From privatization to a governance predicament: A systematic review of jakarta’s water governance, business models, and sustainability

Planner, Ministry Planning and Development/Bappenas, Jakarta

^* Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

Jakarta, one of the world’s fastest-sinking megacities, faces a multidimensional water crisis that poses an existential threat to its sustainability. This crisis stems from the historical legacy of a two-decade Public-Private Partnership (PPP) initiated in 1998, which evolved from a privatization model into a complex predicament of environmental degradation and social injustice. This study employs a systematic literature review to synthesize the academic evidence, tracing the evolution of challenges and proposed solutions over time. The synthesis reveals a cascading failure best understood through an Environmental, Social, and Governance (ESG) lens. Initial Governance failures, rooted in flawed contractual design, metastasized into severe Environmental crises (land subsidence) and a profound Social crisis of “water equity,” disproportionately burdening the urban poor. The review concludes that Jakarta’s water crisis is fundamentally a crisis of governance, not infrastructure or affordability. Therefore, the only viable path forward is a new sustainable business model for the public utility focused on re-establishing robust governance and rebuilding public trust, which is critical for achieving water security.