Air bersih di Indonesia dapat diakses melalui pelayanan yang disediakan oleh Badan Usaha Milik Daerah (BUMD) bernama PDAM (Perusahaan Air Minum Daerah). Hal ini memungkinkan pemerintah daerah untuk ikut andil dalam pengelolaan air di daerah administratifnya masing-masing. PDAM bertanggung jawab untuk menjaga pasokan air di daerah dan menghasilkan pendapatan dari bisnis air bersih tersebut. Namun penyediaan air bersih masih belum efektif sehingga menyebabkan kualitas air yang tidak memadai, distribusi air yang rendah, bahkan kerugian finansial. Untuk mengukur dan menganalisa inefisiensi pelayanan air minum dan pertumbuhan produktivitas PDAM dari tahun 2012-2016, penelitian ini menggunakan teknik non-parametrik, yaitu Data Envelopment Analysis (DEA) dan Malmquist Index Calculation untuk mengukur produktivitas setiap PDAM di Indonesia. Penelitian ini mengungkapkan bahwa terdapat inefisiensi yang signifikan di antara PDAM dari berbagai daerah di Indonesia. Ditemukan bahwa PDAM di luar Jawa berkinerja lebih baik daripada di Jawa; Oleh karena itu, PDAM membutuhkan intervensi kebijakan. Operasional PDAM di kota besar harus direstrukturisasi untuk meningkatkan produktivitas. Selain itu, penyesuaian teknologi (TECCH) tidak secara signifikan meningkatkan efisiensi. Namun, peningkatan produktivitas sebagian besar disebabkan oleh kemajuan teknologi

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Sufficiently clean water is accessible in Indonesia where municipally-owned cooperation (BUMD) handles the management of the PDAM. It allows local governments authority over water management in their administrative districts. This organization is responsible for maintaining the region's water supply while earning income from water business operations. However, this effort is not deemed effective since having a large number of PDAMs results in inadequate water quality, low water distribution, and even financial losses. However, the assumption lack factual evidence as they are not assessed alongside the government audit. In order to analyze the inefficiencies of water supply services and the productivity growth of PDAMs from 2012-2016, this research proposes to use a non-parametric technique, namely data envelopment analysis (DEA) and Malmquist Index Calculation, respectively. The research findings reveal that there were significant inefficiencies among PDAM from various regions in Indonesia. It was found that PDAMs outside Java performed better than those in Java; thus, PDAM needs policy intervention. The operations of larger municipal PDAMs should be restructured to increase productivity. There was no TFP growth (TFPCH) in PDAMs evidenced by the reduction in pure technical (TECH) and scale efficiency change (SECH). In addition, the positive technological adjustment (TECCH) did not significantly improve efficiency. Regarding the increase in the number of PDAMs resulting from technological improvement, the increase in productivity was largely due to technological advancement.