Water Resour Manage

DOI 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

© Springer Science+Business Media B.V. 2010

Abstract Communal water storage reservoirs (embungs) that serve many villages in
West Timor, Indonesia, during the prolonged annual dry season are plagued with
sedimentation problems. Sedimentation progressively reduces water storage capac-
ity, and consequently the benefits that community can derive from embungs. This
paper investigates four alternative strategies for managing the sedimentation of a
typical 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 periodic
sediment 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 the
highest net present value followed by strategy (3). The study shows that the current
“no management” strategy is the worst strategy. Sensitivity analyses were conducted
to investigate how robust the ranking is to alternative discount rates and to assumed
effectiveness 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 world
as a result of growing population, incomes and food demand. Availability of water
resources 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 water
availability: 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. Harris

Agricultural and Resource Economics, University of Sydney, Sydney NSW 2006, Australia
e-mail: pradhan.deepa@gmail.com
 D. Pradhan et al.

often crucial for agricultural production. This is even more important in developing
countries that have a large proportion of the population living in poverty or near
poverty conditions in many rural areas.
Various management approaches have been used to deal with the distribution of
water availability over time. One of the possibilities, particularly suitable in poor
regions of developing countries, is to use small reservoirs (Liebe et al. 2005). Some
of the excess water from the wet season can be stored and then be used to grow crops
and support livestock during the dry season.
Sedimentation has been identified as a serious problem of many water storages in
both less developed countries (Andrus 1986; Shakir and Khan 2009) and developed
countries (Kapadia et al. 2002). It is estimated that, on average, around 0.5% to
1% 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, with
the degree of severity depending on the topography, soil type, vegetation cover and
intensity of rainfall. Importantly, the presence of human activities such as agriculture,
livestock rearing, burning and deforestation within the catchment affects the rate of
sedimentation. The rate of sedimentation can be reduced, at some cost, by changing
catchment management. Alternatively, depleted storage capacity can be regained, at
a cost, by periodically cleaning the reservoir (Kapadia et al. 2002).
From an economic perspective, reservoirs are assets that provide services across a
period of time. Since sedimentation reduces the available storage volume, it reduces
the flow of benefits that can be derived from services provided by the reservoir over
time and ultimately shortens its economic life. Sedimentation can be viewed as asset
depreciation (Hansen and Hellerstein 2007). The present study uses the principle
of capital asset depreciation to analyse the effect of sedimentation on the benefits
derived 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 and
creeks located around the villages for their water supply. However, during the long
dry season (more than 8 months within a year), a majority of surface water sources
and 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 spring
on a daily basis. In light of this situation, embungs have been promoted as a suitable
solution 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 runoff
during the wet season. The stored water has been used in the dry season, not only
for 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 vegetables
and nurseries (Ancev 2009).
The capacity of embungs in West Timor varies from 30 to 60 ML (Naiola and
Biologi 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 Regional
Planning Department in NTT (BAPPEDA NTT), there are 79 embungs in Timor
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

Tengah Selatan (TTS)—one of the districts in West Timor—serving about 4,500

households, 13,500 cattle and 225 ha of agricultural land. Similarly, Kupang district in
West Timor has more than 300 embungs serving around 350,000 households, 105,000
cattle and more than 1,000 ha of agricultural land.
These communal embungs are currently managed at the village level. In the past
10–15 years the embungs have lost significant amounts of water storage capacity due
to sedimentation. Field evidence suggests that most have lost more than 50% of their
initial water storage capacity, some as much as 80%. In light of these massive rates
of sedimentation the behaviour of people in these communities in relation to the
embungs is interesting. Villagers are the users and beneficiaries of the embungs, yet
they are taking very little action to address the sedimentation problems. According to
BAPPEDA NTT, it was originally planned that, once the embungs were transferred
to the communities by the donor agencies, the users would be responsible for their
maintenance. Local communities that use the embungs have, in practice, done little
maintenance work.
Conceptually, from an economic perspective, this represents pure consumption of
an asset that has been given to these communities by donor agencies. If this process
of asset consumption continues, the communities will exhaust the water storage
resource. At the present time, little consideration is being given to this depreciation
of the asset, either by the villagers or by the donor agencies.
In order to maintain long-term usefulness of these assets, the village communities
could adopt various management strategies. One of the focal points of this study is to
determine the present-value maximizing sediment management strategy to address
the sedimentation problem in the embungs of West Timor. The study evaluates
the relative benefit of alternative sediment management strategies including no
management (the status quo); soil conservation to reduce erosion and sedimentation;
periodic sediment removal (dredging); and a combination of both soil conservation
and periodic sediment removal.
Previous studies have carried out economic analyses of conservation practices
such as contour farming and strip farming in relation to water storage (Kapadia
et al. 2002). Kawashima (2007) examined the economic efficiency of alternative
methods (dredging, flushing) for periodic sediment removal. Discount rates have
been identified as an important factor in determining the present-value maximising
sediment 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 suitable
sediment removal method for small and medium reservoirs (Liu et al. 2002). In a
recent article, Hansen and Hellerstein (2007) outlined an analytical framework for
examining the sedimentation of reservoirs as a capital asset replacement problem
following the insights provided in Perrin (1972). The current paper builds on these
studies and provides an application of the capital asset replacement principle to the
sedimentation 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 Nusa
Tenggara (NTT) province in Indonesia. West Timor has a semi-arid climate with
 D. Pradhan et al.

a long dry season lasting from March to November, and a rainy season that lasts
for only 3–4 months, usually starting around November-December and ending in
March-April. The average annual rainfall varies geographically between 500 mm and
2,000 mm. The length of the dry season (8 months or more) contributes to various
problems 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 (Benu
2003). The prolonged dry season has influenced farmers to retain their traditional
agricultural production system of growing subsistence crops, i.e. rice and maize in
the wet season and crops requiring less water, such as mungbean and soybean, in the
dry season. In addition to this traditional cropping, vegetable production for some
cash income is gaining popularity among the farming community.
Vegetables are considered one of the more promising agricultural enterprises in
Indonesia, as the demand for vegetables is growing rapidly because of rapid eco-
nomic development and high income elasticities of demand. The share of vegetable
consumption in Indonesian food expenditure is expected to grow from 4.6% in 1988
to 8.9% in 2010 under an assumption of 6% per annum growth in real incomes
and 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 last
8–10 years in Indonesia according to the data obtained from FAOSTAT (2009).
Horticultural farmers are usually able to earn higher incomes than subsistence crop
producers. The conventional wisdom of development efforts has been that increasing
horticultural production can also have a great impact on commercialization of the
rural 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 significant
role in poverty reduction, with people having access to irrigation being richer than
those living in rainfed areas (Hussain et al. 2006). It could hence be expected that
the good management of embungs would facilitate expanded vegetable production
in West Timor by making more water available for irrigation, particularly during the
dry 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 step
towards improving living standards of the farmers in West Timor. However, this is
crucially dependent on the availability of water during the dry season. The current
situation with the management of the embungs means the communities cannot rely
on this source of water supply in the long run.

3 Analytical Framework

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

1 Althoughvegetables can be grown throughout the year in West Timor if water is available, the
emphasis on dry season vegetable production is put forward in this study with a view of improving
income and the rural economy at low opportunity cost through better utilization of resources.
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

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 benefits
arising 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, namely
AW(t). AW(t) is the amount of water in the embung at the end of the wet season in
year t. The embung is assumed to fill reliably each wet season, so AW(t) is a function
of the initial embung capacity and the total volume of sediment accumulated in the
embung by the end of wet season in year t represented by SED(t). SED(t) in turn is a
function of the sedimentation rate (SR).2 This rate is defined here as the proportion
of the embung designed capacity that is filled with sediment each year. For any
given runoff-related catchment management strategy, this proportion is assumed to
be 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 be
available 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 sediment
accumulated 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, it
follows that AW(t) = AW(0) − AW(0) ∗ SR ∗ t. The loss in storage capacity over
time 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 catchment

runoff management in place be denoted by SR N , with the subscript N denoting
“no management”. In a reservoir with no management, the total expected economic
benefit (BN ) in net present value (NPV) terms is:


T
BN = f (AW N (t))(1 + r)−t (1)
t=1

2 Ingeneral, AW(t) should also be a function of evaporative losses from the end of the wet season
when 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 will
depend on the shape of the embung and, potentially, on when the water is used within the season. If
the embung is cylindrical, then the daily evaporation will not be influenced by the currently available
water (as the surface area does not change with water use or past evaporation) provided water is
not fully used until the end of the season. For an embung with sloping sides, evaporation will be
reduced 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 possible
to do so, precisely to cope with the potential for evaporation. In this paper, there is no formal
allowance for evaporation and the within-year timing of water demand and water availability is not
modelled. Ignoring evaporation means that the benefits derivable from the embung are overstated
in 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 not
clear a priori how the rankings of different interventions would be affected.
 D. Pradhan et al.

where r is the discount rate, and AW N (t) is the water available for use in year t in
the absence of sediment management. The latter is given by AW N (t) = AW(0) −
AW(0) ∗ SR N ∗ t. Details of the annual benefits function f (.) are given in Section 4
below.

3.2 Benefits with Soil Conservation

When catchment management activities are implemented, the sedimentation rate

decreases because of the decrease in the rate of soil erosion. Using subscript S to
denote soil conservation, let SRs be the corresponding sedimentation rate, with SRs <
SR N . With the lower sedimentation rate, the total amount of sediment accumulated
over time t is smaller, providing more water available for use at time t. The service
period 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 conservation
activities, in this study only a single defined package of activities is evaluated. Two
activities that have been included in the model are: Planting trees around the catch-
ment to reduce sediment runoff, and maintenance of fences to prevent entrance
of livestock into the catchment area. This strategy involves a management cost in
the form of the cost of planting trees, the opportunity cost of labour, and also the
opportunity cost of excluding cropping (and livestock) on the land occupied by soil
conservation activities. Let the costs in year t be denoted by CMs (t). Let B S be the
NPV of the total benefits from the embung when soil conservation is implemented:


T
BS = [ f (AW S (t)) − CMS (t)](1 + r)−t (2)
t=1

where AW S (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 soil
conservation is practiced under this third strategy, the sedimentation rate is the same
as in the no management case, SR N . Under the strategy of periodic dredging, the
life of the embung is infinite, as removal of sediment restores the lost storage space
of the embung before the embung begins to accumulate sediment again followed by
subsequent dredging.3 Let CR be the cost of dredging and BD be the NPV of embung
benefits with dredging at year (D):
⎡ ⎤
∞ 
D
BD = ⎣ f (AW N (t p ))(1 + r)−t p − CR(D)(1 + r)−D ⎦ × (1 + r)−D× p (3)
p=0 t p =1

Here the subscript p = 0, 1, 2... is an index of the number of sediment removals

that have been implemented over time, t p is the number of years since the previous
sediment removal (i.e. end of cycle or service period p-1) and D is the number of
years between sediment removal events under this strategy. It is assumed that the

3 It was assumed that dredging removes all the sediment leaving the embung with its original capacity.
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

flow of costs and benefits repeats in perpetuity, i.e. the stored water will be used
identically in each service period. Similarly the sedimentation rate during the first
service period of the embung remains the same in perpetuity. The period between
sediment removal events ideally would be optimized in the same way as in other
asset replacement problem contexts, e.g. optimal machinery replacement and forest
felling time (Perrin 1972). Here the dredging time has been set exogenously at the
time when the sediment level in the embung reaches 30%, as proposed by Hansen
and Hellerstein (2007).
The present value BD in Eq. 3 is, formally, the present value of a sum of money
equivalent to the net value of a single service period (the expression in Eq. 3 and
denoted 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 flow
divided by the discount rate (IDR) over the interval between instalments, BD can
be expressed as BD = [NV] + [NV]/I DR. With an annual discount rate r and an
interval 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 alter
the 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 (SR S ) can be assumed to be the same as that for the strategy
with 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:
⎡  ⎤
∞ 
D
BDS = ⎣ f (AW S (t p )) − CMS (t p )(1 + r)−t p − CR(D )(1 + r)−D ⎦


p=0 t p =1

×(1 + r)−D × p (4)

where D is the number of years since previous dredging. As for the simple periodic
dredging strategy, the NPV of the combination of activities can be expressed as the
net 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 three
water uses, namely domestic water supply, water for livestock raising, and irrigation
of vegetables. As well, for those strategies not employing periodic sediment removal
and so involving eventual complete sedimentation of the embung, the “salvage
value” of the freed-up embung land is included.
The marginal value of water in each use is assumed either to be constant (for
vegetable production) for all levels of use or (for the other uses) to follow a simple
step function, with two levels. That is, marginal values are constant up to a designated
quantity of water before dropping to a lower value. Domestic use has the highest
 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-structured
interviews and surveys.
The water quantities at which the marginal values drop decline are set based on
per unit (e.g. household or animal) requirements and the number of units serviced
by the embung. The lower step values for domestic and irrigation use are assumed to
be below all three upper step values.
When maximum water is available from the embung (year 1), water is assumed to
be used in all three uses. The total annual benefits from using embung water for each
of the activities declines over time with the progressive decrease in available water.
Since irrigation has the lowest priority, the benefits derived from irrigation are the
first to decline. With time, as sediment accumulates, the benefits from livestock use
decline 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 it H ) was calculated
from the saved cost of time spent in collecting water for domestic use. Without an
embung, water would need to be collected from an alternative source, typically a
spring or a creek in the vicinity of a village.
The cost of time is estimated with reference to the wage rate of unskilled labour
in the study area. A fixed daily per person water requirement was assumed, and a
fixed 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 use
of the embung only start to decline when the available embung water is less than
the quantity of water required by the embung users for domestic use. The list of
variables and parameters for the estimation of embung benefits from domestic water
use is provided in Appendix 1 and the particular parameter values adopted are given
in Appendix 3.

4.2 Benefits of Using Water for Livestock

Cattle are the dominant form of livestock in West Timor. The benefits from livestock
raising (Benef it L ) are corresponding to the profit earned from the sale of cattle. In
the absence of good information about alternative sources of water, it was assumed
that if embung water is not available, then the households would not be able to raise
cattle. While not strictly true, the assumption is reasonable. Production would be
heavily curtailed without the water. Data collected in the field through a farmer
survey shows that 72% of the respondents use embung water as the main source of
water for livestock. The variables used for estimation of benefits from using embung
water for livestock rearing are tabulated in Appendix 2.
The water available for raising livestock was the total available embung water less
the water required for the higher priority domestic use. Per animal requirement of
water was assumed to be fixed. The total water required to support the total number
of livestock raised by the households using the particular embung was calculated as
the 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 available
for livestock was insufficient for this number of livestock, livestock numbers were
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

reduced in proportion. That is, less available water means the households can raise
fewer 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 the
higher priority domestic and livestock water needs have been fulfilled. As the total
water available from an embung decreases as a result of sediment accumulation in
the embung, the amount of water available for irrigation decreases first compared
to other water uses. This means that sedimentation of embungs affects the irrigation
benefits before it affects the benefits from other water uses.
The calculation of benefits from embung water supply for irrigation was based
on irrigating high value vegetable crops. The local research teams in West Timor,
such as Lembaga Ilmu Pengetahuan Indonesia (LIPI) and BAPPEDA, have been
focusing on promoting high value vegetable production for efficient utilisation of the
available embung water (Naiola and Biologi 2007).
Water required per hectare of irrigated vegetable crop is assumed fixed, so smaller
quantities of water available for irrigation means that smaller land area can be used
for vegetable production. This assumption of a fixed water requirement rules out the
possibility of altering the water application rates or switching to crops with lower
water needs as water availability declines over time. Such changes will often be eco-
nomically optimal. Not allowing for these economic responses may mean that the
irrigation water benefits are underestimated and the decline in benefits across time
are overestimated, though these discrepancies are unlikely to be serious.
The benefits from irrigating high value vegetable crops using the water stored in
the embung are estimated as follows:

Benef it I = Prof it I ∗ I y /I A (5)

where I y is total quantity of water available for irrigation per year (litre per year),
I A is the water required to irrigate a hectare of vegetable crop, I y /I A is the area of
land (ha) that can be irrigated with I y quantity of water, and Prof it I is the value of
average profit from vegetable production per hectare. I y is calculated as:

I y = AW − H y − L y (6)

where, H y is the total quantity of water required for domestic use per year (litre per
year), L y 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 has
been attributed to embung water as typically no other sources of water are available
to irrigate crops during the dry season in West Timor. Farmers mostly leave their
land fallow during the dry season if there is a lack of irrigation water and rely on
other off-farm activities (typically part-time) like carpentry, wood fire collection, and
non-farm labour work. Farmers typically have spare labour at this time of the year.
Therefore, the profit from vegetable production using embung water for irrigation
would be an additional income to the households in West Timor.
 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 it H (t) + Benef it L (t) + Benef it I (t). (7)

One further item of value (or cost) associated with an embung is the value of the
land 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 on
which an embung stands is typically still owned by the original owners for whom
the reduction in benefits from sedimentation is probably smaller given that they
will reclaim the land if the embung completely fills with sediment. With the salvage
value of freed-up embung land also contributing to the NPV of benefits from embung
service, the effect is to increase marginally (since the one-off salvage value is heavily
discounted across the embung lifetime) the relative attractiveness of the “single
cycle” strategies, those with finite embung lifetimes, viz. strategies (1) and (2). Let
the salvage value of land be represented by LV. The NPV of benefits, B SC can be
estimated for the single cycle strategies (1) and (2) as in Eq. 8 (with T replaced by T 
for strategy 2).


T
 
BSC = VB(t) − CM S (t) (1 + r)−t + LV(T)(1 + r)−T (8)
t=1

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

∞ 
 


BMC = VB(t) − CMS (t p ) (1 + r)−t p − CR(D)(1 + r)−D × (1 + r)−D× p (9)
p=0

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 ACIAR
project, 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 within
a 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. Households
were surveyed in villages from the Timor Tengah Selatan and Kupang districts. A
simple random sample of households was selected in each surveyed village, with 76
respondents in total (Ancev 2009). The list of data used for the analysis is presented
in Appendix 3 along with the sources of data.
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

5.1 Estimates of Water Requirements

For an embung of an average size, the total water requirement for domestic use was
calculated to be 4 ML per annum. The water requirement for livestock was calculated
at around 1 ML per annum for the maximum number of livestock i.e. 3 cattle head
per household as used in the current analysis. The maximum volume of water that is
available 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 tabulated
in Table 1. Despite the marginal value of domestic water use being the highest (up
to 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 not
conducive to using large quantities of water. Water is used for basic needs, and
therefore in limited quantities. On the other hand, irrigated vegetable production is
one of the few cash crops that can be grown in West Timor. As the need for income
increases, the value that could be realised from producing irrigated crops increases
as 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. Applying
this formula, the capitalised asset value of a typical embung in West Timor would
be around 310,000 (US$), or around 5,600 (US$) per household at 12% discount
rate (r). The estimated capitalised asset value of an embung indicates that embungs
are indeed valuable. This is not insignificant and communities might be expected
to appreciate the importance of the embungs as a means to improving their living
standard.

6.2 Evaluation of Alternative Sediment Management Strategies

An embung gradually filling with sediment is likely to be abandoned as a water

storage device, once capacity falls below a threshold level. Here, for simplicity, the
embung is assumed to be used until full of sediment. The expected life (T) of an
embung without any soil conservation activities being undertaken (strategy 1) was

Table 1 Estimated annual Activity Benefits (US dollars)

benefits from maximum
capacity embung water use Domestic water use 11,205
Livestock raising 6,825
Irrigation 19,164
 D. Pradhan et al.

calculated (T = 1/SR N ) as 25 years. When soil conservation activities (strategy 2)

are applied, the expected life (T  ) of embung was estimated (T = 1/SR S ) to be
42 years—representing an extension of the expected service life of 68%. When
sediment 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$) (Table 2). This was the highest NPV of all tested strategies. NPV
estimates for strategy (3) was second highest 271,000 (US$) (Table 2). All active
management strategies were economically preferable to no management. The NPV
for no management (strategy 1) was estimated to be 239,000 (US$) (Table 2). The
results indicate that it is clearly worthwhile maintaining a reservoir through periodic
sediment removal rather than treating the reservoir as an exhaustible finite life asset.
Approximately 13% of the capitalized value of benefits derivable from an optimally
managed 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 ranking
of strategies alter with changes in discount rate (r) and in the effectiveness of soil
conservation in reducing the sedimentation rate (SR S ). Additional sensitivity analysis
was conducted to examine the impact of changes in the sediment removal (dredging)
interval (D) to ensure that the assumption of dredging when sediment levels reached
30% is reasonable. The sensitivity to changes in the costs of soil conservation, CM S
(in strategies 2 and 4) was also studied but these results are not reported because
the NPVs and rankings did not change greatly. These costs, even beyond the upper
end of the range of plausible levels, are minor relative to the benefits realised from
embungs.

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 under
no management (i.e. strategy 1) was substantially less than the NPVs under the other
strategies. However, the differences between NPVs of alternative strategies become
insignificant 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 to
optimal.
The magnitude of discount rates (r) plays an important role in the choice of an
economically optimal sediment management strategy, with high rates enhancing the
optimality of the present situation of no management. This is particularly pertinent

Table 2 NPVs of embung Strategies NPV of embung

under alternative sediment
(thousand US dollars)
management strategies
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

Fig. 1 NPVs under varying

discount rates

to West Timor as discount rates (r) are likely to be high. There is reason to suspect
that the actual discount rates in these areas could be much higher than the value of
12% 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; Barbiche
and Geraets (2007)) coupled with a relatively short life expectancy (average being
57 years according to Barlow and Gondowarsito (2007)). Therefore, the preferences
of the people in these areas may be expected to be more geared towards the present
rather than towards the future. The observed current behaviour of communities in
West Timor in not managing embungs would be consistent with high actual discount
rates. The present study has not further explored actual discount rates.
There are of course other possible reasons for the current behaviour in embung
management. The survey results showed that embung users generally consider
embungs to be the property of government and hence expect the government to do
the maintenance work. This reflects the expectations of possible further ‘transfers’
for embung management, which is perhaps a result of the continued exposure
of these communities to assistance from government and/or international donor
agencies to improve their livelihood. Continued assistance from external sources may
have discouraged villagers from looking at solving the water supply problem them-
selves. If embung users envisaged government or donor agencies providing them with
a perpetual stream of embung services through freely provided replacements at the
embung expected service life of 25 years, the NPV (for the villagers) of such a stream
is (at 12% discount rate) $267,000. If they thought action would be taken to restore
water 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 discount
rates, it is not difficult to imagine villagers choosing the “no management” strategy. If
they 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 better
management.

6.3.2 Altered Sedimentation Rates Under Soil Conservation

The effectiveness of soil conservation can vary with location depending on the soil
type, steepness, intensity of rainfall and other incidents such as bushfires. As no
reliable data on the effect of soil conservation measures on sedimentation rates
were available for West Timor some sensitivity analysis was done. The analysis
involved four different reduction-in-sedimentation rates, namely 20%, 40% (the base
 D. Pradhan et al.

Table 3 Sensitivity analysis Strategy NPVs (1,000 US Dollars) when soil con-
for varying effects of soil
servation reduces sedimentation rate by
conservation
20% 40% 60% 80%
2 254 266 280 294
4 274 279 286 294
Difference in NPV 20 13 6 0
between strategy (4)
and (2) (1,000 US
dollars)(B DS –B S )
Expected life (years)
2 30 42 58 111
4 ∞ ∞ ∞ ∞
Dredging interval for 10 14 19 38
strategy (4) (years)

case), 60%, and 80% of the sedimentation rate occurring in the absence of soil
conservation.
Strategy (4) gave the highest NPV for all of the cases (Table 3). However, with the
increase in the beneficial effect of soil conservation, the difference in NPV between
strategy (4) and strategy (2) decreased and the difference was quite insignificant
when the reduction in the sedimentation rate was large (Table 3). Hence, if the soil
conservation activities can be applied to the level where the sedimentation rate is
substantially decreased, then the strategy which does not involve sediment removal
becomes 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 West
Timor would be valuable.

6.3.3 Varying Dredging Interval

As previously described, the time interval D between dredging is defined in relation
to sedimentation level. Specifically, dredging is done when the embung is 30% filled
with sediment. NPV calculation for strategy (3) and (4) takes into account that the
dredging is done at that point of time. Since the economically optimal dredging
interval would depend on the cost of dredging relative to the value of water, and on
the 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 to
examine the impact of a change in the dredging interval, viz. performing dredging
at the 20% and 40% sediment levels. The sensitivity analysis indicated that the
dredging at 20% and 40% sediment levels generates only slightly higher and lower
NPV 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 in
West Timor. At low discount rates, these benefits justify incurring the cost of periodic
sediment removal. At high discount rates, the benefits are substantially offset by
this cost. This confirms results reported in Kawashima (2007) and Kapadia et al.
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

(2002). Nevertheless, failure to maintain the embung is never the best strategy. In
practice, embungs are not well maintained. While high discount rates contribute to
this decision, it seems likely that other factors may be involved. Potentially, there
may be a moral hazard problem in villagers allowing embungs to go unmaintained in
expectation of government or donor intervention.
Nothing has been reported in this paper on the costs of embung construction. For
the assumed representative embung, these costs are thought to be around 600 million
IDR (US$ 54,545). The net benefit of an embung is necessarily less than all the NPVs
reported 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 of
lost NPV, but a much greater relative loss of potential net embung value, as much
perhaps 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 West
Timorese discount rates are around 20% or more. If rates are this high, as seems
plausible, then the current behaviour of ignoring the sedimentation problem
could be considered rational.
– Optimal embung management depends on the effectiveness of conservation
measures. Since the effectiveness of soil conservation activities is locality specific
and since data is not available for West Timor, future scientific research of
the effectiveness of different types of soil conservation activities in West Timor
would be useful.

Acknowledgement We acknowledge the ACIAR project SMAR/2007/219 for the funding of this
study. We are also thankful to Joko Triastono from BPTP NTT for the provision of information and
data 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 HH
Average household size HM (number of people)
Quantity of water required/person/day WP litres
Quantity required per day/HH Hd = WP*HM litres
Total quantity required per year/HH H y = Hd *365
Quantity that can be collected per visit Q litres
Thus, no. of visits required per day VN = Hd /Q times
Unskilled labor wage rate/hour $WL
Value of the time for collecting water/year from reservoir (embung) VT E = (X*WL)*VN*365
Value of the time for collecting water/year from spring/creek VT C = (Y*WL)*VN*365
Benefit of embung service/year/HH VT C - VT E
Benefit/year/embung Benef it H = (VT C - VT E )*HH
 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 HH
Number of cattle head/household HC
Total 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) L y = Ld *TL*30*7 (litres)
Weight of livestock when ready to sell Wt (Kg)
Price per kilogram $PC
Gross revenue per head GR = PC*Wt($)
Net profit per head PL = 14% of GR($)
Total net benefit/year/embung Benef it L = =PL*TL($)

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 in
no management (SR N ) embung capacity Widiyono et al. (2007)
3 Reduction in sedimentation 40% of SR N 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 (SR S ) embung capacity and (3)
5 Water usage per person per day 40 l GTZ website
6 Average family size 5 members Farmers survey
7 Average distance to water tank 50 m Semi-structured interview
holding embung water from
home
8 Average distance to spring 1 km Semi-structured interview
from home
9 Time required to collect water 30 min Semi-structured interview
from spring 1 km away
10 Volume of water carried per 30 l Semi-structured interview
trip for domestic use
11 Number of households served 55 Average estimated from
by an embung survey of eight villages
12 Opportunity cost of labour for 50% of unskilled labour Inter-American Development
time 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 Website
15 Average number of cattle per 3 head Semi-structured interview
household
16 Weight of cattle when ready 250 Kg Semi-structured interview
to be sold
17 Market price of cattle/kg 13,000 IDR (US$1.18) Semi-structured interview
18 Minimum water requirement per 25 l BPTP, NTT; NRCS (2007)
head of cattle per day
Management of Water Reservoirs (Embungs) in West Timor, Indonesia

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 in
Perdana (2003)
20 Water required to irrigate 4.5 Megalitres (ML) Bryan and Marvanek
1 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 in
vegetable production of production Arsanti et al. (2007)
23 Salvage value of land 8 million IDR (US$727) Semi-structured interview
per hectare
24 Hours of labour required 14 Assumption
per month for fence
maintenance
25 Area of catchment requiring 3 times the area of embung Semi-structured interview
plantation and verified using
Google Earth® view
26 Cost of planting trees per 32 million IDR (US$ 2,909) Mr. Joko Triastino from
hectare BPTP, NTT
27 Catchment area inside fence Equal to area of embung Semi-structured interview
28 Cost of dredging (CR) 160 million IDR (US$ 14,545) Semi-structured interview
29 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, NTT
31 Exchange rate 1US$ = 11,000 IDR As applying in December
2008

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