Cost–Benefit Analysis for Centralized and Decentralized Wastewater Treatment System (Case Study in Surabaya-Indonesia)

Abstract

Around 3 million inhabitants of Surabaya, the second biggest city in Indonesia, still dispose their wastewater to water bodies. This is mainly caused by lack of adequate wastewater treatment system. However, large-scale centralized wastewater treatment is not an economical option particularly for people living in low-income urban areas. Decentralized wastewater treatment systems that are more affordable are being developed. To have a sustainable wastewater treatment system, an integrated assessment of each alternative based on its economical, environmental, social, health and institutional aspects is necessary. This study explores the economical aspects of three scenarios of wastewater treatment system, with Kalirungkut subdistrict, a densely populated urban area in Surabaya, as a case study area. The costs and benefits of alternative interventions are evaluated using the cost–benefit analysis (CBA) method to support the decision making process by bringing elements of transparency and objectives. The results of CBA in this study showed that the decentralized system was more feasible economically for this case study, since the centralized wastewater treatment system had the highest net present value cost and the lowest cost—benefit ratio (C/B ratio). To support decision making regarding the sustainable wastewater treatment system for this area, further assessment on environmental, health, social and institutional aspects are recommended.