The rapid urban population growth in Indonesia has caused a high increased in the demand of public services. One of the most important urban public services needed is water supply. Palembang is one of the big cities in Indonesia which has a problem in providing services in water supply. The local water company, PDAM Tirta Musi, has been established since 1929 to provide such service.
This thesis attempts to evaluate PDAM Tirta Musi's Palembang performance in providing water supply, especially with regards to financial and services aspects. As a matter of comparison, its performance will be compared to PDAM Surabaya and PDAM Bogor the first is the second langest city in Indonesia, while the second one is a regent which is also a sub urban area.
The results show that, service-wise and financially, PDAM Kotamadya Surabaya and especially PDAM Bogor were better than PDAM Tirta Musi Palembang. The performance of PDAM Tirta Musi is categorized as unsatisfactory and illiquid.
There are at least two factors that have caused unsatisfactory performance of PDAM Tirta Musi Palembang in financial and services aspects. These concern with the poor water management and human resources.