1. Loan Number : ADB-LOAN 1964-INO
2. Contract Package : SCBD Contract: C.2.30 Sustainable Capacity Building for Decentralization Project (SCB-DP)
3. Contract No. & Date : 050/630/437.71/2009
4. Contract Value : IDR. 10.782.943.600,- 
5. Credit/Grant Category :  
6. Completion Date of Contract : December 31, 2011
7. Brief Description of Services :  
  Since the introduction of the decentralization Laws No. 22 and 25 of 1999, Indonesia has been undergoing a far-reaching political and socio-economic transformation. The ongoing decentralization initiative represents an ambitious process of governance reform.

In order to support this process, the Sustainable Capacity Building for Decentralization (SCBD) Project supports regional governments to develop effective strategies for capacity building and provide financial and technical resources to implement an investment program in relevant sectors over a number of years. The approach is based on: a) the development of Capacity Building Action Plans (CB-APs); b) the implementation of these plans through contracts awarded to domestic capacity building service providers (the so-called ‘umbrella’ consultant); and c) technical supervision via a system of review boards.

Many administrative, fiscal and service delivery responsibilities have been transferred from central government to regional governments. Decentralization has clearly moved decision-making and resource management closer to the general public. However, most regional governments have limited experience in many of the newly decentralized functions and this constrains their capacity to provide efficient and effective public services.

SCBD supports 37 local governments (kabupaten/kota) and 10 provinces to increase their operational capability with regard to: a) the efficient delivery and maintenance of public services in accordance minimum service standards; b) the promotion of equitable economic development; c) the management of effective poverty reduction programs; and iv) the application of ‘good governance’ practices. Note: all 10 provinces participate in the program through Provincial Project Coordination Offices (PPCO) but not all will necessarily call for bids on SCBD-funded CBAPs.)

The SCBD loan project management in CPMO oversees disbursement of funds and deals with the administration of project implementation. A Capacity Building Review Board screens investment proposals and a national-level capacity building resource center and ‘clearing house’ has been established in National Public Administration Institute (Lembaga Administrasi Negara - LAN) to exchange experience and network good practice.


The following principal project goals have been agreed between the Government of Indonesia as borrower and the Asian Development Bank as lender, and are fully consistent with the GoI’s National Policy context. The overall objectives of the SCBD are:
  • More efficient delivery and maintenance of public services and facilities in accordance with minimum service standards of the Government of Indonesia (e.g. health, education, water-supply, garbage collection disposal, flood control and drainage, etc.) and the 11 obligatory functions of regional governments.
  • More efficient promotion of equitable economic development.
  • More efficient management of poverty reduction programs.
  • Institutionalization of good governance practices.

The principal tasks required under ‘umbrella’ contract package C.2 CB-AP Implementation are as follows:
  • Management of all expenditure qualifying for funding under SCBD during the first three financial years of CB-AP implementation.
  • Delivery, implementation/installation, monitoring and maintenance of services and products specified under the CB-AP.
  • Procurement of any additional specialist services and goods specified under the CB-AP which cannot be economically sourced within the consortium or which are only available through sole-source suppliers.
  • Capacity building management support to the regional government in the management of all CB-AP expenditure specified under the umbrella contract.
  • Professional and technical advice on all aspects of CB-AP implementation funded through the umbrella contract.
  • Professional and technical advice to support the institutionalization of sustainable capacity building programs in regional government to maintain the momentum of the first two years implementation of the provincial CB-AP.


As provided for under the QBCS Contract format, the regional governments will specify a mixture of service-based support and product delivery in the manner of a professional consultancy with substantial ‘out of  pocket’ expenses.

The Provincial Governments (Batch 3’ C.2 contract packages are price-competitive contracts which will include sub-components concerning:
  • Framework (capacity building policy, strategy and planning to meet performance targets including additional base-line and monitoring systems, Performance Indicators, and Consumer Satisfaction Surveys)
  • Institutional Strengthening (legal and regulatory environment; management systems)
  • Human Resources Management (HRM systems and methods)
  • Human Resources Development (training and education)
  • Financing and Budgeting (sustainable systems)

A Gender Action Plan (GAP) forms an integral part of the CB-AP and covers all five components above.