning the reservoir (Kapadia et al. 2002).

From an economic perspective, reservoirs are assets that provide services across aperiod of time. Since sedimentation reduces the available storage volume, it reducesthe flow of benefits that can be derived from services provided by the reservoir overtime and ultimately shortens its economic life. Sedimentation can be viewed as assetdepreciation (Hansen and Hellerstein 2007). The present study uses the principleof capital asset depreciation to analyse the effect of sedimentation on the benefitsderived from water reservoirs through a case study of water reservoirs in West Timor,one of the least developed regions of Indonesia.

Traditionally, villagers in West Timor have relied on wells, natural springs andcreeks located around the villages for their water supply. However, during the longdry season (more than 8 months within a year), a majority of surface water sourcesand wells dry up, making it much more difficult for the villagers to access water(Widiyono et al. 2007). This means that people have to travel substantial distances—often around a kilometre or more—from their house to access water from a springon a daily basis. In light of this situation, embungs have been promoted as a suitablesolution for water supply during the long dry season (Widiyono et al. 2007).

Beginning in the 1980s and initially largely through international donor funding,a number of embungs were constructed in West Timor to capture the intense runoffduring the wet season. The stored water has been used in the dry season, not onlyfor livestock water consumption—which was the original intention of the inter-nationally funded projects—but also for household sanitary purposes (washing,cleaning, cooking, bathing), as well as for watering some crops, typically vegetablesand nurseries (Ancev 2009).

The capacity of embungs in West Timor varies from 30 to 60 ML (Naiola andBiologi 2007). There are now about 400 embungs in Nusa Tenggara Timur (NTT)province—of which West Timor is a major part—serving about 3 million people(Naiola and Biologi 2007). According to the information obtained from the RegionalPlanning Department in NTT (BAPPEDA NTT), there are 79 embungs in Timor

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 341

Tengah Selatan (TTS)—one of the districts in West Timor—serving about 4,500households, 13,500 cattle and 225 ha of agricultural land. Similarly, Kupang district inWest Timor has more than 300 embungs serving around 350,000 households, 105,000cattle and more than 1,000 ha of agricultural land.

These communal embungs are currently managed at the village level. In the past10–15 years the embungs have lost significant amounts of water storage capacity dueto sedimentation. Field evidence suggests that most have lost more than 50% of theirinitial water storage capacity, some as much as 80%. In light of these massive ratesof sedimentation the behaviour of people in these communities in relation to theembungs is interesting. Villagers are the users and beneficiaries of the embungs, yetthey are taking very little action to address the sedimentation problems. According toBAPPEDA NTT, it was originally planned that, once the embungs were transferredto the communities by the donor agencies, the users would be responsible for theirmaintenance. Local communities that use the embungs have, in practice, done littlemaintenance work.

Conceptually, from an economic perspective, this represents pure consumption ofan asset that has been given to these communities by donor agencies. If this processof asset consumption continues, the communities will exhaust the water storageresource. At the present time, little consideration is being given to this depreciationof the asset, either by the villagers or by the donor agencies.

In order to maintain long-term usefulness of these assets, the village communitiescould adopt various management strategies. One of the focal points of this study is todetermine the present-value maximizing sediment management strategy to addressthe sedimentation problem in the embungs of West Timor. The study evaluatesthe relative benefit of alternative sediment management strategies including nomanagement (the status quo); soil conservation to reduce erosion and sedimentation;periodic sediment removal (dredging); and a combination of both soil conservationand periodic sediment removal.

Previous studies have carried out economic analyses of conservation practicessuch as contour farming and strip farming in relation to water storage (Kapadiaet al. 2002). Kawashima (2007) examined the economic efficiency of alternativemethods (dredging, flushing) for periodic sediment removal. Discount rates havebeen identified as an important factor in determining the present-value maximisingsediment management strategy (Kapadia et al. 2002; Kawashima 2007). Liu et al.(2002) recommend various sediment removal methods depending on the sedimen-tation rate and the size of the reservoir. They recommend dredging as a suitablesediment removal method for small and medium reservoirs (Liu et al. 2002). In arecent article, Hansen and Hellerstein (2007) outlined an analytical framework forexamining the sedimentation of reservoirs as a capital asset replacement problemfollowing the insights provided in Perrin (1972). The current paper builds on thesestudies and provides an application of the capital asset replacement principle to thesedimentation problem in the context of West Timor.

2 Study Area

West Timor is a part of the island of Timor and forms part of the East NusaTenggara (NTT) province in Indonesia. West Timor has a semi-arid climate with

342 D. Pradhan et al.

a long dry season lasting from March to November, and a rainy season that lastsfor only 3–4 months, usually starting around November-December and ending inMarch-April. The average annual rainfall varies geographically between 500 mm and2,000 mm. The length of the dry season (8 months or more) contributes to variousproblems including forest fires, water shortages, and community health degradation,all of which aggravate the existing problem of sporadic hunger and malnutrition(Pasaribu 2007).

The crop production system in West Timor is mostly subsistence oriented (Benu2003). The prolonged dry season has influenced farmers to retain their traditionalagricultural production system of growing subsistence crops, i.e. rice and maize inthe wet season and crops requiring less water, such as mungbean and soybean, in thedry season. In addition to this traditional cropping, vegetable production for somecash income is gaining popularity among the farming community.

Vegetables are considered one of the more promising agricultural enterprises inIndonesia, as the demand for vegetables is growing rapidly because of rapid eco-nomic development and high income elasticities of demand. The share of vegetableconsumption in Indonesian food expenditure is expected to grow from 4.6% in 1988to 8.9% in 2010 under an assumption of 6% per annum growth in real incomesand 1.9% per annum increase in population (Darmawan and Pasandaran 2000).Moreover, the producer prices for vegetables such as tomato, cabbage, potatoes,carrots, cucumber, turnips and chillies have increased substantially over the last8–10 years in Indonesia according to the data obtained from FAOSTAT (2009).Horticultural farmers are usually able to earn higher incomes than subsistence cropproducers. The conventional wisdom of development efforts has been that increasinghorticultural production can also have a great impact on commercialization of therural economy via creation of off-farm jobs related to local marketing and processing(Weinberger and Lumpkin 2005).

A study conducted in Java, Indonesia, showed that irrigation plays a significantrole in poverty reduction, with people having access to irrigation being richer thanthose living in rainfed areas (Hussain et al. 2006). It could hence be expected thatthe good management of embungs would facilitate expanded vegetable productionin West Timor by making more water available for irrigation, particularly during thedry season.1 In practice, this means that an additional, and also a high-value crop,can be grown within a given calendar year. This could therefore be an important steptowards improving living standards of the farmers in West Timor. However, this iscrucially dependent on the availability of water during the dry season. The currentsituation with the management of the embungs means the communities cannot relyon this source of water supply in the long run.

3 Analytical Framework

This study uses the concept of capital asset depreciation of an embung, representedby a decrease in benefits from embung water caused by the decrease in the volume of

1Although vegetables can be grown throughout the year in West Timor if water is available, theemphasis on dry season vegetable production is put forward in this study with a view of improvingincome and the rural economy at low opportunity cost through better utilization of resources.

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 343

stored water available for use as a result of progressive sedimentation in the embung.The value of benefits obtained from embung service in year t, t = 1, 2..., (with benefitsarising at the end of the year, and years assumed to end at the end of the dry season)is considered to be a function f (AW(t)) of water available for use in year t, namelyAW(t). AW(t) is the amount of water in the embung at the end of the wet season inyear t. The embung is assumed to fill reliably each wet season, so AW(t) is a functionof the initial embung capacity and the total volume of sediment accumulated in theembung by the end of wet season in year t represented by SED(t). SED(t) in turn is afunction of the sedimentation rate (SR).2 This rate is defined here as the proportionof the embung designed capacity that is filled with sediment each year. For anygiven runoff-related catchment management strategy, this proportion is assumed tobe constant over time and independent of how the cumulative sediment builds up.This means that there is a fixed amount of sediment added to the embung each year.

Let T represent the service period of the embung (in years). The value of bene-fits from embung services depreciates over time with the increase in sediment accu-mulation and reduction in AW(t). The maximum volume of water that could ever beavailable is the initial water holding capacity of the embung, denoted by AW(0).AW(t) is calculated as this initial water holding capacity less the total sedimentaccumulated by the end of the wet season in year t, namely SED(t) so that AW(t) =AW(0) − SED(t). Given the assumption about the constant sedimentation rate, itfollows that AW(t) = AW(0) − AW(0) ∗ SR ∗ t. The loss in storage capacity overtime can only be reversed through sediment removal. The service period T is deter-mined endogenously, and is dependent on the extent of sedimentation.

3.1 Benefits Without any Management (Status Quo)

Let the particular sedimentation rate of an embung when there is no catchmentrunoff management in place be denoted by SRN , with the subscript N denoting“no management”. In a reservoir with no management, the total expected economicbenefit (BN) in net present value (NPV) terms is:

BN =T∑

t=1

f (AWN(t))(1 + r)−t (1)

2In general, AW(t) should also be a function of evaporative losses from the end of the wet seasonwhen the embung is full, to the time when the water is actually used. The obvious effect of evapo-ration is to reduce the available water below the full capacity of the embung. The reduction willdepend on the shape of the embung and, potentially, on when the water is used within the season. Ifthe embung is cylindrical, then the daily evaporation will not be influenced by the currently availablewater (as the surface area does not change with water use or past evaporation) provided water isnot fully used until the end of the season. For an embung with sloping sides, evaporation will bereduced by earlier water use and consequent reduced average embung surface area. In practice,water users may bring forward discretionary water use (e.g. for vegetables) to the extent it is possibleto do so, precisely to cope with the potential for evaporation. In this paper, there is no formalallowance for evaporation and the within-year timing of water demand and water availability is notmodelled. Ignoring evaporation means that the benefits derivable from the embung are overstatedin absolute terms. The rankings of the management options may also be affected by evaporation,with the effective water availability per unit of intervention changing due to evaporation, but it is notclear a priori how the rankings of different interventions would be affected.

344 D. Pradhan et al.

where r is the discount rate, and AWN(t) is the water available for use in year t inthe absence of sediment management. The latter is given by AWN(t) = AW(0) −AW(0)∗ SRN

∗ t. Details of the annual benefits function f (.) are given in Section 4below.

3.2 Benefits with Soil Conservation

When catchment management activities are implemented, the sedimentation ratedecreases because of the decrease in the rate of soil erosion. Using subscript S todenote soil conservation, let SRs be the corresponding sedimentation rate, with SRs <

SRN . With the lower sedimentation rate, the total amount of sediment accumulatedover time t is smaller, providing more water available for use at time t. The serviceperiod of the embung is extended from T years to T ′ years, where T ′ > T.

While there is the possibility of using different combinations of soil conservationactivities, in this study only a single defined package of activities is evaluated. Twoactivities that have been included in the model are: Planting trees around the catch-ment to reduce sediment runoff, and maintenance of fences to prevent entranceof livestock into the catchment area. This strategy involves a management cost inthe form of the cost of planting trees, the opportunity cost of labour, and also theopportunity cost of excluding cropping (and livestock) on the land occupied by soilconservation activities. Let the costs in year t be denoted by CMs(t). Let BS be theNPV of the total benefits from the embung when soil conservation is implemented:

BS =T ′∑

t=1

[ f (AWS(t)) − CMS(t)](1 + r)−t (2)

where AWS(t) is the available water for use in year t with soil conservation.

3.3 Benefits with Sediment Removal (Dredging)

Sediment can be removed by dredging to recover the lost storage space. Since no soilconservation is practiced under this third strategy, the sedimentation rate is the sameas in the no management case, SRN . Under the strategy of periodic dredging, thelife of the embung is infinite, as removal of sediment restores the lost storage spaceof the embung before the embung begins to accumulate sediment again followed bysubsequent dredging.3 Let CR be the cost of dredging and BD be the NPV of embungbenefits with dredging at year (D):

BD =∞∑

p=0

⎡

⎣D∑

tp=1

f (AWN(tp))(1 + r)−tp − CR(D)(1 + r)−D

⎤

⎦ × (1 + r)−D×p (3)

Here the subscript p = 0, 1, 2... is an index of the number of sediment removalsthat have been implemented over time, tp is the number of years since the previoussediment removal (i.e. end of cycle or service period p-1) and D is the number ofyears between sediment removal events under this strategy. It is assumed that the

3It was assumed that dredging removes all the sediment leaving the embung with its original capacity.

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 345

flow of costs and benefits repeats in perpetuity, i.e. the stored water will be usedidentically in each service period. Similarly the sedimentation rate during the firstservice period of the embung remains the same in perpetuity. The period betweensediment removal events ideally would be optimized in the same way as in otherasset replacement problem contexts, e.g. optimal machinery replacement and forestfelling time (Perrin 1972). Here the dredging time has been set exogenously at thetime when the sediment level in the embung reaches 30%, as proposed by Hansenand Hellerstein (2007).

The present value BD in Eq. 3 is, formally, the present value of a sum of moneyequivalent to the net value of a single service period (the expression in Eq. 3 anddenoted as [NV]) received at time 0 and every D years thereafter in perpetuity.Since the capital value of such a perpetuity is the regular flow plus the regular flowdivided by the discount rate (IDR) over the interval between instalments, BD canbe expressed as BD = [NV] + [NV]/I DR. With an annual discount rate r and aninterval D, the interval discount rate is I DR = (1 + r)D − 1. It follows that BD =[NV](1 + r)D/((1 + r)D − 1), a multiple of the benefits of a single service period.Increased D and r both reduce the capitalisation multiplier towards 1; but also alterthe periodic flow [NV], which increases with D and falls with r.

3.4 Benefits with Combined Soil Conservation and Sediment Removal (Dredging)

Under a scenario in which both soil conservation and sediment removal are applied,the sedimentation rate (SRS) can be assumed to be the same as that for the strategywith soil conservation. The costs incurred are the sum of the costs for the two actions,CR and CMs(t). The NPV of embung benefits under this strategy is given by:

BDS =∞∑

p=0

⎡

⎣D′∑

tp=1

f (AWS(tp)) − CMS(tp)(1 + r)−tp − CR(D′)(1 + r)−D′

⎤

⎦

×(1 + r)−D′×p (4)

where D′ is the number of years since previous dredging. As for the simple periodicdredging strategy, the NPV of the combination of activities can be expressed as thenet value of a single service period of the embung multiplied by a capitalisation factor(1 + r)D′

/((1 + r)D′ − 1).

4 Components of Annual Benefits

The flow of benefits from the embung is comprised of the benefits from each of threewater uses, namely domestic water supply, water for livestock raising, and irrigationof vegetables. As well, for those strategies not employing periodic sediment removaland so involving eventual complete sedimentation of the embung, the “salvagevalue” of the freed-up embung land is included.

The marginal value of water in each use is assumed either to be constant (forvegetable production) for all levels of use or (for the other uses) to follow a simplestep function, with two levels. That is, marginal values are constant up to a designatedquantity of water before dropping to a lower value. Domestic use has the highest

346 D. Pradhan et al.

initial marginal value followed by livestock use and then irrigation of vegetables.This is consistent with the evidence gathered in the field through semi-structuredinterviews and surveys.

The water quantities at which the marginal values drop decline are set based onper unit (e.g. household or animal) requirements and the number of units servicedby the embung. The lower step values for domestic and irrigation use are assumed tobe below all three upper step values.

When maximum water is available from the embung (year 1), water is assumed tobe used in all three uses. The total annual benefits from using embung water for eachof the activities declines over time with the progressive decrease in available water.Since irrigation has the lowest priority, the benefits derived from irrigation are thefirst to decline. With time, as sediment accumulates, the benefits from livestock usedecline and, ultimately, so do the benefits from domestic use of water.

4.1 Benefits from Domestic Use

The benefit from embung water supply for domestic use (Benef itH) was calculatedfrom the saved cost of time spent in collecting water for domestic use. Without anembung, water would need to be collected from an alternative source, typically aspring or a creek in the vicinity of a village.

The cost of time is estimated with reference to the wage rate of unskilled labourin the study area. A fixed daily per person water requirement was assumed, and afixed number of households (and persons) serviced by the embung was also assumed,based on the information collected in the field. The total benefits from domestic useof the embung only start to decline when the available embung water is less thanthe quantity of water required by the embung users for domestic use. The list ofvariables and parameters for the estimation of embung benefits from domestic wateruse is provided in Appendix 1 and the particular parameter values adopted are givenin Appendix 3.

4.2 Benefits of Using Water for Livestock

Cattle are the dominant form of livestock in West Timor. The benefits from livestockraising (Benef itL) are corresponding to the profit earned from the sale of cattle. Inthe absence of good information about alternative sources of water, it was assumedthat if embung water is not available, then the households would not be able to raisecattle. While not strictly true, the assumption is reasonable. Production would beheavily curtailed without the water. Data collected in the field through a farmersurvey shows that 72% of the respondents use embung water as the main source ofwater for livestock. The variables used for estimation of benefits from using embungwater for livestock rearing are tabulated in Appendix 2.

The water available for raising livestock was the total available embung water lessthe water required for the higher priority domestic use. Per animal requirement ofwater was assumed to be fixed. The total water required to support the total numberof livestock raised by the households using the particular embung was calculated asthe average number of cattle per household multiplied by the number of households.This number of livestock is set exogenously as an upper limit. If the water availablefor livestock was insufficient for this number of livestock, livestock numbers were

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 347

reduced in proportion. That is, less available water means the households can raisefewer cattle and earn less income from livestock.

4.3 Benefits of Using Water for Irrigating Vegetable Crops

The amount of water available for irrigation is the residual amount left after thehigher priority domestic and livestock water needs have been fulfilled. As the totalwater available from an embung decreases as a result of sediment accumulation inthe embung, the amount of water available for irrigation decreases first comparedto other water uses. This means that sedimentation of embungs affects the irrigationbenefits before it affects the benefits from other water uses.

The calculation of benefits from embung water supply for irrigation was basedon irrigating high value vegetable crops. The local research teams in West Timor,such as Lembaga Ilmu Pengetahuan Indonesia (LIPI) and BAPPEDA, have beenfocusing on promoting high value vegetable production for efficient utilisation of theavailable embung water (Naiola and Biologi 2007).

Water required per hectare of irrigated vegetable crop is assumed fixed, so smallerquantities of water available for irrigation means that smaller land area can be usedfor vegetable production. This assumption of a fixed water requirement rules out thepossibility of altering the water application rates or switching to crops with lowerwater needs as water availability declines over time. Such changes will often be eco-nomically optimal. Not allowing for these economic responses may mean that theirrigation water benefits are underestimated and the decline in benefits across timeare overestimated, though these discrepancies are unlikely to be serious.

The benefits from irrigating high value vegetable crops using the water stored inthe embung are estimated as follows:

Benef itI = Prof itI∗ Iy/IA (5)

where Iy is total quantity of water available for irrigation per year (litre per year),IA is the water required to irrigate a hectare of vegetable crop, Iy/IA is the area ofland (ha) that can be irrigated with Iy quantity of water, and Prof itI is the value ofaverage profit from vegetable production per hectare. Iy is calculated as:

Iy = AW − Hy − Ly (6)

where, Hy is the total quantity of water required for domestic use per year (litre peryear), Ly is the total quantity of water required for livestock per year (litre per year),AW is the total embung water available for use (litre per year).

In this study, the entire profitability from dry season vegetable production hasbeen attributed to embung water as typically no other sources of water are availableto irrigate crops during the dry season in West Timor. Farmers mostly leave theirland fallow during the dry season if there is a lack of irrigation water and rely onother off-farm activities (typically part-time) like carpentry, wood fire collection, andnon-farm labour work. Farmers typically have spare labour at this time of the year.Therefore, the profit from vegetable production using embung water for irrigationwould be an additional income to the households in West Timor.

348 D. Pradhan et al.

4.4 Including Salvage Value of the Asset

The value of total benefits from the use of water stored in an embung is defined as:

VB(t) = Benef itH(t) + Benef itL(t) + Benef itI(t). (7)

One further item of value (or cost) associated with an embung is the value of theland on which the embung stands. When the land is no longer used for the embung,it becomes available for the alternative use in agricultural production. The land onwhich an embung stands is typically still owned by the original owners for whomthe reduction in benefits from sedimentation is probably smaller given that theywill reclaim the land if the embung completely fills with sediment. With the salvagevalue of freed-up embung land also contributing to the NPV of benefits from embungservice, the effect is to increase marginally (since the one-off salvage value is heavilydiscounted across the embung lifetime) the relative attractiveness of the “singlecycle” strategies, those with finite embung lifetimes, viz. strategies (1) and (2). Letthe salvage value of land be represented by LV. The NPV of benefits, BSC can beestimated for the single cycle strategies (1) and (2) as in Eq. 8 (with T replaced by T ′for strategy 2).

BSC =T∑

t=1

[VB(t) − CMS(t)

](1 + r)−t + LV(T)(1 + r)−T (8)

The NPVs for strategies with multiple cycles BMC (i.e. strategies (3) and (4) are givenby Eq. 9 (with D replaced by D′ for strategy 4). No salvage value for the land onwhich the embung stands is included in Eq. 9, as the embung is used in perpetuity.

BMC =∞∑

p=0

[∑(VB(t)−CMS(tp)

)(1+ r)−tp −CR(D)(1+ r)−D

]× (1+ r)−D×p (9)

5 Data

A range of data sources have been used in the study including published sources,farmer surveys, and semi-structured interviews conducted by the related ACIARproject, SMAR/2007/219 (Ancev 2009). The semi-structured interviews were con-ducted in November 2007. The rapid rural appraisal (RRA) technique of semi-structured interviewing (SSI) was used targeting many different individuals withina community, thus ensuring a balanced view of the relevant issues (women, men,youths and the elderly were interviewed) (Ancev 2009).

Formal surveys were conducted in West Timor to collect data in February, 2008.The survey questionnaire was designed to collect information about the issues in agri-cultural water management and vegetable production in West Timor. Householdswere surveyed in villages from the Timor Tengah Selatan and Kupang districts. Asimple random sample of households was selected in each surveyed village, with 76respondents in total (Ancev 2009). The list of data used for the analysis is presentedin Appendix 3 along with the sources of data.

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 349

5.1 Estimates of Water Requirements

For an embung of an average size, the total water requirement for domestic use wascalculated to be 4 ML per annum. The water requirement for livestock was calculatedat around 1 ML per annum for the maximum number of livestock i.e. 3 cattle headper household as used in the current analysis. The maximum volume of water that isavailable for irrigation (when there is no sediment in the embung) is around 43 ML,enough to irrigate 9.5 ha of vegetable crops.

6 Results and Discussion

6.1 Capitalized Value of the Embung

The maximum annual benefits for a village from using embung water are tabulatedin Table 1. Despite the marginal value of domestic water use being the highest (upto the designated quantity of 4 ML), the total benefit from irrigation (19,164 US$per annum) exceeds the benefit from domestic water use (11,205 US$ per annum)(Table 1). The reason for this is that infrastructure availability (no showers, dish-washers, water heaters, washing machines) and lifestyle (very traditional and primi-tive from a modern Western perspective) in West Timorese households are notconducive to using large quantities of water. Water is used for basic needs, andtherefore in limited quantities. On the other hand, irrigated vegetable production isone of the few cash crops that can be grown in West Timor. As the need for incomeincreases, the value that could be realised from producing irrigated crops increasesas well.

If the annual benefits in Table 1 could be maintained indefinitely (with no main-tenance cost), the capitalised value of the embung would be calculated using the capi-talization formula for a perpetual asset i.e. Expected Annual Benef its / r. Applyingthis formula, the capitalised asset value of a typical embung in West Timor wouldbe around 310,000 (US$), or around 5,600 (US$) per household at 12% discountrate (r). The estimated capitalised asset value of an embung indicates that embungsare indeed valuable. This is not insignificant and communities might be expectedto appreciate the importance of the embungs as a means to improving their livingstandard.

6.2 Evaluation of Alternative Sediment Management Strategies

An embung gradually filling with sediment is likely to be abandoned as a waterstorage device, once capacity falls below a threshold level. Here, for simplicity, theembung is assumed to be used until full of sediment. The expected life (T) of anembung without any soil conservation activities being undertaken (strategy 1) was

Table 1 Estimated annualbenefits from maximumcapacity embung water use

Activity Benefits (US dollars)

Domestic water use 11,205Livestock raising 6,825Irrigation 19,164

350 D. Pradhan et al.

calculated (T = 1/SRN) as 25 years. When soil conservation activities (strategy 2)are applied, the expected life (T ′) of embung was estimated (T = 1/SRS) to be42 years—representing an extension of the expected service life of 68%. Whensediment removal (dredging) is done at the stage when sediment level reaches 30%of the original embung capacity, strategies (3) and (4) require dredging at every 8(D)

and 14(D′) year intervals respectively.The estimated NPV for strategy (4), BDS at a discount rate (r) of 12% was

279,000 (US$) (Table 2). This was the highest NPV of all tested strategies. NPVestimates for strategy (3) was second highest 271,000 (US$) (Table 2). All activemanagement strategies were economically preferable to no management. The NPVfor no management (strategy 1) was estimated to be 239,000 (US$) (Table 2). Theresults indicate that it is clearly worthwhile maintaining a reservoir through periodicsediment removal rather than treating the reservoir as an exhaustible finite life asset.Approximately 13% of the capitalized value of benefits derivable from an optimallymanaged installed reservoir are lost if the reservoir is not maintained.

6.3 Sensitivity Analyses

Sensitivity analyses were conducted to test how the NPV values and the rankingof strategies alter with changes in discount rate (r) and in the effectiveness of soilconservation in reducing the sedimentation rate (SRS). Additional sensitivity analysiswas conducted to examine the impact of changes in the sediment removal (dredging)interval (D) to ensure that the assumption of dredging when sediment levels reached30% is reasonable. The sensitivity to changes in the costs of soil conservation, CMS

(in strategies 2 and 4) was also studied but these results are not reported becausethe NPVs and rankings did not change greatly. These costs, even beyond the upperend of the range of plausible levels, are minor relative to the benefits realised fromembungs.

6.3.1 Varying Discount Rates

Calculated values of the NPV for the four strategies under different discount rates(r) are presented in Fig. 1. At a low discount rate (8%), the NPV of an embung underno management (i.e. strategy 1) was substantially less than the NPVs under the otherstrategies. However, the differences between NPVs of alternative strategies becomeinsignificant at discount rates of 20% or higher. If actual discount rates (r) are high,the current practice of not managing embungs (i.e. strategy 1) would be close tooptimal.

The magnitude of discount rates (r) plays an important role in the choice of aneconomically optimal sediment management strategy, with high rates enhancing theoptimality of the present situation of no management. This is particularly pertinent

Table 2 NPVs of embungunder alternative sedimentmanagement strategies

Strategies NPV of embung(thousand US dollars)

1. No management 239 (BN)

2. Soil conservation 266 (BS)

3. Periodic sediment removal (dredging) 271 (BD)

4. Both soil conservation and dredging 279 (BDS)

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 351

Fig. 1 NPVs under varyingdiscount rates

to West Timor as discount rates (r) are likely to be high. There is reason to suspectthat the actual discount rates in these areas could be much higher than the value of12% that is customarily used for calculations in development projects in this region.People in NTT have relatively poor conditions of living with a low income level(average income per capita is less than one third of the national average; Barbicheand Geraets (2007)) coupled with a relatively short life expectancy (average being57 years according to Barlow and Gondowarsito (2007)). Therefore, the preferencesof the people in these areas may be expected to be more geared towards the presentrather than towards the future. The observed current behaviour of communities inWest Timor in not managing embungs would be consistent with high actual discountrates. The present study has not further explored actual discount rates.

There are of course other possible reasons for the current behaviour in embungmanagement. The survey results showed that embung users generally considerembungs to be the property of government and hence expect the government to dothe maintenance work. This reflects the expectations of possible further ‘transfers’for embung management, which is perhaps a result of the continued exposureof these communities to assistance from government and/or international donoragencies to improve their livelihood. Continued assistance from external sources mayhave discouraged villagers from looking at solving the water supply problem them-selves. If embung users envisaged government or donor agencies providing them witha perpetual stream of embung services through freely provided replacements at theembung expected service life of 25 years, the NPV (for the villagers) of such a streamis (at 12% discount rate) $267,000. If they thought action would be taken to restorewater supply before it fails completely at 25 years, the NPV would rise, approaching,for example, $280,000 at a 20 years replacement cycle. Coupled with higher discountrates, it is not difficult to imagine villagers choosing the “no management” strategy. Ifthey believed they would have to meet the cost of embung replacement themselves,there would be a stronger incentive to extend the life of an existing embung by bettermanagement.

6.3.2 Altered Sedimentation Rates Under Soil Conservation

The effectiveness of soil conservation can vary with location depending on the soiltype, steepness, intensity of rainfall and other incidents such as bushfires. As noreliable data on the effect of soil conservation measures on sedimentation rateswere available for West Timor some sensitivity analysis was done. The analysisinvolved four different reduction-in-sedimentation rates, namely 20%, 40% (the base

352 D. Pradhan et al.

Table 3 Sensitivity analysisfor varying effects of soilconservation

Strategy NPVs (1,000 US Dollars) when soil con-servation reduces sedimentation rate by

20% 40% 60% 80%

2 254 266 280 2944 274 279 286 294Difference in NPV 20 13 6 0between strategy (4)and (2) (1,000 USdollars)(BDS–BS)

Expected life (years)2 30 42 58 1114 ∞ ∞ ∞ ∞Dredging interval for 10 14 19 38strategy (4) (years)

case), 60%, and 80% of the sedimentation rate occurring in the absence of soilconservation.

Strategy (4) gave the highest NPV for all of the cases (Table 3). However, with theincrease in the beneficial effect of soil conservation, the difference in NPV betweenstrategy (4) and strategy (2) decreased and the difference was quite insignificantwhen the reduction in the sedimentation rate was large (Table 3). Hence, if the soilconservation activities can be applied to the level where the sedimentation rate issubstantially decreased, then the strategy which does not involve sediment removalbecomes profitable. The embung still has a finite life but a relatively longer one.Further studies of the level of effectiveness of soil conservation activities in WestTimor would be valuable.

6.3.3 Varying Dredging Interval

As previously described, the time interval D between dredging is defined in relationto sedimentation level. Specifically, dredging is done when the embung is 30% filledwith sediment. NPV calculation for strategy (3) and (4) takes into account that thedredging is done at that point of time. Since the economically optimal dredginginterval would depend on the cost of dredging relative to the value of water, and onthe discount rate, adopting the 30% figure as used in Hansen and Hellerstein’s (2007)US study may not be appropriate. Therefore, sensitivity analysis was conducted toexamine the impact of a change in the dredging interval, viz. performing dredgingat the 20% and 40% sediment levels. The sensitivity analysis indicated that thedredging at 20% and 40% sediment levels generates only slightly higher and lowerNPV estimates (0.5% to 1%) respectively compared to the NPVs estimated at 30%.

7 Conclusion

The calculated capitalised value of the benefits of a typical embung (US$ 310,000, or$ 5,600 per household) indicates the importance of embungs for the communities inWest Timor. At low discount rates, these benefits justify incurring the cost of periodicsediment removal. At high discount rates, the benefits are substantially offset bythis cost. This confirms results reported in Kawashima (2007) and Kapadia et al.

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 353

(2002). Nevertheless, failure to maintain the embung is never the best strategy. Inpractice, embungs are not well maintained. While high discount rates contribute tothis decision, it seems likely that other factors may be involved. Potentially, theremay be a moral hazard problem in villagers allowing embungs to go unmaintained inexpectation of government or donor intervention.

Nothing has been reported in this paper on the costs of embung construction. Forthe assumed representative embung, these costs are thought to be around 600 millionIDR (US$ 54,545). The net benefit of an embung is necessarily less than all the NPVsreported here by this amount, but still significantly positive (at a 12% discount rate).Failure to manage the embung still involves the same absolute opportunity cost oflost NPV, but a much greater relative loss of potential net embung value, as muchperhaps as 15%.

Based on the findings, the following conclusions are drawn:

– Embungs are valuable assets and have the capability to improve the living stan-dard of people in West Timor if well managed.

– Given the prevailing sedimentation problem, the current absence of any man-agement is not an economically optimal or near optimal strategy unless WestTimorese discount rates are around 20% or more. If rates are this high, as seemsplausible, then the current behaviour of ignoring the sedimentation problemcould be considered rational.

– Optimal embung management depends on the effectiveness of conservationmeasures. Since the effectiveness of soil conservation activities is locality specificand since data is not available for West Timor, future scientific research ofthe effectiveness of different types of soil conservation activities in West Timorwould be useful.

Acknowledgement We acknowledge the ACIAR project SMAR/2007/219 for the funding of thisstudy. We are also thankful to Joko Triastono from BPTP NTT for the provision of information anddata for this research.

Appendix 1

Table 4 Variables for calculating domestic water use and the associated embung benefits

Time required to get water from reservoir (embung) X (hours)Time required to get water from spring/creek Y (hours)Number of households using the embung HHAverage household size HM (number of people)Quantity of water required/person/day WP litresQuantity required per day/HH Hd = WP*HM litresTotal quantity required per year/HH Hy = Hd*365Quantity that can be collected per visit Q litresThus, no. of visits required per day VN = Hd/Q timesUnskilled labor wage rate/hour $WLValue of the time for collecting water/year from reservoir (embung) VT E = (X*WL)*VN*365Value of the time for collecting water/year from spring/creek VTC = (Y*WL)*VN*365Benefit of embung service/year/HH VTC - VT E

Benefit/year/embung Benef itH = (VTC - VT E)*HH

354 D. Pradhan et al.

Appendix 2

Table 5 Variables for calculating livestock water use and the associated embung benefits

Number of household using the embung HHNumber of cattle head/household HCTotal livestock served by embung TL = HC* HH (number of head of cattle)Quantity of water required per head per day Ld (litres)Total water required/year (1 year = 7 months) Ly = Ld *TL*30*7 (litres)Weight of livestock when ready to sell Wt (Kg)Price per kilogram $PCGross revenue per head GR = PC*Wt($)Net profit per head PL = 14% of GR($)Total net benefit/year/embung Benef itL = =PL*TL($)

Appendix 3

Table 6 List of data used for analysis of economically suitable sediment management strategy

S. no. Description of data Data used Data source

1 Dimension of embung 80 m × 40 m × 15 m Semi-structured interview(for current study)

2 Sedimentation rate under 4% per annum of full Estimated from data inno management (SRN) embung capacity Widiyono et al. (2007)

3 Reduction in sedimentation 40% of SRN Claassen et al. (2001)rate with soil conservation by

4 Sedimentation rate with soil 2.4% per annum of full Estimated from (1), (2)conservation (SRS) embung capacity and (3)

5 Water usage per person per day 40 l GTZ website6 Average family size 5 members Farmers survey7 Average distance to water tank 50 m Semi-structured interview

holding embung water fromhome

8 Average distance to spring 1 km Semi-structured interviewfrom home

9 Time required to collect water 30 min Semi-structured interviewfrom spring 1 km away

10 Volume of water carried per 30 l Semi-structured interviewtrip for domestic use

11 Number of households served 55 Average estimated fromby an embung survey of eight villages

12 Opportunity cost of labour for 50% of unskilled labour Inter-American Developmenttime spend in collecting water wage rate Bank as in Whittington

et al. (1990)13 Unskilled labour wage rate/month 650,000 IDR (US$59) Patung (2008)14 Average working hours per week 44 BPS NTT Website15 Average number of cattle per 3 head Semi-structured interview

household16 Weight of cattle when ready 250 Kg Semi-structured interview

to be sold17 Market price of cattle/kg 13,000 IDR (US$1.18) Semi-structured interview18 Minimum water requirement per 25 l BPTP, NTT; NRCS (2007)

head of cattle per day

Management of Water Reservoirs (Embungs) in West Timor, Indonesia 355

Table 6 (continued)

S. no. Description of data Data used Data source

19 Profit per head of cattle sold 14% of gross revenue Estimated from data inPerdana (2003)

20 Water required to irrigate 4.5 Megalitres (ML) Bryan and Marvanek1 ha of vegetable land (2004)

21 Average value of production US$ 4,000 EASRD (2005)of irrigated land in Indonesia

22 Average profitability from 49% of average value Estimated from data invegetable production of production Arsanti et al. (2007)

23 Salvage value of land 8 million IDR (US$727) Semi-structured interviewper hectare

24 Hours of labour required 14 Assumptionper month for fencemaintenance

25 Area of catchment requiring 3 times the area of embung Semi-structured interviewplantation and verified using

Google Earth® view26 Cost of planting trees per 32 million IDR (US$ 2,909) Mr. Joko Triastino from

hectare BPTP, NTT27 Catchment area inside fence Equal to area of embung Semi-structured interview28 Cost of dredging (CR) 160 million IDR (US$ 14,545) Semi-structured interview29 Optimal time of dredging At 30% sediment level of full Hansen and Hellerstein

embung capacity (2007)30 Discounting rate 12% Mr. Joko Triastino from

BPTP, NTT31 Exchange rate 1US$ = 11,000 IDR As applying in December

2008

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