STUDY ON PRIVATE-INITIATIVE INFRASTRUCTURE PROJECTS IN

DEVELOPING COUNTRIES IN FY2011

STUDY ON SOEKARNO HATTA INTERNATIONAL AIRPORT
EXPANSION AND UPGRADING PROJECT IN JAKARTA
IN THE REPUBLIC OF INDONESIA

FINAL REPORT

February 2012

Prepared for:

The Ministry of Economy, Trade and Industry

Prepared by:

ITOCHU Corporation

SHIMIZU CORPORATION

Japan Airport Terminal Co., Ltd.

Nikken Sekkei Ltd

Nikken Sekkei Research Institute

Japan Economic Research Institute Inc.

Reproduction Prohibited

Preface

This report is a summary of the results of a Study on Private Sector Initiative Infrastructure Projects

commissioned as a project in fiscal year 2011 by the Ministry of Economy, Trade and Industry to

ITOCHU Corporation, SHIMIZU Corporation, Japan Airport Terminal Co., Ltd., Nikken Sekkei Ltd.,

Nikken Sekkei Research Institute, and Japan Economic Research Institute Inc.

This Study on Soekarno Hatta International Airport Expansion and Upgrading Project in Jakarta in

the Republic of Indonesia was an investigative study of the feasibility of a project for expanding and

upgrading the airport’s airside facilities, upgrading utility facilities, constructing new terminal

building, renovating and upgrading existing terminal buildings and constructing new commercial

buildings at a budget of approximately 104.5 billion yen. In recent years the number of passengers

using Soekarno Hatta Airport in the Jakarta Metropolitan Area of the Republic of Indonesia has been

increasing dramatically. Realization of a project to expand and upgrade the airport will contribute to

resolving problems resulting from aviation demand surpassing anticipated capacity.

We sincerely hope that this report will be of assistance in the realization of the above project and will

also serve as a useful reference for interested parties in Japan.

February 2012

ITOCHU Corporation

SHIMIZU CORPORATION

Japan Airport Terminal Co., Ltd.

Nikken Sekkei Ltd

Nikken Sekkei Research Institute

Japan Economic Research Institute Inc.

Map of the Project Site Map of Indonesia Source: Prepared by the Study Team from Google Earth photos Location of Soekarno Hatta Airport Source: Prepared by the Study Team from Google Earth photos .

Perum Angkasa Pura 1 AP-II PT. Bogor. List of Abbreviations Abbreviations Long Forms ACI Airport Council International APM Automated People Mover AP-I PT. Trade and Industry (Japan) MOSOE Ministry of State-Owned Entrprises (Indonesia) MOT Ministry of Transportation (Indonesia) Master Plan for Establishing Metropolitan Priority Area for Investment and MPA Industry in Jabodetabek Area PMC Project Management Consultant PTB Passenger Terminal Building PPP Public Private Partnership . Depok. Shimizu JPY Japanese Yen LCC Low Cost Carrier METI Ministry of Economy. JETRO Japan External Trade Organization JICA Japan International Cooperation Agency JIS JapanTerminalBuilding. Perum Angkasa Pura 2 ASEAN Association of South‐East Asian Nations Badan Perencanaan Pembanguan Nasional BAPPENAS (National Development Planning Agency) BCP Business Continuity Plan BHS Baggage Handling System CH/IN Check-in CPI Consumer Price Index DGCA Directorate General Civil Aviation EIRR Economic Internal Rate of Return EV Elevator FIRR Financial Internal Rate of Return IDR Indonesia Rupiah IIGF Indonesian Infrastructure Guarantee Fund JABODETABEK Jakarta. Tangerang and Bekasi JCR Japan Credit Rating Agency Ltd. Itochu.

R&I Rating & Information Investment Inc. ROE Return On Equity SBI Central Bank of the Republic of Indonesia .

etc. etc. 3-1 (2) Necessary considerations for determining project details. 3-17 (3) Project Plan Overview 3-42 . Objectives and Technical Feasibility of the Project (1) Project Background and Necessity. Table of Contents Executive Summary (1) Background and necessity of the project S-1 (2) Basic policy concerning decisions on project content S-3 (3) Project overview S-7 (4) Implementation schedule S-14 (5) Feasibility of implementation S-15 (6) Superior Technology of Japanese companies S-17 (7) Concrete schedule for realizing the project and risks inhibiting its realization S-19 (8) Maps indicating the project implementation site S-23 Chapter 1: Overview of the Host Country and Sector (1) Economy of the Country & Financial Conditions of the Government 1-1 (2) Description of the Targeted Sector 1-8 (3) Description of Project Area 1-13 Chapter 2: Study Methodology (1) Contents of the Study 2-1 (2) Method and Organization of the Study 2-3 (3) Schedule of the Study 2-4 Chapter 3: Justification.

engineering. and operation & management) 8-1 (2) The Competitive Advantage that Japanese Companies have in the Implementation of this Project (Technology . Economic Aspects) 8-19 (3) Measures Necessary to Promote the Issuance of Orders with Japanese Companies 8-22 . procurement & management.Chapter 4: Evaluation of Environmental and Social Impacts (1) Analysis of current environmental and social conditions 4-2 (2) Improvement effect of the environment accompanying the implementation of the project 4-4 (3) Environmental and social impacts accompanying the implementation of the project 4-4 (4) Summary of laws and regulations relating to environmental and social considerations of the partner country 4-14 (5) Procedures the implementing country (implementing or other relevant organization) must follow for realizing a project 4-20 Chapter 5: Financial and Economic Evaluation (1) Project Cost Estimate 5-1 (2) Overview of the Results of Preliminary Financial/Economic Analysis 5-4 Chapter 6: Planned Project Schedule (1) Planned Project Schedule 6-1 (2) Issues Pertaining to the Project Schedule 6-2 Chapter 7: Implementing Organization 7-1 Chapter 8: Technical Advantages of Japanese Companies (1) Expected Form of Japanese Involvement (Investment.

Chapter 9: Outlook for Fund Procurement (1) Review of Sources of Funds and Financing Plans 9-1 (2) Possibility of Funding 9-2 (3) Cash Flow Analysis 9-13 Chapter 10: Action Plan and Issues (1) Status of Activities for the Implementation of the Project 10-1 (2) Status of Activities of Relevant Government Agencies and Implementers in Indonesia for the Implementation of the Project 10-2 (3) Legal and Financial Restrictions of Indonesia 10-3 (4) Necessity of Additional Detailed Analysis 10-18 .

and JICA commenced a master plan study for this purpose in May 2011. which JICA is currently in the process of preparing. also presents plans for the development of new airport in the future. and targets nine priority sectors. the number of users of Soekarno Hatta Airport has grown steadily and in 2010 the number of passengers reached a record 44 million. The Project for the Master Plan Study on Multi-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia (hereafter. surpassing the airport’s capacity.Executive Summary (1) Background and necessity of the project 1) Background of the project Aviation demand in Indonesia is growing at a remarkable pace and the Soekarno Hatta International Airport (hereafter referred to as Soekarno Hatta Airport) plays a central role in aviation transport for the Jakarta Metropolitan Area (Jabodetabek). JICA Master Plan). which plays a key role in Indonesia’s rapidly growing economy. In December 2010 a memorandum of cooperation was signed between the governments of Japan and Indonesia for “the concept of Metropolitan Priority Area for Investment and Industry (MPA) in Jabodetabek Area” for the development of infrastructure in Jabodetabek. One of the priority sectors is airport facilities and the master plan proposes a plan for the expansion of Soekarno Hatta Airport. the airport also serves as a domestic air transport hub. Since it commenced operation in 1985. JICA’s master plan focuses on the development of infrastructure essential for promoting further growth in Jabodetabek. In addition to being the major gateway of Jabodetabek. The plan presented here also aims at accommodating Indonesia’s increasing airport demand through the expansion and upgrading of Soekarno Hatta Airport in the interim period before any new airports are S-1 .

At the same time. passenger numbers far exceed the terminal’s capacity of 22 million. progress in the implementation of this project has fallen behind the schedule of the initial plan. the state-owned enterprise currently operating Soekarno Hatta Airport. As a consequence.ready to commence operation. Angkasa Pura II (hereafter. Reaching 44 million in 2010. 2) Issues in Soekarno Hatta Airport and the need for expansion and upgrading In 2010 passenger numbers at Soekarno Hatta Airport increased about four-fold in comparison with passenger numbers recorded in 2000. the following problems also came to light:  Loss of business opportunities  Inadequate security measures  Aging of facilities In view of the current state of the airport’s overextended capacity and congestion both landside and airside. which it announced in 2011. has already prepared its own plan for the expansion of the airport. the airport must contend with the following issues:  Congestion in the terminal building  Congestion on the apron  Congestion in airport parking lots During the Study Team’s site survey. However. AP-II). In addition to responding to the need for tighter airport security S-2 . it can be said that the expansion and upgrading of Soekarno Hatta Airport is an issue that needs to be addressed urgently.

parallel documents. environmental considerations in facilities used. methods of financing. the Study Team will examine in this study a project menu of options for the airport expansion. respective master plans drawn up by AP-II and the Directorate General Civil Aviation (hereafter. the Study Team will present proposals to AP-II to further explore the feasibility of the project S-3 . this airport must fulfill its role as the gateway to Indonesia by providing a range of services for airport users and endeavoring to enhance their level of satisfaction. (2) Basic policy concerning decisions on project content 1) Basic policy of the study As mentioned above.reflecting the 9. rather. After having assessed the respective master plans for the expansion of Soekarno Hatta Airport. Then. the expansion and upgrade of this airport is a pressing issue. The purpose of this study is to investigate and examine the feasibility of the expansion and upgrading of Soekarno Hatta Airport by drafting a plan from the viewpoint of the airport management and from the viewpoint of private sector companies intending to participate in the project. and the introduction of energy-saving equipment. However. DGCA) have not been coordinated. a Japanese private sector group to participate in an expansion and upgrade project for this airport first needs to determine the feasibility of the project by engaging in consultation with AP-II and relevant government organizations.11 terrorist attacks. the two master plans stand as independent. and a project schedule. In the context of various requirements mentioned above. conducted the Study Team’s own airport site surveys and interviews with AP-II and other related organizations and consulted with JICA Master Plan Team.

3) Analysis of revenue structure and identification of management issues A look at the revenue structure of Soekarno Hatta Airport shows that a little less than 80 % of the airport’s revenues are related to aviation business while a little over 20% are derived from non-aviation business and just under 2% of revenues are related to cargo business. It is believed that the airport can accommodate 60 million passengers annually with current capacity for take offs and landings. AP-II and the JICA Master Plan Team. The current capacity of the terminals including Terminals 1 through 3 is 22 million. this study will remain within the parameters of annual passenger numbers to a maximum of 60 million with the use of two runways (excluding preliminary investigations described in Chapter 4).through dialogues. and therefore it is estimated that there is available capacity until about 2015. Plans for a new airport are being considered for 2017 onwards when the demand for air travel can be expected to exceed 60 million passengers annually but at this stage the plans are still in a state of flux. On the other hand. 2) Forecast for demand and airport capacity We established 60 million passengers in 2017 (domestic passengers: 47 million. which falls far short of the actual number of passengers at 44 million. Therefore. international passengers: 13 million) as a forecast figure for demand of air travel to and from Jakarta area. The ratio of revenues related to non-aviation business is low compared to international standards (2010 Airport S-4 .000. and this figure was agreed on in consultation with the DGCA. the annual takeoff and landing capacity for the current two runways is 370.

Therefore. In specific terms. Hong Kong. it is believed that there is significant room for improvement. there is a need for increase in space available for leasing following the expansion of the terminal buildings. and customers sending off passengers. customers in transit.Council International Study: 46. so that Soekarno Hatta Airport can contribute to the further development of Indonesia’s economy (ii) To promote improvement in customer satisfaction level and airport security by adjusting the airport to the present world-wide needs through expansion and modification for solution of existing issues. improvement in the quality of shops and inclusion. the Study Team set the following goals for the Soekarno Hatta Airport expansion project. Thailand and Malaysia. 4) Goal setting and basic policy for the expansion project a) Goal setting for the expansion project Taking into account the current status of the airport facilities and management issues regarding revenue. To increase unit sales per customer. and about 50% for Singapore).5 %) as well as standards for major Asian airports (a little over 40 % for Narita. (i) To resolve the problem of insufficient capacity by appropriately providing facilities on the airside (taxiways and aprons) and on the landside (terminals etc. the establishment of attractive commercial facilities is also necessary. so that Soekarno Hatta Airport can be transformed into a world-class airport (iii) To promote infrastructure development with a view to making Soekarno Hatta Airport an urban hub in the long term S-5 . as customers. of those visitors to the airport who at present are unable to enter the terminal buildings when they send off or meet passengers. The airport will have to continue its management efforts by replacing and upgrading shops on the premises to meet the ever-changing preferences of customers. as well as promoting the development of shops to meet the various needs of departing customers.).

so as to secure safety of passengers and concerned persons and inaugurate unserviced air routes. currently owned and operated by AP-II. giving careful consideration to the coordination of the roles of the Study Team and AP-II is essential. (i) To promptly resolve the lack of capacity on both the airside and the landside. b) Basic policy for the expansion project Based on the targets we set for the expansion project. (v) To provide a new moving system so as to improve the inconvenient movement between terminals c) Basic policy for commercialization of the project The project will not be a new development project but a project whose objective is to expand the existing facilities of Soekarno Hatta Airport. Therefore. domestic or LCC passengers (iii) To improve security by upgrading the system to the present needs. so as to provide an airport terminal appropriate to the gateway to Indonesia. S-6 . (iv) To deepen the attractiveness of the current airport terminal by positively taking advantage of the local cultural climate. by specifying customer-based grades. The project is currently being examined on the basis of the following approaches but these may change in the future upon consultation with AP-II. to consecutively make a series of expansion. such as international. replacement and modification of facilities so as to ensure the development with the airport in operation (ii) To enhance satisfaction of customers and focus investment in higher profitable project areas. we established the following basic policy for the development of facilities. such as ones for North America.

As mentioned earlier. and Japanese companies having intention to provide know-how and some administration (iii) Allow the private sector (mainly Japanese companies) as risk takers to participate in numerous project areas where there are many uncertain elements. interviews and site surveys. The Grand Design. which is AP-II’s airport expansion plan. the Study Team based its estimate of the scale of the facility on figures forecast for demand adopted for this study. the JICA Master Plan. (3) Project overview 1) Overview of the project After undertaking a review based on the AP-II’s Grand Design. (i) Implement a joint project with AP-II. etc. however. Although future airport expansion policies for the surrounding area of Jakarta can be expected to affect the position of Soekarno Hatta Airport and fluctuations in user numbers. that is. assumes the construction of Runway 3 and Terminal 4 at the northern perimeter outside the current airport area to accommodate demand exceeding 60 million passengers. This study also did not include a railway station due to uncertainty regarding the commencement of S-7 . this study narrowed the scope of the project to two runways and 60 million passengers per annum. taking into consideration the attendant characteristics and risk (ii) Implement a project with AP-II as the main organization in key areas of the management of operations at Soekarno Hatta Airport. annual passenger numbers of 60 million in 2017 (47 million for domestic and 13 million for international passengers). the Study Team drew up an overview of the project and determined its scale as shown in the table below. such as the concession and cargo business.

the operation of the railway itself and because of the long-term concept for the eastern commercial area within the airport grounds. S-8 .

East Not included ― side Source: Prepared by the Study Team S-9 . Table S-1: Project Elements in the Grand Design and Scope of the Project Anticipated for This Project Assumed Scale of Assumed Scope of Facility Project elements in the AP-II Grand Design Facilities in the Development in the Project Project New development + Apron Partial upgrade of existing aprons Airside New construction of runway on the eastern side Development area Taxiway Partial upgrade of existing 360.5km Terminal People mover development of dedicated (4 stations) ancillary bus roads) construction Upgrade of utilities and Utilities.000 ㎡ runway Addition to existing 30. roads Railway Station Railway station Not included ― Runway 3 Not included ― Future Expansion Terminal 4 Not included ― Commercial area.000 ㎡ Integrated buildings Connecting buildings Commercial Area New construction 185.000 ㎡ (extended facilities area) Terminal 1 +upgrade of existing +upgrade of existing facilities area Addition to existing 30. etc.000 ㎡ (extended Terminal facilities area) Terminal 2 +upgrade of existing +upgrade of existing facilities area Addition to existing 200.000 ㎡ Interchange terminals Parking building New construction of connecting terminals (or Total length: 3.000 ㎡ Terminal 3 facilities (extended area) Cargo New construction 150.

financial and economic analyses from hereon will be implemented on the basis of our plan.. as shown in the table below. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) From the viewpoint of the main implementing organizations and assumed sources of funding for the scope of the project plans. which established a joint venture project with a wider scope and we will conduct analyses of two scenarios. S-10 . one based on package (3) with the inclusion of package (2) and another without the inclusion of package (2). we divided the project into five package options as shown below. While there are differences in views between AP-II and the Study Team regarding the main project areas and funding sources. (2) and (3) were calculated as shown in Table S-3. Figure S-1: Difference between project elements in AP-II’s Grand Design and those in our plan Source: Prepared by the Study Team based on JICA. Project costs for packages (1).

office. However. assets utilizing yen loans taxiway and apron) are transferred to AP-II as equity or grants? Implemented as public works Package (2) as in Package (1). Table S. utilities.) as public works. utilizing yen Terminal ancillary work loans.2: Five Package Options Capital sources AP-II is assumed Capital sources the Study Team Project item to utilize is assumed to utilize Package (1) Implemented as public works Airside (new construction of utilizing government funds Implemented as public works taxiway. etc. develop on the basis of a JV as in Package (3) AP-II internal reserve or funds procured from the domestic Separate Soekarno Hatta market with AP-II as the main Airport operating company borrower. and undertake Upgrade and expansion of development of the terminal terminal buildings building after receiving third party participation. if not treated (people mover. and operate the business for a certain period of time Package (4) New construction of cargo village Construction based on the Joint venture including third Package (5) concession system with third party participation Commercial area party participation (commercial. parking facilities) Source: Prepared by the Study Team S-11 . and upgrade of  After implementation. hotel. Package (3) from AP-II.

Table S-3 : Calculation of Project Costs Unit: Million IDR Equivalent Yen USD Equivalent Equivalent Local Foreign Total Portion Portion Basic Facility (1) 6.625 Costs (3) Upgrade for Terminal 2 10.838 Source: Prepared by the Study Team 2) Summary of results of preliminary financial and economic analyses In AP-II’s financial results for fiscal 2010.382.000 246 2.350 1.838 426.625 2. and is therefore a profitable airport that supplements the AP-II’s head office expenses and offsets the deficits of other local airports that AP-II owns. According to the demand forecast adopted for this study.229 11.280 447. On the premise that Indonesia continues effective economic growth of around 6% in the S-12 .352 12.911.176.788. the increase in revenue will overtake the increase in costs from the expansion of the terminal. which is the upper capacity limit for the airport upon completion of this project.000 647 5.500 1.375 294.838 426.481 132.425 9.000 129 1. According to the outlook for income and expenditure resulting from this project scheme calculated on the basis of total passenger numbers of 60 million and other assumptions (see Chapter 5 of this report).000 1.125 Upgrade for Terminal 1 10.470.411.070 Construction Extension for Terminal 3 50.750 61 558.500 4.750 61 558.900 564.125 Subtotal of Construction Costs 95.000 78 705.375 294.647. the total number of both domestic and international passengers using this airport will continue to grow and can be expected to reach 60 million by 2017. by 2020.720 141.180 Development (2) Terminal Ancillary Work 19.294.356 Total Project Costs 104.000 129 1.235.529.176.125 Design Expenses (5% of Construction Costs) 4. or the fifth year after commencement of the new airport services. and operating profit exceeding that of 2010 by 52% can be expected.356 Reserved Fund (5% of Construction Costs) 4.500 882.750 8.588 2.875 1.176.500 882. Soekarno Hatta Airport earned 134% of AP-II’s overall operating profit.882.481 132.

000 households will be unavoidable due to the expansion of Soekarno Hatta Airport. EIRR. will be converted to land for airport purposes. financial internal rate of return. and provide high-quality space for the use of both passengers and the general public. A preliminary investigation of environmental and social impacts following the development of Runway 3 and Terminal 4 in the future was conducted in the JICA Master Plan. underutilized land. making possible the integrated and orderly use of land. such as the golf course that at present is partially located between the two runways. 3) Environmental and social impacts The consideration of environmental and social aspects of the schemes or plans proposed by this study is basically cited from the study results of the JICA Master Plan. FIRR.future. an increase in the number of passengers using Soekarno Hatta Airport and an increase in the airport’s revenue can be expected to continuously grow in the future. Furthermore. an antecedent study related to this study. The improvement of the terminal functions and connection functions between terminals examined in this study will improve the usability of facilities for both passenger and cargo flights. was 17%. and formulation of a relocation plan is necessary. The introduction of service facilities including commercial areas will also create employment opportunities and will enable the revitalization of retail and distribution businesses. As a result. involuntary relocations on a scale of 2. for Package (3) was 19% and economic internal rate of return. Based on passenger growth forecasted by AP-II and increase in consumption per passenger assumed by the study team. the conversion of agricultural land into land for airport use will require the rerouting of irrigation S-13 . In addition.

unavoidably increase the impact on the environment. the agency in charge of the plan. The JICA Master Plan study project is proceeding with preparations for a joint study in cooperation with the DGCA. It has already been confirmed that the assignment of the respective terminal functions in the project have not yet been finalized even within AP-II. Therefore. If Terminal 3 is to be developed as a terminal for the dedicated use of domestic flights. This problem can be mitigated to some extent by adopting building designs that conform to building standards in the guidelines of the the Ministry of Environment Decree No. an environmental impact assessment (EIA) including a Strategic Environmental Assessment (SEA) must be undertaken prior to the expansion of the airport. The expansion of the terminal facilities will increase the floor areas of buildings and. the plan for upgrading Terminals 1 and 2 will differ significantly from the plan this study has anticipated. and the University of Indonesia to enable the required environmental assessments to proceed. (4) Implementation schedule The schedule for the implementation of this project that can be assumed at this stage is shown below. The conversion of agricultural land to land for other purposes will also necessitate a review of industrial policies in regional planning. S-14 . However. Due to the scale and content of the airport.8/2010 that provides the standards for environmentally friendly buildings.channels and the shifting of roads used by residents in their everyday activities. therefore. it must be noted that this factor will have a significant impact on the implementation schedule of the project.

the subject of this study. etc. Detailed design Bid for construction works Construction works Project management Cargo terminal Detailed design Bid for construction works Construction works Project management Connected Building Detailed design Bid for construction works Construction works Project management Source: Prepared by the Study Team (5) Feasibility of implementation 1) Status of the implementation organization of the partner country AP-II. as well as other airports in western Indonesia. is a state-owned enterprise wholly owned by the Indonesian government and has an established track record in managing a total of 12 airports including Soekarno Hatta Airport. the implementing organization on the Indonesian side. Table S-4 : Implementation Schedule Year 2011 2012 2013 2014 2015 2016 2017 Quorter Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Overall plan Pre F/S Selection of consultant Basic plan Bid for project rights Terminal 3 Detailed design Bid for construction works Construction works Project management Terminal 2 Detailed design Bid for construction works Construction works Project management Terminal 1 Detailed design Bid for construction works Construction works Project management Taxiways. AP-II also engages in air traffic control operations in S-15 . The scope of AP-II’s operations encompasses all airport facilities including basic airport facilities as well as terminal facilities.

AP-II possesses sufficient capabilities in terms of management. However.com) S-16 . experience and know-how. As the implementing organization of this project. As a result of the Team’s analysis assuming that the project be financed by 40% equity and 60% debt with 12% interest and 23-year tenor. organizational structure. etc. financial base. and that the feasibility of the project remained high even after taking into account Indonesia’s recent economic conditions and interest rate level. and received the approval of the government to proceed with this plan in July. we were able to confirm that the return on equity.” This review was undertaken solely as one option for the implementation of the project. at over 15% was satisfactory if the project did not assume investment costs for ancillary facilities such as taxiways or people mover.0085 yen (Bloomberg.western Indonesia.1 billion yen 1 ) per annum. a comprehensive plan for Soekarno Hatta Airport. ROE. 2) Results of financial analyses of the project The feasibility of the project was confirmed through cash flow analysis on the soundness of the balance of investment and earnings if the upgrade and expansion project proceed following the acquisition of business rights to operate Soekarno Hatta Airport for 20 years at the cost of 600 billion rupiah (about 5. the two points noted below will have significant impact on financial analyses and 1 As of November 30th. 1 rupiah was worth 0. This assumption differs from AP-II’s policy to “singlehandedly undertake the development and management of the terminals. In 2011 AP-II formulated the Grand Design.

a result that make investment decision difficult under the current Indonesia’s recent economic conditions and interest rate levels. Undertaking additional detailed analyses of a passenger terminal project in particular and presenting proposals to AP-II from the viewpoint of business operators will be effective in proceeding with this project. a) Environmental technology At every stage including development. b) Continuous contact with AP-II One factor that will significantly affect the return on investment is the payment of concession costs to AP-II. (6) Superior Technology of Japanese companies 1) Consideration of technology Japanese companies are known to excel in technology in the following areas. Three Japanese companies wish to participate in this project as joint partners and all of these have proven track records in promoting a wide range of projects to date. At airports in Japan.therefore further investigation is necessary for implementing the project. Whether or not the project becomes an attractive proposition for the Japanese companies involved depends on negotiations with AP-II. construction. and operation. a) Application of yen loans or other low interest financing provided by Japanese Government A financial analysis of the scenario where the project assumed investment costs for ancillary facilities yielded ROE of 11%. an airport has significant impacts on the environment. consideration of the surrounding environment and the S-17 .

b) Construction technology Japanese construction companies are also considered to have superior technical know-how in construction technology for reducing environmental impacts. and energy control systems in buildings. From the perspective of other types of casualties as well. Japanese companies also have a competitive edge in their ability to draft plans for facilities that incorporate technical know-how and BCP response capabilities developed in Japan over many years. baggage handling systems. which in recent years has experienced a number of large-scale earthquakes. When it comes to countermeasures for the surrounding environment during construction. c) Disaster response measures and business continuity plan (BCP) Earthquake resistance performance of Japanese buildings is unsurpassed at the top international level. these companies have a reputation for implementing various mitigation measures as well as ongoing monitoring. this project too will be able to realize the construction of a highly environmentally friendly model that incorporates a wide range of environmental technologies. S-18 . and the design of buildings utilizing Japanese earthquake resistance technology can be considered very effective in protecting human life and establishing emergency bases during disasters in a country like Indonesia. are known for their high reliability. d) Operation management systems Japanese security systems. Utilizing the know-how in design and construction of Japanese companies. among others.fastidious introduction of environmentally friendly technologies for buildings during development are already quite advanced.

AP-II’s intentions differ somewhat from the project the three Japanese companies envision. Therefore. the three companies based their participation in the passenger terminal project on a joint venture with AP-II. the operator of the present Soekarno Hatta Airport. Therefore. raising some concern regarding the cost competitiveness of Japanese companies. Japan Airport Terminal. On the other hand. In this study. AP-II has already announced at a press conference its intentions at present to undertake the terminal project as a single entity but will approve investment of foreign capital in concession businesses such as hotels. independent projects such as hotels in cooperation with business groups led by these three Japanese firms. (7) Concrete schedule for realizing the project and risks inhibiting its realization 1) Concrete schedule for realizing the project ITOCHU Corporation. and SHIMIZU Corporation are the three Japanese companies that wish to participate in this project.2) Economic considerations The yen has been trending at historically high values. promoting consultation with AP-II at an early stage for the implementation of the project will continue to be important. The three companies also make the assumption that they will pursue other profitable. Japanese companies can be considered to be in an advantageous position compared to other countries due to the provision of capital through ODA and export credit agencies. As part of this process. However. the Japan Airport Terminal in tandem with this S-19 .

Japan Airport Terminal has managed the terminal building at Haneda Airport for about 50 years. there are no business restrictions applicable to the project. a) Restrictions on foreign capital participation The only restriction on foreign capital participation in this project is as a “provider of air traffic control operations. 2) Risks inhibiting the realization of the project The following risks exist as legal restrictions in the realization of this project. S-20 . On the other hand.” therefore.study has been putting forward proposals for business cooperation in airport management business with AP-II. careful attention must be paid to the fact that investment by Japanese companies in the project will be restricted to no more than 49%. it is believed that cooperation in this project will be extremely effective in the future management of Soekarno Hatta Airport. Therefore. Soekarno Hatta Airport shares many similarities with Haneda Airport in terms of its location in a metropolitan area and the characteristics of passengers who use the airport. an upper limit of 49% has been set for foreign capital investment in business areas indicated in the table below. Therefore.

and there is a likelihood that finalizing these will have an impact on the project schedule. and aircraft Max 49% foreign investment leasing) Air transportation non-commercial Max 49% foreign investment Services related to airport Max 49% foreign investment Freight forwarder service Max 49% foreign investment Airplane cargo service Max 49% foreign investment General Selling Agent (GSA) of foreign air transport company Max 49% foreign investment Source: Presidential Decree No. however. however. Transportation Sector (Airport-Related) Terminal supporting business Max 49% foreign investment Airport service Max 49% foreign investment Air transportation supporting service (reservation system via computer. To establish a joint venture company in Indonesia and to commence construction and business operations. procedures have been simplified. S-21 . etc. Attachments I and II (May 25th. In recent years. ground handling for passenger and cargo. acquisition of ownership rights and licenses (including construction rights. and the acquisition of business and construction permits. registration of the establishment of the new company.). 2010. In the future it will be necessary to take advantage of these services. are required the registration of investment plans. Table S-5: Restrictions on Foreign Investment in Indonesia (relevant to Airports) Business Field Condition 10. 2010) b) Risks relating to various procedures This study proposes a method of establishing a joint venture company. 36. and integrated “one-stop services” where most applications can be lodged at the Investment Coordinating Board are now provided.

which expects Indonesia to utilize low-interest. In that case. long-term public loans from the Japanese government. however. S-22 . the Study Team. may be able to demonstrate its strengths to even greater advantage. c) Funding risk The recent European financial crisis does not allow for optimism at present and if its impact extends to ASEAN countries including Indonesia. it can be assumed that it will have a significant impact on funding of this project.

(8) Maps indicating the project implementation site Figure S-2: Map of Indonesia Source: Prepared by the Study Team from Google Earth photos Figure S-3: Location of Soekarno Hatta Airport Source: Prepared by the Study Team from Google Earth photos S-23 .

and the Asia Economic Monitor predicts it will be 6.2-6.0% and is on a downward trend. As a result of the decline in external demand and monetary tightening policies designed to curb domestic inflation. Risks and Policy Issues” (July 2011)). On the other hand. (See Table 1-2) 2 The Indonesian government predicts that its 2011 GDP growth rate will be 6.0 +/-1. 1-1 .4% in 2011 (and 6.2 The rate of increase in the Consumer Price Index (CPI) has been kept within the government’s target range for inflation of 5.4% (October). the other countries in ASEAN-4 (Thailand. Malaysia.7% in 2012.Chapter 1 Overview of the Host Country and Sector (1) Economy of the Country & Financial Conditions of the Government The Indonesian economy has maintained favorable growth for a little over the past ten years led by domestic demand. see Table 1-1). and the Philippines) are forecasted to see a deceleration of economic growth due to a contraction of production from domestic industry and declining exports. the expectation is that companies will expand capital investments backed by robust domestic demand.4%) exceeding the 2010 level will continue. and that rapid growth (6. the IMF predicts it will be 6.2% (April). since prices are stable in Indonesia. while the impact on the country from the global recession that followed in the wake of the collapse of Lehman Brothers was mild compared to that in its neighboring countries (it maintained a 4-5% positive growth rate over the period from the second quarter of 2008 to the second quarter of 2009. “Asia Economic Monitor: Economic Outlook.

looking at the central government’s debt situation reveals that its public debt outstanding as of the end of 2010 was at the low level of 27.6 4. Thus.6 4.4 18.7 6.4 5.0 4.8 2010 3.5 100.7 14.6 6.7% as a share of GDP.5 4.3 3.2 capital formation Exports 9.9 4.5 4.2 5.8 6.3 17.4 15.0 14.0 4.8 2.6 9.7 2.6 3. “Monthly Report on Socio-economic Data” (November 2011.6 7.5 9.3 7.1 consumption Gross fixed 2. “Monthly Report on Socio-economic Data” from July through November.0 3. and Monthly Reports on Socio-economic Data from July through November) Table 1.0 5.0 *1: Real values (based on the year 2000) *2: Target values Source: Statistics Indonesia (BPS).0 6.2 6. 1-2 .6 4.6 2. “Laju Pertumbuhan dan Distribusi PDB Menurut Penggunaan Tahun 2006-2010 (persen)” in the November edition.4 3. which has been kept within the 3.3 8.1 32.5 6. Table 1-2: Trends in the Rate of Rise of the Consumer Price Index (CPI.1 10.5 7.3 9.0 2011 7. and plans to reduce public debt as a proportion of GDP down to at least 22% (with 20% being ideal).43% as a share of GDP (IMF Statistics).4 Source: Statistics Indonesia (BPS).8 56. Unit: %) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 9.1 6.5 9.7 3. Table 1-1: Trends for Growth Rates of Real GDP by Component of Expenditures (Unit: %) GDP Growth Rate Composition GDP Growth Rate (Year-on-Year)*1 (Corresponding Period of the Ratio*2 Previous Year) 2006 2007 2008 2009 2010 2011Q1 2011Q2 2011Q3 2010 Real GDP 5.9 4.6 9.3 11.7 6.5 2.0% as a share of GDP stipulated in the State Finance Act.2 -23.7 consumption Government 9.8 5. Corresponding Period of the Previous Year. there are no major concerns with its fiscal balance for the immediate future.5.8 4.2 5. “Inflasi Nasional Year-on-Year” Next. Mainly Table 2.2 7.7 2.0 5.4 8.0 6. The government is aiming to achieve equilibrium in its fiscal balance through the year 2014.2 6.9 12.7 0.6 Imports 8.9 10.6 16.5 6.5 -9.6 4.5 6.8 2. the deficits from its fiscal balance viewed from its initial budget from FY2011 is 1.9 3.9 7.3 6.8 3.5 24.0 17.0 Private 3.3 15.3 4.4 2.9.2 8.3 6.0 -15. In addition.

Table 1-3: The Central Government’s FY2011 Initial Budget and Revised Budget, and its Draft
Budget for FY2012
FY2011 FY2011 FY2012
(Unit: Trillion rupiah) initial revised draft
budget budget budget
Annual revenue 1,104.90 1,169.90 1,311.40
Tax revenue 850.3 878.7 1,032.60
Other revenue 250.9 286.6 278
Subsidies 3.7 4.7 0.8
Annual expenditures 1,229.60 1,320.80 1,435.40
Central government expenditures 836.6 908.2 965
Local government expenditures 393 412.5 470.4
Fiscal balance -124.7 -150.9 -124.0
Share of GDP -1.7% -2.1% -1.5%
Fundraising 124.7 150.8 124
Raised domestically 125.3 153.6 125.9
Raised overseas -0.6 -2.8 -1.9

FY2011 FY2011 FY2012
Macroeconomic conditions
initial revised draft
(Unit: Rupiah)
budget budget budget
GDP (trillion rupiah) 7,226.90 7,019.90 8,119.80
GDP growth rate (%) 6.5 6.4 6.7
Rate of inflation (%) 5.65 5.3 5.3
Exchange rate ($/rupiah) 8,700 9,250 8,800
Policy interest rate (SBI rate) (%) 5.6 6.5 6.0
Crude oil price (US$/brl) 95 80 90
Source: Ministry of Finance of the Republic of Indonesia (http://www.depkeu.go.id/)

Fiscal Policy Office (BKF) (www.fiskal.depkeu.go.id)

Future grounds for concern include: (1) the impact from sudden oil price rises in terms of worsening

domestic inflation and the fiscal balance, and (2) the impact on external demand and international

financial flows from the aftermath of the debt crisis in European countries and a protracted economic

slump in the United States, which is Indonesia’s major export partner.

Of these, sudden rises in crude oil prices are grounds for concern. The Indonesian government has a

1-3

policy in place of providing subsidies for gasoline and other fuels in order to mitigate the impact of

sudden oil price rises on domestic prices. But due to the recent oil price hikes (the Indonesia Crude

Price (ICP) forecasted in the initial budget of US$40 per barrel had risen to US$80 per barrel as of

the time of the revised budget), the outlays for oil subsidies exceeded the initial budget from FY2011

(expanding from the 95.9 trillion rupiah estimated in the initial budget to 120.8 trillion rupiah

(US$14.1 billion)3). The fiscal balance deficit from the revised budget grew to 2.1% as a share of

GDP (whereas it was 1.7% in the initial budget). Though this has been kept within the 3.0% as a

share of GDP stipulated by the State Finance Act, attention must be paid to trends in the international

oil prices in the future.

Attention must also be paid to trends in international financial flows. Financing for Indonesia’s

budget deficit is raised mainly through the sale of government bonds in the market. As a result of the

ongoing monetary easing that has been taking place primarily in developed countries in recent years,

the proportion of government debt held by overseas investors has rapidly ballooned from 19% (108

trillion rupiah) at the end of 2009 to 31% (196 trillion rupiah) at the end of 2010, and on to 36% (249

trillion rupiah) at the end of July 2011.4 However, since August, the proportion of such debt retained

by overseas investors has been on a downward trend, as it appears that funds from overseas investors

have started to flow out of bond markets due to uncertainties over the future course of the Western

economies. This has been accompanied by a weakening of the rupiah from US$1 = 8,533 rupiah at

the end of August to US$1 = 8,852 rupiah at the end of October, and proceeding on apace to US$1 =

9,025 rupiah as of November 21st. However, preventative monetary easing steps have been taken by

the Central Bank of the Republic of Indonesia (SBI) (it lowered its policy interest rate from 6.75% to

3
Reuters News Agency (JAKARTA, July 4, 2011)
4
MOF: Ownership of IDR Tradable Government Securities (SBN) as of 31 October 2011

1-4

6.50% in October), domestic prices are stable, and there exists robust domestic demand. When these

and other factors are taken into consideration, Indonesia’s economic growth is forecast to continue

through 2012 and beyond.

In addition, the Indonesian government is planning to improve and expand infrastructure in its draft

budget for FY2012 (167 trillion rupiah, a 19.4% increase from the revised budget from the previous

fiscal year), with it expected to achieve a GDP growth rate of 6.7% in 2012 (see Table 1-3). In order

to achieve equilibrium in its fiscal balance through the year 2014, the government plans to use a PPP

in order to perform infrastructure improvements without placing a burden on public finances.

According to the Five-Year Development Plan from 2010-2014, of the net total for infrastructure

improvements of 1,429 trillion rupiah that will be needed over this five year period, 511 trillion

rupiah (36% of the total) will be covered by national taxes, with the plan being to raise 407 trillion of

the remaining 918 trillion rupiah (28% of the total) through the PPP method.5

Given the abovementioned circumstances, major ratings agencies have raised their long-term

sovereign ratings for Indonesia across the board. S&P raised it from BB to BB+ in August 2011,

Moody’s raised it from Ba2 to Ba1 in January 2011, the Japan Credit Rating Agency (JCR) raised it

from BB+ to BBB- in August 2010 (giving it the same rating again in August 2011), and the outlook

by the Rating & Information Investment Inc. (R&I) remained at the BB+ level in October 2010 but

was upgraded from “Stable” to “Strengthening,” with each of these raising Indonesia’s long-term

foreign currency sovereign credit ratings. JCR pointed to a number of factors when it came to its

reasons for raising its rating. These include the fact that Indonesia’s economy has achieved robust

growth led by domestic demand for more than the past ten years, as well as the expectation of

5
Ministry of Industry, “Facts & Figures” (2011)

1-5

continued economic growth backed by brisk domestic demand coming mainly from private

consumption (since purchasing power is expected to rise in the future), and that the state of its

national finances is in good condition. It is conjectured that Indonesia will be able to further improve

its rating by boosting its tolerance against external fluctuations in the future and accelerating its

economic growth by promoting investments in infrastructure.

Table 1-4: Indonesia’s Long-term Foreign Currency Sovereign Credit Ratings (October 2011)

Rating agency Rating Outlook
Moody's Ba1 Stable
S&P BB+ Strengthening
Fitch Ratings BB+ Strengthening
JCR BBB- Stable
R&I BB+ Strengthening

Source: SBI “Historical Indonesia Sovereign Rating November 2011”

Despite the various problems the country still has to contend with, Indonesia can be considered

politically and socially stable overall. The 32-year autocratic regime of President Suharto finally

collapsed in May 1998 in the wake of growing social unrest exacerbated by the Asian financial crisis,

and efforts in the ensuing six years to promote democracy6 by three successive presidents – Habibie,

Wahid, and Megawati – culminated in the first direct presidential election in the country’s history in

October 2004. The incumbent President Yudhoyono has maintained a high public approval rating

since his election in the direct election in 2004 and is currently serving his second term after being

6
Measures to democratize the country included amendment of the 1945 constitution four times (October 1999,
August 2000, November 2001, and August 2002), the abolition of the People’s Consultative Assembly’s right to
appoint the president, introduction of direct elections, limiting the terms of both president and vice president,
strengthening of the power of the legislative branch of government, and the creation of the Regional Representative
Council.

1-6

it is not the sole religion of Indonesia but one of six religions including Christianity and Hinduism officially recognized by the government. known as Pribumi) comprising 97% of the total population and Chinese who immigrated to Indonesia during the Dutch colonial period comprising the remaining 3%. The Daily Jakarta Shimbun 8 “Domestic politics and Indonesia’s international position. 2011. analysts and authorities on Indonesia consider this insistence as a tradition of the country’s orientation toward autonomy since the country won its independence and that there is no need for concern8. The majority of Islam belongs to the Sunni sect. due largely to the uncovering of corruption within the Democratic Party.sworn into office in October 2009 following his re-election in the general election in July. 1-7 . While some political parties still insist that activities of foreign companies and organizations should be more regulated. the support base of President Yudhoyono. 2011 (www. holds only 27% of the parliament’s 150 seats and to secure a majority in parliament. Although terrorist activities by Islamic extremists occur from time to time and make the future situation unpredictable. his government formed a coalition of six political parties. there is a strong likelihood that President Yudhoyono will see out his second term.eastasiaforum. Therefore. October 18.org).” Rizal Sukma. the Yudhoyono government’s policy to eradicate terrorism is already having 7 “Heads of four major political parties cut a deal” October 22 & 25. Although about 90% of Indonesia’s population is Islam. and therefore have little inclination to restrict a free market economy. Islam extremists in Indonesia remain a minority. The Democratic Party. which is a moderate sect and has only a mild view regarding world control. There are over 300 tribes in Indonesia with ethnic Malays (native Indonesians. which continues until October 20147. the major parties within the coalition seem to have a tacit agreement not demand Yudhoyono’s resignation despite leveling open criticism at the president and his party. Although the centripetal force of the Democratic Party as the leading ruling party has dwindled since the beginning of the second term of government.

no transportation infrastructure of any kind connecting these islands together has been set in 9 Economist Intelligence Unit. such as in the case of independence movements in Aceh or Papua.S.S.” Nevertheless.110km east to west and 1.000 islands of varying sizes that are dotted throughout a vast area that runs 5. airplanes have been the most efficient means of travelling long distances for Indonesia. 1-8 . Its national territory comprises roughly 18. According to the Political Instability Index9 compiled by the Economist. Indonesia ranked 52nd out of 165 countries in order of political instability for the 2009/2010 period. companies active in ASEAN countries (Cambodia. Malaysia. it is considered to be of lower risk than Thailand.an impact and it is believed that there is little likelihood of terrorist activities having a devastating effect on the country’s economic activities. but efforts are being made to resolve these problems including the signing of a peace treaty with Aceh and the designation of Papua and West Papua as special autonomous regions. Thailand. companies belonging to the U.800km north to south. which ranked 39th in the same index. local problems have not reached the stage where they have had an impact on the country as a whole. and was included in the group of “high-risk countries. Chamber of Commerce in ASEAN countries indicated that although approximately 90% of respondents considered corruption in Indonesia to be a problem. and Vietnam). Because of efforts like these. the Philippines. 10 AmCham Singapore. “The ASEAN Business Outlook Survey 2011.S. as it is an island country. about 30% of respondents replied that they would choose Indonesia as a destination for expanding their business. The Economist. In addition. Singapore. Indonesia.” a questionnaire survey targeting 327 executive officers of U. (2) Description of the Targeted Sector Essentially. At present. In regional areas riots do occur sporadically. results of a 2011 survey10 of executive directors of U.

” Tokyo Institute of Technology homepage: http://www. with the demand for airplanes rising on the whole.pdf (November 10. which account for 80% of the total. “Aviation in ASEAN: Liberalization and Low Cost Carriers. and so aviation infrastructure is a useful means of getting around within the country. 11 Shinya Hanaoka. per-capita income has increased and the use of airplanes as a means of transportation has been rising year by year. as a result of the remarkable economic development of recent years. and so low cost carriers (LCCs) began to appear on the scene in Indonesia.11 The appearance of these LCCs contributed to making airplanes a more accessible means of transportation for people across a broad spectrum of incomes. 2011) 1-9 . 29 of which provide flights along international routes. with demand for domestic routes showing particular growth since 2000. Airplane passengers in Indonesia are characterized by their overwhelmingly strong demand for domestic routes. Regulations on entering the market for domestic air transport were relaxed in Indonesia from the latter half of the 1990s until about 2001.place.jp/~hanaoka/take-off. By now 189 airports have already been installed within the country. What is more.titech.ac.ide.

which is located about 20km to the west of Jakarta. “Passenger Traffic 2010 Final”. which is the capital of Indonesia. the only form of public transportation connecting the city of Jakarta with the airport are buses.12 12 Airports Council International (ACI) homepage. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia. Soekarno Hatta Airport was opened in 1985.org (November 10. 2011) 1-10 . and functions both as a major gateway for Jakarta and as a hub within the country. assuming the road is not congested. Figure 1-1: Number of Airplane Passengers in Indonesia Source: JICA. with this already exceeding the airport’s capacity. and so users of the airport are forced to travel there by vehicle. At present. making it the 16th most congested airport in the world. which serves the Jakarta metropolitan region. The actual results from 2010 showed that the number of passengers at Soekarno Hatta Airport exceeded roughly 44 million people. www. and can be accessed from central Jakarta by car in about thirty minutes by using toll road. Progress Report” (March 2011) This growth in the demand for air travel has brought about a remarkable rise in the number of passengers using Soekarno Hatta Airport. It is found in the Chengkareng area.airports.

Ltd. which is exclusively used for domestic routes. In 2009 Terminal 3 was newly opened as a terminal exclusively for LCCs.. in terms of national policies there are calls for the formulation of an airport policy for the Jakarta metropolitan region that places emphasis on enlarging Soekarno Hatta Airport and building a new airport within the metropolitan region.Soekarno Hatta Airport mainly consists of Terminal 1. Chiyoda Corporation.. Ltd. Oriental Consultants.. Taisei Corporation. in December 2010 the governments of Japan and Indonesia signed a memorandum of cooperation for “the concept of Metropolitan Priority Area for Investment and Industry (MPA) in Jabodtabek Area”. Mitsubishi Corporation. Inc. the Japanese government has decided to implement the Master Plan Study on Multiple Airport Development for Greater Jakarta Metropolitan in the Republic of Indonesia based upon a request from Indonesia. In addition. Terminal 2. Mitsubishi Research Institute.. JICA is coordinating with the Directorate General of Civil Aviation (DGCA) of Indonesia to formulate a master plan for expanding Soekarno Hatta Airport and to select planned sites for new airports. But it is forecasted that Soekarno Hatta Airport will reach its saturation point when it reaches 60 million passengers per year in 2017.. JGC Corporation. it has been decided that the study operations under JICA’s supervision will be completed by March 2012. Presently. 11 private companies (Nippon Koei Co. Tokyo Metro Co. For this reason. For about one year starting from May 2011. Co. and NYK Line) led by JICA have formed a study team 1-11 . Hitachi.. In light of this background... Ltd. which is used for international routes and the state-run carrier Garuda Indonesia Airlines. Metropolitan Intercity Railway Company. with the facilities undergoing marked deterioration and growing obsolete. Ltd. and two open parallel runways.

and lists nine priority sectors for this. This plan is primarily characterized by the new installation of a third runway.” was prepared with Indonesia’s Institute of Technology Bandung hired to serve as a consultant. and so as things stand it seems to be difficult to achieve the target for the improvements of 2014. offers other than those from this team to take part in the airport expansion project have been coming in from other countries as well. According to AP-II. This master plan emphasizes the infrastructural improvements that are crucial for encouraging greater growth in the Jakarta metropolitan region. But according to information obtained from the meetings between the higher-ups at AP-II.and been working out this concept. and they have also been approached from overseas entities in France (Aeroports de Paris (ADP)). and the Study Team. the new installation of an automated people mover (APM). other companies from Japan have been in contact. Airport 1-12 . which is the engine driving the remarkable growth in Indonesia’s economy. South Korea (Incheon International Airport Corporation). which it unveiled in July 2011. Basic Design is currently being prepared on the basis of consulting by the Institute of Technology Bandung. and the construction of a commercial building called a connecting building. according to information from AP-II from the time of the interviews. the construction of Terminal 4. and serves as an element that constitutes one of the pillars of this concept. as of September 2011. which is the state-owned company that is running Soekarno Hatta Airport. such as the president. has also prepared its own airport expansion plan. Aviation was taken up as one of these priority sectors. The target date for the improvements was initially announced for around 2014. the expansion of the apron. Airport Authority of Hong Kong. What is more. which was named the “Grand Design. This expansion plan. Conversely. Its completion has been delayed since the beginning. Angkasa Pura II (hereafter written as AP-II).

and so the Indonesian government conducted a study on constructing a new airport that would be shared by international and domestic routes. it was outfitted with Terminal 1 and two open parallel runways. which was tasked 13 Yoshiyuki Hoshiyama. By the 1970s the number of passengers of these two airports exceeded their capacity. (3) Description of Project Area 1) Description of Soekarno Hatta Airport Jakarta initially had two airports: Kemayoran Airport.13 The construction was carried out under the direct control of the national government (DGCA). the engineering company from the United States. Out of several candidate sites. after which Terminal 1 was used for domestic routes and Terminal 2 was mainly used as the international route terminal (and for some domestic routes). with a rough estimate for the construction costs coming to about 30 billion yen for Phase I and 70 billion yen for Phase II. a state-owned airport management company. Terminal 2 was completed in 1992. The Indonesian government purchased about 1. the Tangerang region was selected as the most suitable candidate site. the Netherlands (Schipol Airport Authority).Authority of India. Parsons Company. Initially the Ralph M. which it submitted to the Indonesian government in 1979. was consigned to carry out a primary study in 1969. At first. which was an airport for international routes.306 1-13 . a Canadian consulting consortium formulated a preliminary master plan. This airport was constructed through a loan from France.800ha of land in the paddy field zone of Chengkareng. Aeroports de Paris (ADP) from France formulated a master plan for a new airport based upon these previous studies.” Airport Review (1997) p. which was an airport exclusively for domestic routes in the northern part of the city. which is situated to the west of Jakarta. Afterwards. and Halim Airport. “Jakarta’s Soekarno Hatta International Airport. and others. It then built the new airport on the basis of the master plan by ADP and opened Soekarno Hatta Airport in June 1985. after which the facilities were handed over to AP-II. In 1974.

as well as being fully outfitted with air conditioning. In 1995 the Landscaping of Soekarno Hatta Airport was awarded the Aga Khan Award for Architecture.akdn.15 14 Aga Khan Award for Architecture homepage: http://www.306-309 1-14 . Terminal 1 consists of an architectural style that makes use of natural draughts.” Airport Review (1997) p. “Jakarta’s Soekarno Hatta International Airport. The design of Terminals 1 and 2 was overseen by Paul Andreu of ADP in France. per a request from the Indonesian side it was required to have a double curbside in order to shorten the curbside distance and walking distance. including both its airside and landside areas.2 million passengers by the year 1995 and 31 million by the year 2000. which recognizes exceptional architecture throughout the Islamic world.14 For this reason its basic design is the same as that for Terminal 1. For the construction of Terminal 2.org/architecture/pdf/1560_Ind.pdf (November 14. The initial demand forecasts for Soekarno Hatta Airport envisioned that there would be 9. but it differed in aspects such as its arrangement and building size. Using red as the keynote color.with managing and operating them. Terminal 3 was built on the east side of the premises as a terminal exclusively for LCCs in 2009. 2010) 15 Yoshiyuki Hoshiyama. no major capital investments have been carried out within the airport for a while. Since the addition of Terminal 2. But given its insufficient capacity. Indonesia. he went with a type of architecture that brims with local color by incorporating the traditional architectural style of the island of Java. but it had already surpassed the 13 million mark by 1995.

The airside facilities include the north-south runway. 1-15 . According to claims by the higher-ups at AP-II who took part in the interviews. Aprons A. as well as Aprons D. B. and the cargo area that were built in 1984. E. and F at Terminal 2 that were built in 1990.2) About AP-II AP-II. as things currently stand the profits from Soekarno Hatta Airport are used to cover the deficits run by its other airports. and C at Terminal 1. It manages and operates 12 airports located on the west side of the country. it was found that Soekarno Hatta Airport is the only airport out of the 12 that it manages and runs that has managed to turn a profit. The particulars for the airside facilities are listed in the following table. is a 100% state-owned company. 3) Soekarno Hatta Airport’s Existing Facilities a) Airside Facilities An overview of the airside and landside facilities was listed within this report by reflecting the content from the on-site study by the Study Team. principally the “Master Plan Study on Multiple- Airport Development for Greater Jakarta Metropolitan in the Republic of Indonesia: Progress Report” (March 2011) prepared by JICA. which manages and runs Soekarno Hatta Airport. as Indonesia was subdivided geographically into an east and west side (AP-I is in charge of the east side). From information during the interviews between the Study Team and AP-II.

1.505 m2 Source: “Table 6.600mx60m Parallel Taxiway A 1984 3.353 m2 Remote Apron D 1990 54.271 m2 Apron F(Terminal 2) 1990 131.760mx23m Apron A(Terminal1) 1984 84.315 m2 Remote Apron F 1990 59.800mx 23m Connection Taxiway F 1984 1.660mx60m Parallel Taxiway C 1984 1.850 m2 Connection Taxiway E 1984 1.Table 1-5: History of the Construction of the Civil Engineering Facilities at Soekarno Hatta Airport Facility Construction Year Remarks North Runway(07R-25L) 1984 3.564 m2 Apron E(Terminal 2) 1990 95.800mx 23m Apron G (Terminal 3) 1996 62.306mx 23m Parallel Taxiway D 1984 3. translated into English by the Study Team 1-16 .071 m2 Apron C(Terminal1) 1984 88. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011).071 m2 Apron B(Terminal1) 1984 84.1 Construction History of SH Airport Civil Facilities” in JICA.505mx 24m Apron D(Terminal 2) 1990 12.760mx23m Parallel Taxiway B 1984 3.275 m2 Apron Cargo 1984 33.278 m2 Remote Apron B/C 1984 9.309 m2 South Runway (07R-25L) 1984 3.

Figure 1-2: Image of the Current Arrangement of Soekarno Hatta Airport Golf course Terminal 3 Cargo area Terminal 1 Terminal 2 Utility area Source: Prepared by the Study Team based upon the JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-17 .

There is a small amount of seating there. with check-in and arrival handled on the first floor. This area is constantly packed with passengers prior to check-in and the people there to see them off. Its envisioned capacity from when it was initially built was 9 million people per annum. and which has a semicircular corridor that continues from Terminals A through C. It is frequently used by LCCs such as Citilink. and passenger boarding of the airplanes carried out on the floor above this. Lion Air. 1-18 . The facilities comprising Terminal 1 are listed below. The building is a two-story structure constructed of steel reinforced concrete. The concept for Terminal 1 is for one and a half stories. and is currently used as a terminal exclusively for domestic routes. b) Terminal Facilities (i) Terminal 1 Terminal 1 was completed in 1985. and has three units (Terminals A. The terminal forms a semicircular shape. <Curbside Area / Departure and Arrival Lobby> (First floor) The curbside area at Terminal 1 is a semi-enclosed space that is covered with a roof. and Batavia Air in particular. which are connected by a corridor. which is a subsidiary of Garuda Indonesia Airlines. with people in this area purchasing plane tickets. The curbside area also contains an LCC sales window for LCC tickets. with a total floor space of approximately 143. There are restaurants and eating establishments for the general public facing the curbside area. B. and C) that are each independent.000m2. but the sight of people who could not get a seat sitting on the ground can be seen. There is a surface parking lot in front of the curbside area at Terminal 1 that is constantly packed. There are seven boarding areas in the front of each unit.

Additionally. Scenes of passengers who seemed to be waiting for delayed flights sitting or laying down in the passageway are conspicuous. a fine-mesh fence has been spread around the viewing platform. Photo 1-1: The packed curbside area Photo 1-2: Restaurants in the curbside area Source: Taken by the Study Team (September 2011) <Viewing Platform> (Second floor) Visitors can get to the viewing platform which looks out over the runways and aprons from the external staircases on either end of the curbside area. but customers using this mall are rarely seen. 1-19 . There are few people actually watching the airplanes arrive and depart. However. and no chairs or other furniture have been installed there. and so the view from there is not all that good. as one of its recent initiatives AP-II has installed a shopping mall that can also be used by general customers in the second floor area.

(March 2011). Photo 1-3: Viewing platform Photo 1-4: View of the airside area from the viewing platform Source: Taken by the Study Team (September 2011) <Entrances> (First floor) There are three entrances facing the curbside area. p. <Airport Service Fee Counter> (First floor) At the end of the check-in lobby there is a counter where customers who have completed check-in 16 JICA.16 In general. with 27 such counters in Terminal B and 24 in Terminal C arranged in a similar fashion. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. with passengers undergoing inspection via a metal detector. Security checks have been set up at these entrances. in order to alleviate the congestion these are operated so that only people with a ticket can enter the check-in lobby. <Check-in Lobby> (First floor) In Terminal A 25 check-in counters have been set up in a linear arrangement. there are two lines lined up at each counter dealing with passengers. and their baggage subject to an X-ray scan. But according to those in charge at AP-II.6-9 1-20 .

Four sets of metal detectors and X-ray scanners have been installed at the security checkpoint. <Security Check> (Second floor) A ticket and security checkpoint has been installed right in the middle of the main passageway which general visitors are restricted from passing through.” It was recently installed by AP-II. In the departure lounge. restaurants and souvenir shops are lined up on either side of the passageway. 1-21 . which also enlarged the concession area. Photo 1-5: Check-in counters Photo 1-6: Airport service fee payment counter Source: Taken by the Study Team (September 2011) <Departure Lounge> (Second floor) After paying their airport service fee at the counter. This area is called the “Shopping Arcade. This area can also be used by the general public by passing into it from the stairs and deck on the side of the curbside area.pay the airport service fee. passengers take the escalator up to the second floor.

17 The departure gate lounges are generally equipped with air conditioning. with each lounge connected to the main departure lounge via a corridor.6-9 1-22 . Arriving passengers descend to the first floor via the stairs within the gate lounges and pass through 17 JICA. p. they travel from the first floor to the apron by bus. The area surrounding the departure lounges has been festooned with various species of tropical plants that are a delight for the passengers to look at. Conversely. Passengers move from the departure gate lounges to a passenger boarding bridge (PBB) by passing through the corridor. while in some cases. but part of the corridor linking the main departure lounges for Terminals A and B are open-air space despite having a roof. ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. Each lounge has about 100 seats. air conditioning is controlled throughout all of Terminal C. (March 2011). Photo 1-7: Shopping Arcade Photo 1-8: Security checkpoint Source: Taken by the Study Team (September 2011) <Departure Gate Lounges> (Second floor) There are seven independent departure lounges in each terminal.

the passengers are transported to their airplanes by bus. (March 2011). p. with the remaining two used for small-sized aircraft. Since it lacks a PBB. ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. Photo 1-9: Passageway to the departure gate lounges Photo 1-10: A departure gate lounge Source: Taken by the Study Team (September 2011) <Baggage Claim Area> (First floor) Five rotating conveyor belts have been installed here.6-9 1-23 . 18 JICA. Three of these are used for mid-sized aircraft such as B737s.18 <VIP Terminal> There is a two-story terminal exclusively for VIP passengers located between Terminals A and B.the corridor to arrive at the baggage claim area.

Photo 1-11: Baggage claim area Photo 1-12: Exterior view of the VIP terminal Source: Taken by the Study Team (September 2011) 1-24 .

Terminal 1 Source: Prepared by the Study Team based on the JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-25 . Figure 1-3: First Floor Layout.

“Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-26 . Figure 1-4: Second Floor Layout. Terminal 1 Source: Prepared by the Study Team based on the JICA.

with the plan for the terminal essentially emulating the plan for Terminal 1. It separates out the arrival and departure functions to different floors. Terminal 2 is located to the north of Terminal 1. The Terminal 2 building is a three-storey structure constructed of steel reinforced concrete. which is similar to that for Terminal 1 in that it gets congested. E. What is more. Like Terminal 1. with a total floor space of approximately 135. and is currently used as a terminal for international routes and some domestic routes by Garuda Indonesia Airlines and others. the floor of the second floor area forms the ceiling for the first floor curbside area. and F) that are each independent. The second-floor departure lobby is connected to the curbside area via an elevated roadway. (ii) Terminal 2 Terminal 2 was completed in 1992. It differs from Terminal 1 in that it adopts a two-storey concept. the concept of a “garden airport” was set forth for the Terminal 2 architecture. Terminal 2 has a surface level parking lot facing its curbside area. Terminal 2 has three units (Terminals D. On the other side. It consists of an semi-open air space that is covered by a consecutive gabled roof that emulates the traditional style in Indonesia. 1-27 . but inverting it. which is connected to the elevated access road. which gives one a somewhat gloomy impression. <Curbside Area> (First and second floor) The curbside area on the second floor of Terminal 2 has the same design as that of Terminal 1. with the first floor serving as the arrival lobby and the second floor as the departure lobby.500m2. which makes it possible to access it by car. and so a garden-like space was created for the curbside area and it has been festooned with planted tropical plants.

<Entrances> (Second floor) Six entrances leading into the check-in lobby have been set up. There is a small amount of seating there.6-15 1-28 . On either side of the passageway there are concessions such as cafeterias. Photo 1-13: Curbside area (second floor) Photo 1-14: Curbside area (first floor) Source: Taken by the Study Team (September 2011) <Departure Lobby> (Second floor) Terminal 2 differs from Terminal 1 in that there is a departure lobby found between the check-in lobby and the curbside area that the general public can enter. The departure lobby is an indoor space outfitted with an air conditioner. p. retail stores.19 with only passengers that have a ticket permitted to enter. and so on facing both the first and second floor curbside areas. retail stores.There are cafeterias. but it is not enough to accommodate most of the waiting passengers and lot of them are found sitting on the floor. 19 JICA. Metal detectors and X-ray scanners have been installed at each entrance. and exchange counters. (March 2011). ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”.

1-29 . Each inspection area consists of seven units. and F all together.20 Counter numbers 73 through 98 have been allocated to Terminal F. with each unit made up of two booths. 20 ibid. <Embarkation Inspection Area> (Second floor) There are two embarkation inspection areas connected to the check-in counters. and these are used for domestic routes. There are 106 check-in counters for Terminals D. with counter numbers 1 through 72 allocated to Terminal D and numbers 99 through 106 allocated to Terminal E.where inspections of the boarding passengers and their luggage are carried out. E. with these being used for check-in for international routes. Photo 1-15: Departure lobby Photo 1-16: Entrance Source: Taken by the Study Team (September 2011) <Check-in Lobby> (Second floor) Check-in counters have been set up in a row side by side along the lobby wall.

as well as restaurants. This departure lounge primarily consists of a passageway and the concessions and business lounges lined up on either side of this passageway. and F. and South Korea. Malaysia. 1-30 . E. A moving sidewalk has been installed right in the center of the central passageway. <Security Checkpoints> (Second floor) Security checkpoints have been set up before the number 1 and number 7 gate lounges in each terminal. It lacks brand shops when compared against the new international airports in Asian countries like Japan and neighboring Singapore. as it consists mainly of shops selling Indonesian handicrafts and souvenirs. Passengers and hand luggage are inspected via two metal detectors and X-ray scanners. Photo 1-17: Check-in lobby Photo 1-18: Embarkation inspection area Source: Taken by the Study Team (September 2011) <Departure Lounge> (Second floor) Upon passing through the embarkation inspection areas there is a shared departure lounge joining Terminals D.

They essentially have the same design as the gate lounges in Terminal 1. Photo 1-21: Exterior view of the gate lounges Photo 1-22: Passageway to the gate lounges Source: Taken by the Study Team (September 2011) 1-31 . each of which is connected to the central passageway via their own passageways. Photo 1-19: Departure lounge Photo 1-20: Security checkpoint Source: Taken by the Study Team (September 2011) <Departure Gate Lounges> (Second floor) There are seven independent gate lounges in each terminal.

where a great many people can be seen waiting while seated on the floor. Passport control areas have been set up beyond the central passageways for Terminals D and E. ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. as there is virtually no seating. <Baggage Claim Area> (First floor) Five conveyor belts for long-distance flights have been installed between Terminals D and E. <Arrival Lobby> (First floor) The arrival lobby contains restaurants. p. There are eight units in the inspection areas. 21 JICA. and three long conveyor belts for international flights have been installed between Terminals E and F. exchange counters. and other concessions. The area for the people who will pick up passengers is separated by the fences. and two long conveyor belts have been installed in Terminal F for the passengers from domestic routes.6-16 1-32 . with two booths in each unit. cafes.<Passport Control Areas> (First floor) Passengers arriving in Soekarno Hatta Airport take the stairs in each gate lounge down to the first floor and pass through the passageway to reach the central passageway. <Security Checkpoints and Customs> (First floor) There is a single metal detector and X-ray inspection machine in front of the exit where the final security checks are carried out.21 A baggage claim area has been separated out between Terminals E and F via a glass partition. (March 2011).

Photo 1-25: Entrance to the transit hotel Photo 1-26: Corridor within the hotel (the right-hand airside contains the guestrooms) Source: Taken by the Study Team (September 2011) 1-33 . Photo 1-23: Baggage claim area Photo 1-24: Arrival lobby Source: Taken by the Study Team (September 2011) <Transit Hotel> (Third floor) There is a transit hotel on the third floor of Terminal 2. The entrance is on the second floor of Terminal E. lounge. and there are 82 rooms in total. and restaurant have been arranged in the center of the hotel. with the guest rooms set up on one side of a semicircular corridor. The guest rooms are arrayed along the airside. with guests passing through a metal detector and X-ray scanner in order to enter the hotel. Common spaces such as the front desk.

Figure 1-5: First Floor Layout. Terminal 2 Source: Prepared by the Study Team based on JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-34 .

Terminal 2 Source: Prepared by the Study Team based on the JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-35 . Figure 1-6: Second Floor Layout.

which is not that crowded compared to Terminals 1 and 2. Whereas Terminals 1 and 2 emulate a traditional Indonesian architectural style. <Curbside Area> (First floor) The curbside area is a semi-enclosed space that is covered by a large roof. meeting spaces have been established for general customers in the vicinity of the entrances and exits. Terminal 3 is a two-storey structure of steel reinforced concrete. and is currently served by domestic and international LCC routes. Transport between the terminals is provided via a free shuttle bus service. Terminal 3 adopts a contemporary architectural design.5 storey concept was adopted for Terminal 3. No PBB was constructed in the interest of cutting costs. with a total floor space of approximately 29. The design for Terminal 3 was designed by the Schiphol Airport Authority from the Netherlands.000m2. 1-36 . A 1. In addition. and so passengers are transported to the apron by bus. Stores such as fast food restaurants and airline offices have been set up facing this curbside area. The terminal was built for LCCs. There is an exclusive parking lot in front of Terminal 3. (iii) Terminal 3 Terminal 3 was completed in 2009 in the area on the east side of Terminal 1.

<Check-in Lobby> (First floor) There are 30 check-in counters lined up side by side along the wall in the check-in lobby. p. (March 2011). Metal detectors and X-ray scanners have been set up at both entrances.6-21 1-37 . Photo 1-27: Exterior view of Terminal 3 Photo 1-28: Curbside area Source: Taken by the Study Team (September 2011) <Entrances> (First floor) There are entrances to Terminal 3 in two locations. One is for passengers checking in. and the other is an entrance for general public. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”.22 22 JICA.

restaurants. exchange counters. <Security Checkpoint> (Second floor) There is a security checkpoint between the shopping arcade and the departure lounges. There are eight shops. in which two metal detectors and X-ray scanners have been installed.6-21 1-38 . ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. Photo 1-29: Entrance for general passengers Photo 1-30 Check-in lobby Source: Taken by the Study Team (September 2011) <Departure and Arrival Lobbies> (First floor) The departure lobby and arrival lobby share the same space. The departure and arrival lobbies have facilities like cafes. kiosks. such as souvenir shops. and information desks. no lighting is needed during the daytime.23 <Departure Lounge> (Second floor) 23 JICA. (March 2011). p. Since natural light enters in from the arch-shaped roof. <Shopping Arcade> (Second floor) Upon passing through the departure and arrival lobbies and taking the escalator up to the second floor visitors come to the shopping arcade. This area can also be accessed by the general customers as well.

1-39 .24 Boarding passengers descend from here to the first floor.100 chairs have been provided. where they are guided to the apron via buses.The departure lounge is essentially a shared space in which about 1. Photo 1-31: Shopping arcade Photo 1-32: Departure lounge Source: Taken by the Study Team (September 2011) 24 Ibid. where there are six conveyor belts. <Baggage Claim Area> (First floor) Passengers getting off the buses immediately enter the baggage claim area.

Terminal 3 Source: Prepared by the Study Team based on the JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-40 . Figure 1-7: First Floor Layout.

Figure 1-8: Second Floor Layout. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 1-41 . Terminal 3 Source: Prepared by the Study Team based on the JICA.

This cargo terminal is composed of a cargo terminal for domestic routes. Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report (March 2011) (ii) Terminal 3 Six cargo buildings were constructed on the east side of Terminal 3. c) Cargo Terminals (i) Terminal 1 There is a cargo terminal on the east side of Terminal 1. Figure 1-9: Cargo terminal Source: JICA. 1-42 . The cargo terminal for international routes is more spacious than that for domestic routes. an international route cargo terminal for imported cargo. with the one for international routes being about 36. (iv) Transport between the Terminals At present.000m2. half of which have already been demolished as the expansion work for the apron is carried out.000m2 and that for domestic routes being about 12. and an international cargo terminal for exported cargo. This cargo terminal handles the cargo for Terminals 1 and 2. transport between the terminals is provided by running free buses between them.

4) Other Facilities A control tower. and a hotel (Sheraton). utility-related facilities and the AP-II head office building are located in the area between Terminals 1 and 2. 5) Planned Site for the Construction of the Runway 3 and Terminal 4 The planned site for the third runway that is currently being planned as part of the Grand Design by AP-II will be situated on the northern side of the airport grounds. golf course. According to the onsite study by the Study Team. the grounds on the southeast side within the airport are used as a business park (offices and warehouses of the logistics companies). but progress has yet to be made on purchasing the land. residences are lined up along 1-43 .  AP-II head office building  Control tower  Extra high voltage substation  Water receiving and purification facility  Mosque Photo 1-33: Interior of the extra high voltage substation Photo 1-34: Water purification facility Source: Taken by the Study Team (September 2011) In addition.

the planned site. Photo 1-35: Planned site for the construction of Photo 1-36: Planned site for the construction of the Runway3 and Terminal 4 (distant view) the Runway 3 and Terminal 4 (foreground view) Source: Taken by the Study Team (September 2011) Proposed sites for construction of the Runway 3 and Terminal 4 Photo 1-37: Planned sites for the construction of theRunway 3 and Terminal 4 (aerial photograph) Source: Created by the Study Team based on a Google Earth image 1-44 . and so the expectation is that land acquisitions for the construction of the third runway will be difficult.

”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. where the security requirements are stringent. Depending on the parts of the road. 7) Development Plans of the Transportation Network around Soekarno Hatta Airport a) Current State of the Road between Downtown Jakarta and Soekarno Hatta Airport The current state of the transportation infrastructure running from the center of downtown Jakarta to Soekarno Hatta Airport could not be described as being adequate. users of the airport are forced to access it either by car or by bus.6) In-service Flights The in-service international routes mainly run to Japan. Due to the fact that the embankment for this toll road is on a site with poor soil it gets flooded during the rainy season. Germany. because the development of the vicinity surrounding the Tangerang district in which Soekarno Hatta Airport is located is making progress and the demand for commuting into downtown Jakarta has increased. Singapore. it has six or eight traffic lanes. However. (March 2011). as well as some flights to Europe (France.25 25 JICA. there are no routes running to North America. Moreover.6-40 1-45 . China.). this is also worsening the congestion. However. the Netherlands. as the road tends to be congested. p. which poses obstacles for vehicle passage. This road is called the Airport Toll Road and it forks off from the beltway running around the area of central Jakarta and heads towards the airport. Australia. and other countries in the Asian region. Since there is no access by railway at present. this diminishes the convenience for airport users. etc.

For this reason. An environmental assessment was carried out by Raillink (joint venture between AP-II and PT. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. It is expected to commence its service in 2014. even if these roads were to be built the current road to the airport would still be the shortest route to Soekarno Hatta Airport from downtown Jakarta. b) Development Plan of the Road Network around Soekarno Hatta Airport A plan exists to construct infrastructure such as a second beltway and another toll road in order to relieve the chronic traffic congestion in the Jakarta metropolitan region. and so it is believed that it will be difficult to implement construction quickly. a northern route and a southern route.6-41 1-46 . 8) Status of Access Railway Development Presently there is no railroad linking downtown Jakarta with the airport. However. p. but there is a plan to construct the Airport Access Link which was approved by the Directorate General of Railways of the Ministry of Transportation in 2004. 26 JICA. it is viewed as being more highly feasible.KAI). (March 2011). Since the southern route is the existing railroad route going to Tangerang station near the airport. From a hearing with AP-II it was learned that progress has not been made in purchasing the land that will be needed for the construction of the railroad along the northern route.26 There are two routes from the direction of Jakarta envisioned. it is assumed that no dramatic changes will occur unless a railroad or other such means of public transportation is developed. and approval was given by the Ministry of Environment in March 2009.

(March 2011) 1-47 . Figure 1-10: Planned Route Map of the Airport Access Link Source: JICA. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”.

two master plans stand as independent. and project schedule for the expansion of Soekarno Hatta Airport. the Study Team will conduct its own study of the airport. financing method. Therefore. Based on this assessment. while DGCA which oversees all the airports in Indonesia has commissioned JICA to make the master plan to deal with the same matter. This study will evaluate these existing master plans for the expansion of Soekarno Hatta Airport. The Study Team will draw on this information to design and propose to AP-II a project outline. and the feasibility will be explored through consultation. the expansion of Soekarno Hatta Airport requires urgent measures.Chapter 2 Study Methodology (1) Contents of the Study As stated in Chapter 1. In principle. hearings of AP-II. parallel documents. 2-1 . as there has not been enough coordination between AP-II and DGCA. However. the study was carried out in coordination with the JICA MP Team as much as possible through exchanges of views and other relevant information. and hearings of relevant organizations. including the JICA Master Plan (M/P) Team. The relationship between the Study Team and relevant organizations is shown in the following figure. AP-II has made its own expansion plan called Grand Design. the content of these two master plans has some differences.

M/P Team DGCA Group Study Team JICA MPA Team MOSOE AP-II AP-I Source: Prepared by the Study Team A more detailed list of the study contents is as follows:  Review existing studies  Analyze current airport demand and capacity. Figure 2-1 Relevant Indonesian and Japanese Organizations and their Relationship Government of Indonesia Government of Japan EKUIN Office of Ministry of Finance JETRO / JKT METI President BAPPENAS Embassy of Japan President MOFA in Indonesia JICA / JKT MLIT MOT DGLT DGST JICA Airport Itochu Corp. and review future demand projection  Recommend realistic investment plan in line with demand projection  Review profit structure of airport business and modality of public-private partnership (role-sharing with AP-II)  Make recommendations for increasing/diversifying profits of private initiative PTB development project  Recommend airport specifications/evaluate environmental impact  Forecast financing demand  Review Indonesia’s legal system and regulations on foreign capital participation regarding PPP and restrictions on granting of business rights 2-2 .

 Collect information through meetings and hearings from relevant organizations in Indonesia  Site survey  Analyze information collected and prepare proposal  Present proposal to relevant organizations and exchange views  2) Organization of the study ◎Bu ilding Technology Nikken Sekk ei Ltd Kazutaka Horii ◎Economic and Financial Analysi s ITOCHU Corporati on Masatake Tashi ro.. ITOCHU Corporat ion Yasuhid e Yonem ot o and Naohiro Kusu ◎Cost Estimate SHIMIZU Corporation Sadayasu Asano and Yoshihi ro Sato ◎ En vironment and Social Analysis Nikken Sekkei Research Insti tute Shigehisa Mat sumura Source: Prepared by the Study Team 2-3 . etc. Ltd. Hirokazu Naka. Norihi sa Takahashi ◎ Legal Scheme Japan Economic Research Ins titute Inc.  Review Indonesia’s investment and loan environment/country risk  Identify anticipated risks of private initiative PTB development project and explore risk mitigation measures  Identify envisioned PPP project scheme and requirements for its implementation (2) Method and Organization of the Study 1) Method of the study  Carry out preliminary survey by reviewing relevant materials and conducting hearings of stakeholders in Japan. ◎Managing Company Hiromasa Kon do Project Devel opment & Trade ◎Project M anagement Coordination Group ITOCHU Corporation ◎Airport Demand and Operation Anal ys is Plant Project & Machi ne Division ICT & Machin ery Company Hi rokazu Naka Japan Ai rport Termi nal Co.

3) Counterpart in Indonesia AP-II. and a briefing session in Indonesia. three series of meetings. 2012. As of November 2011. the Study Team will carry out one site survey. no definite agreements have been made in particular regarding activities conducted in partnership by AP-II and the Study Team. (3) Schedule of the Study 1) Overview of the schedule The study period is from August 31st. Table 2-1: Schedule of the Study 2011 2012 July August September October November December January February March Indonesia Field study and meetings 1st meeting 2nd meeting 3rd meeting Briefing session 1Week 1 Week 1 Week 1 Week 1Week Japan ▼ ▼ ▼ Interim report Submission of draft report Submission of report Info gathering Analysis Analysis     Compilation of draft report Final reporting Compilation of report Source: Prepared by the Study Team 2) Contents of the site survey and meetings in Indonesia The site survey and meetings were carried out on the following dates and contents. 2-4 . is anticipated to be the implementation unit in Indonesia. The schedule of the study is as shown in Table 2-1. During this period. the company responsible for the operation of Soekarno Hatta Airport. 2011 to February 16th.

2011  Meeting with JICA Master Plan Team Mr. 2011  Meeting with the concerned party  Tour of Terminal September 16th. Matsunaga (Senior Representative) Mr. a) Site survey (September 12th-17th. Uehara (Team Leader) 3 others  Visit to JICA Indonesia Office Mr. 2011 Travel (Japan→Jakarta. 2011  Site survey of the airport (by Study Team) September 15th. Maeda and 2 others 2-5 . Higuchi  Visit to Japanese Embassy Mr. Indonesia) September 13th. 2011) September 12th. 2011  Meeting with a concerned party  Tour of Soekarno Hatta Airport September 14th.

2011) November 1st. 2011  Meeting with DGCA Secretary General 2 Others  Exchange of views with the concerned party November 3rd. Higuchi  ANA Jakarta Office  Meeting with the concerned party 2-6 . 2011  Meeting with DGCA Director of Airports  Meeting with the concerned party  Hearing of JAL Jakarta OfficeHH November 2nd. Uehara (Team Leader)  Visit to Japanese Embassy First Secretary Kamite  Visit to JICA Indonesia Office Senior Representative Matsunaga Mr. b) 1st series of meetings (October 30th-November 4th. 2011  Meeting with JICA Master Plan Team Mr.

2011) December 19th. 2011) November 21st. c) 2nd series of meetings (November 21st-23rd. 2012  Meeting with the concerned party 2-7 . 2011  Meeting with JICA Jakarta Office Senior Representative Matsunaga d) 3rd series of meetings (December 18th-20th. 2011  Visit to Japanese Embassy Counselor Yoshizawa  Meeting with JICA Jakarta Office Mr. 2011 Meeting with the concerned party e) Debriefing Session in Jakarta (January 25th-28th. 2012) January 26th. Higuchi December 20th. 2011  Meeting with the concerned party November 24th. 2011  Visit to Japanese Embassy Minister Ushio Counsellor Yoshizawa November 25th.

2012  Visit to Japanese Embassy Minister Ushio  Meeting with JICA Jakarta Office Mr. Higuchi 2-8 .January 27th.

etc. and flood countermeasures.Chapter 3 Justification. beginning May 2011 in order to carry out the following: 1) formulation of a city vision for greater Jakarta for the year 2020 by taking into account predictions of the socioeconomic conditions of Indonesia in 2030. the construction phases of which are to start by the end of 2013. Objectives and Technical Feasibility of the Project (1) Project Background and Necessity. And. This MPA Study is being carried out on nine areas: public transportation networks. close exchanges of opinion have been taking place concerning the development of the area with the aim of resolving Jakarta’s infrastructure problems. The MPA Study is scheduled to last approximately one year. 3-1 . airports and related infrastructure. roads. A steering committee composed of cabinet members and others of both countries has been established along with a technical committee composed of working-level staff. the Master Plan for Establishing Metropolitan Priority Area for Investment and Industry in Jabodetabek Area (MPA) in the Republic of Indonesia was launched by JICA in May 2011. waste. and 3) acceleration of realizing the Fast Track Projects for which construction is scheduled to start by the end of 2013 at the latest. the Governments of Japan and Indonesia agreed on the content of the master plan study and the Fast Track Projects. 1) Positioning of Soekarno Hatta Airport in upper-level plans and related plans A Memorandum of Cooperation was signed between the Governments of Japan and Indonesia for the concept of Metropolitan Priority Area for Investment and Industry (MPA) in Jakarta in December 2010. 2) based on this vision. Accordingly. At the first MPA Steering Committee meeting held in March 2011. water and sewage. railways. electric power. formulation of a comprehensive infrastructure plan to be achieved in Jakarta by 2020 and identification of priority projects. ports.

Of these. expansion of Soekarno Hatta Airport. “Master Plan For Establishing Metropolitan Priority Area For Investment And Industry In JABODETABEK Area: PPT Slide” (June 2011) The process of drafting an airport development policy within Jakarta was even reported in the JICA Master Plan. The greater Jakarta metropolitan area is currently undergoing rapid urbanization. and the construction of a new airport have been raised as issues of particular pressing importance. the construction of an access railway to Soekarno Hatta Airport. and it is expected 3-2 . with regard to airports and related infrastructure. and based on this plan the Indonesian Ministry of Transportation (MOT) and DGCA drafted a mid-term strategic plan (RENSTRA 2010-2014). The Indonesian Government drafted a mid-term development plan (RPJM 2010-2014) focusing on national and local economic development until the middle of the 21st century. Table 3-1: List of priority MPA projects Source: MPA Master Plan Study Team.

BAPPENAS) has not approved this application list (Blue Book). Figure 3-1: Grand Design by AP-II Source: AP-II “Grand Design” pamphlet 3-3 . In light of these circumstances. however. supports the expansion of the airport and has released a “Grand Design” as a concept document for the airport’s expansion. At present. which oversees the operations of Soekarno Hatta Airport. the Badan Perencanaan Pembanguan Nasional (National Development Planning Agency. AP-II.that the capacity of runways at Soekarno Hatta Airport will not be able to handle a long-term rise in air flight demand. the DGCA has applied for a subsidy using foreign technical aid in order to draft a master plan for constructing an airport in Jakarta. It is believed that this will seriously restrict private sector air travel in the future. however. Meanwhile. acknowledging the importance and urgency of formulating policy for an airport in the greater Jakarta area.

and in 1993 constructed its north runway and Terminal 2. However. 2) Trends of increase in number of passengers at Soekarno Hatta Airport Soekarno Hatta Airport opened its south runway and Terminal 1 in 1985. respectively. 2. The graph below shows that the number of passengers grew from 10 million in 2000 to 42 million by 2010. immigration. An expansion is planned for the existing facilities of Terminals 1. as well as commercial facilities. surpassing 20% on average between 2001 and 2006.According to the Grand Design. and 3. 3-4 . This is an increase of approximately four-fold over the 10-year period. The airport has experienced extremely high growth in passenger numbers. where Terminals 1 and 2 would be linked using an integrated building which would contain boarding gates. The current terminal capacity amounts to a total of 22 million people when combining the nine million for Terminals 1 and 2. and other areas. Runway 3 and Terminal 4 will be newly constructed on the northern side of the premises. making it safe to say that the number of passengers has already reached a point of saturation compared to terminal capacity. with the four million for Terminal 3. the number of passengers currently amounts to two-times this capacity.

as can be seen in the graph below. 3-5 . the number of arrivals and departures possible per annum is 370. and it is forecasted that this will suffice until around 2015. It is believed that this number of arrivals and departures can accommodate up to 60 million passengers. Figure 3-2: Changes in passenger numbers at Soekarno Hatta Airport Source: JICA. “Master Plan Study On Multiple–Airport Development For Greater Jakarta Metropolitan Area In The Republic Of Indonesia: Progress Report” (March 2011) Meanwhile.000.

including inside the terminal. (i) Terminal congestion As mentioned earlier. and 3) aircraft parking apron congestion. There is also a marked accumulation of passengers in the visa application and immigration areas of the international arrival lobby. departure lobby. This creates congestion in various areas. Figure 3-3: Forecasted number of arrivals/departures at Soekarno Hatta Airport (2000-2040) Source: MPA Master Plan Study Team. which were made clear in the first round of discussions with AP-II. are: 1) terminal congestion. and departure lounge. 2) parking lot congestion. 3-6 . arrival lobby. the airport currently receives 44 million passengers despite its terminal capacity of 22 million. “Master Plan For Establishing Metropolitan Priority Area For Investment And Industry In JABODETABEK Area: PPT Slide” (June 2011) 3) Extracting the issues from the site survey a) Extracting issues from discussion with AP-II The main issues that should be resolved at Soekarno Hatta Airport that AP-II identifies as being problematic.

250 cars (6 million passengers annually). Haneda Airport offers a domestic airline parking lot for approximately 9.400 vehicles. Throughout the parking lots there are cars parking on the shoulder of the road and cars that disrupt the order of the lot. it is clear that the number of passengers have already exceed parking lot capacity. Photo 3-1: Congested arrival lobby Photo 3-2: People resting at the observatory tower Source: Taken by the Study Team (September 2011) (ii) Parking lot congestion The existing parking lots at Terminals 1. 3-7 .000 per day). and 3 are able to accommodate 5.500 cars (57 million passengers annually) and an international terminal parking lot that accommodates approximately 2. For reference. but considering that actual passenger numbers reach 44 million (120. 2.

many of the aircraft are smaller in size. The aircraft parking apron as a whole appears to be congested. Photo 3-3: Congested curbside Photo 3-4: Congested parking lot Source: Taken by the Study Team (September 2011) (iii) Aircraft parking apron congestion As passenger numbers continue to rise. making for a larger number of aircraft that use the parking apron and further boosting the necessity for an expansion of the parking apron. there is a lack of fixed spots and there is an increase in the number of airplanes using open spots to wait. Furthermore. which is a response to the increasing number of LCCs in service. while the number of passengers is increasing. Photo 3-5: An aircraft parked in an open spot Photo 3-6: LCC equipment Source: Taken by the Study Team (September 2011) 3-8 .

However. In this way. as far as can be observed. the Study Team conducted a site survey of their airport over a three-day period. smoking areas. and more. By properly providing the necessary services from the viewpoint of airport users it will be possible to expand business significantly. (i) Loss of business opportunity Currently. despite the large number of airport users at Soekarno Hatta Airport. 3-9 . the product lineups at duty free shops within the security area lack visual appeal. In actuality. thus sacrificing great business opportunity. b) Issues extracted via the Study Team’s site survey On the first visit to Soekarno Hatta Airport. airports are boosting their non-aeronautical revenues. including concessions inside and outside of the security gates. a rich food and beverage selection. and 3) aging and obsolete systems. making it difficult to say that the existing facilities respond to the widespread customer needs of foreign businesspersons and resort tourists. Furthermore. 2) inadequate security structure. Most of the stores in the departure lobby are either souvenir shops or cafeteria-style restaurants catering chiefly to local residents. diverse services for waiting passengers such as lounges. there is not very much use of concessions at the curbsides and other places. while the terminal buildings are overflowing with passengers and well-wishers. and compared to other airports there is a lack of brand name shops and other stores that handle luxury goods. as mentioned earlier. at famous airports throughout the world there are facilities to provide users with the services that they need. few services are provided for improving the convenience and comfort of users. There is also a lack of restaurants and lounges within the security area where passengers can rest and relax. The Study Team discovered the following three issues with the airport: 1) loss of business opportunity. Internet services. play spaces for children.

Compared to the baggage handling system at Haneda Airport. The airport utilizes outdated security systems and there are apparent flaws in security operations and facilities. the results of an interview survey conducted on Japanese airlines that use Soekarno Hatta Airport indicated that it was possible to move from the arrival area inside the security area to the departure area via elevator. it is hard to say that a thorough system of safety control is being implemented. where a single employee visually confirms the X-ray scanned images of baggage. Even the team’s survey revealed that there was no glass or other barrier along the arrival passage within the security area. which makes use of the latest computer control technology.Photo 3-7: Unattractive concessions Photo 3-8: Passengers waiting with nothing to do Source: Taken by the Study Team (September 2011) (ii) Inadequate security structure In general. 3-10 . allowing people to freely pass over to the airside. the attitude towards security at Soekarno Hatta Airport can hardly be considered as strict. Moreover. The X-ray scanners used to check the checked luggage and carry-on baggage of customers are outdated. Moreover. the baggage handling system that was installed when the airport first opened is still being used.

As one example of an operational problem. there is not a proper effort of BCP. As there are no preparations in place to respond to power outages. meaning that people are permitted to bring in lighters. EV facilities. with regard to the power supply facilities. a person was confirmed to be smoking in a location after the final security check on the other side of the departure gates. and after more than 25 years the facilities clearly show signs of aging and obsolescence. CH/IN facilities. Photo 3-9: Security system Photo 3-10: Passageway near the airside Source: Taken by the Study Team (September 2011) (iii) Aging facilities Terminals 1 and 2. which ensures the smooth and safe flight of aircraft. which occur frequently in Indonesia. BHS facilities. etc. 3-11 . which opened in 1985. etc. Consideration must be paid to restoring the building’s structure (waterproofing and sealing). Furthermore. a country with a shortage of power. It is anticipated that upgrading to the latest energy-saving facilities will allow for reducing the overall burden. the stable operation of flight control systems.). have never undergone major upgrading and renovation since opening. cannot be guaranteed. machinery (air conditioning and sanitation). electrical facilities (lighting.

enhancement of favorable impression on Indonesia through appropriate spatial arrangement of the gateway. 3-12 . there is a clear necessity for rapidly carrying out expansion and upgrading of facilities at Soekarno Hatta Airport. it is expected that the expansion and upgrading of the facilities will bring forth prevention of the loss of opportunities for outside economic activities due to insufficient capacities. and so on. In addition. improvement of profitability through introduction of passenger-oriented functions leading to satisfaction of customers. In order to make this airport a suitable gateway to Indonesia. it will be necessary to introduce and manage advanced security systems. extension of air routes through increase in security. a country undergoing marked economic growth. and provide various new customer services. install and upgrade to facilities that take into consideration the environment.Photo 3-11: Outdated baggage handling Photo 3-12: Later installed air conditioning system system Source: Taken by the Study Team (September 2011) 4) Necessity for expansion and upgrading of Soekarno Hatta Airport As can be seen.

however. with regard to Terminal 4. the Study Team has decided not to include the Terminal 4 in our scope. as the period for the launch of operations for the railway is uncertain. which conducted a survey ahead of others. amongst other reasons. does not incorporate plans to construct Runway 3 due to difficulties in appropriating the land where the runway was planned for construction. Even the MP produced by the JICA MP Team.. the JICA team drafted the MP under the premise that Terminal 4 would be constructed in the area which is currently occupied by the golf course in the airport site. considering the recent tendency of increase in LCCs which prefer open spot operation.5) Scope of project a) Project elements The envisioned scope of this project is outlined in the table below. the Study Team believes that the capacity of the airport depends more on the runway capacity. The difference from the Grand Design of AP-II is that our team does not incorporate the construction of Runway 3 and Terminal 4. which AP-II envisions to construct in the north area of the airport site. 3-13 . Furthermore. not on the terminal capacity. In addition. the railway station has also been left out from our project scope. Moreover.

and related facilities in order to be able to accommodate the yearly amount of 34 million passengers by the year 2019. Table 3-2: Project elements in the Grand Design and project scope envisioned in this project Envisioned scope of Envisioned scale of AP-II Grand Design project elements construction in this project facilities in this project New construction + repair of Apron existing areas Airside New construction of taxiway on eastern side. Commercial area New construction 185.5 km People mover connecting to new terminal construction (4 stations) (or construction of bus route) Utilities. access road. Area developed: Taxiway partial repair of existing 360. East Side Not applicable ― Source: Prepared by the Study Team 6) Consideration and comparison of alternative plans According to the Interim Report drafted by the JICA MP Team. The new airport will tentatively include four runways in order to 3-14 .000 ㎡ Integrated Building (Connecting building. Utilities.000 ㎡ (extension) Cargo New construction 150. road improvement Railway station Railway station Not applicable ― Runway 3 Not applicable ― Future expansion Terminal 4 Not applicable ― Commercial Area. etc.000 ㎡ inter change terminal) (Parking building) New construction for Additional terminal Total length: 3.000 ㎡ runway Extension to existing facilities 30. Moreover. a terminal.000 ㎡ (extension) + Terminal 2 Terminals + repair of existing areas repair of existing facilities Terminal 3 Extension to existing facilities 200.000 ㎡ (extension) + Terminal 1 + repair of existing areas repair of existing facilities Extension to existing facilities 30. the new airport in the greater Jakarta area is proposed for construction on the southern side of Karawang as an airport that provides both domestic and international services. there are plans to develop two runways.

In other words. “Master Plan Study On Multiple–Airport Development For Greater Jakarta Metropolitan Area in the Republic of Indonesia: Interim Report” (June 2011) 3-15 . and Curug Airport. As of present. the airports currently located in the great Jakarta metropolitan area can be utilized. there are plans to construct Majalengka Airport and Panimbang Airport. it was believed necessary to accommodate the growing demand for air transportation by expanding Soekarno Hatta Airport until the new airport is constructed in 2019. As an alternative option until the new airport is constructed. Pondoc Cabe Airport. Figure 3-4: Location of major airports in greater Jakarta Soekarno Hatta Airport Karawang Airport Curug Airport Pondoc Cabe Airport Halim Airport Bandung Airport Majalengka Airport Source: JICA. The following is an evaluation of these airports as a substitute airport for Soekarno Hatta Airport.ultimately accommodate for an annual amount of 100 million passengers. Furthermore. this area hosts three operating airports: Halim Airport.

It takes about 30 minutes by car to get to the airport from the center of Jakarta. at about 30 minutes by car. the access road to the airport passes through a residential area. the airport is often used for noncommercial flights.  Bandung Airport Bandung Airport is the airport that provides services for Indonesia’s second largest city. but the terminal building is believed incapable of accommodating a further increase in passengers. and there are restrictions on the number of regular flights. This airport’s runway is also not long enough to accommodate a Boeing 737 and is not suited for regular flights. Currently. It will be difficult to greatly increase the number of departures and arrivals.  Pondoc Cabe Airport Pondoc Cabe Airport is 25 km southwest of Soekarno Hatta Airport and is about 20 km from the center of Jakarta. Halim Airport Halim Airport is about 11 km from the center of Jakarta. The airport’s runway is not long enough to accommodate a Boeing 737 and is not suited for regular flights. Moreover. and as it is somewhat far from inner Jakarta. such as military persons and VIPs . and it takes about 60 minutes by car to reach. and is located about 180 km southwest of Jakarta. Bandung. the airport provides six domestic and 5 international flights everyday. since the airport is 130 km away from Jakarta’s main 3-16 . offering easy access. Moreover. The access road to the airport passes through a residential area. access is a problem. Currently.  Curug Airport Curug Airport is located 30 km from the center of Jakarta. making it an unfavorable option considering access time.

(2) Necessary considerations for determining project details. making access a problem in using this airport as a substitute for Soekarno Hatta Airport. it is located 130 km from the center of Jakarta. In order to respond to this increase. it is envisioned that Terminal 1 will be increased 3-17 . In terms of capacity by terminal. However. etc. there are plans to boost the airport’s capacity to 62 million by 2013. making access a problem in using this airport as a substitute for Soekarno Hatta Airport. Construction is planned to commence in 2012 and the airport is scheduled to begin operating in 2014. 1) Demand forecasts a) Demand forecasts in AP-II’s Grand Design Demand forecasts in the AP-II Grand Design indicate that passenger numbers are to reach 54 million by 2015. the new airport will be located 130 km west of Jakarta.  Majalengka Airport Majalengka Airport is a new airport planned for constructed in West Java. It will be located 200 km from central Jakarta. As can be seen from the explanation above.shopping district. it is a problem with access to use this airport as a substitute for Soekarno Hatta Airport.  Panimbang Airport According to the master plan for Panimbang Airport. expanding Soekarno Hatta Airport is the only viable option for covering the increase in flight demand in greater Jakarta.

from 9 million to 18 million. and Terminal 3 from 4 million to 25 million. 3-18 . Figure 3-5: Passenger number statistics and demand forecasts Source: AP-II Grand Design pamphlet. Terminal 2 from 9 million to 19 million. Figure 3-6: Expansion plan for terminal capacity Source: AP-II Grand Design pamphlet.

Furthermore. The response specifies the intermediate target of responding to passenger demand by raising passenger capacity to 53 million by 2014. 2) Responding to airport capacity and demand The JICA Master Plan team presented a response to airport capacity and demand illustrated in the graph below in a meeting held in October 2011 with the DGCA and AP-II. and the JICA Master Plan team. the decision was made to set the demand forecasts in their master plan study at 60 million people (47 million for domestic and 13 million for international travel). AP-II. The following is the envisioned demand targets for both the intermediate target and final target. it also indicates the final target of raising passenger capacity to 60 million by 2017. b) Demand predictions used in this plan Table 3-3: Demand predictions in this plan Intermediate Target (2014) Target Demand (2017) Airport capacity 53 map Airport capacity 60 map Domestic 42 map Domestic 47 map International 11 map International 13 map Source: Prepared by the Study Team In a meeting in October 2011 between the DGCA. 3-19 . The Study Team has also adopted this forecast for the feasibility study.

Figure 3-7: Phased terminal development Source: JICA Study Team. 3-20 . “Development Plan of Soekarno .Hatta Airport”: PPT Slide (October 2011) The following development situation is envisioned for the intermediate target phase.

Hatta Airport: PPT Slide (October 2011) The following development situation is envisioned for 2017. Study On Development Plan of Soekarno . 3-21 . Figure 3-8: Phased Area Development Plan (2014) Source: JICA Study Team.

3-22 . a little less than 80% of all profits come from aeronautical business. while non-aeronautical business accounts for just over 20%. Study On Development Plan of Soekarno .Hatta Airport: PPT Slide (October 2011) a) Profit structure analysis and extracting administrative issues AP-II’s profit structure and that of Soekarno Hatta Airport are similar. and cargo services for less than 2%. Figure 3-9: Phased Area Development Plan (2017) Source: JICA Study Team.

582 496.757 Non-Aeronautical Revenues 524.479 3.509.467 Non-Aeronautical Revenues 433.853 24.374 1.093 48. Table 3-4: AP-II revenue breakdown (Unit: Million IDR) 2008 2009 2010 Aeronautical Revenues 1.369 Source: AP-II Annual Report (2009.413 560.745.230.365 Total 2.109.373. 2010).771 682.714.743 Source: AP-II Annual Report (2009.262 1. Table 3-5: Soekarno Hatta Airport revenue breakdown (Unit: Million IDR) 2008 2009 2010 Aeronautical Revenues 1.619 Cargo Services 22.250 39.657 Total 1.524 2. 2010) Figure 3-10: AP-II profit structure Figure 3-11: Soekarno Hatta Airport profit structure Source: AP-II Annual Report (2009.850 30.367 2.697 2.709.106. 2010).638 2.829.615 2.907 596.247 Cargo Services 37. 3-23 .276.918.375.

aeronautical revenue 39% 44% 43% Other 1% 1% 1% Total (M. CAG) they account for approximately 50%. In terms of non-aeronautical earnings by Asia’s major airport management companies. Table 3-6: Revenue breakdown of Narita Airport FY2008 FY2009 FY2010 Aeronautical revenue 56% 56% 57% Non. 2010).015 10.aeronautical earnings account for more than 40%.27 non-aeronautical revenue accounted for 46. at Narita.According to the 2010 Airport Economics Survey released by the Airports Council International.897 187. HKD) 8.5% of all business earnings by the 646 airports that responded to the questionnaire (2009.airports.org/aci/aci/file/Annual%20Report/ACI_Annual_Report_2010_online.483 Source: Narita International Airport Corporation “Financial Report” (FY2009.359 195. and Malaysia (Malaysia Airports Holding Berhad) non. FY2010) Table 3-7: Revenue breakdown of Hong Kong International Airport FY2008 FY2009 FY2010 Aeronautical revenue 60% 56% 56% Non. 2011) 27 http://www.aeronautical revenue 44% 44% 43% Other 0% 0% 1% Total (million yen) 196. AOT). Thailand (Airports of Thailand. Hong Kong. while in Singapore (Changi Airport Group.pdf 3-24 .583 Source: Hong Kong International Airport Annual Report (2010.886 9.

3-25 .033 Source: Airports of Thailand Annual Report (2009.740 21. financial information is only available for the founding year of June 15. Table 3-8: Revenue breakdown of Airports Of Thailand FY2008 FY2009 FY2010 Aeronautical revenue 56% 57% 58% Non.469 1. THB) 26. Source: Changi Airport Group Annual Report (2009/2010) From the above revenue structure analysis.675 Source: Malaysia Airports Holding Berhad Annual Report (2009. MYR) 1.279 1. it is believed important from an administrative perspective for Soekarno Hatta Airport to implement measures for boosting non-aeronautical revenues. As such.aeronautical revenue 44% 43% 42% Total (M. 2010) Table 3-9: Revenue breakdown of Malaysia Airports Holding Berhad FY2008 FY2009 FY2010 Aeronautical revenue 51% 52% 52% Non-aeronautical revenue 49% 48% 48% Total (M. as the airport’s ratio of non-aeronautical revenues on overall revenues is much lower compared to the rest of Asia and the world. 2010) Table 3-10: Revenue breakdown of Changi Airport Group 2009/2010 Aeronautical revenue 36% Non-aeronautical revenue 51% Other 13% Total (M.502 24. 2009 to March 2010 (business period of about eight months). SGD) 961 Note: The Changi Airport Group (CAG) was founded in June 2009 and the fiscal year begins in April.

1% 62.000 rupiah for domestic flights.2% 2. Aeronautical revenues  The largest factor of AP-II’s aeronautical revenues was passenger service. due to data restrictions it was only possible to assess figures for AP-II (there was no breakdown of revenues for aeronautical /non-aeronautical by airport in the annual reports).6% 17.3% 20.3% Counter usage 3. This was followed by flight services and then landing services (the air traffic control services operated by AP-I and AP-II in Indonesia are now state-owned.0% Source: AP-II Annual Report (2009. 2010)  Passenger service fees (formerly known as ‘airport taxes’) at Soekarno Hatta Airport are set at 150.6% 2.9% Total 100. According to JICA’s Master Plan survey.8% 14.8% Flight Services 26.9% 2. there were a total of approximately 42 million passengers in 2010 3-26 .2% Aviobridge usage 2.0% 100.6% 58. Table 3-11: AP-II airport revenue breakdown Aeronautical Revenues 2008 2009 2010 Landing Services 17.9% 15. there have been no specific developments as of yet).000 rupiah for international flights and 40.9% 2. b) Analysis of detailed revenue breakdown With regard to a detailed breakdown of revenues (breakdown of aeronautical revenue and non-aeronautical revenues).0% 100.8% Passenger Service 49. and while the decision has been made to separate the services from the airport management company.

3-27 .821 1. or 54. (of which 32 million were domestic travelers and 9.3715 trillion rupiah. JICA Master Plan  Compared to the international flight fees of surrounding airports in Asia.033 40. IDR) Domestic 32.5% of the airport’s aeronautical revenues (1.490 Source: AP-II Annual Report (2009.000 647.371. Table 3-12: Airport usage fees at Soekarno Hatta Airport (estimate) Passenger Departing Passenger Fee Revenue (JICA MP) (Estimated) per passenger (Estimated) (people) (people) (IDR) (M. This is 71.823.066 16.9185 trillion rupiah). Estimating that half of the airport users are travelers that pay airport usage fees.568 Total 42. however.000 723.921 International 9. airport usage fees at Soekarno Hatta Airport in 2010 can be assumed to be around 1. domestic flight fees are rather high compared to other airports in Asia. airport service fees at Soekarno Hatta Airport are not very high.198.642 21.788 150.5 million were international travelers).647. On the other hand.396. 2010).021.576 4.043.6% of overall revenues.

6 Kuala Lumpur International Airport (Malaysia) 51 MYR 1.729 22. Source: Websites for each respective airport. Source: Websites for each respective airport.266 16. LCC) 18 SGD 1. 3-28 .9 Note: Narita.2 Kuala Lumpur International Airport (Malaysia) 9 MYR 218 2.654 21.1 Hong Kong International Airport 120 HKD 1. 2011). LCC) 25 MYR 604 7.9 Changi Airport (Singapore) 28 SGD 1.000 26.1 Kuala Lumpur International Airport (Malaysia.8 Kuala Lumpur International Airport (Malaysia. Table 3-14: Airport service fees (domestic flights) Yen Dollar Local currency equivalent equivalent Indonesia Soekarno Hatta Airport 40. LCC) 6 MYR 145 1.5 Narita Airport 2.1 Haneda Airport 2.2 Hong Kong International Airport N/A N/A N/A Suvarnabhumi International Airport (Thailand) 100 THB 247 3. and Hong Kong also have separate fees for children.000 IDR 338 4. Currency equivalents were taken at the time the report was drafted (November 21.183 15.9 Changi Airport (Singapore) N/A N/A N/A Changi Airport (Singapore.540 JPY 2. Currency equivalents were taken at the time the report was drafted (November 21.000 JPY 2.000 IDR 1. LCC) N/A N/A N/A Note: Narita.4 Suvarnabhumi International Airport (Thailand) 700 THB 1.063 13.233 16.520 yen per adult.4 Narita Airport 0 JPY 0 0. Haneda.5 Changi Airport (Singapore. Table 3-13: Airport service fees (international flights) Yen Dollar Local currency equivalent equivalent Indonesia Soekarno Hatta Airport 150. 2011).0 Haneda Airport 170 JPY 170 2.540 33. Haneda. Figures for Narita Airport are for domestic flights that originate at Narita Airport. and Hong Kong also have separate fees for children. The transit charge for international flights is 1.

total floor area of terminals at Soekarno Hatta Airport amounts to 307.9% 30.2% 0.7% of total floor area).Non-aeronautical revenues  Non-aeronautical revenues account for a little more than 20% of all AP-II revenues.3% 10.3% 4. with 290 retail shops and 130 restaurants and eating establishments.0% 10.pdf). 3-29 .8% Airport Pass 2.4% 31.147 m2. more than 70.1% 10.8% 7.changiairport.220 m2.0% 100.3% 1.2% 9. making the rentable area of the airport likely around 8.29  Currently.28 Moreover. the main non-aeronautical revenues are concessions and space rentals.changiairportgroup.0% 100.000 m2 is used for commercial space (6. 2010)  At Singapore’s Changi Airport. the total floor area of the four terminals that makes up the airport amounts to 1.9% Utilities 12. non-aeronautical revenues accounted for 51% of all business revenues in fiscal 2010.9% 24. Of that floor area. 29 Source: Changi Airport website (http://www. 2.000 m2 (of which.046.3% 8.9% AMACS 0.8% 9.1% Others 2. Table 3-15: AP-II non-aeronautical revenue breakdown Non-Aeronautical Services 2008 2009 2010 Space Rental 25.4% 1.0% Land Rental 5.2% 0.2% 24.8% Subtotal 100.1% 5.  Of those revenues.com/export/sites/caas/assets/changi_connection/Changi_Airport_Group_AR_0910_F ull.5% Concession 32.9% Advertising 8.com/our-business/about-changi-airport/facts-statistics).0% Source: AP-II Annual Report (2009.000 m2 is for 28 Source: Changi Airport Group Annual Report 2009/2010 (http://www.6% 9.1% Parking Services 10.

4. in addition to the new construction of Terminal 3. Thus. while also making efforts to increase sales by targeting well-wishers by constructing Terminal 3 and a connecting building (place where only passengers with tickets can currently go).  Possible methods for increasing non-aeronautical revenues are boosting the amount of commercial space or raising the average spending per customer. it is important to work to expand the amount of rentable space in accordance with the upgrading of Terminals 1 and 2. In order to promote more spending by departing passengers.6% of the airport’s total floor space. The following is an overview of the administrative issues as taken from the above detailed revenue analysis. (i) Resolve the capacity problem and contribute to the further development of the Indonesian economy 3-30 . In order to do this. rentable area accounts for approximately 2. the following targets have been set for the expansion project of Soekarno Hatta Airport.  In order to raise the average spending per customer it is necessary to establish attractive commercial facilities. and 2. Terminal 1.000 m2 for Terminal 2. passengers in transit. and well-wishers. it will likely be necessary to upgrade the quality of commercial facility management and make administrative efforts such as opening stores that meet the customers’ needs.000 m2 for Terminal 3). 3) Target setting and the basic policy for expansion a) Target setting for the expansion project In light of current issues with the facilities and administrative issues related to revenues.

including holdups at immigration for international flights and an unattractive concessions area for departing passengers. First. and consider a finely-tuned response. Indonesia is a nation comprising a large number of islands. including with baggage handling.Indonesia is currently experiencing an ongoing trend of healthy economic growth. constructed. the purpose of travel differs between domestic and international passengers. (ii) Improve customer satisfaction and security to make the airport a world-class airport As described earlier. The lack of air travel capacity should be resolved quickly and a foundation for further economic growth. the airport has a large number of security problems. the current airport terminal lacks convenience and appeal as a gateway to the growing market of Indonesia. and these issues are the reason that flights have yet to be established with North America. the majority. is accounted for by passengers 3-31 . As can be seen in the figure below. establish customer segments. approximately 30%. an overview of flight passengers will be provided from the JICA MP Team’s Progress Report. Moreover. making air travel a very significant mode of medium to long-distance domestic travel. and the number of air travel passengers is dramatically increasing in response. working to make the airport a world-class airport. For domestic flights. In increasing customer satisfaction it is important to assess the situation of customers. One target of the expansion project will be to increase customer satisfaction and security.

these users account for 16. while nearly 25% are traveling for sightseeing purposes. Meanwhile. the majority of international air travelers. where the average reflected on air travel passengers is 0.returning home or visiting family. where the average reflected on air travel passengers is 0.431 people.4%. travel for business.5%. For domestic flights. Master Plan Study On Multiple –Airport Development For Greater Jakarta Metropolitan Area In The Republic Of Indonesia: Progress Report (March 2011) Let us use the survey above to look at the situation of airport users that are well-wishers. the percentage of airport users that are well-wishers is 24. for international flights. 3-32 . Figure 3-12: Travel purpose of airport users taken from a questionnaire Source: JICA. at approximately 40%.298 people. while nearly 30% travel for sightseeing. Meanwhile.

Carriers are the customers that should be emphasized the most. by maintaining airways and bringing in their customers. in addition to the flight passenger-related businesses described above. while this may not apply at present. Tenants of restaurants. the following groups can be assumed as customers for other airport businesses. it will be necessary sooner or later to pay a certain degree of consideration to passengers traveling to visit the airport itself. Furthermore. Master Plan Study On Multiple –Airport Development For Greater Jakarta Metropolitan Area In The Republic Of Indonesia: Progress Report (March 2011) Moreover. 3-33 . and lounge operators are also important customers that provide rent money and influence the satisfaction level of airport customers. shops. Figure 3-13: Ratio of well-wishers Source: JICA.

people movers and other shuttle facilities will be developed on the airport grounds in order to construct the infrastructure necessary for forming a new city core. but in the long term to introduce business. Figure 3-14: Customer segmentation of Soekarno Hatta Airport Source: Prepared by the Study Team (iii) Infrastructure development advanced in view of forming a city core with Soekarno Hatta Airport at its center in the long term As described in the Grand Design of AP-II. and convention functions. and to form a city core that is centered on Soekarno Hatta Airport. While promoting the early introduction of railway transport. 3-34 . the Soekarno Hatta Airport expansion project aims not only to expand the airport’s terminals. lodging.

While maintaining the necessary comfort for domestic passengers. a) Prompt rectification of the lack of capacity As mentioned above.4) Basic policy for facility development The following is the basic policy for facility development in light of the current challenges faced and the targets laid out for the expansion project above. further investments will be focused on the international terminal in efforts to achieve the status of a world-class airport and increase customer satisfaction. rectifying the lack of capacity is an urgent issue. aircraft parking spots  Parking lots (i) Setting grades in accordance with the customer As airport service fee of an international passenger is 3. and developments will be made at the earliest timing possible. it is plausible to assume that the revenue increase per person contributed by an international passenger who spends money at commercial facilities will be larger than that by a domestic passenger. meaning 3-35 .  Terminals  Apron. as discussed in Chapter 5 Overview of the Results of Preliminary Financial/ Economic Analysis. The following categories have been set in order to overcome this issue.75 times that of domestic passenger. (ii) Improving security The airport’s security gates and baggage handling systems are aging and growing obsolete.

but rather a project to expand and upgrade existing Soekarno Hatta Airport. (iii) Boosting the appeal of the current airport terminal by exploiting regional character Terminals 1 and 2 of Soekarno Hatta Airport are rich with an original design that makes use of the regional architectural features. As such. The number of flights will be increased while enhancing security and providing a safe and secure environment. and these factors have prevented the airport from commencing flights with North America. these buses are not easily accessible. (iv) Increasing the convenience of inter-terminal travel Currently. when considering business aspects it is necessary to pay heed to the division of roles with AP-II. In addition. That appeal will be expanded upon in aim of constructing a new world-class airport that exploits the local characteristics. the people mover will be constructed between terminals. The convenience of traveling between terminals will be improved.that sufficient security is not being ensured. which is currently owned and operated by AP-II. Specifically. b) Basic business policy This project is not a development project. This section will pay consideration to a basic direction for such aspects. 3-36 . most travel between terminals is conducted on shuttle buses. however. thus keeping usage levels low. starting from a scratch. security flaws were observed at transport areas to the terminals. including for the purpose of forming a city core in a long run.

as clarified in the table above. Thus. business should be considered under the following policy. while also taking into account the importance of the Soekarno Hatta Airport within AP-II’s overall business. Table 3-16: The expertise and administrative resources needed by AP-II and the Study Team for the expansion project AP-II Study Team Fund procurement ○ ○ Including public fund procurement Security operations (including baggage ○ ◎ handling) Concession area Tenant composition △ ◎ operations MD Tenant leasing △ ◎ Tenant management △ ◎ Promotions △ ◎ Cargo terminal operations △ ◎ Facility maintenance and management ○ ○ Energy conservation in particular Air traffic control ○ - Source: Prepared by the Study Team With regard to the business aspects. by utilizing the Study Team’s expertise on security and other issues.The table below is a comparison of the expertise and administrative resources needed for the expansion project between AP-II and our team. 3-37 . utilizing the Study Team’s expertise in the operations of concessions areas and cargo terminals would particularly contribute to overall business. Moreover. consideration should be paid to areas where further added value can be created.

Ltd. working to improve services and enrich businesses at the Soekarno Hatta Airport. implementing a joint project with private sector businesses with airport administration expertise would be an effective way to utilize a wider range of know-how. divide the risk. the expansion project of Soekarno Hatta Airport includes the introduction of new functions. (ii) Core airport operations at Soekarno Hatta Airport are administered by AP-II while Japanese corporations provide expertise and implement partial operations As mentioned above. and add diversity to funding procurement. cooperation will be carried out to promote the mutual utilization of expertise and administrative assistance via operational partnerships with Japanese companies.. In addition. Full consideration should be given to this point. instead of implementing the overall project using AP-II alone... The Study team includes Japan Airport Terminal Co. a private sector company that has for many years handled the management and operations of Haneda Airport. the conventional business and operating entity. (i) Implement joint businesses under this project with AP-II in consideration of the respective attributes and risk As clarified in Table 3-16. and AP-II should continue to be mainly in charge of the operation of Soekarno Hatta Airport. 3-38 . and it is safe to say that this project greatly supports AP-II operations. projects related to Soekarno Hatta Airport play a major role in overall AP-II businesses. particularly in terms of employment and profits. and it is assumed that we will be able to utilize business expertise that will lead to efficient airport administration and boosting non-aeronautical revenues to the maximum extent possible. This means that.

Hence. (iii) The private sector takes risk for businesses with many uncertain elements. lodging. and passenger numbers subsequently returned to normal conditions. Previous declines in passenger demand due to short-term factors such as those described above ended in six months to one year. Short-term factors include 1) the spread of contagious diseases such as avian flu both in Indonesia and overseas and 2) the avoidance of travel by the public due to incidents such as large-scale terrorist attacks. and convention functions. 3-39 . The kind of political and economic chaos that occurred in Indonesia in the latter half of the 1990s as a result of the Asian crisis could reduce passenger demand over the long term. AP-II has not accumulated administrative expertise and business risk management in these business lines. offices. such as concessions and cargo business AP-II has not yet pursued the business opportunities on a large scale that generally contribute to the creation of a city core such as shopping malls. there are no effective measures to reduce risk of this nature either. will bear the risk and implement these functions. there are no effective countermeasures for dealing with such factors. However. However. Therefore. 5) Assumed risk in privately-owned airport management business and ways to mitigate them a) Decrease in passenger numbers An increase in air passenger demand will be conditional on political stability and stable economic growth in Indonesia. the Study Team which comprises private sector businesses and have knowledge and experience in the these businesses. and demand could decrease due to various short-term and long-term factors. cargo terminal.

Therefore. Likewise. In future. will also become necessary. d) Increase in operating expenses including personnel and utilities. accurately identifying customer needs and implementing ongoing improvements in commercial areas are essential. where economic growth is set to continue in the future. who account for the majority of the revenue from the airport passenger service charges and commercial sales. this will result in a significant reduction in revenue and become a factor for a decline in profits. attention must be paid to policy developments in the construction of new airports. In this case. however. increases in all operating expenses including personnel expenses can be expected. In Indonesia. if highly profitable international passengers. it could expect to lose some of its passengers due to the completion of a new airport facility. Paying attention to efficient. etc. energy-saving management in the use of utilities such as electricity and water. it will be important to approach the Indonesian government about raising airport taxes as required. b) Reduction in passenger numbers due to the construction of a new airport in metropolitan Jakarta Soekarno Hatta Airport currently has a monopolistic position on air transport and travel in the Jakarta metropolitan area. 3-40 . Therefore. c) Contraction of sales in commercial areas Sales of goods and services within the airport facilities are areas that are significantly affected by the management of business operators even when the number of passengers remains at a consistent level. migrate in large numbers to the new airport. etc.

therefore. In addition to taking appropriate countermeasures against these various events within budget constraints. measures to cope with typhoons and heavy rains are essential. it is necessary to cooperate with security authorities in formulating adequate countermeasures against terrorist risk. 3-41 . consideration of insurance coverage as required is vital. and when damages caused by terrorist bomb attacks occur. Therefore. e) Terrorism Airports are often the target of terrorist attacks. it can be assumed that both human and physical damages will be caused. Floods also regularly occur in the capital of Jakarta and. and the possibility of natural disaster events such as earthquakes or tsunamis cannot be overlooked. f) Natural disasters Indonesia is a country formed from volcanoes.

making it difficult to handle the over-capacity of passengers and well-wishers. and the check-in lobby and arrival lobby are positioned together. 3-42 . and traveling to another unit. Nevertheless. B. “Master Plan Study on Multiple–Airport Development For Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) Terminal 1 is a semi-circular building reserved for domestic airlines. and C) is independent of each other. passengers making a domestic transit are forced to undergo an inconvenient processes of picking up their baggage upon arrival. as each unit (A.(3) Project Plan Overview 1) Issues with the existing terminals a) Terminal 1 Table 3-17: Area list of domestic passenger terminal (Terminal 1) Source: JICA. there is only one curbside pickup. moving along the curbside pickup. this terminal hosts most passengers in the airport. leaving the arrival unit. Furthermore. As mentioned earlier.

when the airport initially started operations each unit was allotted for one carrier. This format is very difficult for passengers to understand.000 m2 in size. as can be seen from Figure 3-18 below on the relationship between terminal building area and annual passenger numbers. “Master Plan Study on Multiple–Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 3-43 .5 million domestic air passengers. each unit is approximately 48. it is clear that the facilities are insufficient in size to accommodate the approximately 34. As can be seen in Table 3-15 on area.Moreover. Moreover.000 m2. while the overall size of Terminal 1 is 143. b) Terminal 2 Table 3-18: Area list of domestic/international passenger terminal (Terminal 2) Source: JICA. but currently over 50 low-cost carriers are operating in a single small space.

In terms of size. making for an appealing entrance to the international terminal. on the curbside pick-up. The airlines used at each unit have remained the same since services first started.” and various tropical plants are placed in and around the terminal. and other locations. or vice-versa). just as with Terminal 1. Furthermore.Terminal 2 is also shaped in a semicircle form like Terminal 1. even when looking at Figure 3-15. where unit D is all international carriers other than Garuda Indonesia.). with separate departure and arrival levels. moving between units is extremely more convenient compared to Terminal 1. as each unit is connected to one another. etc. as the domestic lines are concentrated in Terminals 1 and 3. and the total area of Terminal 2 is 135. transiting is easy for customers using Garuda Indonesia (from international to domestic. and F. 3-44 .000 m2. Terminal 2 is divided into three independent units: D. and unit F if Garuda Indonesia’s domestic line. The terminal’s size is appropriate to accommodate the annual number of international passengers. and is mainly used as the international flight terminal (one portion is used for domestic flights for Garuda Indonesia. but it appears as if the bus does not make frequent rounds. which looks at the relationship between annual passenger numbers and passenger terminal size. when Terminal 2 was being constructed its concept was a “garden airport. However.000 m2. Therefore. unit E is Garuda Indonesia’s international line. Transfer between terminals is handled using a free shuttle bus. Also. for the passengers of other airlines it is inconvenient to transfer between terminals. each unit is allotted about 45. Also. The biggest difference with Terminal 1 is clearly that it adopts a two-floor terminal plan.7 million. 9. E.

c) Terminal 3 Table 3-19: Area list of domestic passenger terminal (Terminal 3) Source: JICA. Moreover. which offer a strong sense of local architectural features. Terminal 3 has a modern design. it is envisioned difficult to respond to the future increase in cargo demand using the current cargo terminal size.000 m2 that accommodates a nominal annual passenger scale of 4 million passengers. The curbside pick-up is on the first floor and the departure and arrival lobby are conjoined. but as there is no PBB. In terms of size. efficiency is poor. Moreover. “Master Plan Study on Multiple–Airport Development For Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) Terminal 3 is a terminal specially constructed for low-cost carriers that was an urgent measure to respond to the increase in low-cost carriers. compared with Terminals 1 and 2. passengers are forced to again travel to the bus departure gate on the first floor. and as they are decentralized. It is economically constructed and contains no PBB. each regular terminal is equipped with a cargo terminal. d) Cargo terminals Currently. showing no association between the old and new. it is a small terminal of less than 30. where passengers that have completed checking in are guided to a second floor departure lobby. The path of travel for passengers is complicated. 3-45 .

 Upgrade to a two-floor curbside pick-up The current single-floor curbside pick-up will be revamped into a two-floor curbside zone in efforts to ameliorate the issue of congestion. and issues with existing terminals. Terminal 1  Construction of an integrated check-in lobby Develop an integrated check-in lobby located at the center of the curbside zone in order to consolidate the check-in areas. This will simplify changing gates and searching for passengers.417m (international) T1 cargo facility 12. Table 3-20: Size of existing cargo terminals Facility Area Cargo handled (10.638 m2 50 Source: JICA.000t) 2 T1 cargo facility 36. The check-in space will be relocated to the 3-46 . current boarding check operations conducted in front of gates will be revised.  Expand the gate lounges and seating space The gate lounge of each unit will be expanded and connected to create a unified gate lounge. the following policy has been set for terminal construction. In accordance with this. business scheme considerations.800 m2 Total 68. “Master Plan Study on Multiple–Airport Development For Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011) 2) Basic policy for terminal construction In light of the aforementioned profit structure analysis.421 m2 (domestic) T3 cargo facility 19.

 Placement of bus lounge and maximum use of open spots A bus lounge of a maximum size possible will be placed under the newly added gate lounge area in aim to enrich response to LCCs using open spots.  Expand the gate lounges and seating space The gate lounge of each unit will be expanded and connected to create a unified gate lounge. current boarding check operations conducted in front of gates will be revised. second floor and the space expanded. which is expanding for domestic lines. 3-47 . Also. tenant leasing will be implemented with a focus on store diversity in order to respond to a broad range of customers. Furthermore. floor space will be added on the airside of the second floor only between units in order to expand concessions. In accordance with this. efforts will be made to ensure effective use of the terminal by operating these separately from the upper PBB usage spot. Terminal 2  Construction of an integrated check-in lobby Develop an integrated check-in lobby located at the center of the curbside zone in order to consolidate the check-in areas. in terms of operational aspects. This will simplify changing gates and searching for passengers.  Expanding the departure and arrival lobbies and enhancing the variety of concessions The outdoor space located between the curbside zone and the departure and arrival lobbies will be utilized to expand each lobby. Furthermore.

However.  Establishment of a PBB in the existing terminal The existing Terminal 3 is only host to LCCs and thus does not have a PBB. Moreover. A cargo terminal and exclusive space will be constructed on the west side of the airport grounds in order to respond to cargo 3-48 .Terminal 3  Expansion into a world-class terminal with focus on international airlines As Terminals 1 and 2 has some special and technical difficulties in enriching security system or installing advanced baggage system. as the passenger volume of Terminal 3 is too large for international passengers alone. The design of the terminal will utilize the regional character used in the design of Terminals 1 and 2. giving Terminal 3 a look that is befitting to Indonesia. Cargo terminals  Form a consolidated cargo zone using the latest equipment The existing cargo terminals are aging and growing obsolete. a PBB will be constructed. The two functions described above will be constructed into a unified terminal while taking into account security aspects in order to flexibly respond to future changes in the ratio of international and domestic flights. Terminal 3 will be expanded with a focus on international flights so as to make it into a world-class terminal. as the terminal is to be expanded to host a wide range of international and domestic carrier flights. the terminal will be developed to host both international and domestic flights.

terminal sizes are dispersed within the average range of ± approximately 15% of about 10. which is forecasted to grow in the future. 3-49 . demand. According to this analysis. Table 3-21: Details of terminal development under this plan Project Details Notes Terminal 1 Two-story curbside zone Domestic lines (mainly LCCs) Integrated check-in construction Guest lounge expansion Bus lounge expansion Concessions expansion Update systems Terminal 2 Integrated check-in construction Domestic line terminal Guest lounge expansion Concessions expansion Update systems Terminal 3 Development of world-class terminal Joint international/domestic lines Establishment of PBB at existing terminal facilities Cargo terminals Construction of integrated cargo zone Domestic and international air in west part of site logistics Concentrated facilities that realize a compact logistics line Source: Prepared by the Study Team 4) Size of planned new terminals a) Analyzing cases of terminal plan units When determining a size for the terminals. a correlation analysis between annual passenger numbers and terminal size conducted by the Service Center of Port Engineering was referenced. These details are presented in Table 3-21. 3) Aspects of terminal development The details of terminal development for this plan were decided in light of the basic policy for terminal construction.000 m2 per million annual passengers.

“Kuko Kogaku. *The grey area in the graph indicates the ±15% range.5 “Relationship between annual passenger numbers and passenger terminal size” taken from Service Center of Port Engineering.000 LCC 8. Table 3-22: The terminal plan unit 2 Classification Area (m ) per million passengers per annum International 11. The following plan units have been set by user grouping for the scope described above. Figure 3-15: Relationship between annual passenger numbers and passenger terminal building size Tota l floo r area (m2) Annual number of passengers (10.000s) Source: 2007 directory of all airport terminal buildings. etc.241 (2010.500 Domestic 9. Nikkan Kensetsu Kogyo Shimbun) and partially altered by the Study Team. b) Setting the terminal plan unit The basic policy of this plan is to develop facilities and provide services in accordance with the passenger demographics. Source: Figure 13.” p.1.500 Source: Prepared by the Study Team 3-50 .

000 m2 Offices 15. Table 3-23: A size for the terminal plan Approximate number Main target Current Size Annual number of Terminal Expansion (m2) Total (m2) of passengers per passengers (m2) passengers annum (millions) T1 LCC 142.000 13 Subtotal 28.000.459 18.500 149. c) Setting a size for the terminal plan The following list of terminal plan sizes has been established in light of the above plan units.000 172.000 m2 Subtotal 30.000 m2 5.000 567.534.000 m2 5.000 m2 Subtotal 30.667 9 International 0 149.958 200. project elements have been classified into the following five packages in view of business activities.000 m2 Concessions 15.321.147 260.000 m2 Concessions 40.730 20. 3-51 .000 m2 Source: Prepared by the Study Team 5) Setting an area size for this plan In determining area for this plan.000 165.828.176 60 Source: Prepared by the Study Team Each of the terminals is taken to be composed as follows: Table 3-24: Area list of expanded terminal Item Area Remarks T1 (Expanded) Integrated check-in 10.384.958 21.958 50.000 m2 Subtotal 200.000 m2 added after check-in relocated Gate lounge / bus lounge 5.667 22 Total 307.147 60.828.000 m2 Concessions 15.458 8.000 m2 T2 (Expanded) Integrated check-in 10.459 30.500 13.000 m2 T3 (Expanded) Terminal 145.000 228.730 30.333 18 T3 Domestic 28.176 20 T2 Domestic 135.500 79.000 m2 added after check-in relocated Gate lounge 5.

etc. car parks) Source: Prepared by the Study Team The set size of facilities is summarized as follows by project package. implemented as Ancillary works for terminals AP-II’s collection of funds from public works using yen loans. (People mover. 3-52 . utilities. development will be carried out through JV as per Package (3). Package (4) Joint venture including third party Construction is carried out in a New construction of cargo fund concession style using third party village funds. Package (5) Commercial area (Commercial space. in the event that it is not carried out as a public work. offices.) domestic market However. carry out development of the terminal buildings using third party funds. modification of taxiways and completion may be transferred as aprons) equity or grant to AP-II. and operate for a fixed period of time. hotels.) Package (2) Use of internal reserve of AP-IIand Like Package (1). Table 3-25: Five Project Packages Source of funds anticipated Source of funds anticipated Packaged project elements by AP-II by the Study Team Package (1) Implemented as public works using Implemented as public works using Airside (New construction or government fund (Assets after yen loans. Package (3) The managing company for Soekarno Renovation and extension of Hatta Airport will be separated from terminal buildings AP-II.

3-53 . Interchange terminal. partial modification of 360.5 km (4 woks for new terminal (or construction of bus stations) terminals route) Utilities etc.000 ㎡ (extension) modification of existing areas + modification of existing facilities Terminal 3 Extension of existing facilities 200. Utilities. road improvement Package (3) Terminal Terminal 2 Extension of existing facilities + 30. Table 3-26: Size of facilities by project package Project elements Anticipated scope of facilities Anticipated Size Package (1) Airside Apron New construction + modification of existing areas Taxiway New construction of taxiway on Area developed: eastern side. Parking building Source: Prepared by the Study Team 6) Model plan for this plan A model plan has been created as follows based on the above considerations. connecting building.000 ㎡ area building. Connecting building.000 ㎡ Package (5) Commercial Integrated New construction 185.  A specific plan for the location of the commercial.  Exact route of APM will be determined once detailed location of Airport Link Railway station within the airport premise is provided.000 ㎡ (extension) Package (4) Cargo village Cargo New construction 150. and parking space will be crafted once detailed planning is conducted.000 m2 existing areas Package (2) Ancillary People mover New construction for connecting to Total length: 3.

Figure 3-16: Model plan (tentative) Source: Prepared by the Study Team Alternative proposals have been provided below as a reference. 3-54 .

a design of Terminal 3 that exploits the regional character achieved in Terminals 1 and 2 is developed even further. it will be difficult to consider two different buildings together as one terminal building.Alternative Plan 1 In this plan. leaving the problem of having to remove the existing. Figure 3-17: Alternative Plan 1 Source: Prepared by the Study Team 3-55 . As the additional part of the Terminal 3 looks totally different from the existing part.

Terminal 3 is designed to accommodate more open spots. however. This design will allow for developing a certain degree of open area at the north and east sides of Terminal 3. it will be difficult to accommodate those spots. At the same time.Alternative Plan 2 In this alternative plan. Figure 3-18: Alternative Plan 2 Source: Prepared by the Study Team 3-56 . in the event that a terminal is constructed that emphasizes fixed spots. Thus. this will reduce the number of fixed spots.

the proposed plan has been prepared so as to minimize relocation of existing facilities accompanying extension of terminal buildings and construction of connecting buildings. It is 3-57 . it is preferable to continuously hold meetings with the railway unit and. Therefore. etc. part of the facilities has to be relocated or demolished. it is necessary to draw up a detailed development plan with due consideration for staged relocation. (iii) Coordination about connection with railway station In preparing cross-sections of modified or ameliorated terminal buildings. Therefore. tenants. Therefore. (iv) Relocation of existing facilities Essentially. it is necessary to ensure coordination with the planned railway station in view of horizontal and vertical development. (ii) Elaborate study on staged development plan Since this project for extension and improvement must be implemented while maintaining the airport operation. where it takes much time to complete a railway. In constructing taxiways. plans of connecting buildings and plans of people mover. however. impose the railway unit planning conditions reviewing the master project schedule. part of the golf course has to be demolished and flattened. it is preferable to start meetings with airline companies. at the earliest stage.7) Issues and solutions for realization of the project Technical issues and solutions for realizing the plans stated above are enumerated as follows: (i) Detailed investigation of existing terminals Existing conditions including utility line routes and building structures will have to be investigated in detail in planning extension and modification of the present terminals. it is necessary to confirm intention of present building users at the early stage and know who would be moved to where (including new connecting buildings).

in relation to the present cargo area is formed on the eastern side of Terminal 1. necessary to start a meeting with the concerned persons at the early stage to commence site preparation as scheduled. Therefore. at the early stage and ascertain to what extent open spot area will be placed in the business area site. concerning relocation to the Cargo Terminal and its vicinity and reflect it in the plan of Cargo Terminal. In providing the Cargo Terminal. 3-58 . it is necessary to verify intention of these companies etc. it is needed to conduct inquiries to the concerned companies etc. (v) Rearrangement of business area related to Cargo Terminal The business area which comprises offices of distribution companies etc.

and the linking of terminals in an expansion project for Soekarno Hatta Airport in Indonesia’s Jabodetabek Area. As stated in the JICA Master Plan.Chapter 4 Evaluation of Environmental and Social Impacts The purpose of this study is to consider the feasibility of a facility project for the construction of a new airport terminal. which is not at variance with the findings of the JICA Master Plan in regard to environmental and social impacts. the upgrading of existing terminals. The environmental and social impacts covered in this chapter have also been examined in detail by the JICA Master Plan and this study. relates details of results of this study while introducing the main points of the JICA Master Plan. A separate comparative study on the validity and content of extension projects in plans for new construction and upgrading of several airports including Soekarno Hatta Airport in Indonesia’s Jabodetabek Area has already been undertaken by JICA in the Project for the Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia (JICA Master Plan) and is antecedent to this study. Although the construction of Runway 3 and Terminal 4 which requires additional land of precincts on the north of the present site is not within the scope of this study. an environmental impact assessment (EIA) including a strategic environmental assessment (SEA) established by the government of Indonesia must be implemented in proceeding with the expansion plan for Soekarno Hatta Airport. results of the preliminary study made in the JICA Master Plan are outlined in this chapter. JICA will provide technical cooperation to Indonesia to enable the 4-1 . As discussed later in (4) of this chapter.

go. The total number of buildings is approximately less than 2. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia” (Progress Report).jp/english/operations/social_environmental/archive/pro_asia/pdf/ind12_03. with dwellings occupying one-fourth of the total area. The land earmarked for expansion of the airport is flat terrain less than 5m above sea level. acquisition of the land planned for the expansion has not started yet. The area is dotted with small ponds and marshy areas so it can be presumed that the land naturally formed into an alluvial fan at the estuary of Chi-Sadane River. ( 2011) pp.jica. Because the plan for expansion has not yet reached the implementation stage.10-1. The University of Indonesia is currently undertaking a survey of the number of households. 10-2 4-2 .000 and irrigation channels stretch for about 2km across the land planned for the project.30 (1) Analysis of current environmental and social conditions 1) Analysis of the current state Soekarno Hatta Airport is located in the northeast corner of the city of Tangerang in the eastern corner of Banten Province. population for involuntary resettlement and the current use of the target land.implementation of the SEA for the realization of the Soekarno-Hatta Airport extension plan. The majority of the land for the planned project consists of rice fields and residential areas.31 30 http://www.pdf 31 JICA. The northern perimeter of the airport is on the border of the city of Tangerang and the Tangerang District and the expansion plan (Runway 3 and Terminal 4) of the airport will have an impact on six villages (Desa) in the area.

The issue as to whether to proceed with the expansion of Soekarno Hatta Airport or to accommodate future demand through the upgrading and development of other airport infrastructure without expanding the Soekarno Hatta Airport is already being studied in the JICA Master Plan. making the regeneration of an attractive Soekarno-Hatta Airport difficult.According to interviews with Indonesia’s Ministry of Environment. failure to proceed with expansion of the airport facilities is likely to lead to a decline in the user services of the airport itself. 2) Future outlook (if the project does not proceed) The purpose of the Soekarno Hatta Airport expansion project is to expand and develop the existing airport facility to accommodate the airport’s ever-increasing aviation passenger and cargo demand. Therefore. Infrastructure development and redevelopment of the terminal functions proposed in this study will inevitably be concomitant with the expansion of functions of Soekarno Hatta Airport. 4-3 . the future prognosis regarding environmental and social changes if the expansion of Soekarno Hatta Airport does not proceed will be left to the findings of the JICA Master Plan. Therefore. In such case. a decline in economic activities can also be expected. except chronic traffic congestion around the airport. This study specifically focuses on the expansion and upgrading of terminal functions and the improvement in connection functions between the terminals. the ministry has not identified conspicuous environmental problems such as noise.

( 2011) p.10-2 4-4 . the redevelopment of terminal functions will enable the use of underutilized land. the terminal building may come to be utilized as a high-quality urban space. indicate that the following environmental constraints will occur as a result of the site expansion of Soekarno Hatta Airport. which at present includes a golf course situated in a pocket between Runway 1 and Runway 2.32 32 JICA.(2) Improvement effect of the environment accompanying the implementation of the project The expansion of Soekarno Hatta Airport will make it possible not only to accommodate increased aviation demand but also to stimulate latent aviation demand. which is related to this study. Improved functions of the terminal buildings will enhance the convenience of passenger and cargo flights and provide high-quality spaces for the enjoyment and entertainment of passengers. In terms of land use. (3) Environmental and social impacts accompanying the implementation of the project 1) Impacts on environmental and social areas already indicated in existing studies Analyses conducted by JICA in the JICA Master Plan. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia”(Progress Report). making possible integrated and orderly use of the land. If the general population as well as travelers visit the terminal and use it as a place for shopping and sightseeing. The establishment of service and commercial facilities within the terminal buildings will also create employment opportunities and lead to the revitalization of the retail and distribution business. purely for the purposes of the airport.

The JICA Master Plan with the cooperation of the University of Indonesia and the Strategic Environment Assessment Department. The expansion of the airport will also require the reconstruction of trunk irrigation channels. there are plans to hold a stakeholders meeting during Phase 2 of the JICA Master Plan. Ministry of Environment intends to engage in discussions with the District Coordinative Body of Spatial Plan (BKPRD) regarding changes in the Regional Spatial Plan for Banten Province and 4-5 . A resettlement plan for the residents will be formulated by the project proponent (AP-II). b) Conversion of agricultural land Agriculture is the main industry throughout the surrounding area of the land planned for the project.000 residential buildings occupying the land proposed for the expansion. To sufficiently grasp the views of the local residents and to provide them with adequate information. the Tangerang District and the city of Tangerang. c) Roads A main road used by residents in the course of their daily lives run parallel to the irrigation channel. To accommodate the rerouting of irrigation channels. and the use of the existing land for rice fields will change from agricultural use to use as airport land. a) Involuntary resettlement There are about 2. d) Impact on the Regional Spatial Plan The change of the land use of existing rice fields is a factor that will have an impact on the Regional Spatial Plan and will require coordination with the stakeholders. and involuntary resettlement will be unavoidable. the involuntary resettlement outside the planned land can also be expected. and this road will also have to be diverted.

2) Screening according to JICA guidelines As a matter of course. In addition.go. work and procedures in the JICA study project introduced in the previous section are performed according to the Environment and Social Consideration Guidelines established by JICA in April 2010. The provisional scoping in Table 4-1 targets several locations suitable for the construction of new airport facilities including the expansion of Soekarno Hatta Airport in the Jakarta Metropolitan Area. which is the subject of this study. and results of JICA’s screening at the preliminary examination stage are announced together with provisional scoping on the JICA Website (Table 4-1). 33 http://www. In this connection. and with the Regional Body for Planning and Development (Bappeda) regarding the Regional Medium Term Development Plans (RPJM).html 4-6 .Tangerang District (RTRW). natural environment. and pollution will also apply to the Soekarno Hatta Airport expansion plan.jp/english/operations/social_environmental/archive/pro_asia/indonesia_12. and all items noted including the social environment.33 There is some concern regarding environmental and social impacts as explained in the previous section.jica. information published on the JICA Master Plan website also states that an agreement has been reached between JICA and the DGCA to undertake a review equivalent to a Strategic Environmental Assessment (SEA) of the Jakarta Metropolitan Area according to laws and regulations of Indonesia and a review equivalent to an Initial Environmental Examination (IEE) for drafting an expansion plan for Soekarno Hatta Airport in the JICA Master Plan (see (4) 2) a) of this chapter for details). the Study Team was informed by the JICA Master Plan study team that no rare species to be conserved are found in the expansion area.

this study examines methods for the 4-7 . which aims to explore appropriate measures for the expansion or new construction of an airport in the Jakarta Metropolitan Area. which provides for standards for environmentally friendly buildings (see (4) 2) b) of this chapter for details of the standards). the following may be considered as anticipated environmental and social impacts. that is. To address the second point stated above.  Increase in parking demand and volume of traffic within the airport premises  Greater impact on the environment due to facility expansion (increase in energy and water consumption and generation of waste water. certain measures can be implemented such as the adoption of specific building designs that conform to the Ministry of Environment Decree No. Insofar as the re-development of the terminal alone is concerned. 3) Comparative study of environmental and social considerations of a plan different from the proposed plan In line with the JICA Master Plan. greater impact on the environment due to facility expansion. waste heat and other waste matter)  Temporary environmental and psychological impact and general inconvenience accompanying the partial removal of existing building structures  Settlement of arrangements with existing tenants in the terminal Measures to address each will be examined closer to the implementation stage of the project when a spatial plan is concretized. 8 of 2010.This study focuses mainly on the examination of support measures for the improvement of the terminal building and connecting functions of the expansion plan of Soekarno Hatta Airport.

4-8 . a quantitative comparative study of environmental and social impacts will be conducted in a more specific spatial plan in the future in regard to plans for the terminal and terminal connection facilities proposed in this study. Therefore. 34 “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia”(Progress Report). pp. JICA. 12-1 to 12-9.smooth realization of infrastructure development and improvement in terminal functions and terminal connection functions at Soekarno Hatta Airport.34 Furthermore. a comparative study of airport development plans with lower environmental and social impacts will be undertaken in the same JICA Master Plan including examination of means of access to the airport. 9-11 to 9-13. 2011.

Table 4-1: Results of Environmental and Social Considerations

4-9

4-10

4-11

Attached Table:

4-12

4-13 .

umich. Kantor Menteri Negra Lingkungan Hidup) in 1983 and further into the present Ministry of Environment (LH. The Environmental Basic Law (Law No. This law established the basis for all initiatives for controlling and managing the use of the environment in 35 PPLH was reorganized into the Ministry of Population and Environment (KLH.edu/News-and-Events/news-events-docs/11-12/eco-labels2011/JorgeGarciaLopez. 04 of 1982) is Indonesia’s first environmental law. Pusat Pendidikan Lingkungan Hidup).jp/english/operations/social_environmental/archive/pro_asia/pdf/ind12_01. environmental issues rose to prominence as an area of priority in initiatives of the Indonesian government. http://erb. Source: Results of Preliminary Examination of the Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia http://www.35 Since then the government has continued to frame and implement legislation relating to the environment on an ongoing basis. Kementerian Lingkungan Hidup) in 1993.jica.pdf (4) Summary of laws and regulations relating to environmental and social considerations of the partner country 1) Summary of laws and regulations relating to environmental and social considerations Following the establishment in 1978 of a government agency dedicated to dealing with environmental issues.pdf 4-14 .go. the Ministry of Environment and Development Supervision (PPLH.

and the management of harmful and poisonous substances. 2009.200 ministry staff in operations promoting environmental management. This law also stipulates that all Indonesians have an obligation to make efforts to protect the environment and to control environmental pollution and destruction. 32 of 2009).order to protect and preserve environmental resources for future generations by preventing their depletion and deterioration. 23 of 1997). On September 19th. The law provides that every business and/or activity which gives rise to a large and important impact on the environment shall possess an environmental impact analysis to obtain the license to conduct a business and/or activity. The organizational chart of the Ministry of Environment is shown in Figure 4-1. the Environmental Management Act was replaced by the Environmental Protection and Management Act (Law No. environmental impact assessments. The Ministry of the Environment is the head of environmental administration in Indonesia and engages about 1. which brought regulations concerning the environment in line with world standards. Taking into consideration issues such as the discharge of waste matter. this law focused on the sustainability of the environment. This new legislation strengthened both regulations and the jurisdiction of the government and at present forms the legal basis for the protection and conservation of Indonesia’s environment. measures to control pollution and other tasks. On October 3rd. 1997. 4-15 . this law was superseded by the Environmental Management Act (Law No.

regulations and standards. 4-16 . NTT Sulawesi. NTB. Maluku Sumatra and Papua Source: JICA. While the central government and agencies like the Ministry of Environment are responsible for establishing national policies. local governments and assemblies (regional lower houses) are allowed to engage in autonomous legislative activities in matters that are not of national interest. Oil. for Agro Industry for Enterprises and for Mobile Source Pollution Control Energy. Figure 4-1: Organizational Chart of the Ministry of Environment Minister Secretary to the Minister Assistant Minister Assistant Minister Assistant Minister Assistant Minister Assistant Minister for Global for Economy and for Cultural. for Law and for Sustainable Bureau for Bureau for Environmental Poverty Social Partner Interrelation Development General Planning Affairs between Technology Affairs International Instructions Cooperation Inspectorate Deputy for Spatial Deputy for Deputy for Nature Deputy for Deputy for Deputy for Deputy for Environment Pollution Control Conservation. local governments are responsible for enforcing and overseeing these. Hazardous and Environmental Community Capacity Building Management Enhancement & Toxic Waste Compliance Empowerment and Technical Environmental Management and Infrastructure Destruction Environmental Communication Assistant Deputy Assistant Deputy Assistant Deputy Assistant Deputy Assistant Deputy for Manufacture for Gas. “Master Plan Study on Multiple-Airport Development For Greater Jakarta Metropolitan Area in the Republic Indonesia: Progress Report” (March 2011) In Indonesia. All of the country’s 33 states are divided into provinces (Kabupaten) and cities (Kota). Pollution Pollution Control Domestic Pollution Emission Pollution Control Control Control Assistant Deputy Assistant Deputy Assistant Deputy Assistant Deputy for Environment for Environmental for Environmental for Environmental Impact Assessment Planning Evaluation and Institution Monitoring Regional Center Regional Center Regional Center Regional Center Regional Center for Environmental for Environmental for Environmental for Environmental for Environmental Management in Management in Management in Management in Management in Kalimantan Java Bali.

for example. 2) Summary of Indonesia’s EIA a) Environmental assessments Indonesia’s environmental assessment system (AMDAL) was first introduced in 1986 in accordance with the Environmental Basic Law. and later became established in 1997 under the Environmental Management Act. No. the Strategic Environmental Assessment was introduced as an environmental assessment system under the Environmental Protection and Management Act. Government Regulation No. which aims for environmental conservation from the initial stage of a project and also from a wide range of environmental views. No. 04 of 1982. 25 of 2007 regarding investment projects and made all investors responsible for environmental protection. According to this regulation. all investors must bear the burden of costs for the restoration of the natural environment at every stage of development in areas utilized by their projects. Environmental assessments (AMDAL) for projects in Jakarta. The assessment and approval of the environmental impact report (ANDAL) are the domain of the Ministry of Environment for large scale or cross-sectoral projects that cover plural areas under local government jurisdiction. but cities such as Tangerang apply the national system. 27 of 1999 requires an environmental impact assessment (EIA) of any activity that is likely to have an impact on the environment. The respective local governments also appoint committee members to serve on the Environmental Assessment Committee. the provinces or cities are implemented by the local governments of respective areas. Then.In 2007 the Indonesian government established the Investment Act. particularly in investments resulting in the destruction of nature such as. A strategic environmental assessment (SEA) is required at the master plan stage of a project. Jakarta has its own AMDAL system. in 2009. 32 of 2009. No. 23 of 1997. Under this law. assessment 4-17 . No. the development of natural resources.

000 m2 impacts Source: Prepared by the Study Team based on JICA. 8 of 2010 establishes building standards that recognize environmentally friendly buildings. and 4-18 . 11 of 2006. According to this decree. After determining whether activities listed in the appended table of the Ministry of Environment Decree No. emissions. and use of locally produced building materials  Conservation of water resources. Those activities that require an EIA are stated in the Ministry of Environment Decree No. Table 4-2: Related Activities that require an Environmental Impact Assessment (EIA) Activities Area Scale Environmental Items Runway > 200m Noise.6-65 Procedures for an EIA begin when a project proponent submits a project plan to the relevant agency and seeks its opinion as to whether an EIA is needed or not. “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia” (Progress Report) (2011). The standards of that decree are summarized below.000m2 (see Table 4-2). Airport Anywhere biology. the Ministry of Environment Decree No.  Use of environmentally friendly building materials bearing eco-labels or other proof of guarantee of eco-friendliness. p.results are to be used in making decisions on whether or not to approve a project. an EIA is required for an airport with a runway of longer than 200m and a terminal more than 2. b) Environmentally friendly building standards To encourage the participation of building owners in initiatives for promoting a sustainable environment. social Terminal > 2. 11 of 2006 apply to the submitted plan or whether the plan will have a significant impact on the environment. the agency decides whether or not the process of EIA is required. equipment. and the development of procedures.

outdoor spaces with healthy plants. low-energy consumption lighting. “Citizen Awareness of the Environment and Environmental Policies in Indonesia. p. equipment.” (2011). and infrastructure for wastewater treatment and recycling of treated water  Development of methods for separating types of water  Establishment of building management procedures in line with spatial plans. At present the construction of environmentally friendly buildings is optional but it is possible that in the future obtaining environmentally friendly certification for buildings will become a requirement. utilization of natural light. 9 (Text in Japanese) 4-19 . taking into consideration microclimate and climate changes to secure dedicated areas for sustainable growing of plants using purified water circulation equipment. and air recirculation systems  No use of ozone-depleting materials in equipment such as air-conditioning and fire extinguishers  Development of procedures.36 36 JETRO. infrastructure for conserving water quality including systems for utilizing rainwater  Development of procedures. and rainwater collection equipment  Outfitted with disaster-response systems including early warning systems for natural disasters and use of building materials with superior resistance to extreme weather conditions (torrential rains or drought) Buildings that satisfy all of the above conditions are certified as environmentally friendly buildings and certification is valid for a period of two years. equipment. and infrastructure for conserving energy and diversifying energy use including the use of renewable energy.

after environmental assessments described in (4) of this chapter are carried out. upgrading of the existing terminal. the relevant Indonesian organizations must approve the actual implementation of the expansion project itself. the land agency will grant approval). while Article 5 of the Presidential Regulation No. Principal permit and in (3) 1) of this chapter. Approval for land development requires the following permits: a. Therefore.6-67 4-20 . “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia”(Progress Report) ( 2011). Building permit (Approval is required prior to the start of construction). which is the purpose of this study.(5) Procedures the implementing country (implementing or other relevant organization) must follow for realizing a project To realize construction of a new terminal. As indicated above in a. and improvement in terminal connection facilities through the Soekarno Hatta Airport expansion and upgrading project. d. It must also determine whether the land ownership or the use of the planned land is appropriate and decide whether to give its approval. 56 of 2006 establishes procedures for land acquisition for public use including airports. b. a review is currently underway for more practical 38 procedures. Planning permit (Approval is required for drawing up a development plan).37 Moreover.6-67 38 Ibid. Location permit (If the plan is appropriate for the land management purposes. p. Principal permit (If it meets the Spatial Plan. the government agency uses the results of assessments to decide whether to approve a project plan. c. the Soekarno Hatta Airport 37 JICA. the local government will grant approval). p.

expansion and upgrading project will require a change in land use for agricultural land. and improving terminal connection facilities will require a detailed plan underpinned by the administrative procedures. and the relevant government agency is required to change the Regional Spatial Plan for the relevant district. The local government is also obliged to cooperate in the examination of the resettlement of residents by the project proponent. upgrading the existing terminals. Proceeding with the construction of a new terminal. 4-21 .

356 Total Project Costs 104.382.352 12.500 882. (2) and (3).375 294.838 426.000 246 2.356 Reserved Fund (5% of Construction Costs) 4. Million IDR IDR Equivalent Yen USD Local Foreign Equivalent Equivalent Total Portion Portion Basic Facility (1) 6.280 447.229 11.425 9.838 426.788.882.481 132.750 61 558.411.500 882.625 on Terminal 3 Costs Upgrade for (3) 10. as it had not been possible to proceed with a review of the detailed specifications for each facility that would undergo maintenance work as a result of the expansion and upgrading project.911.000 78 705.176.470.125 Terminal 1 Subtotal of Construction Costs 95.875 1.294.625 2.180 Development Terminal Ancillary (2) 19.750 61 558.720 141. the cost estimate was drawn up based on the following stance.Chapter 5 Financial and Economic Evaluation (1) Project Cost Estimate 1) Project Costs for the Soekarno Hatta Airport Expansion and Upgrading Project The following estimate was drawn up for the abovementioned project. 5-1 .125 Terminal 2 Upgrade for 10.375 294.176.647.350 1.900 564.070 Work Constructi Extension for 50.838 Source: Prepared by the Study Team 2) Stance for Cost Estimate For this study.529.125 Design Expenses (5% of Construction Costs) 4. Table 5-1: Results of Project Cost Estimate Unit.750 8. Below (1) .000 1.588 2.481 132.000 129 1.000 647 5. (2) and (3) show Package(1) .235.500 1. taking reference from AP-II press releases and the results of prior reviews conducted.500 4.176.000 129 1.

000 m2) and the accompanying renovation of runways (40.  The apron in Terminal 3 is excluded from the plan as work had already commenced when the study was launched 5-2 . as laid out in Chapter 3. Terminal 2  Estimated based on the same stance as for Terminal 1.  With regard to passenger facilities such as baggage handling systems and boarding bridges.000 yen/ m2 by the JICA study team.000 yen/m2. The renovation cost is set as 37.000 m2 additional construction of taxiways (360. in the event that specifications for each facility are revised based on the progress of future reviews. is 200. an amount equivalent to 10 billon yen has been allocated as a one-off estimate.000m2 extension and renovation of the existing terminal. Terminal 1  Estimated for a 30. equivalent to 75% of the cost for the extension for Terminal 3. Basic facilities  Estimated for a total of 400. based on the plan laid out in Chapter 3.000 m2). as set by the JICA study team.  The per-unit construction cost.000 yen/m2.  The per-unit construction cost is set as 150.  The per-unit construction cost is set as 15.Hence. Table 5-2: Stance for Cost Estimate Target facility Stance for cost estimate Terminal 3  Estimated for a 200. there is a need to pay attention to the possibility of accompanying changes to the project cost. equivalent to 25% of the cost for the extension.500 yen/m2.000m2 extension. based on the plan laid out in Chapter 3.

and was excluded from the estimate. car parks. Design expenses. and foreign costs  With regard to construction costs.  An amount equivalent to 5% of the direct construction costs has been etc.  With regard to civil engineering works. allocated. 75% has been set as the local cost. although a review of the facility scale was carried out in Chapter 3. Concession facilities  With regard to concession facilities such as Integrated Building and hotels. utility supply facilities. and supply conduits.  The construction cost is set as 4 million yen/ km. Proportion of local  Set by the JICA study team.  A total of 5 billon yen has been allocated for the renovation and construction works of access roads at all passenger terminals. it has been set as a project implemented under an independent accounting system. Target facility Stance for cost estimate Ancillary works for  Estimated based on the assumption of all maintenance costs for traffic terminals improvements within the premises laid out in Chapter 3.5 km). and piers. it has been set as a project implemented under an independent accounting system. and was excluded from the estimate. Reserve fund  An amount equivalent to 5% of the direct construction costs has been allocated. including people mover tracks (3. Cargo terminal  Although a review of the facility scale was carried out in Chapter 3. 80% has been set as the local cost. Source: Prepared by the Study Team 5-3 . tracks.

878 9.248 Cargo revenues 30.365 Total operating revenues 2.489 776.590 As of November 30th.517 44.629 682.509.488 3.656 17.816 245.812 Bad debt losses 7.750 223.469 121.293) (1.862 229.0085 yen (Bloomberg.492 281.500 8.481 loss. Source: Prepared by the Study Team based on AP-II’s annual reports 5-4 .668 Rental expenses (electricity.) Ordinary income 1. Soekarno Hatta Airport generated 134% of AP-II’s overall operating profits.370 Employee expense 271. 198.026 8.167 326.731 Other expenses (exchange 26.814 113.492 78.360 water.600 10.175 8.163 (422.340 Other revenues (interest.286 202.634 185.918.238.375.757 revenues Non-aeronautical revenues 560. 1 IDR = 0.176 73.975) 1.106.687 2.652.030 Operating income (Loss) 1.018 1.356 67.com).619 121.579 423.027 2.(2) Overview of the Results of Preliminary Financial/Economic Analysis 1) Financial condition of Soekarno Hatta Airport According to AP-II’s Statement of Accounts for 2010. Table 5-3: 2010 Ordinary Income for Soekarno Hatta Airport and AP-II Head office Subtotal for Total for (Million IDR) Soekarno Hatta expenditure other airports AP-II Aeronautical 1.433 597. etc.150 2.868.379.174 amortization Total operating expenses 847.662 306.530) 1. etc.662. offsetting losses from regional airports and head office expenditure.140 456.369 254.709 48.533 (270.731 Maintenance and inventory 127.287 Depreciation and 110.467 1. telecom) General expenses 132.140 595.) 16.968) (1.742 1.

000 IDR (in line with other international airports) by the year 2020 for international route passengers.000 IDR for 5-5 .)  There are no changes to landing and aircraft parking fees. based on the premise that Indonesia sustains real economic growth of approximately 6%.  With the enhancement of commercial facilities. it is also important to put in effort to increase non-aeronautical revenue. resulting in forecasts for growth in revenue for Soekarno Hatta Airport. and flattening out thereafter. the unit sales for each passenger has been raised to approximately 220. are not included in the income forecast. which can be gained from the increasing passenger numbers.2) Overview of the Results of the Preliminary Financial Analysis As described in Chapter 1.000 IDR for international routes. which are under review to be transferred to the government. (The air traffic control revenue for 2010 for this airport is assumed to be 82% of AP-II. The main premises for the review of the projected income for this project scheme are as follows. the number of passengers using the airport facilities will then be expected to continue increasing.  Airport tax is assumed to stay at current levels—40. the total number of passengers on domestic and international routes are expected to continue increasing in the future. and to approximately half of that at 120. and the revenue from these fees is predicted to increase at the same rate as that of passenger increase. reaching the maximum permissible number of 60 million people by 2017. Furthermore. Premises for income  Based on the estimates in the interim report drawn up by the JICA Master Plan Team.000 IDR for domestic routes and 150. by strengthening the commercial sector.  Air traffic control operations.

in which ancillary works are self-funded. domestic route passengers. The airport receives 15% of the amount as concession revenue. Based on the above premises.com) 5-6 . 1 IDR = 0. and the floor area that can be leased will increase 6. Premises for expenses  No significant cost reductions are predicted. From 2016.000 m2 to 50. are assumed to come under the national budget for public works and be transferred to Soekarno Hatta Airport at no charge. 39 As of November 30th. operating income is projected to increase by 52% over operating income for 2010.147 m2 as of 2010) will double to 682. and construction investment takes place in the four-year period from 2013 to 2016. Operating expenses for Soekarno Hatta Airport for 2010 are expected to increase at the same ratio as the terminal floor area.)  The establishment of the new company is taken to be the year 2012. However. 147 m2.000 m2.  Ancillary works. is also under consideration.25 times from the current 8. it is predicted that the total building floor area (307. is as follows.  Floor rent is taken to be same amount as it currently is. the fifth year after its full opening to the public.0085 yen(Bloomberg. a second scenario. (Operating expenses for 2010 for the airport is assumed to be 82% of AP-II. including airside projects and unmanned people mover. and vacancy rate—including the increased floor space—remains at 80%. As the growth in income exceeds the increase in expenses accompanying the expansion of the terminals.  The operating cost of the unmanned people mover is predicted to be 50 billion IDR/y (approximately 425 million Yen39). the projected income for 2020.

199.Other expenses 26.919 2.724 Landing. Five Years after Completion of the New Facilities 2010 2020 STATEMENT OF INCOME Aeronautical Revenues 1. 48.619 1.645 Revenues .General expenses 132.666 Consession Others (golf course.Depreciation & amortization (new facility) 301.257.131. .People Mover 50. locating.538 3.036 .Utilities 55.000 TOTAL OPERATING EXPENSES 874.Passenger Service (International) 723. water.604 Aviobridge Non-Aeronautical 560.492 48.Other Non-Aeronautical Revenues 134.310 .570.492 501.Bad debts expenses 7.687 21.949 TOTAL REVENUE 2.Passenger Service (Domestic) 647. telecom) 198.913.635 69. parking.Employee expense 271.484 189.879.201.604 .228 440. 110.Consession Retail (10% of retail sales) 129.230.878 facility) .810 OPERATING EXPENSES .495 (Million IDR) Source: Prepared by the Study Team 5-7 . Table 5-4 : Operating Income for Soekarno Hatta Airport—Actual Income for 2010 and Projected Income for 2020.165 .027 365.430 284.657 .201 .968 .467 1.407 charging.) .914 .917 Depreciation & amortization (existing .568 1. counter.315 OPERATING INCOME 1.792. fuel .508 .426 .878 110.071 1.026 234.Rent Room 137.949 134.Advertisement Space 55.Maintenance & Inventory 127.164 519.Rental expense (electricity.159 208. etc.469 244.562.554 .921 879.

the financial internal rate of return (FIRR) will be 14%. 5-8 . On the other hand. (See Table 5-6 for the base-case FIRR forecast for Packages (2) and (3) invested by AP-II).Based on the above premises. in the event that the 89 billion yen for works related to the terminals and ancillary works including people mover. are borne by AP-II. in the event that only the 70 billion yen for renovations for Terminals 1 and 2 as well as extension work for Terminal 3 are borne by AP-II. financial internal rate of return (FIRR) for the 20 years after completion will be 19% (See Table 5-5 for the Base-Case FIRR Forecast for Package (3) invested by AP-II).

Table 5-5: Base-Case FIRR Forecast for Package (3) invested by AP-II(in Million IDR ) Source: Prepared by the Study Team based on financial statements of AP-II and other sources 5-9 .

Table 5-6: Base-case FIRR Forecast for Packages 2 & 3 invested by AP-II(in Million IDR) Source: Prepared by the Study Team based on financial statements of AP-II and other sources 5-10 .

5 trillion IDR ten years after the completion of the said terminal. c) Growth in employment in tandem with the expansion of terminals As the terminals will occupy a floor space that is approximately twice the size of the current floor space after the expansion.4 trillion IDR five years after the completion of the new terminal. b) Construction demand Total construction-related spending of 104.5 billion yen is projected. we computed the revenue 5-11 . centered on Japanese and Indonesian companies. Employee expense for Soekarno Hatta Airport was 271. commercial space will expand to six times that of the current size. thereby creating various business opportunities such as retail and Food&Beverage. Based on the premises of the financial analysis laid out under the previous item. the number of employees is also expected to double. other than financial revenues for the operator. with regard to a) above. significantly exceeding the 2010 projected sales of 1.3 billion IDR after the new terminal is put into operation. it is estimated that the commercial sector will gain sales of 4.3) Overview of the Results of the Preliminary Economic Analysis The followings are possible economic effects that may arise as a result of this project. employee expense is projected to be 501. against that. Of these. a) Increase in revenues for retailers in the terminals In tandem with the expansion of terminals. and 5. and is expected to generate benefits to the related companies. as part of the attempt to quantify benefits other than those captured by business entities directly involved as lenders or shareholders.5 billion IDR for 2010.3 trillion IDR.

in the event that this project is implemented (“With” condition) and in the event that it is not implemented (“Without” condition). as it is difficult to conceive of alternative spending for the consumption made by passengers while they wait for their flights in their terminals.increase to the tenants in the terminal facility. it has been assessed to be a new economic activity generated as a result of this project. The reasons for adopting only a) are that for b) Construction demand it is difficult to make a comparison with the benefits from other projects in the event that this project is not implemented. such as retailers and service providers. as well as the difficulty in making a comparison with the benefits from the current work carried out by newly-hired staff with regard to c) Growth in employment. 5-12 . with regard to a). and assessed the economic internal rate of return (EIRR) based on the assumption that 30% of the revenue increase becomes the economic profits of the tenants. On the other hand.

in 2016. and 2% per annum for international flights. implemented as a public project by the Indonesian government.  The benefits to passengers and airline operators using the terminal were replaced by the business profits computed in the financial analysis laid out in Chapter 5.  With regard to project costs. Thereafter. [Results of computation] The EIRR obtained based on the above assumptions is at a high level of 17% in the base case. section (2) 2). it is assumed to grow at an annual rate of 5% for domestic flights and 2% for international flights. it is assumed that the per passenger consumption for domestic flights will increase 56% year-on-year and 81% year-on-year for international flights.[Premises]  Through the enhancement of commercial facilities and services under the “With” condition.  Under the “Without” condition. Package (1). has been added to the figures for Packages (2) and (3) used in the financial analysis. when terminal expansion and renovation has been completed. it is assumed that per passenger consumption for domestic flights will increase from the current level to 5% per annum. 5-13 .

Table 5-7: Base-Case EIRR Forecast for Package (3) invested by AP-II(in Million IDR) Source: Prepared by the Study Team based on financial statements of AP-II and other sources 5-14 .

Detailed design Bid for construction works Construction works Project management Cargo terminal Detailed design Bid for construction works Construction works Project management Connected Building Detailed design Bid for construction works Construction works Project management Source: Prepared by the Study Team 6-1 . at this point in time. Figure 6-1: Projected Implementation Schedule for the Project Year 2011 2012 2013 2014 2015 2016 2017 Quorter Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Overall plan Pre F/S Selection of consultant Basic plan Bid for project rights Terminal 3 Detailed design Bid for construction works Construction works Project management Terminal 2 Detailed design Bid for construction works Construction works Project management Terminal 1 Detailed design Bid for construction works Construction works Project management Taxiways. is set out as follows. etc.Chapter 6 Planned Project Schedule (1) Planned Project Schedule The projected implementation schedule for this project.

(2) Issues Pertaining to the Project Schedule 1) Establishing the division of functions for the passenger terminals This study took reference from the JICA Master Plan study that had been started earlier. it was verified that policies relating to the division of functions for each terminal under this project have also not been established within AP-II. it is also expected to have a significant impact on the shape that concession projects will take. in the hearing sessions conducted by the Study Team in the site survey. the Indonesian Government has plans to develop a rail system connecting the heart of Jakarta to Soekarno Hatta Airport. the renovation plans for Terminals 1 and 2 will differ greatly from the assumptions set forth in this study. AP-II’s Grand Design also takes it into consideration to enhance the connection between terminals and planned railway station. As the location of the rail station greatly influences the division of functions for passenger terminals. In driving this project forward in the future. in the event that the policy is to prepare Terminal 3 as a dedicated terminal for domestic routes. the policies pertaining to the division of functions for the passenger terminals. it is necessary to take prompt steps to consult with the 6-2 . and the location of concession businesses. 2) Relationship with the development plan for transportation infrastructure While it has not been included in the scope of our project. Furthermore. and the schedule was reviewed based on the assumption that Terminal 3 will be used as an international terminal. However. it will be important to decide. Hypothetically. at an early stage.

6-3 .related authorities on the tentative location of the rail station. and to come to a decision at an early stage.

It manages and operates Soekarno Hatta Airport. The management structure of AP-II comprises a head office organization made up of four directorates (Operation and Engineering. which is the subject of this project.988 employees. The highest decision-making authority for managerial decisions is the Board of Commissioners. AP-II’s business area covers the management of the entire airport facility. including basic facilities and terminal facilities. The organization has a total of 4. the implementing organization on the Indonesian side. 7-1 . is a state-owned enterprise that is 100% owned by the Indonesian Government. Commercial and Business Development. In addition. Finance. as well as 12 airports in the western part of Indonesia. and Personnel and General Affairs) that come under the charge of the President Director. A branch office is also located in each airport.Chapter 7 Implementing Organization 1) AP-II AP-II. air traffic control operations for the western part of Indonesia are also implemented by AP-II.

the company recorded strong revenue takings with sales of 33 billion yen and ordinary income of 12 billion yen. (March 2011) Business conditions for AP-II have remained steady with the increase in passenger numbers accompanying economic growth in Indonesia in recent years. then transferred to AP-II for management and operation after development has been completed. Under the project scheme that has been in place till now. Figure 7-1: AP-II Organizational Structure Source: Prepared by the Study Team based on JICA. However.”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”. with the privatization 7-2 . Soekarno Hatta Airport is a core business for the company. generating 80% of its sales and 134% of its profits. development and improvement of the airport have been carried out under the direct control of the state. In 2011.

achievement. AP-I. financial base. concluded a business partnership with the Incheon International Airport Corporation in 2011 on future airport development. and knowhow. However.of state-owned enterprises under the Yudhoyono regime. which is undergoing airport development works. 7-3 . which is the target for this project. To sum up the above. and of driving a project. organizational structure. AP-II has been shifted to a scheme under which the company carries out airport development works independently. we are proposing the scheme to jointly implement the passenger terminal development project. Other than Soekarno Hatta Airport. In addition. AP-II has had the experience of establishing a joint venture with the airport authority of Schiphol Airport during the development of the existing Terminal 3. to take on the role of the implementing organization for this project. In this study. future renovation plans for other airports are underway. AP-II is assessed to have more than sufficient capacity. in terms of business conditions. with regard to the Medan airport. the development and improvement of terminal buildings are being implemented by AP-II. these are scheduled for implementation as independent AP-II projects. while the development of basic facilities comes under the state. which is managing and operating airports in the eastern part of Indonesia. Currently.

and Anticipated Sources of Funds for AP-II Project item Current anticipated source of funds Implemented as public works with government Package (1) funding Repair of runways. Package (2) Utility plant buildings. and operation & management) The anticipated projects for the expansion of Soekarno Hatta Airport are divided into the five broad categories shown below. Passenger terminal buildings Package (4) Cargo terminals Package (5) JV. and procured from the Package (3) domestic market with AP-II as the borrowing entity.Chapter 8 Technical Advantages of Japanese Companies (1) Expected Form of Japanese Involvement (Investment. aprons and taxiways. engineering. including third-party funds. hotels. assets shall be transferred etc. car parks Source: Prepared by the Study Team Against the above. the Study Team proposes the following. Commercial buildings. offices. etc. ⇒After implementation. to AP-II as equity or a grant. The anticipated sources of funds based on information obtained from dialogues with the Indonesian Government and AP-II conducted to date and reports from media are laid out as follows. procurement & management. Retained earnings of AP-II. people mover. 8-1 . Table 8-1: Outline of the Soekarno Hatta Airport Expansion and Upgrading Project.

carried out as a public work. However. The managing company for Soekarno Hatta Airport will be separated from AP-II. Ltd. etc. in the event that it is not Utility plant buildings. Based on Assumptions by the Study Team Project item Current anticipated source of funds Package (1) Implemented as public works using yen loans. carry out Package (3) development of the terminal buildings using third Passenger terminal buildings party equity participation. aprons and taxiways. Package (4) Cargo terminals Construction is carried out in a concession style Package (5) using third party funds. car parks Source: Prepared by the Study Team The expected form of involvement by Japanese investor group: Japan Air Terminal Co. Table 8-2 : Anticipated Sources of Funds. Itochu Corporation and Shimizu Corporation. can be summarized as follows. development will be carried out through JV as per Package (3). Repair of runways. and operate for a fixed period of time. hotels.. As for Package (1). collectively called as “JIS”. 8-2 . people mover. Commercial buildings. offices. implemented as public works Package (2) using yen loans.. etc.

For Packages (1) and (2) described above in the event that they are implemented as public works. Table 8-3: SHIA Expansion and Upgrading Project—Project Scheme Proposal Source: Prepared by the Study Team The management entity for aeronautical operations in Soekarno Hatta Airport is AP-II. Japan is also expected to take on the role of operator under a BTO (Build Transfer Operate) contract for services agreement. With regard to Package (3). Japan is also expected to develop the terminals as part of a joint venture with AP-II. Japan is expected to shoulder the construction and management 8-3 . Japanese involvement will mainly take the form of contractor for civil engineering and construction projects. Japanese involvement will take the form of investing in equity of the management company of Soekarno Hatta Airport spun off from AP-II. for Package (2). and after the completion of the project. centered on post-completion maintenance. In addition. With regard to Packages (4) and (5). to operate them jointly with AP-II.

as per the above. several projects have been implemented in the transportation sector.of facilities as an independent project implementing body. including roads and ports. Japan also has a proven track record. Japan has contributed to the development of infrastructure in Indonesia. and Package (2) Construction and operation of shared facilities As the construction works for this project are expected to be implemented by the Indonesian Government as public works. 2005 8-4 . rather than as the primary project implementing body. and these results are expected to have an appeal. reviews were conducted as follows. 2002 41 Hamaza Corporation press release. Commission for Package (1) Civil engineering works for runway extensions as well as the repair and new construction of taxiways. January 4th. In the area of airports. with Shimizu Corporation—a member of the recent consortium—developing the new Padang airport in 200240. Japan is considering participating in the project through Japanese companies that will act as construction contractors and operation contractors. making use of Special Terms for Economic Partnership (STEP). For a long period of time since the postwar recovery period. With respect to each type of contracts. The Indonesian Government also has policies aimed at 40 Shimizu Corporation press release. AP-II currently owns and manages both of these airports. September 28th. In recent years. If we were to assume that Package (1) is implemented as a government project. there is also a possibility that for development to be implemented under STEP. and Hazama Corporation developing the new Palembang airport41 in 2003.

reducing its public debt (detailed in Chapter 9: Financial Outlook).620 Highways. Road Construction Project 26.869 Railways.150 2009 Special Capital Region Project (I) Jakarta Metropolitan Area Directorate General of November Highway Improvement 1. As shown in the following figure.306 Regional Infrastructure. while the rupiah had maintained a rate of approximately 70 yen to 75 yen in 2002 and 2003. although it rose to above 100 yen momentarily in April 2010. as the exchange rate for yen against rupiah has risen more than 50% since 2002 and 2003. Table 8-4: Track Record for Yen Loans Under the Special Terms for Economic Partnership (STEP) in Indonesia’s Transportation Sector Contracted Loan contract Project amount Project implementing body date (Million yen) Jakarta Metropolitan Area March 31st. Flyover Project 2005 Department of Public Works Tanjun Priok Port Access Directorate General of March 31st. the impact of the global financial crisis had caused it to rise beyond 130 yen by 2009. Government of the Jakarta Highway Improvement 48. 4. 2006 Project (E/S) Transportation Tanjung Priok Port Access Directorate General of March 29th. Department of 2006 (II) Public Works Directorate General of North Java Corridor March 31st. Ministry of 28th. 2005 (I) Department of Public Works Source: Prepared by the Study Team based on the information from JICA website A point of concern is the possibility of a drop in price competitiveness. Thereafter.287 Regional Infrastructure. and requests for yen loans for this project have not been confirmed. when Shimizu and Hamaza Corporations were commissioned to take on airport projects in Indonesia. the yen continued to appreciate against 8-5 . Road Construction Project 26.

they were set up as a separate package due to the possibility of yen loans.) under Package (2). 2011) With regard to the development of shared facilities (utility plant.8377 Source: Bloomberg (accessed on November 29th. Figure 8-1: Fluctuations in Yen and Rupiah Exchange Rates for the Past Ten Years (2002-2011) ■Most recent value/Closing value/Price/Revised value 116. while there are originally a part of the terminal building and a part of Package (3). and the rupiah depreciated to 116 yen as of November 2011. 8-6 . etc.8939 High value 01/30/09 131. The people mover is also operated in Narita Airport and Kansai International Airport. the electricity and water supplies that are vital to aviation services.2401 Low value 06/06/03 68. an appeal can be made for the results achieved under each local government. etc.3907 Simple average 89. in the form of the new transit system—a short-distance unmanned transit system that can also operate outside the airport.a weakening rupiah. in consideration of the public nature of shared facilities (means of passenger transportation. people mover.). In addition.

8km Japan Rokko Island Line (Rokko Railway 1.3km 1998 Skyrail (Skyrail Midorizaka Line) Hiroshima New Transit Railway 0.8km AGT (side guide rail) Transit Waterfront Line 1995 Tracks 7.0km Hiroshima Short Distance Transit Seno Line Tracks 1.9km (Yurikamome) Kanazawa Seaside Line Tracks 10.3km AGT (side guide rail) 1994 Line 1(Astram Line) Tracks 18.6km Railway 3.1km Source: Prepared by the Study Team based on “New Transportation System” on Wikipedia 8-7 .8km 1985 Liner) VVVF inverter control Yukarigaoka Line Railway 4.0km AGT (guide rails on both Port Island Line (Port 1981 sides): First application in Liner) Tracks 7.9km 2005 HSST (Maglev) (Linimo) Nanko Port Town Line Railway 3. Table 8-5: New Transportation Systems in Japan Railway/ Operating Year of Route (Known as) Remarks Tracks distance establishment Ina Line (New Shuttle) Railway 12.8km 2008 AGT (side guide rail) Tokyo Waterfront New Railway 6.5km AGT (side guide rail) 1990 Liner) Tracks 3.7km 1983 AGT (side guide rail) Nippori-Toneri Liner Tracks 9.6km 1989 AGT (side guide rail) Yamaguchi Line (Leo AGT (side guide rail) Railway 2.3km AGT (side guide rail) 1981 (New Tram) Tracks 4.1km 1982 AGT (center guide rail) Tobu Kyuryo Line Railway 8.

there is a possibility for the incorporation of third party funds for the development and operation of the terminal buildings. and the New Medan International Airport that is currently a work-in-progress.7 billion yen43 ).com) 8-8 . since several years ago. selected through an open tender. Indonesia had operated in the following style—the state would develop airport facilities. and the completed facilities would be transferred to AP and AP-II .0085 yen (Bloomberg. 42 http://baltyra.Package (3) New construction of terminal buildings While both the Indonesian Government and AP-II appear to be in agreement toward undertaking construction with AP-II shouldering responsibility for the terminal buildings. approximately 1.com/2010/03/05/terminal-3-soekarno-hatta-airport/ 43 As of November 30th. Previously.1 IDR = 0. it had shifted to a developmental policy aimed at suppressing government funds—existing airports would be developed by the airport operators AP or AP-II. However. while new airports would be developed through PPP by private-sector companies. The Study Team will review opportunities to participate in Soekarno Hatta Airport operations as a project partner. The new terminal buildings constructed using AP-II funds under the new government policy includes Soekarno Hatta Airport Terminal 3 (total construction cost of 200 billion rupiah 42 . This is due to a lack of knowhow on the construction and management of large-scale facilities. and which is slated to be the second largest in scale in Indonesia. or issues pertaining to funds procurement due to adverse changes in economic situation in the future. which commenced operations in 2010.

the ownership rights will be transferred to AP-II through the BOT (Build Operate Transfer) system.050. Based on reports released in July this year. Medanku.3 billion IDR (approximately 9. Photo 8-1: Terminal building of the New Medan International Airport Source: July 13th. while the landside is owned by a joint venture established between AP-II and the state and operated under a 30-year contract. 2009.com/ 46 Calculated at the rate of 1 yen = 115 IDR 8-9 . AP-II is anticipated to inject a total of US$315 million (approximately 24.2 billion yen44) into this project45. Thereafter.The New Medan International Airport airside is owned by the Indonesian Government.1 billion yen46) to the construction in progress and other assets on its balance sheet as of the end of 2010.com 44 Calculated at the rate of US$1 = 77 yen 45 May 15th. Kuala Namu International Airport | Medan Indonesia Pride http://www. and the original launch of the airport scheduled for July this year will be postponed to after 2013. the construction of roads connecting the city to the new airport has been greatly delayed. although the new terminal is approaching completion.medanku. 2011 by Medan Indonesia. and has allocated a carrying value of 1.

com While the investment in the New Medan International Airport is one of the largest to-date by AP-II. 8-10 . Photo 8-2: Grand design of the Medan airport (including after future extensions) Source: May 15th. 2009 by Medan Indonesia. it has not been confirmed that there has been a significant increase in the amount of loans taken out in tandem with the progress of this project. The new terminal for Soekarno Hatta Airport is believed to be the first project of a scale that requires the taking out of loans. including those from Japanese companies. the following are the options that can be taken into consideration as means of accepting third-party funds. Expected Form of Involvement by Japanese Companies in the Management of Soekarno Hatta Airport As Soekarno Hatta Airport currently forms a part of AP-II. MedanKu.

investment analysis would be difficult due to the need to assess policy risks. T2. cargo. even in the event that the Indonesian Government takes up the option of partial privatization. b) Spinoff of Soekarno Hatta Airport into a separate company for a fixed period of time Figure 8-3: Conceptual image of Soekarno Hatta Airport spin-off AP II Soekarno Hatta Airport T1. land Capital Japanese Soekarno Hatta financing Spin-off Financing by AP-II Source: Prepared by the Study Team 8-11 . including the future of an unprofitable airport for investors.a) Investing in AP-II Figure 8-2: Conceptual image of investment in AP-II AP II Assets Liabilities 12 airports in various parts of Indonesia Capital Japanese Investors Source: Prepared by the Study Team AP-II is currently owned wholly by the Indonesian Government. Hypothetically. and there are no plans for privatization. Liabilities T3.

8-12 . and this form would be the easiest way to receive third party equity and the procurement of debt. there is a need to conduct detailed studies.Soekarno Hatta Airport is the most profitable airport. The assumption is that AP-II. and lend these to a third party for a fixed period of time. which is the current owner of the facilities and concession rights. accept third party funding. as a result of opposition within Indonesia and other factors. we believe that the review should proceed with a focus on proposing to keep the ownership of the airport with AP-II. and develop the terminals and improve operations. As such. will exchange the relevant assets and rights for a certain value. separate all Soekarno Hatta Airport operations for a fixed period of time. into the practicalities as well as legalities involved in bringing this to fruition. and complete privatization is believed to be fraught with difficulties. it was not implemented. However. In reality. This would be similar to the concept of concessions applied to infrastructure PPP. at the request of the IMF. including dialogues with the Indonesian authorities. an international bidding took place (Paris Airport Authority won the negotiation rights). The spin-off and partial privatization of Soekarno Hatta Airport was reviewed after the Asian economic crisis. However.

after a fixed period of operation.c) Separation of passenger terminal operations for a fixed period of time Figure 8-4: Conceptual image of passenger terminal spin-off AP II Extension Existing Existing Japanese facility facility financing Financing by AP-II Source: Prepared by the Study Team This scheme involves the separation of the operations of Soekarno Hatta Airport. while the ownership and management of the terminal buildings will be undertaken by the newly established JV (as for Haneda Airport). there is no need to the separation to be permanent. 8-13 . airside operations including runways and apron will be handled by AP-II. which is currently managed under a vertically integrated system (as for Narita Airport). As for b). the ownership rights will be transferred to AP-II under the concession system. The division of roles for AP-II and JV after the vertical separation can be classified under two broad categories.

On the one hand.(1) Annuity (receive certain fees from AP-II) Figure 8-5: Conceptual image of annuity arrangement Dividend Usage fees User AP II Equity investments Shared Passengers services Airlines Facility among usage fees buildings Loans JV Bank (T1-3) Repayment Equity investment and O&M Dividend Japanese Companies Source: Prepared by the Study Team This system is frequently used by Japanese PFI. JV will be able to enjoy stable revenues in the form of facility usage fees from AP-II. on the other hand. 8-14 . the scope for increase in benefits are limited.

However. Comparison of Options and the Orientation of This Study Team The merits and demerits of each option to investors have been organized as follows. (2) Concession (Investors take business risks) Figure 8-6: Conceptual image of concession arrangement Dividend Usage fees User Financing AP II Agreement on operations Usage fees JV (T1-3) Repayment Financing Bank O&M Dividend Loans Japanese Companies Source: Prepared by the Study Team This system is used by the international terminal of Haneda Airport. as the bulk of Soekarno Hatta Airport’s profits are made up of airport taxes. it would be an issue to have AP-II and JV come to an agreement on profit sharing rules. 8-15 .

AP-II is headed toward the direction of conducting 8-16 . the costs of development administration. Summarizing the dialogues and media reports to date. etc. but also from the increase in aviation income from landing fees and aircraft parking fees. Table 8-6: Comparison of Options and the Orientation of This Study Team Merits Demerits (a) Investment in AP-II No costs accompanying the Need to maintain unprofitable separation of operations. This option allows us to aim for greater profits not only from the enhancement of non-aviation sectors such as the commercial department. On the other hand. as well as the Citizens are expected to oppose increased profits as a result the partial privatization of an of sales expansion in the airport in the capital city. (b) Investment in spinoff of Possibility of gaining Gives rise to obligation to pay a Soekarno Hatta Airport increased profits from airline large concessionary fee to companies as a result of the AP-II. as well as to bear such as negotiations. commercial department. enhancement in the aviation department. the Directorate General of Civil Aviation (DGCA) of Indonesia views the participation of foreign companies in this project as one of the options under consideration. taxes. (c) (1) Separation of Stable profits Limited room for expansion of operations for the terminal profits (Annuity) (c) (2) Separation of Possibility of gaining Possibility of suffering losses operations for the terminal increased profits as a result in the case that the commercial (Concession) of sales expansion in the department does not fare well. Source: Prepared by the Study Team based on AP-II’s annual reports This study team is oriented toward (b) Spinoff of Soekarno Hatta Airport into a separate company for a fixed period of time. commercial department. local airports.

commercial facilities. and concession revenues make up the largest share among non-aeronautical revenues. the new cargo terminal. part of the non-aeronautical operations such as commerce. the first step toward bringing this project to fruition would be to gain AP-II’s understanding on the involvement of a third party in the operation of Soekarno Hatta Airport. Even as the maximum investment (of 49%) remains a legal limitation to the fixed-period spinoff of Soekarno Hatta Airport. the commercial sector. Going forward. AP-II appears to be considering undertaking the development of these facilities using third party funds under the concession system.and cargo-related operations are managed using third party funds under the concession system.the aviation and passenger terminal businesses by itself. which is what our study team prefers. and hotels. For that reason. it is important to keep up outreach efforts in view of the potential merits to be gained in partnering with our group. at Soekarno Hatta Airport. and hotels. Packages (4) and (5) With regard to Terminals 1 and 2 connecting buildings.Therefore. AP-II’s policy is to keep up the operation of the airport—its core business—independently. AP-II has reviewed these and designated them as non-core businesses. 8-17 . while working in collaboration with foreign companies on the new cargo terminal. This differs from the form of involvement that our group is considering. Currently.

and possesses a high level of knowhow in the development and management of facilities in diverse areas. shopping centers located on approximately 1. from AP-II. the rights to use the land and carry out operations laid out in the contract for a fixed period of time (20 to 25 years). parks. 8-18 . space for disposal of goods 2. connecting roads Sanggraha Daksa Mitra BOT 1999*1 20 years Development and management of golf course.000 m2 of land PT Birotika BOT 1999 20 years Construction and management of Semesta/DHL warehouses and offices located on approximately 1. Japan has significantly higher per passenger expenditure than Indonesia. car parks 2.20 m2 of land *1 There are no records of contract date on AP-II annual reports.292m2. Source: Prepared by the Study Team based on AP-II’s annual reports In a concession contract. offices 340 m2. The strengths of Japanese companies with regard to air cargo handling facilities and the operation of commercial facilities are as follows. Table 8-7: Major Concession Contracts Contracting party Project Contract Period Contents type year (Year) PT Wahana Dirgantara BTO 2005 Development of warehouse 2. the participating company takes over. such as product retail.584 m2.  With respect to the operation of commercial facilities in airports.664 m2.  Japan’s air cargo handling volumes clearly surpasses that of Indonesia’s.411. and constructs facilities and carries out business operations at its own risks. The period of “20 years after commencement of operations” is set out in AP-II’s annual reports.000. Date of commencement of operations for golf course based on information from Wikipedia. F&B. *2 Calculated based on the rate of 1 yen = 115 IDR. and it also possesses experience in working with ground logistics.com.

it is possible to create environmentally friendly architectures that incorporate numerous environmental technologies. consideration is given to the environment during development. and management. and leave a deep impact on the environment throughout all stages of development. Similarly. The concrete measures are as follows. through design and construction work carried out by Japanese companies. and consideration of involvement in these packages is dependent upon future developments. in this project. For that reason. open spaces 8-19 . Packages (4) and (5) are not the main targets for review in this report. (2) The Competitive Advantage that Japanese Companies have in the Implementation of this Project (Technology . construction. and multistory car parks. Japanese companies have a strong competitive advantage in this project. hotels. and environmentally friendly technologies are actively incorporated into the buildings. Economic Aspects) 1) Technology a) Environmental technologies Airports are made up of massive buildings and civil engineering structures. [Use of natural energy] Settingup of photovoltaic systems Conservation of energy through the use of natural light in wide. With regard to Japanese airports.

Figure 8-7: Example of the use of natural energy in the airport Solar power generation panels Utilization of daylight Source: Records of terminal facility construction at Central Japan International Airport [High-efficiency facility systems] Introduction of high-efficiency equipment aimed at energy conservation. For instance. Setting up of cogeneration systems. Japanese construction companies may also have superior technological prowess. in the construction of Central Japan International Airport. Introduction of lighting controls that utilize daylight sensors and motion sensors. iron and steel slag (by-products that arise in the manufacturing of steel) were actively used in the roadbed of large-surface roads such as runways. such as inverter and LED lighting. [Effective use of resources] Introduction of rainwater recycling systems Introduction of water recycling systems Use of recycled materials b) Construction technologies With regard to construction technologies with low environmental burden. as part of efforts 8-20 .

to use resources effectively. Japanese companies have a track record for using slip form methods (approximately 60% of the paving surface) as opposed to formwork47. The utilization of high quality management knowhow in the management of construction materials and waste materials during the period of construction is also anticipated. Japan 47 Homepage of Central Japan International Airport (http://www. earthquakes. such as volcanic eruptions.jp/) 8-21 .co. These include response measures when infrastructure is cut off. Japanese companies have also previously succeeded in reducing the burden on the surrounding environment through methods such as continuous monitoring. c) Disaster response and support for BCP (Business Continuity Plan) The quake-resistance levels of Japanese architecture are the highest in the world. with its conspicuous inadequacy of security and aging equipment. it is also possible to formulate facility plans that utilize BCP support technologies refined through natural disaster responses in Japan. and hurricanes. Japanese companies will also be able to exert their competitive edge in operational aspects. and buildings that utilized Japanese quake-resistant technologies are also considered to have been extremely effective in protecting lives and serving as emergency centers during the recent major earthquake in Indonesia. In addition. d) Operations At Soekarno Hatta Airport. as well as the introduction of the latest baggage handling systems that make use of IC tags and CT scans. in concrete paving works such as for aprons. such as measures in the event of power outages and water shortage. such as the introduction of advanced security systems such as fingerprint authentication systems. With regard to measures against the large number of natural disasters that have hit Indonesia in recent years.cjiac. With regard to consideration for the surrounding environment during construction.

With respect to technological capabilities that can justify high costs. and Japanese financial institutions are also providing loans toward infrastructure PPP projects in Indonesia. Shimizu Corporation. including tenant billing. Ltd. it is important to work toward convincing the parties in question. Japanese ODA has a very dominant position with respect to the Indonesian Government. Japanese companies are believed to have a competitive advantage over other countries.. the current operator of Soekarno Hatta Airport. The three Japanese companies involved in this study envisage participation in the passenger terminal project as part of a joint venture with AP-II. which are able to grasp energy consumption patterns in a building and carry out the appropriate energy management. (3) Measures Necessary to Promote the Issuance of Orders with Japanese Companies The three Japanese companies that proposed this study—Itochu Corporation. 2) Economic aspects While the technological superiority of Japanese companies is often acknowledged.—have the intention of participating in this project. in the aspect of financing through ODA and export finance institutions. and Japan Airport Terminal Co. As will be described later in Chapter 9. and the assumption is that independent account projects such as hotels will be commercialized under a corporate entity 8-22 . the historical impact of yen appreciation has given rise to an undeniable disadvantage in terms of cost.is also considered to have superb technologies in the area of BMS systems. On the other hand.

2) Personnel exchange. AP-II has announced to the press its intentions to independently implement the terminal project and acknowledge external investments in concession projects such as hotels. we look forward to receiving the following support from the Japanese Government as a push toward consultations. This is not in complete accordance with the intentions of the three Japanese companies. For that reason. and invitational exchanges for AP-II As it appears that the management of AP-II is conducting observations and training to airports overseas. in the event that the Indonesia side raises a request for yen loans for the public works portion of the project.centered on a Japanese company. as countermeasures. We look forward to receiving support from the Japanese Government toward such observations and training. 1) Financing While details will be laid out in the following chapter. and to provide capacity building support for AP-II and other related agencies that have no experience in utilizing yen loans. However. as of now. 8-23 . we believe that it would be very meaningful to invite AP-II management to conduct observations and training at Haneda Airport. while it is important to continue to push for swift consultations with AP-II toward the implementation of the project. we would like to request that the Japanese Government take prompt steps to review the provision of yen loans.

people mover. Package (1) etc. In the event of JV: Same as Package (3) Package (3) Self-funding by AP-II and JIS Passenger terminal buildings External loans (Subletting of yen loans from the government. Table 9-1:Anticipated Sources of Funds for Each Target Construction Project Project item Current anticipated sources of funds Package (1) Taxes Repair of runways. aprons and taxiways.II self-funding e) JIS self-funding Source: Prepared by the Study Team 9-1 . bonds) Package (3 ) c) Japanese government agencies Probably for Package (2) d) AP. Japanese government agencies) Source: Prepared by the Study Team Categorizing these sources of funds gives us the following.Chapter 9 Outlook for Fund Procurement (1) Review of Sources of Funds and Financing Plans The anticipated sources of funds for each of the five packages included in his proposal are laid out as follows. local banks. banks. Government bonds (domestic and foreign) etc. such as yen loans Package (2) In the event of public works: Same as Utility plant buildings. Loans from aid agencies. Table 9-2: Target Construction Project for Each Source of Funds Source of funds Target construction project a) Yen loans (for the public works Package (1) portion of the project) Consider potential for Package (2) b) External loans (Subletting of yen loans.

4 trillion Rupiah. low-interest loan (yen loan) from JICA should the Indonesian Government wish to receive assistance from the Japanese Government. or 5. and loans from overseas aid agencies. it is up to the Indonesian Government to decide the course it wishes to take.In our consideration of possibility of funding and cash flow analysis contained in the following chapters. the Indonesian Government adheres to a strict code of fiscal discipline. Given the assumption on the investment costs in Chapter 5 of 19 billion Yen for Package (2) and 70 billion Yen for Package (3) plus 10% for design and contingency. for projects that require massive investments and for which returns can only be recouped in the long-term. or 7 trillion Rupiah. for Package (3). but through long-term debts. we assumed that 60% of total costs for Package (2) and (3) should be raised from debt. As described in Chapter 1. issuance of government bonds overseas. For that reason.2 billion Yen. (2) Possibility of Funding 1) Yen loans (for the public works portion of the project) Financing by the Indonesian Government for large-scale public works such as Package (1) is obtained from the broad categories of taxes. for Package (2) and (3) and 46. as well as loans from aid agencies. total debt would be 58. The means through which a government can procure financing include the issuance of government bonds locally and overseas. 9-2 . issuance of government bonds in the domestic market. financing is obtained not through taxes. Japan makes up a significant proportion in the area of loans from aid agencies. and there is a high possibility for the materialization of a long-term.7 billion Yen.

4% (similarly targeted at countries with low GDP) over a 30-year loan period even under standard terms.46% in US dollars. Table 9-3: Balance of ODA Loans Taken Out by the Indonesian Government (As of the Second Quarter of 2011. www.163 5% France 2.2% over a 40-year loan period.317 100% Source: prepared by the Study Team from Indonesian Financial Statistics Vol.187 2% Total 62. Despite that. the yield on a 10-year loan is 6.001 43% ADB 10. and a fixed interest rate of 1.id Loan terms for yen loans are overwhelmingly advantageous to the debtor with regard to nominal interest rate. In contrast.983 3% USA 1.75% in the local currency and 4. against a background of subsiding inflation.436 4% IDA 2. 9-3 . The current distribution yield of Indonesia’s national debt in the domestic market has dropped to its lowest levels historically. Special Terms for Economic Partnership (STEP) yen loans have a fixed interest rate of 0.392 4% Germany 1. million USD) Creditor Loan outstanding Share Japan 27.bi.932 14% IMF 3.9.go.866 17% IBRD 8.

50 20 6 s Option 3 0.40 25 7 General Below US$3. 2011) Source: http://asianbondsonline.906 Standard 1.10 30 10 Source: JICA Website However.55 30 10 countrie Untied terms Option 2 0. there is a need to include exchange rate fluctuation risks in the review. it is not possible to make a comparison of loans in different currencies based only on nominal yields. Figure 9-1: Indonesia’s Yield on Government Bonds in its Local Currency (Closing Prices as of November 24th.php?code=government_bond_yields Table 9-4: Loan Terms for Yen Loans Grace Income GNI per capita Standard/ Interest Repayment Procurement Terms period level (2009) Option rate (%) period (Year) conditions (Year) Below US$1.65 40 10 income Priority Option 1 0. While the 9-4 .40 15 5 Standard 0.org/indonesia/data/marketwatch.80 15 5 Middle- Standard 0.95 20 6 Untied terms Option 2 0.20 40 10 STEP Tied Option 0.adb.945 Option 1 0.

its value against the yen has dropped significantly. That is why a certain amount of time is required for the process. the principal and interest calculated in rupiah may have become more than five times that of the original. negotiations between the Indonesian and Japanese Governments.0840 Source: Bloomberg In addition. there is a need to recognize that the debtor’s outlook for exchange rate fluctuations can also play an influencing role.8939 High value 01/30/09 131. Figure 9-2: Long-term Trends for Indonesia Rupiah and Japanese Yen Exchange Rates ■Most recent value/Closing value/Price/Revised value 116. if it had received a yen loan around August 2008.3907 Simple average 77. Should it have received a yen loan before the Asian economic crisis.Indonesian rupiah is relatively stable against the US dollar. information has also been received to the effect that AP-II has raised concerns that yen loans take too much time to materialize. In comparing the cost of loans. from the commencement of 9-5 . Hypothetically. the principal and interest calculated in rupiah would have increased by approximately 35% in three years. and there is a need for coordination with aviation authorities and planning ministries in Indonesia. and budgetary measures in Japan.6308 Low value 04/11/97 19. Yen loans are based on a principle of cooperative formation.

by the Ministry of Finance of Indonesia. items with a six-month period have conventionally been used as an indicator.75% plus 1%) (as of September 2011). pending the revision of an article. The terms of conditions for sub-loans are currently under review. there have been no discussions from AP-II pertaining to the on-lending of yen loans. comparing the average values for September 2011. 2011 9-6 . However. but are as follows under existing regulations48. yen loans are provided directly to the government but on-lent to state-owned enterprises when they act as the main entities to projects. (ii) In the event that it on-lends the loan in yen. With regard to the interest rate of the central bank securities (SBI).5% on top of the yen loan interest rate. and is able to receive yen loans on-lent from the Indonesian Government. (i) In the event that the Ministry of Finance of Indonesia converts it to rupiah and on-lends it to a state-owned enterprise. as six-month central bank securities are no longer being issued. the interest rate in the event that nine-month 48 Article 3 of the Regulation of Minister of Finance of Republic of Indonesia Number: 259 / KMK. AP-II is a state-owned enterprise. However./1993 49 Bank Indonesia Website as of November 19. with regard to this project. the interest rate will be 1% on top of the market interest of Indonesia’s central bank securities (SBI).negotiations to the granting of funds. 2) On-lending of yen loans to AP-II As a public work. assuming that the interest rate—in the event that the policy interest rate (Bank Indonesia Rate or BI Rate) is cited—is 7. According to the Indonesia Financial Statistics49.75% (BI Rate 6. the interest rate will be 0. the substitute indicator has not been established.017.

According to statistics released by Bank Indonesia. “Commercial Banks’ operation” 51 Bank Indonesia Website as of November 19. 16% of all bank loan balances as at the end of August 2011 were in foreign currency denominations50. as a result of the strong financial base and profitability of AP-II. most of these foreign loans were in US dollars.9. do not exist in rupiah.central bank securities are cited will be 7.75% (as of September 2011).28% plus 1%) (as of September 2011). p. Swaps. According to the Indonesia Financial Statistics51 mentioned previously. However.28% (SBI 9 months 6. Despite being significantly lower than rupiah-denominated loans. these will be more advantageous to the debtor than the average 10. there is a need to be cautious in asserting the advantages. 2011 9-7 . and there are few companies that would attempt to maximize interest savings while bearing the risks of exchange rate fluctuations. Vol. there is a need to assess how AP-II evaluates the foreign exchange risks that accompany the taking out of yen loans. In the Asian economic crisis that hit after 1997. these loans are mostly taken out by export companies that gain revenues in US dollars. and according to an interview study of local bank officials.4.”) 50 Indonesian Banking Statistics. the average interest rate for US dollar-denominated loans is 4. is also plausible.57% rupiah loan interest rates offered by state-owned commercial banks. which hedge the foreign exchange risks for long-term yen loans. which extends to more than 30 years. Taking out loans in yen is not a common practice among Indonesian enterprises. As the yen has also risen significantly against the rupiah in recent years. August 2011. as the potential of the issuance of bonds and of obtaining loans with much more advantageous loan terms than those of the average interest rate. many business operators who have retained the memory of the rupiah crash have been reluctant to take foreign exchange risks. (Please refer to the previous “Long-term Trends for Indonesia Rupiah and Japanese Yen Exchange Rates.

As such.In addition to these concerns. in its drive to reduce public debt. As the subletting of the loan in rupiah. described in (1) above. the promulgation of external debt reduction policies by the Indonesian Government is also an important point to consider in reviewing the advantages of a yen loan. With the high profile and monopolistic position in air travel in the Jakarta metropolitan area. and the bond market is also developing gradually.” it faces high commercial risks as it lacks the track record of having the stable revenues that the passenger terminals are able to generate. page 26 9-8 . there is a possibility that the parent company is requested to act as guarantor. there may be some unease as to whether or not the Indonesian Government. it is considered possible for AP-II to procure tens of billions yen necessary for the implementation of Packages (2) and (3). On the other hand. the ratio of loans to local commercial bank deposits was as low as 66%52. However.11. as described earlier. will select the option of taking a yen loan as a public debt in a case where AP-II is able to procure financing independently. No. is expected to provide better loan terms that that for borrowing from a commercial bank. 52 Financial Stability Report. bank finance is seeing an annual growth of more than 20%. it may be a desirable option for AP-II. Against the background of a favorable economy. Bank Indonesia. September 2011. Financing Capability of Bank Indonesia As of the end of June 2011. with regard to Packages (4) and (5) which will be implemented as independent projects under JIS. 3) Loans from local banks Indonesia’s financing environment is considered to be in good condition. despite having a monopolistic position in the areas of “treatment of air cargo” and “passenger services in the airport.

www.go. Under current conditions and based on Indonesian Banking Statistics. Table 9-5: Assets and Loan Limit of the Top Four Banks in Indonesia (IDR billion) (JPY 100 million) Loan limit Market Total Total Lending Rank Bank Name (20% of share assets assets limit equity) 1 Bank Mandiri 13. which faces extreme fluctuations.364 3.129 2. the loan limit for the top four banks as of the end of 2010 was 252.In order to ensure economic growth.531 2 BRI 11. Bank Indonesia has even taken the exceptional measure of penalizing banks that do not lend out more than 78% of their deposits (starting from March 2011) 53.300 12.815 Total 43.363 Source: Prepared by the Study Team from Indonesian Financial Statistics Vol.286 7. 2011 9-9 .id In reality.419 6.84% 324.117 3 Bank Central Asia 10.75% 248. March 1.9. but there is also a need to take note of the fact that Indonesian regulations on the maximum lending limit that can be provided to a single company to 20% of its shareholders’ equity.576 2.231 3. three of the four banks listed above provided a total of 4. Jakarta Post. The tens of billions yen of funds that are needed urgently for the expansion of Soekarno Hatta Airport is unlikely to hit the loan limit ceiling.37% 404.581 6.822 27.624 21. While the low loan-deposit ratio serves as a liquidity measure for the Indonesian economy.060 29.9 billion yen.309 38.899 4 BNI 7. Major banks seeking borrowers are believed to welcome new financing demands from good borrowers. a large part of it can be attributed to the lack of good financing targets.335 34.bi.089 121.55% 1.775 8.427.59% 449.7 trillion IDR (approximately 47 53 “Bank Indonesia’s lending drive risk creating bad loans”. The lending power of major Indonesian banks is a factor.

Currently.61 Bank Negara Indonesia 1. should carry higher interest rate. 08 Jan.15 Bank Rakyat Indonesia 0. In addition.70 Loan 1.com55 Although average loan interest rate are announced for each type of bank.5% in November. fell by 0.01 yen 55 Four lend into Trans-Java toll road. under a financing agreement concluded in January 2010.83 4. Table 9-6: Breakdown of Financing for Semarang-Solo Road (Toll Road.projectfinancemagazine. and higher risk transactions. and thecurrent rupiah interest rate may fall even lower than the rate as of September. blue-chip companies are thought to carry lower interest rates than the rates shown below.84 Bank Mandiri 1.25% in October and 0. such as for nonrecourse financing. 54 Calculated based on the rate of 1 IDR=0. it has hit its lowest level in history at 6%. loans for large. which is a policy interest rate.com 9-10 . while the following statistics are valid up till September. 76km) (1 trillion IDR) Use Source 6. 2010. www.10 Bank Jateng 2. Bank Indonesia’s interest rate.13 Financing Jasa Marga(State Owned) Sarana Pamganguan Jawa Tengah (Regional Government Owned) Source: Prepared based on an article from Projectfinancemagazine. these include the average values for small and medium-sized enterprises.billion yen at prevailing rates at the time54) for the infrastructure project in Indonesia described below.

there is a need for a framework for collateral provided by a third party guarantor.64 10.59 10.79 10. Issuance of Bonds in Indonesia In the event that the amount obtained through the bank loan is insufficient in making up the amount needed. if the ownership rights of the land and buildings are wholly transferred to the new company.25 12.17 5. banks that require large amounts of long-term funding as well as power companies and 9-11 .85 4.11 12.57 banks Commercial 12.60 10. the bank may require collateral before providing a loan.22 banks Source: Prepared based on the website of the Central Bank of Republic of Indonesia.11 3.20 12.10 12.60 10.75 banks Commercial 5.39 3.00 4.73 4.61 10.64 10.96 10.06 5.14 3.56 10.47 10.61 10.13 12. Table 9-7: Average Interest Rates of Yen and US Dollar Denomination Facility Loans Average Interest Rate for Rupiah-Denomination Facility Loan (%.83 4.18 12.30 3.11 banks Average Interest Rate for Dollar-Denomination Facility Loan (%.77 4.88 4. With regard to the fixed period spin-off of Soekarno Hatta Airport under consideration for this project.06 banks Foreign 10. there is also an option of bond issuance.64 4. While the interest rate for bonds tends to be higher as compared to bank financing.67 10. with consideration for the creditability status and high profile of AP-II.14 3.86 banks Foreign 3.56 10.26 3.82 4.12 3.71 10. from Jan to Sep 2011) Jan Feb Mar Apr May Jun Jul Aug Sep State-owned 10.16 12.96 4.39 3.16 12.64 4. from Jan to Sep 2011) Jan Feb Mar Apr May Jun Jul Aug Sep State-owned 5.56 10.07 5.65 10. In the event that the ownership rights remain with AP-II.90 4.12 5. Indonesian Financial Statistics The problem of collateral could pose a problem when receiving bank financing.04 4.

vender finance companies that have a demand for funding that exceeds the bank loan limits have issued tens of billions yen in bonds. there is a possibility that it could become a burden to AP-II. including Indonesia. 9-12 . 4) Loans from Japanese government agencies. excluding yen loans In the event that AP-II and the Japanese companies that will become sponsors have the intention of borrowing at dollar denominations. in such a situation. there may be room to make use of low-interest. However. Should its impact reach ASEAN. 5) Risks in procurement of funds The recent European financial crisis is in an extremely precarious state. the Study Team may be able to exert its strength in utilizing public low-interest. long-term financing from Japan even more effectively. it is possible that it would have considerable influence on the procurement of financing for this project. long-term financing and guarantees from Japanese governmental financial institutions. While it is entirely possible to offer favorable terms for the dollar-denomination facility financing loans from the abovementioned Indonesian banks should Japanese governmental financial institutions seek support from the Indonesian Government.

(3) Cash Flow Analysis
In financial analysis, based on the involvement form b) in Chapter 8 (1), the concession rights for 20

years of operation of Soekarno Hatta Airport are acquired at a consideration of 600 billion IDR

(approximately 5.1 billion yen56) yearly, and the feasibility of the project was verified through the

computation of its Financial Internal Rate of Return (FIRR) in order to derive the health of its

investment and profit balance, in the event that a terminal renovation and extension project is

implemented. This assumption differs from AP-II’s policy of “having AP-II independently develop

and manage the terminals,” and ultimately, the review was conducted only as one of the project

implementation options available.

As described in the appended materials, assuming that 40% of total investment costs by equity and

the remaining 60% by local debt (12% fixed interest and twenty-three year term), return on equity

(ROE) is a satisfactory 15% when the ancillary facilities are not included (See Table 9-8); however,

should the ancillary facilities be included, the rate will be 11%, a level at which judgment could fall

either way (See Table 9-9). In addition, as there is a risk that aviation demand may decline as a result

of various factors such as terrorism, war, and infectious diseases, a “down-side case” hypothesis was

also established in which the number of passengers decreases by 10% every three years. In this case,

the return on equity (ROE) will be 14% if ancillary facilities are not included and 10% if they are

included (See Table 9-10 and Table 9-11).

However, as investment yield is largely dependent upon the increase in concession costs to AP-II,

the appeal of the project to Japanese companies will depend upon negotiations with AP-II.

56
As of November 30th, 1 IDR = 0.0085 yen (Bloomberg.com)

9-13

The cash flow analysis is based on the following key premises.

Form of involvement: A joint venture is established in partnership with AP-II, and concession rights

to operate Soekarno Hatta Airport for 20 years are acquired.

Premises for income

 Under the base case, based on the estimates in the interim report drawn up by the JICA Master

Plan Team, the total number of passengers on domestic and international routes are expected

to continue increasing in the future, reaching the maximum permissible number of 60 million

people by 2017, and flattening out thereafter. Under the “down-side case,” starting from 2018,

the number of passengers is predicted to decrease by 10% every three years.

 Air traffic control operations, which are under review to be transferred to the government, are

not included in the income forecast. (The air traffic control revenue for 2010 for this airport is

assumed to be 82% of AP-II.) There are no changes to landing and aircraft parking fees, and

income is predicted to increase at the same rate as that of passenger increase.

 Airport tax is assumed to stay at current levels—40,000 IDR for domestic routes and 150,000

IDR for international routes.

 With the enhancement of commercial facilities, the unit sales for each passenger has been

raised to approximately 220,000 IDR (in line with other international airports) by the year

2019 for international route passengers, and to approximately half of that at 120,000 IDR for

domestic route passengers. The airport receives 15% of the amount as concession revenue.

 Floor rent is taken to be same amount as it currently is, and vacancy rate—including the

increased floor space—remains at 80%.

9-14

Premises for expenses

 No significant cost reductions are predicted. Operating expenses for Soekarno Hatta Airport

for 2010 are expected to increase at the same ratio as the terminal floor area. (Operating

income for 2010 for the airport is assumed to be 82% of AP-II.)

 One trillion IDR (more than 60% of Soekarno Hatta Airport’s operating income for 2010) is

paid to AP-II as the concession fee collateral for the operation of Soekarno Hatta Airport.

 The establishment of the new company is taken to be the year 2012, and construction

investment takes place in the four-year period from 2013 to 2016. From 2016, it is predicted

that the total building floor area (307,147 m2 as of 2010) will double to 682,147 m2, and the

floor area that can be leased will increase 6.25 times from the current 8,000 m2 to 50,000 m2.

 Ancillary works, including airside projects and unmanned people mover, are assumed to come

under the national budget for public works and be transferred to Soekarno Hatta Airport at no

charge. However, a second scenario, in which ancillary works are undertaken at the expense of

Soekarno Hatta Airport, is also under consideration.

 The operating cost of the unmanned people mover is predicted to be 50 billion IDR per year

(approximately 425 million IDR57).

 60% of investment costs will be financed with a rupiah-denomination loan at 12% interest,

and the loan will be returned over 19 years (5% of principal every year, and 10% in the last

year only) from the year after works on all terminals have been completed.

 One trillion IDR (more than 60% of Soekarno Hatta Airport’s operating income for 2010) is

paid to AP-II as the consideration for concession rights.

57
As of November 30th, 1 IDR = 0.0085 yen (Bloomberg.com)

9-15

Table 9-8: ROE for Package (3), without ancillary facilities (BASE CASE) (IDR million)

Source: Prepared by the Study Team based on financial statements of AP-II and other sources

9-16

Table 9-9: Equity IRR for Packages (2) and (3), with ancillary facilities (BASE CASE)
(IDR million)

Source: Prepared by the Study Team based on financial statements of AP-II and other sources

9-17

Table 9-10: Equity IRR for Package (3). without ancillary facilities (DOWNSIDE) (IDR million) Source: Prepared by the Study Team based on financial statements of AP-II and other sources 9-18 .

Table 9-11: Equity IRR for Package (2) and (3). without ancillary facilities (DOWNSIDE) (in million rupiah) Source: Prepared by the Study Team based on financial statements of AP-II and other sources 9-19 .

has proposed to forge a business alliance with AP-II for the operation of the airport. and its function as the hub airport of the country. the three companies propose to participate in the project in its entirety. with Japanese companies fulfilling a central role in the corporate structure. has over a 50-year track record with terminal building operations at Haneda Airport. are enthusiastic about participating in the Soekarno Hatta Airport expansion project. Japan Airport Terminal Co. AP-II has announced to the press its policy to implement its own terminal project and to permit foreign investment in concession projects. It is thus believed that the business alliance will be extremely effective for the future operation and management of Soekarno Hatta Airport. the characteristics of its passengers (the number of domestic flight passengers significantly outweigh the number of international flight passengers). including hotels. including hotels.. Soekarno Hatta Airport shares many similarities with Haneda Airport. Ltd. including: its positioning as a capital city airport.. Ltd. In parallel with this study. and SHIMIZU Corporation.. Japan Airport Terminal Co. the current operator of Soekarno Hatta Airport.Chapter 10 Action Plan and Issues (1) Status of Activities for the Implementation of the Project 1) Status of activities of three Japanese companies Three Japanese companies. the companies envision participating in the passenger terminal project jointly with AP-II. As of this report’s publication. Ltd. As indicated in Chapter 8 (1) of this study. establishing standalone businesses. Specifically. and furthermore. namely ITOCHU Corporation. 10-1 . This policy contradicts partially with the wishes of the three Japanese companies. Japan Airport Terminal Co..

(2) Status of Activities of Relevant Government Agencies and Implementers in Indonesia for the Implementation of the Project 1) Status of activities of AP-II AP-II formulated an expansion plan in 2007 for increasing the number of runways and terminals in response to the increasing demand of Soekarno Hatta Airport. The Soekarno Hatta Airport expansion project has also been designated as a “fast track project” based on the Memorandum of Cooperation on the Cooperation for Establishing Metropolitan Priority Areas (MPAs) signed between the Governments of Indonesia and Japan in December 2010. however. 10-2 . JICA has been implementing the Master Plan Study for Establishing Metropolitan Priority Area for Investment and Industry (MPA) in JABODETABEK since May 2011 and supporting the realization of the project through high-level talks among government-related organizations. JICA.2) Status of other activities in Japan Ahead of this study. With a view to materializing the MPA concept. The objective of the aforementioned study is to formulate a master plan for the development of a new airport and Soekarno Hatta Airport for coping with the anticipated continued increase in air traffic demand in Jakarta as a result of Indonesia’s economic development. has not been approved based on the view of DGCA that a drastic resolution is necessary. at the request of DGCA. is implementing the Project for the Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic Indonesia. This plan.

In this light. as of the interview conducted by the Study Team during the site survey. 2) Status of activities of DGCA DGCA. The objective of the study is to establish a vision for the modality of the airports of the Greater Jakarta Metropolitan Area. AP-II formulated and presented the Grand Design in 2011 to serve as the future plan for the whole Soekarno Hatta Airport. while not directly applicable to this project. At a private-sector session of the Japan-Indonesia administrative vice-ministerial meeting on transportation which was held in Tokyo in July. Furthermore. (3) Legal and Financial Restrictions of Indonesia This section will present an overview on the possibility for foreign companies to enter the anticipated project and whether there is preferential treatment as well as on the licenses which companies should acquire for the implementation of this project. the situation was having a major impact on the operations of Soekarno Hatta Airport. 1) Regulations on foreign entry and preferential treatment 10-3 . Deputy President Director of AP-II who was in attendance explained the Grand Design and stated that AP-II will quickly select a Project Management Consultant (PMC) and move forward with the project. there are signs that the increase in airport demand is exceeding forecasts. At the same time. the PMC had not yet been selected.Meanwhile. has asked JICA to carry out a master plan formulation study as discussed earlier. However. this section will discuss the applicable PPP for the development of new airports. as a national authority responsible for overseeing aviation administration in Indonesia.

no regulations on foreign entry exist in particular except for those business fields which set forth a maximum foreign investment restriction of 49%. only “Air Traffic Guiding Service” applies among the business fields listed. the (partial) list of conditions to foreign entry applicable to the transportation sector. to Investment” in Appendix II of the said Regulation. With regard to airport-related services. the investment sector related to this project. 36 of 2010 (May 25th.” With regard to the transportation sector (airport). 10-4 . Among the “List of Business Fields Open. 2010). With Conditions. Appendix I “List of Business Fields Closed to Investment. which are believed to be relevant to this investment project. 2) Necessary licenses for establishment of new joint ventures and business management 3) Infrastructure development using the PPP method 1) Regulations on foreign entry and preferential treatment Conditionally open business fields The sectors in which foreign entry is prohibited in Indonesia are listed in the Presidential Regulation No. are as follows.

and aircraft Max 49% foreign investment leasing) Air transportation non-commercial Max 49% foreign investment Services related to airport Max 49% foreign investment Freight forwarder service Max 49% foreign investment Airplane cargo service Max 49% foreign investment General Selling Agent (GSA) of foreign air transport company Max 49% foreign investment Source: Presidential Regulation No. Registrations58 The following is an outline of the investment plan. 2010) 2) Necessary licenses for establishment of new joint ventures and business management First. ground handling for passenger and cargo. deed of establishment. Then. 58 JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises] 10-5 . Table 10-1: Sectors in Indonesia Open with Conditions to Foreign Investment (Airport-Related) Business Field Condition 10. joint ventures will obtain a Capital Investment Approval Letter from BKPM. 36 of 2010. Transportation Sector (Airport-Related) Terminal supporting business Max 49% foreign investment Airport service Max 49% foreign investment Air transportation supporting service (reservation system via computer. and company registrations required for new companies. joint ventures between Indonesian and foreign companies must apply for deed of establishment and investment plan registration as a Limited Liability Company (LLC) with the Investment Coordinating Board (BKPM). Appendix I & II (May 25th.

and right to harvest and lease forestry products) require government approval. Certification of September 4th. 1997 “Real Estate Registration System” 10-6 . right of building.  Investment registration may precede or follow company establishment. Among the 11 types. Trade No. /2007) Source: JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises] Land rights59 Currently. Company Register company with Ministry of Justice. 5 of 1960 “Basic Agrarian Law” and Government Decree No. right of use. Table 10-2: Outline of Registration Procedures Required for Establishing New Companies Registration Procedure Applicable Law Investment  Register investment plan with BKPM of BKPM Regulation No. Obtain approval letter for establishment from Minister of Justice and Human Rights. dated December 23rd. 24 dated July 8th. 2007 company registration issued immediately (effective (No. After Regulation of Minister of registration obtaining Approval Letter from Minister of Justice. Deed of Apply and register with Ministry of Justice and Same as above establishment Human Rights. 12 registration Indonesia and obtain initial approval. 2009  Obtain investment basic license only for (Issued January 2010) investments in business fields requiring financial accommodation. business operation right. Indonesia has 11 types of land rights which individuals and companies may possess with government approval pursuant to the laws and decrees prescribed regarding land60. 37 dated apply with Ministry of Trade. six types (right of ownership.  Prepare quarterly reports on progress of construction work to BKPM and BKPM authorities at the provincial or city levels. reclamation right. The 59 JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises] 60 Government Decree No.37/M-DAG/PER/9 5 years).

right of pledge. 34 of 1992 concerning the use of the land for which the land business operation right and right of building were granted to a foreign joint venture.remaining five types (land lease right.. and in this way. Therefore. and right to lease agricultural land) may be transferred and obtained among stakeholders without government approval. newly established joint ventures): Presidential Decree No. with regard to the business operation right granted to it: 1) May assign the right (however. Meanwhile. there are also restrictions.e.. While there are advantages. According to Presidential Decree No. 1980). we assume JIS) (i. we assume AP-II) and a foreign investor (for this project. Right of ownership is approved only for Indonesian nationals and may not be acquired by foreign nationals. These title holders lease the use of the land to joint businesses. constructing a building 61 Regulations on business right and construction right concerning foreign investment companies established through mergers between an Indonesian investor (for this project. and 3) May retain the right for a maximum of 35 years and extend the right for a maximum of 25 years. including the possibility of renewal.g. prior approval of the Minister of Territorial Jurisdiction is necessary). residency right. ever since the 1994 government regulation allowed the formation of companies with 100% foreign investment. 10-7 . 32 of 1992 (follow-on law of Presidential Decree No. 23 dated March 20th. 1) A foreign joint venture may not use the land for purposes other than those prescribed in the business operation right (e. foreign joint ventures have been able to acquire the land business operation right directly under their names. tenancy right. it has traditionally been the case with joint ventures between foreign and Indonesian companies that Indonesian investors apply for the right to conduct business operations on the land and register the right in their names. 2) May turn the right into a loan guarantee through establishing a mortgage. a foreign joint venture. joint ventures have used the land for business operations61.

an Indonesian investment company is permitted to transfer the right of use and right of building associated with the aforementioned land to a foreign joint venture. if the land for construction and business operations under this project is owned by the Indonesian Government and is provided to AP-II for the aviation business). The following is an outline of the right of building. 2) If a foreign joint venture uses the land for uses and under conditions other than those prescribed in the contract. On this basis. and right of operation. 1965).e. the foreign joint venture may be granted the right to manage the land provided by the government by the Minister of Territorial Jurisdiction (Land Minister Regulation No. 10-8 . If the land is not owned by an Indonesian investment company (i. right of use.which serves a purpose other than the initial purpose).. 3) The right will apply only to the businesses of the foreign joint venture. 4) The right applies only to land for which an Indonesian investment company has already acquired the business operation right. the business operation right will be revoked. 9 dated December 6th.

years with government-owned in Indonesia -Right may be turned into loan guarantee possibility of land. return the title certificate to land authorities 10-9 . Table 10-3: Outline of Key Land Rights Land Right Right Holder Condition Deadline Right of building: Indonesian -Right may be assigned through Effective for nationals. and contract for right of operation was companies). 2) Use of land according to the purposes and land is used only conditions set forth in the decision regarding for the same the right of building. sale/purchase. capital maximum of 30 Right to construct corporations participation. sale/purchase. exchange. the right of building and contract Renewal possible. capital maximum of 25 Right to use corporations participation. contract for use of land purpose. donation. 3) Maintain land and buildings in favorable stage and preserve the environment (Pay sufficient considerations to interests of local communities) 4) Following the determination of the right. or foreign method stipulated in the decision regarding operation was individually-owned investment the right of building offered requires land companies). contract for use of land which right of investment with operation right. 2) Use of land according to the purposes and prior agreement etc. or law 1) Payment of amount and by the payment government-owned individually-owned (including method stipulated in the decision regarding or is land for land foreign the right of building. nationals. conditions set forth in the decision regarding with right holder. exchange. return the title certificate to land authorities Right of use: Indonesian -Right may be assigned through In principle. swiftly return the land to the Government/holder of the right of operation/landowner 5) Following the determination of the right. donation. and contract for right of possible. use with landowner 3) Maintain land and the buildings on the land in favorable stage and preserve the environment 4) Following the determination of the right. swiftly return the land to the Government/holder of the right of operation/landowner 5) Following the determination of the right. land for Indonesian construction) Extension of right which right of law -Obligations of right holders include: of building on land operation was (including 1) Payment of amount and by the payment for which right of granted. if the operation was Indonesian -Obligations of right holders include: land is granted. or accession. Renewal with operation right. or accession. land for founded in through mortgage (mortgage expires with 20-year maximum which right of line with determination of right of use extension. land. years with and own buildings in Indonesia -Right may also be turned into loan possibility of built on founded in guarantee through mortgage (mortgage 20-year maximum government-owned line with expires with determination of right of extension. use with landowner granted and the etc.

Jurisdiction to the 1) Maximum area which can be assigned: (Provisions on aforementioned 1. Real Estate Usage System in Indonesia (2010). Source: JETRO report.000m2 registration are set government 2) Assignee is restricted to Indonesian forth in the agency nationals and corporations located in Minister of Land Indonesia which were established according Regulation No. Assignment is permitted dated January 5th. parking space. the company will apply for and obtain a building license from the provincial or city public works authorities with regard to buildings and non-buildings (e. sports court. 9 dated December 6th. The building license is also a precondition for receiving public services (e. 5 of 1960 “Basic Agrarian Law. Minister of Land Regulation No. water.. 32 dated April 30th. 1965.. pool).g. Building license62 The construction of a connecting building to Soekarno Hatta Airport requires the acquisition of a building license.g. particular. 2010. 1966). pursuant to the provisions of the Minister of Home Affairs Regulation No. If to a third party for directorates (3) To assign a six-year right of use to part of effective dates are the use of the land. 1 to Indonesian law. sewage. and telephone). 62 JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises] 10-10 . for right of operation. or district technology plan (RTRK). it is by the Minister of compensation.” and other laws. general the land to a third party not specified in the right granted (4) Receive funds in the form of income. and annual payments deemed to be over Territorial The following restrictions apply to (3): five years.” Government Decree No.Right of operation: Government Those granted with the right of operation are Registration is agencies. Plan for Building and Environment (RTBL). Government Decree No. only once. recognized to have the following rights: specified if the If land provided by including (1) To plan the purpose of the application effective date for the Government to ministries and use of the aforementioned land the right of a government and agencies (2) To use the land for the purpose of its operation exceeds agency is provided and application and use five years. Specifically. Applicable laws: For right of building and right of use. special provincial governor) issue the building license pursuant to the locality’s District Spatial Plan Details (RDTRK). 24 of 1997 “Real Estate Registration System. electricity. The provincial governor and city mayor (in the case of Jakarta.

these procedures have become simplified. 63 BKPM Regulation No. 14 dated January 20th. the services provided by One-Stop Integrated Services are as follows. After obtaining the business license. According to the overview provided by JETRO. For example. Taxation and preferential treatment measures which will serve either as investment incentives or disincentives for the implementation of the project are listed below. 12 dated December 23rd. however. The company will apply for and obtain the license from BKPM or the provincial BKPM authority. One-Stop Integrated Services are available also in the special province of Jakarta at the Jakarta Investment and Promotion Board (BPMP) (Governor Regulation No. 2007). JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises] 10-11 . In recent years. the company will bear an obligation to:  Prepare quarterly reports on the progress of the construction work to BKPM and BKPM authorities at the province or city.Business license63 A company which is newly founded for the said investment project must acquire a business license. 2009 (issued January 2010). A variety of license and non-license procedures are required for activities ranging from the founding of a new company to the start of construction and business operations. One-Stop Integrated Services are provided which allow for the submission of most applications at a single location within the BKPM (Articles 26 and 28 of the provisions of the New Investment Law No. The business license for foreign companies is effective for 30 years from the start of business or production. and  Provide reports on investment activities in the first and second half of the year to BKPM and BKPM authorities at the province or city. 2010). 25 dated April 26th.

permit for business modification: r. services. information and communications. transportation. City special planning (KRK) / Building arrangement plan (RTLB) i. 64 JETRO website: “Indonesia – Investment System – Taxation System ‘Other Taxation System’ Details” 10-12 . education. permit for joint business with investment q. Location permit g. Expatriate employment plan (RPTKA) c. Table 10-4: List of Services Provided by One-Stop Integrated Services License Services Non-License Services a. tourism. Recommendation for temporary residency visa (TA 01) d. Permit for construction of buildings (IMB)/IPB/KMB j. Nuisance Act Permit (UUG/HO) k. Expatriate employment permit (IMTA) e. Basic permit for investment expansion o. Relevant taxation systems. etc. industry. Producer import license (API-P) b. Investment registration m. Information and complaint services Commerce. Permit of land use appropriation (IPPT) h. tax rate reduction measures available for specified products and services.64 1) Value-added tax (VAT) (PPN in Indonesia): Standard tax rate = 10%. Local incentives company. and other services f. Basic permit for investment modification p. business expansion permit. mining. agriculture. Basic permit for investment n. fisheries. forestry. hotel) and real estate rental business. commercial business complex. Company registration certificate issued by Ministry of Trade (TDP) l. Business permit. livestock. labor. Other permits necessary for investment Source: JETRO “Indonesia – Investment System – Investment Promoting Organization “Investment Promoting Organization” Details” The following paragraphs summarize the financial incentives available for the anticipated construction project (multilevel parking garage at the building connecting to Soekarno Hatta Airport. public works services.

the owner of the real estate will bear the costs. paragraph (3) of the New Investment Law No. The underlined conditions are believed to apply to the said investment project. Issued on April 1st. Article 18. 2010 (No. Specifically. limited to Limited Liability Companies) in which foreign investors are investing. hotel services and parking space services are not subject to taxation. 80 dated April 5th.  VAT on hotel and parking space services According to the revised VAT law65. 8 of 1983 was amended for the third time through Law No.5% tax is applied to the taxable amount. If the Government’s appraisal value is more than 1 billion rupiah. If the Government’s appraisal value is less than 1 billion rupiah. offices) (No. the taxable amount is equal to 20% of the said amount. Preferential treatment of foreign companies Preferential tax treatment is offered to companies in Indonesia (however.80/PMK. If the VAT is not shifted to the rents of tenants. Minister of Finance Regulation No.  Take in many workers  Included in high priority fields 65 The Value-Added Tax Law No.id/contents/p14/tax/14) 10-13 . 200766 set forth that facilitation measures are provided to businesses which meet at least one of the following conditions. 25 dated April 26th.. shopping malls. 2009. 2003).SE-14/PJ. 2) Land and building tax A 0.g. the taxable amount is equal to 40% of the said amount.  VAT on rents 100% of service fees are subject to VAT on rents of commercial business buildings (e.53/2003 dated June 3.go.bkpm. 66 BKPM website (http://www6. 42 dated October 15th. 2010.03/2010) has been issued to serve as administrative instructions.

or facilities The contents of the preferential tax treatment are presented below. machinery. or other areas deemed in need of investment  Engages in activities directed at maintenance of natural environment  Conduct research and development and innovative activities  Has partnerships with very small as well as small and medium enterprises or with cooperatives  Industry that utilizes the country’s capital goods. it is believed that the applicable details will be amended as appropriate.  Include infrastructure development  Conducts technology transfers  Implements pioneering business  Invests in frontier areas. paragraphs 4 to 6 of the New Investment Law set out provisions on preferential tax treatment. while paragraph 7 of the said law provides that the Ministry of Finance (MOF) will prescribe the details of the treatment set forth in paragraphs 4 to 6. 10-14 . border areas. Because the measures will be offered in line with the Government’s National Industrial Policy (Article 19 of the said law). underdeveloped areas. Article 18.

high external economic potential. industries with high added value. Reduction of import duty on capital goods and Article 18. and extension extension for VAT on capital goods and equipment which paragraph (4) d of cannot be procured domestically said law Special Rapid amortization Article 18. 67 of 2005 concerning infrastructure PPP procedures  A Memorandum of Understanding (MOU) regarding the system of responsible authorities for 10-15 . reduction existing facilities paragraph (6) MOF additional MOF will set forth the details of the above system of Article 18. 3) Infrastructure development using the PPP method The Yudhoyono administration in Indonesia. and strategic value for the national economy) Import duty Import duty reduction for all investors updating their Article 18. reduction equipment which cannot be procured domestically paragraph (4) b&c . 2007. measures preferential financial treatment. reduction specified regions and districts paragraph (4) f of said law Corporate tax Reduction of corporate taxes of specified amounts and for a Article 18. from its first term (2004-2009) and into its second term (2009-2014).  Applicable law: Enforcement of Presidential Decree No. paragraph (7) Source: New Investment Law dated April 26th. reduction specified period. New investments in pioneer industries paragraph (5) (industries with significant ripple effects. depreciation paragraph (4) e of said law Fixed asset tax Reduction of fixed asset taxes in specific business fields in Article 18. Table 10-5: Preferential Tax Treatment for Foreign Investors Preferential Tax Contents of Regulation Applicable Law Treatment Income tax Income tax reduction for investments up to a specific limit Article 18. has consistently improved the infrastructure promotion environment by identifying public-private-partnerships (PPP) as an approach for developing the investment environment without increasing foreign debt. new technologies. reduction which were made during a specified period paragraph (4) a of New Investment Law Import duty .Reduction of import duty on raw materials and of said law ancillary materials which were imported with conditions during a specified period VAT exemption Exemption (for a specified period) or tax payment Article 18.

and 2) from the perspective of whether or not projects by themselves are financially viable: (a) For projects which are financially not viable by themselves. in hopes of receiving bids from foreign companies. and it is believed that airport expansion and renovation projects.  To promote infrastructure PPP projects. 67 Reference: BAPPENAS.  To cover for the risk of the PPP business. and MOF. BAPPENAS. The Indonesian Infrastructure Guarantee Fund (IIGF) was established (2010). intends to issue the “PPP Book” annually. Procedures pertaining to site acquisition were amended (2006).” 10-16 . hybrid financing is envisioned. which will serve as an infrastructure PPP project plan. the Infrastructure Summit has been held (2005 and 2006) and the “PPP Book” has been issued (2009 and 2011). The PPP Books up to PPP Book 2011 have listed multiple new airport development and enhancement projects among the air transportation projects. in which the public sector will bear the construction costs and the private sector will bear the O&M costs. a risk management unit which manages support measures was set up within the Ministry of Finance. the Infrastructure Finance Facility was established in 2009 and the Infrastructure Investment Fund in 2010.  To ensure public financing for PPP projects. PPP was concluded in 2010 among three agencies: BKPM. The Government of Indonesia67. will be implemented by AP and AP-II. and will disclose the tender results of infrastructure PPP projects as well as potential projects. 38 of 2006 concerning risk management of PPP projects was enforced. In 2006. Infrastructure Project Plan “PPP Book 2010-2014. and tender projects.  All PPP projects are 1) assumed to be economically viable. including PPP Soekarno Hatta Airport. Existing airports are owned by state-owned companies. Minister of Finance Decree No. priority projects. AP and AP-II.

or offer bonus points (10% maximum) to the assessment of the bidder at a tender. giving the bidder preferential treatment69. by Bastary Pandji Indra. Bangkok. “PPP Policy and Regulation in Indonesia. MSP Director for PPP Development (8 February 2011).(b) If projects are financially marginal by themselves. PPP with Government support is envisioned. in which the public and private sectors will bear the construction costs and the private sector will bear the O&M costs. 15 February 2009. it is believed that while all infrastructure PPP projects are subject to competitive tendering. Bastary Pandji Indra. and thereby. “Priority projects” indicate projects requiring pre-FS or FS. and “Tender projects” indicate projects approved by the Government (MOF). in which the private sector will bear all the costs (construction costs and O&M costs)68. a regular PPP is envisioned. Ir. 69 BAPPENAS. (c) If projects are financially viable by themselves. the contracting agency may purchase the project for a price commensurate with the contents of the FS proposal (if not participating in a tender).  The PPP projects listed in “priority projects” specify the type of solicitation. waiting until the competitive tendering is in fact too late and 68 Reference: BAPPENAS. 10-17 .  A rough guide to understanding the PPP projects listed in the PPP Book for private companies: “Potential projects” indicate projects which are at the stage of preliminary economic analysis. Therefore. In the case of the latter.” by Dr. including cost recovery. “unsolicited” projects which are submitted at the discretion of the private sector in the absence of solicitation are permitted. While a great majority of the projects are “solicited” projects which are submitted in accordance with the solicitation from the contracting agency. Director for Public Private Partnership Development. “Infrastructure PPP in Indonesia”.

Soekarno Hatta Airport is the gateway of international flights in Indonesia and serves as the hub of its domestic flights. it will become essential for companies to participate earlier on.. port. ultimately. 10-18 . (4) Necessity of Additional Detailed Analysis 1) Promotion of detailed plan of passenger terminal project This project is crucial for the future development of the Indonesian economy. BAPPENAS will offer guidance for the development of PPP projects throughout the process (planning and preparations) until the tender of a PPP project. Ministry of Public Works (toll roads and water supply and sewage). and this is an effective method for advancing this project. the operator will need to make its own judgment.  In accordance with the MOU concluded in August 2010. and urban transport).e. coal railway. the Government-owned national electricity company PLN (power generation). railway. a diverse range of challenges need to be solved for promoting the plan. The MOF is responsible for viability gap funding (to supplement construction funds) and debt guarantees for the Government-funded portion of PPP projects70. while BKPM is responsible for promoting PPP projects and marketing. The main contracting agencies are the Ministry of Transportation (airport. AP-II has indicated its intent to move forward with the project by recruiting a PMC. and its swift commencement is desirable. Domestic and international companies wishing to make a bid must negotiate directly with the contracting agencies. As such. On the other hand. However. i. and provincial governments. during the pre-FS or FS stage (“priority project” stage). 70 Presidential Regulation 78/2010 and Ministry of Finance Regulation PMK 260/2010.

In particular. In particular. Such factors may significantly affect scheduling and other aspects. AP-II has indicated its intent to start this project using its own funds and bank loans. In this light. However. with respect to promoting the project. The promotion of this project will require the cooperation of the Government of Japan for the early implementation of various procedures. as this study has proposed. 10-19 . 2) Considerations regarding Japanese support. including ODA loans As of the publication of this report. the state-owned company. in addition to this project. bearing in mind that Soekarno Hatta Airport serves as a core business for AP-II. the Study Team believes that it will be extremely effective to implement additional detailed analysis concerning the passenger terminal project and making a proposal to AP-II from the perspective of the business operator. as AP-II. and their financing is anticipated to pose a significant challenge. AP-II has plans to repair nine airports. However. it is believed that financial assistance for this project will have tremendous impact on AP-II’s management.The three Japanese companies have indicated its wish to participate in the project as co-business operators. the use of ODA loans will require consultations with the Indonesian Government. the Study Team believes that offering financial support including the use of ODA loans for certain project components such as the construction of basic facilities will be very effective for moving along this project. will be the core implementer of this project. These companies have an extensive background in project promotion.