REPUBLIKA.CO.ID, PALEMBANG -- Grant from the government of Australia continues for the water supply project in Palembang amid a setback in the relations between the two neighboring countries.

The project has been built by a company owned by the city administration Perusahaan Daerah Air Minum (PDAM) Tirta Musi.

PDAM Tirta Musi will receive grant aid from Australia for the project to install clean water pipes for 3,900 customers among low income people in 2015 a PDAM Tirta Musi director Andi Wijaya said here on Tuesday.

Relations between Indonesia and Australia have suffered a setback lately over refusal of Jakarta to pardon two Australians convicted death for drug smuggling.

The two and six other drug convicts are expected to be executed any time soon.

There have been reports of Australia to stop any humanitarian assistance for Indonesia in retaliation to the execution plan.

Andi said the grant was the third for the same program. Two years earlier, the city administration received grant under the program of Australia Water Facility and Infrastructure and Sanitation.

"The cooperation already began two years ago and every year there is grant for the installation of water pipes for 6,000 customers among low income people. In the third year now ,PDAM Tirta Musi received an allocation for 3,900 customers," Andi said.

He said, there is difference in the process of funding the project in 2015 from the process in 2014 and 2013.

This year, the initial fund came from state budget and in 2013 and 2014, the initial fund came from the city budget.

The initial funds were replaced with the grant from Australia after the project has been completed.

"Starting this year, all funding process is to be handled in the center . Therefore, the initial fund is derived from the state budget," Andi said.

The city's PDAM has decides which area is to receive the grant this year , he said, adding, the decision is based on a survey held earlier.

The choice fell on the Seberang Ulu area, which is one of the biggest slum areas in Palembang, he said.

Meanwhile, head of the city's financial management body M Zulfan said the city administration proposed for grant of Rp5 billion for PDAM project in 2014.

The fund from the city budget had been verified by a team of Australian Program of Water Facility and Infrastructure and Sanitation , therefore, the fund s expected to be disbursed soon, Zulfan said.

"The project has been completed and we are waiting only for the fund to be replaced," he said.

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