TRANSPORTATION INVESTMENT

OPPORTUNITIES IN INDONESIA
2018

PROJECT BRIEF

1
 “National Infrastructure
development projects should not be
Message From postponed any longer void higher
cost in the future”

President “I Encourage Minister to Invite

Joko Widodo
Private Sector to contribute in large
infrastructure project, such as the
building of sea port, airport and toll

2
 By MINISTER OF
TRANSPORTATION
OF THE REPUBLIC
OF INDONESIA
The Ministry of Transportation pays
great attention to the one of President Joko
Widodo’s Nawacita Program “To accelerate
the development of infrastructure in order to
meet public service standard”. The Ministry
of Transportation realize that based on an
estimation of infrastructure funding needs in
2015-2019, the government is only able to fulfil
41,3% of to the infrastructure funding needs,
and approximately 36,5% of the gap funding
is expected to be fulfil by cooperation with
private sector.
The amount of investment required for
transportation projected to reach US $ 20-37
Billion. About half of total investment is required
for roads, while the other half is used for
financing the transport sector, namely railways,
ports, airports, land transportation, and urban
transport, with investment ranged between US
$ 20-37 Billion per year. State budget won’t be
sufficient for infrastructure funding.
As the efforts to deal with these
conditions, The Ministry of Transportation
is continuing to purse and improve creative
funding scheme by cooperating with private
3
sectors through a fair, transparent and
healthy competition. Currently, Ministry of
Transportation has actively sought other
sources of financing scheme to finance
Transportation Project.
As a concrete commitment of Ministry of
Tran sportation to the implementation of Public
Private Partnership in providing transport
infrastructure, Public Private Partnership’s
Pilot Projects across subsector with in Ministry
of Transportation has been selected and
expected to achieve its financial close in this
year. The Pilot Projects will enable the Ministry
of Transportation to evaluate the effectiveness
of its PPP Framework as it becomes the key to
deliver the better project. In order to attract and
support to the private sectors involvement, the
Ministry of Transportation is also making efforts
towards deregulation and refine regulating
framework. The policy framework of Ministry
of Transportation has performed a regulatory
reform, from sea transport sector from 44
permits to 2 permits, air transport sector from
112 permits to 3 permits, land transportation
sector from 27 permits to 3 permits and railway
sector from 14 permits to 4 permits. Besides, the
Ministry of Transportation also has issued the
Ministerial Regulation Number 58 of 2018 on
System and Procedure of The Implementation
Cooperation Between Government and
Business Entity in Providing Transportation
Infrastructure in Ministry of Transportation that
will guide explicitly a comprehensive overview
and create a common perception regarding the
implementation of PPP in the transportation
sector.
The guide line also will be focused on
providing added values to each phase of the
PPP’s Project from planning, preparation and
expected transaction, and could reduce the risk
of projects failure and finally will produce the
projects successful.
For institutional framework, Ministry
of Transportation has established a PPP node
i.e. Centre for Partnership Facilitation and
International Organization under Secretariat
General to kindly escort the implementation of
PPP in transportation sector. The unit is expected
to act as a supportive unit organization to build
well structure projects.
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The private sector involvement
in transportation infrastructure is greatly
expected not only to fulfil financial resources
but also to share knowledge and expertise in
the development, operation and management
of transport infrastructure projects until could
contribute to the national transportation
and economic development and gain access
to higher value for money for Indonesia
Government.
This book will provide the clear
information on the regulating framework of
PPP in transport sector and also will update to
the latest preview and information a Transport
Investment Project in Indonesia. We greatly
expect that this book can be found useful
as a reference for any stakeholders who will
be involved in transportation infrastructure
investment in Indonesia.
I Thank you
Minister of Transport
Ir. Budi Karya Sumadi
5
TABLE OF CONTENT

CHAPTER 1 ............................................................................................................................................................ 23
INDONESIA TRANSPORT OVERVIEW.................................................................................................... 16

1.1 Indonesia PPP Regulatory Frame Work............................................................................... 17

1.2 Indonesia PPP Institutional Frame Work............................................................................. 22
1.3 Indonesia PPP Project Facilities.............................................................................................. 24
1.3.1 Types of Public Support for Indonesia PPP Projects....................................................... 25

CHAPTER 2 ............................................................................................................................................................ 28
SECTOR OVERVIEW....................................................................................................................................... 28

2.1 Transportation Development Review 2015-2017............................................................ 28

2.2 Transport Infrastructure Funding Gap 2018-2019........................................................... 29
2.3 Ministry of Transportation PPP Frame Work...................................................................... 31
2.3.1 Center For Partnership Facilitation and International Organization......................... 32
2.4 Ministry of Transportation PPP Process Frame Work...................................................... 33
2.5 General Form of Private Participation in Transport Sector........................................... 40
2.5.1 User Pay PPP.................................................................................................................................. 40
2.5.2 Government Pay PPP (Availability Payment)..................................................................... 42
2.6 Policy Frame Work....................................................................................................................... 44

Chapter 3 ............................................................................................................................................................ 47
SUB SECTOR OVERVIEW............................................................................................................................. 47

3.1 Railway Sector............................................................................................................................... 47

3.1.1 Railway Sector Investment Need 2015-2019..................................................................... 47
3.1.2 Contracting Agency.................................................................................................................... 49
3.1.3 Foreign Participation.................................................................................................................. 49
3.1.4 Unsolicited Bid.............................................................................................................................. 49
3.1.5 Tariff.................................................................................................................................................. 50
3.1.6 Railways PPPs Project Potential.............................................................................................. 50
3.1.7 Form of Cooperation.................................................................................................................. 51

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TABLE OF CONTENT

3.1.8 Railways Business Entity............................................................................................................ 52

3.1.9 Sector Regulation........................................................................................................................ 52
3.1.10 Land Procurement....................................................................................................................... 53
3.2 Airport Sector................................................................................................................................ 54
3.2.1 Airport Sector Investment Need 2015-2019...................................................................... 54
3.2.2 Contracting Agency.................................................................................................................... 56
3.2.3 Foreign Participation.................................................................................................................. 56
3.2.4 Unsolicited Bid.............................................................................................................................. 56
3.2.5 Tariff.................................................................................................................................................. 57
3.2.6 Airport PPPs Project Potential................................................................................................. 56
3.2.7 Form of Cooperation.................................................................................................................. 59
3.2.8 Airport Business Entity............................................................................................................... 60
3.2.9 Regulatory Agency...................................................................................................................... 60
3.2.10 Land Procurement....................................................................................................................... 61
3.3 Port Sector...................................................................................................................................... 62
3.3.1 Port Sector Investment Need 2015-2019............................................................................ 62
3.3.2 Port Funding Scheme................................................................................................................. 63
3.3.3 Contracting Agency.................................................................................................................... 63
3.3.4 Foreign Participatio..................................................................................................................... 64
3.3.5 Unsolicited Bid.............................................................................................................................. 64
3.3.6 Tariff.................................................................................................................................................. 65
3.3.7 Port PPPs Project Potential....................................................................................................... 65
3.3.8 Form of Cooperation.................................................................................................................. 66
3.3.9 Sector Regulation........................................................................................................................ 67
3.3.10 Port Business Entity..................................................................................................................... 69
3.3.11 Regulatory Agency...................................................................................................................... 69
3.3.12 Land Procurement....................................................................................................................... 70

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TABLE OF CONTENT

CHAPTER 4 ............................................................................................................................................................ 70
TRANSPORTATION INVESTMENT PROJECT SUMMARY
ALREADY TENDER.......................................................................................................................................... 73

4.2 MAKASSAR PAREPARE RAILWAY PROJECT.................................................................... 74

4.2.1. Project Summary......................................................................................................................... 74
4.2.2 Project Structure.......................................................................................................................... 75
4.2.3 Development Plan....................................................................................................................... 76
4.2.4 Traffic Projection and Preliminary Adjustment................................................................. 77
4.2.4.1 Passenger Demand..................................................................................................................... 77
4.2.4.2 Goods Transport Demand........................................................................................................ 78
4.2.5 Cost and Preliminary assessment.......................................................................................... 80
4.2.5.1 Overall Railway Project.............................................................................................................. 80
4.2.6 Project Status................................................................................................................................ 80
4.3 TRANSIT ORIENTED DEVELOPMENT (TOD) PORIS PLAWAD TERMINAL.......... 81
4.3.1 Project Summary......................................................................................................................... 81
4.3.2 Project Structure.......................................................................................................................... 82
4.3.3 Development Plan....................................................................................................................... 82
4.3.4 Traffic Projection and Preliminary Adjustment................................................................. 83
4.3.5 Cost and Preliminary assessment.......................................................................................... 84
4.3.6 Project Status................................................................................................................................ 85
4.4 KUALA NAMU INTERNATIONAL AIRPORT...................................................................... 86
4.4.1 Project Summary......................................................................................................................... 86
4.4.2 Project Structure.......................................................................................................................... 88
4.4.3 Development Plan....................................................................................................................... 88
4.4.4 Traffic Projection and Preliminary Adjustment................................................................. 90
4.4.5 Cost and Preliminary assessment.......................................................................................... 91
4.4.6 Project Status................................................................................................................................ 91
4.5 PORT OF BENOA......................................................................................................................... 92
4.5.1 Project Summary......................................................................................................................... 92
4.5.2 Development Plan....................................................................................................................... 93

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TABLE OF CONTENT

UNDER PREPARATION.................................................................................................................................. 94

4.6 SURABAYA TRAM....................................................................................................................... 94

4.6.1 Project Summary......................................................................................................................... 95
4.6.2 Development Plan....................................................................................................................... 96
4.6.3 Traffic Projection and Preliminary Adjustment................................................................. 98
4.6.4 Cost and Preliminary assessment.......................................................................................... 98
4.7 LIGHT RAIL TRANSIT (LRT) AND BUS RAPID TRANSIT (BRT) MEDAN................ 99
4.7.1 Project Summary......................................................................................................................... 99
4.7.2 Project Structure.......................................................................................................................... 100
4.7.3 Development Plan....................................................................................................................... 101
4.7.4 Traffic Projection and Preliminary Adjustment................................................................. 102
4.7.5 Cost and Preliminary assessment.......................................................................................... 104
4.8 BANDUNG RAYA METROPOLITAN MONORAIL DEVELOPMENT........................... 105
4.8.1 Project Summary......................................................................................................................... 105
4.8.2 Project Structure.......................................................................................................................... 106
4.8.3 Development Plan....................................................................................................................... 107
4.9 KOMODO AIRPORT................................................................................................................... 108
4.9.1 Project Summary......................................................................................................................... 108
4.9.2 Project Structure.......................................................................................................................... 109
4.9.3 Development Plan....................................................................................................................... 110
4.9.4 Traffic Projection and Preliminary Adjustment................................................................. 111
4.9.5 Cost and Preliminary assessment.......................................................................................... 113
4.10 LOMBOK INTERNATIONAL AIRPORT................................................................................ 114
4.10.1 Project Summary......................................................................................................................... 114
4.10.2 Project Structure.......................................................................................................................... 116
4.10.3 Development Plan....................................................................................................................... 116
4.10.4 Traffic Projection and Preliminary Adjustment................................................................. 118
4.10.5 Cost and Preliminary assessment.......................................................................................... 120
4.11 SOEKARNO HATTA INTERNATIONAL AIRPORT 2 (CGK)........................................... 121

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TABLE OF CONTENT

4.11.1 Project Summary......................................................................................................................... 121

4.11.2 Project Structure.......................................................................................................................... 123
4.11.3 Development Plan....................................................................................................................... 123
4.11.4 Traffic Projection and Preliminary Adjustment................................................................. 124
4.11.4.1 Passenger Demand Traffic (Terminal Capacities) -(Demand Analysis 10 year)...... 124
4.11.4.2 Passenger Forecast in CGK-2.................................................................................................... 124
4.11.5 Cost and Preliminary assessment.......................................................................................... 124
4.12 CARGO VILLAGE SOEKARNO HATTA INTERNATIONAL AIRPORT........................ 126
4.12.1 Project Summary......................................................................................................................... 126
4.12.2 Project Structure.......................................................................................................................... 127
4.12.3 Development Plan....................................................................................................................... 128
4.12.4 Traffic Projection and Preliminary Adjustment................................................................. 129
4.12.5 Cost and Preliminary assessment.......................................................................................... 129
4.13 PORT OF BAUBAU...................................................................................................................... 130
4.13.1 Project Summary......................................................................................................................... 130
4.13.2 Project Structure.......................................................................................................................... 131
4.13.3 Development Plan....................................................................................................................... 131
4.13.4 Traffic Projection and Preliminary Adjustment................................................................. 131
4.13.5 Cost and Preliminary assessment.......................................................................................... 133
4.14 PORT OF ANGGREK................................................................................................................... 134
4.14.1 Project Summary......................................................................................................................... 134
4.14.2 Development Plan....................................................................................................................... 135
4.15 KUALA TANJUNG INTERNATIONAL HUB PORT............................................................ 136
4.15.1 Project Summary......................................................................................................................... 136
4.15.2 Project Structure.......................................................................................................................... 137
4.15.3 Development Plan....................................................................................................................... 138

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TABLE OF CONTENT

4.15.4 Traffic Projection and Preliminary Adjustment................................................................. 138

4.15.5 Cost and Preliminary assessment.......................................................................................... 139
4.16 MAKASSAR NEW PORT........................................................................................................... 140
4.16.1 Project Summary......................................................................................................................... 140
4.16.1 Project Structure.......................................................................................................................... 142
4.16.2 Development Plan....................................................................................................................... 142
4.16.3 Traffic Projection and Preliminary Adjustment................................................................. 142
4.16.4 Cost and Preliminary assessment.......................................................................................... 143
4.17 NEW DEEP PORT DEVELOPMENT IN KIJING PHASE I................................................ 144
4.17.1 Project Summary......................................................................................................................... 144
4.18 DEVELOPMENT OF PROVING GROUND FOR VEHICLE TESTING..........................
AND CERTIFICATION AGENCY............................................................................................. 146
4.18.1 Project Summary......................................................................................................................... 146
4.18.2 Project Structure.......................................................................................................................... 147
4.18.3 Development Plan....................................................................................................................... 148
4.18.4 Traffic Projection and Preliminary Adjustment................................................................. 149
4.18.5 Cost and Preliminary assessment.......................................................................................... 151

POTENTIAL........................................................................................................................................................ 152
4.19 SERVICE EXTENSION OF MRT (LEBAK BULUS-SOUTH TANGGERANG)............. 153
4.19.1 Project Summary......................................................................................................................... 153
4.19.2 Development Plan....................................................................................................................... 154
4.19.3 Traffic Projection and Preliminary Adjustment................................................................. 155
4.20 TRANSIT ORIENTED DEVELOPMENT JATIJAJAR TERMINAL.................................. 156
4.20.1 Project Summary......................................................................................................................... 156
4.21 JAKARTA ELEVATED LOOP LINE RAILWAY...................................................................... 157
4.21.1 Project Summary......................................................................................................................... 157
4.21.2 Development Plan....................................................................................................................... 158
4.21.3 Cost and Preliminary assessment.......................................................................................... 159

BIBLIOGRAPHY................................................................................................................................................ 160

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DEFINITION
TERM DEFINITION
Public–Private Contractual arrangement between public (national, state,
Partnership (PPP) provincial, or local) and private entities through which the
skills, assets, and/or financial resources of each of the public
and private sectors are allocated in a complementary
manner, thereby sharing the risks and rewards, to seek to
provide optimal service delivery and good value to citizens.
In a PPP, the public sector retains the ultimate responsibility
for service delivery, although the private sector provides the
service for an extended time.

Availability/performance- Method of investment recovery in PPP projects, when

based paymentmethod payments to the private party are made by the contracting
authority over the lifetime of a PPP contract in return for
making infrastructure or services available for use at accept-
able and contractually agreed performance standards.
Financial close The event whereby, there is the existence of a legally binding
commitment of equity holders and/or debt financiers to
provide or mobilize funding for the full cost of the project
and the conditions for funding have been met and the first
tranche of funding is mobilized. If this information is not
available, construction start date is used as an estimated
financial closure date.

Government The ministry, department, or agency that enters into a PPP

contracting agency contract with the private sector and is responsible for
ensuring that the relevant public assets or services are
provided.

Government Agreements under which a government agrees to bear some

Guarantee or all risks of a PPP project. It is a secondary obligation that
legally binds the government to take on an obligation if a
specified event occurs. A government guarantee constitutes a

12
 contingent liability, for which there is uncertainty as to
whether the government may be required to make
payments, and, if so, how much and when it will be required
to pay. In practice, government guarantees are used when
debt providers are unwilling to lend to a private party in a
PPP because of concerns over credit risk and potential loan
losses. Government guarantees can also be used to benefit
the equity investors in a PPP company when they require
protection against the investment risks they bear
Project development A fund dedicated to reimburse the cost of feasibility studies,
fund (PDF) transaction advisers, and other costs of project development,
to encourage contracting agencies to use high-quality trans-
action advisers and best practice. PDFs provide the special-
ized resources needed to conduct studies, to design and
structure a PPP, and then to procure the PPP.

Viability gap fund A scheme wherein the projects with low financial viability are
given grants (or other financial support from the govern-
ment) up to a stipulated percentage of the project cost,
making them financially viable as PPP

Unsolicited bid A proposal made by a private party to undertake a PPP

project. It is submitted at the initiative of the private party,
rather than in response to a request from the government.
State-owned enterprise A company or enterprise owned by the government or in
which the government has a controlling stake.
Regulatory framework A framework encompassing all laws, regulations, policies,
binding guidelines or instructions, other legal texts of general
application, judicial decisions, and administrative rulings
governing or setting precedent in connection with PPPs. In
this context, the term “policies” refers to other
government-issued documents that are binding on all
stakeholders, that are enforced in a manner similar to laws and
regulations, and that provide detailed instructions for the
implementation of PPP

13
DBFOM (Design, Build,
Finance, Operate and
Maintain) DBFM (Design,
Build, Finance and
Maintain)/DCMF (Design,
Construction, Maintain and
Finance) and DBFO (Design,
Build Finance and Operate)
BOT (Build-Operate-Trans-
fer), BOOT (Build-Own-Op-
erate-Transfer), BTO
(Build-to-Order), ROT (Reha-
bilitate-Operate-Transfer)
and similar terms
Concession (of public works)
O&M
contract types by describing the functions transferred to the
private party by the contract, or by using acronyms for these
descriptions. For example, a contract may be described as a
Design, Build, Finance, Operate and Maintain contract, or
DBFOM.
generally, the private partner is regarded as the owner only in
“economic terms”, but the asset remains in legal terms under
the ownership of the government. Hence,. In any case, there
are many dimensions of ownership (legal, economic, tax) and
these acronyms may create unnecessary confusion as to
which form of ownership is being referred to. BOT and BOOT
may be considered redundant. BTO refers to contracts in
which legal ownership of the asset is on the private side of
the contract only during construction. ROT simply replaces
the “build” element with “rehabilitate” and is used for some
contracts in some jurisdictions where the capital investment
is associated with the rehabilitation or upgrading of the infra-
structure asset. These concepts may equally refer to govern-
ment-pays PPPs and user-pays PPPs.
Concession is a traditional legal term in civil code jurisdictions.
A concession is in essence the legal title or institution that in an
administrative law jurisdiction entitles the government to
transfer economic rights of use in a public asset to a private
partner.
Contract in which the scope or functions include operations
and maintenance, but not capital investment) should only be
regarded as a PPP when the contract is clearly long-term and
life-cycle cost management is transferred to some extent. This
is in addition to the transfer of cost-related risks and a clear
performance orientation
14
15
Chapter 1

INDONESIA’S INDONESIA’S
TRANSPORTATION OVERVIEW
CHAPTER I
TRANSPORTATION OVERVIEW

As the world’s largest archipelago country in the world Indonesia Demographic bonus
becomes a strategic opportunity to accelerate its economic development, supported by the
availability of productive age population in significant quantities. Central Statistics Agency
(BPS) estimates that Indonesia will enjoy a demographic bonus era in 2020-2035. During this
period, the number of productive age population is projected to be at highest chart history,
reaching 64 percent of the total number of Indonesian populations of 297 million people.

Transportation play catalyst role to contribute to Indonesia sustainable economic growth in

which case transport provide connection to isolated areas and to large market outlet while
saving time and money, the point of view has put forward of why it is important to improve
the quality and capacity of infrastructure network and transportation service to make capital
shift and realize more balanced in all modes of transportation, improving transport quality
and capacity can mean that the government should be more active inviting private sector in
the infrastructure financing scheme in addition to closing the gap between funding
requirement and availability, the scheme is also will enable The availability of alternative
services in the market place that eventually will create competition among operator that will
put the favour on the consumer point of view for operator to improve their service while
achieving efficiencies

Under Indonesia transportation sector law namely the Aviation Act 12/2009, the port Act
17/2008 and railway act 23 /2007, Indonesia already adopting the principle of separation

16
between the regulator also the operator that switching Indonesia Transportation Industry from
monopoly to competitive market stated owned enterprise have positioned its role as operators
while the market as well as the national transportation industry have grown rapidly to carry the
burden of the need to increase transportation development this can be done by building more
railway network, port, airports and ferry transport its mission is to build connectivity

1.1 INDONESIA PPPs REGULATORY FRAME WORK

Several key changes have been made to improve the Indonesia PPP Policies and Regulatory
Frame work as one of the ways to improve the attractiveness and competitiveness of PPP
program, it has made a continuous effort to institutionalize and promote PPP arrangements.
Under the presidential Regulation No 38/2015 the government of Indonesia has introduced new
features to support the Public Private Partnership Implementation in the following:

a) Availability payment scheme as a source of investment return, in addition to traditional user

payment method. This can now be applicable for sectors where government is not a direct
off-taker of the services (i.e., outside of power generation and bulk water supply).
b) Expansion of PPP sectorial coverage to social infrastructure (including urban, educational,
tourism, sports, health facilities, and public housing). The regulation also enables two types
of infrastructure to be bundled as a single PPP project.
c) Government Support for land acquisition, guarantees and tax incentive
d) Direct Appointment procurement to the state-owned company / regional owned enterprise
to accelerate the PPP process
e) Procurement of Transaction Advisory to help the government preparing bids documents,
bid parameter, setting up procurement schedule, negotiate and creating model concession
agreement

The stages of Implementation of Indonesia PPP are regulated under the Ministry of National
Development Planning No 4/2015 which divided PPP process into three main stages that
comprise from planning (Project Identification and Preliminary Study), Preparation (Outline
Business Case and Final Business Case), Transaction (Tender Preparation, Pre-qualification,
Request for Proposal, Bid Award, PPP Agreement Signing, and Financial Close)

17
PPP project which has the potential for cooperation with Business Entities has to be:
1. Proposed by Minister or Head of National Agency and can be Implemented by Director
General/ Deputy or SOE Directors for PPP initiated by Central Government.
2. Implemented by Head of Region Unit/ SOE Directors or ROE Directors for PPP initiated by
Regional Government.

a) Planning
Preliminary study is the initial study conducted by the Ministry/ Head of Institutions/
Head of Region/ Director of State Owned Enterprise/ Director of Regional Owned Enterprise
to provide the description of the requirement for the infrastructure provision and also its
benefits if it is delivered under the cooperation with the Special Purpose Company (SPC)
through PPP mechanism. It shall explain the plan of PPP form; plan of PPP financing and the
source of the fund; also plan of PPP tenders which consist of schedule, process, and
procedure. Furthermore, the Preliminary Study should consist of a study on: (Source:
Bappenas PPPs Book 2018)
1) Need analysis, includes:
a) Confirmation that the PPP has the technical and economic rationale based on the
analysis of any available secondary data;
b) Confirmation that the PPP has sustained request and measured from insufficiency of
service, whether in quantity or quality, based on the analysis of any available
secondary data;
c) Confirmation that the PPP has sufficient support from the relevant stakeholders, one
of which is through Public Consultation.

2) Compliance criteria, includes:

a) Compliance with the prevailing laws and regulations, including determination of the
Minister/ Head of Institution/ Head of Region/ SOE directors/ ROE Directors who
will act as a GCA;
b) PPP compliance with the National/ Regional Mid-Term Development Plan and/or
Strategic Plan of the Ministry/ Institution, Regional Government Working Plan, SOE/
ROE business plan;

18
 c) PPP location compliance with the Spatial Plan (if needed in accordance with the type
of Infrastructure needed to have cooperated); and d. Relating to the infrastructure
sector and inter-region (if needed in accordance with the type of Infrastructure
needed, to have cooperated).

3) Deciding factor criteria of Value for Money of business entity participation, includes:
a) Private sector having an advantage on PPP implementation including risk
management;
b) Ensuring the effectiveness, accountability and equitable distribution of service for
the long-term
c) Transfer of knowledge and technology; and d. Ensuring fair competition,
transparency, and efficiency in the procurement process.

4) Analysis of potential revenue and project fund scheme, includes:

a) User capability to pay;
b) Fiscal capability of the central government, regional government, SOE/ ROE in
conducting PPP;
c) Other potential revenues; and
d) Perspective on government support.

5) Recommendation and follow-up plan, includes:

a) Recommendation of the form of PPP;
b) Recommendation on the main criteria of the business entities; and
c) Schedule plan of preparation and PPP transaction activity.

b) Preparation
The PPP preparation stage comprises the Pre-Feasibility Study activities, which consist of:
1) Preparation of Outline Business Case (OBC), consisting of:
a) Legal and institutional study;
b) Technical study;
c) Economic and commercial study;
d) Environmental and social study;
e) Study of cooperation form and structure in infrastructure provision;

19
 f) Risk management study;
g) Study of Government Support and/or Government Guarantee needs; and
h) Study of follow-up issues

2) Preparation of Final Business Case (FBC) which consist of the data adjustment based
on the current conditions and updates of the feasibility and readiness of the PPP
referred to the Outline Business Case. FBC includes the fulfilment of all requirements
of the Pre-Feasibility Study including follow-up issues; approval of the PPP by
stakeholders; and certainty on whether Government Support and/or Government
Guarantee is required or not. During the PPP Preparation Stage, the Government
Contracting Agency (GCA) will perform Public Consultation and Market Sounding. The
purpose of Public consultation:
a) Reviewing the compliance of the social and environmental standards in
accordance with the provisions of laws and regulations in the environmental
sector;
b) Obtain inputs regarding public needs related to the PPP;
c) Ensure the PPP readiness.

Meanwhile, the Market Sounding is intended to obtain inputs and response from the
PPP markets (business entities/ agencies/ institutions/ national or international
organizations). (Source: Bappenas PPP Book 2018)

c) Transaction
Transaction phase is basically tendering process to find the private sector to be the
winner and form a Special Purpose Vehicle to build, operate and maintain the project
after construction. This process of finding the Special Purpose Vehicle is divide in two
option.

The first option is by tendering process. The second option is by direct assignment.
However direct assignment can only be performed if there is only one bidder during the
tendering process.

20
In the transaction stage, during tendering process, there are some stages in the pipeline.
The stages are Pre-qualification, Request for Proposal, Bid Award, PPP Agreement
Signing. Pre-qualification: In this stage, the bidders will be evaluated according to its
background, history, and ability. The objective is to get a list of the qualified bidders to
do the PPP Project. Request for proposal: After the bidders are set, they are given all of
the documents related to the transaction process. Then the bidders will evaluate the
documents and propose a bidding proposal based on those documents. Bid award is the
time when the winning bidder is announced. After the bidder was awarded, usually the
non-winner bidders were given an amount of time to show objection or to clarify some
issue.

In the next stage, PPP agreement signing: the winner then have to sign some agreement
regarding that PPP project. In general, they have to sign PPP agreement with the GCA,
and also have to sign recourse agreement with IIGF.
Financial close should be obtained no longer than 12 months after signing Cooperation
Agreement and could be extended from time to time if the failure to obtain funding is
not contributable to a failure of Business Entity. Every extension being given for financial
close is no longer than 6 months. Financial close could be done gradually in accordance
with the project cycle. Financial close derived from a loan is deemed to have been
implemented if:

1) The loan agreement has been signed to finance the entire PPP; and
2) A part of the loan can be disbursed to start the construction works.

under the Government Goods and Services Procurement Policy (LKPP) Regulation No. 19
of 2015 concerning Procurement Procedure for Partnership between Government and
Business Entities for Procurement of Infrastructure the Pre-qualification, Request for
Proposal documents should at least include:

21
 Pre-Qualification Documents Request for Proposal
a. Background and brief description of the a. General explanation of the Project
project b. Instructions to participants
b. The purpose of the project c. Conditions for opening and evaluation
c. Object and scope of the project of documents
d. Important project information d. Ban on CCN, fraud, and COI
e. Qualifying participants' requirements e. Required service and technical
f. Description of the Prequalification specifications
process (schedule, criteria, assessment f. Risk allocation matrix
methods, things that can abort, form g. Payment method
and fill format qualification h. Financial models include sources of
funding
i. Fulfilment of requirements (legal,
social, environmental)
j. Warranty and terms of warranty
k. Other things that are considered
necessary
l. Appendix (memorandum of
information, draft contract, terms of
agreement agreements, and other
documents)

1.2 INDONESIA PPP INSTITUTIONAL FRAME WORK

Series of institution that deliver different function from the government needed to
implement a PPP program

Institution Responsibilities to PPP

Bappenas, Directorate of Public Private Coordinating, formulating and implementing
Partnership policies, and monitoring, evaluating and
controlling national development planning in
the field of public and private cooperation.

22
Committee for Acceleration of Prioritized
Infrastructure Development (KPPIP)
PPP Joint Office (BAPPENAS), Ministry of
Finance, Coordinating Ministry of Economic
Affairs Ministry of Home, Indonesia’s
Investment Coordinating Board National
Public Procurement Agency Infrastructure
Guarantee Fund –IIGF (PT. Penjaminan
Infrasruktur Indonesia – PT. PII).
Directorate General of Financing and Risk
Management, Ministry of finance
23
Coordinating unit in decision making to
encourage resolution of problems arising from
the ineffectiveness of the coordination of these
various stakeholders. KPPIP is a point of contact
in the implementation of coordination for
debottlenecking of National Strategic Project
and Priority Project
Assist the GCA, investors, and answer any
queries about PPP Scheme. The PPP
stakeholders from the central government and
institution agreed to establish this PPP Joint
Office in Jakarta. This PPP Joint Office now acts
as ‘one stop service’ for PPP. Hence PPP could
be accelerated in an accountable method.
Set up as a preparation for national strategic
project and can procure advisors directly or can
assign other government agencies, for example,
PT SMI. Coordination of preparation of Final
Business Case and transaction advisory.
Assessing and approving the necessity for
government support (tax incentives, viability
gap funding, or guarantees) for PPP projects.
 Picture 1: Indonesia PPP Cycle
Source: Bappenas PPP Book 2018

1.3 Indonesia PPP Project Facilities

PPP Project facilities provided by the Government of Indonesia or commercial parties to
support PPP transaction, project facilities for PPP will be formalize in contracts entered by
parties to the financing with the purposed of ensuring that identified risk are borne by the party
of parties best able to manage those risk

24
1.3.1 Types of Public Support for Indonesia PPP Project

Supports Regulation Explanation

PPP risk project Presidential Could be provided through PT PII, also known as the

Guarantee Regulation No IIGF. The IIGF provides guarantees for obligations of

78/2010 GCAs under contractual agreements to mitigate
risks stemming from the government’s actions and
inaction, comprising, among others:
• Breach of contract,
• Delays in obtaining permits and/or licenses,
• Changes in the law,
• Failure of tariff adjustment,
• failure of network/facility integration, and
• GCA’s obligation in contractually agreed revenue
payments. For IPP projects undertaken under the
Electricity Law (not under a PPP framework), the
MOF may issue a BVGL. It is addressed to the project
companies and covers the risk of non-payment
and/or termination of the agreement. The BVGL
may be granted for the period from preconstruction
to construction and/or part or all the operation
period. The BVGL should be construed as a form of
support undertaking. It is a mechanism to ensure
that the MOF funds PLN so that PLN can fulfil its
payment obligations to the IPP. In the event of non-
payment and/or termination, the project company
is required to submit the claim for the benefit of
BVGL through PLN. Although project companies do
not have direct recourse to the MOF under the
BVGL, under the Indonesian Civil Code, the MOF
support letter likely creates a primary legal
obligation on the MOF to procure performance by
PLN. If the MOF fails to do so, it may be liable for
payment of damages to the project company. The

25
 BVGL is not automatically granted to project
companies and, therefore, projects wishing to
benefit from the guarantee are subject to an
application process. The BVGL will be issued after
signing of the power purchase agreement.
Regulation 173/2014 requires that the project
benefiting from the BVGL must achieve financial
close within 12 months from the date of issue of the
BVGL. However, this deadline is extended to 48
months for geothermal projects.
Capital Contribution/ PMK 223/011/2012 VGF can be allocated as a cash contribution to a part

Viability Gap Funding (not dominant) of the construction cost at the

(VGF) construction stage of well-prepared PPP projects

(which are economically feasible but not financially
viable) under the approval of the MOF. the
maximum number of VGF that can be given is 47 %
from the total project cost
Land Settlement PMK 54/01/2017 National Land Agency is assigned to coordinate land
acquisition process, compensation, and other
issues. LMAN was established in 2015 by the MOF
to facilitate the financing of land for infrastructure
projects. It is expected that LMAN will speed up the
overall land acquisition process. LMAN has a flexible
budgeting system that allows them to use the
budget any time, without any obligation to return
the unused budget to the MOF. Land Revolving
Fund managed by the Ministry of Public Works and
Housing is a dedicated facility to support land
acquisition for toll road PPP projects where
Government of Indonesia provides bridging
finance for the private sector
Tax Incentive / Tax (PMK) 35/2018 The government opens the possibility for new
Holiday for Infrastructure pioneering industries to get tax holidays, one of
Project which is economic infrastructure which
includes (PPP) infrastructure financing schemes

26
 Project Preparation PMK 265/08/2015 PDF is administered by the MOF to support
Facility (PDF) GCAs in preparation of final business cases and
transaction advisory for PPP projects. In
addition, Committee for Acceleration of
Prioritized Infrastructure Development has a
mandate to prepare outline business cases for
infrastructure priority projects (including PPPs),
and the MOF-owned IIGF carries out project
preparation studies for PPP projects that
require government guarantees. All or part of
project preparation cost could be imposed onto
the winning bidder.
Availability Payment PMK 260/08/2016 Availability/performance-based payment methods
have been introduced in the latest PPP regulation
(Presidential Regulation 38/1205) as a potential
source of investment return, in addition to
traditional user-paid mechanism. This can now be
applicable for sectors other than power generation
or bulk water supply

`
The infrastructure projects to be implemented under the PPPs scheme must meet the economic
feasibility and financially so that private sector will be interested. from most of the project in
Indonesia which is planned, only about 10% is financially feasible, while the rest are eligible
financially marginal. Government support is needed to improve financial feasibility of the PPP
project.

27
Chapter 2

SECTOR OVERVIEW
2.1 TRANSPORTATION DEVELOPMENT REVIEW 2015-2017

Transportation development review is the translation of how well the Ministry of

Transportation exercised its Strategic plans for the term of 2015 – 2019, which covers the
construction of facilities and infrastructure of railways, land transportation, sea
transportation, air transportation, human resources development and the drafting of
legislation and management. it can be seen in as follows:

Table 2.1: Transportation Development Review 2015-2017

2015 - 2019 2015-2017

Construction of Port to support Sea toll 24 24
Development of Ferry Port 65 11
Construction of Pioneer Ships 103 103
Construction of Railway Track (KM) 3258 388.3
Development of Non-Commercial Port 100 67
Development of New Airport 15 4

TRANSPORT DEVELOPMENT ACHIEVEMENT 2015 - 2017

120 120

100 100

80 80

60 60

40 40

20 20

0 0
Construction Development Construction Construction Development Development
of Port to of Ferry Port of Pioneer of Railway of Non of New
support Sea Ships Track (KM) Commercial Airport
toll Port

2015 - 2019 2015-2017

Picture 2.1: Transportation Development Achievement

28
 SUB SECTOR TARGET PERFORMANCE
120%

100%

80%

60%

40%

20%

0%
Sea Transport Air Transport Land Transport Railway

Target Actual

Picture 2.2: Sub-Sector Target Performance

The data’s above has indicated that the overall sub-sectors achievements still collapse far
below the target with the most effective sub-sector for meeting its target is Directorate
General of Sea Transport (with 85% of target achievement) and the lowest is Directorate
General of Railway (with 12% of target achievement, On the second year of its strategic plan
The Ministry of Transportation has remaining 2 years for each sub-sectors to have the same
level of understanding of factors that contribute greatly to poor target performance that can
comprise from low budget allocation, resistant by local people, failed to get approval from
local government and also Land Acquisition and Resettlement Issue, The Ministry of
Transportation is expected to apply a strategic change to create more conducive policy and
regulation regarding to the project of well planning and budgeting while at the same time
building internal frame work that will enable private participation, not only to mobilize the
additional financial resource but also to make a better mitigate of the risks that are
associated with construction, site risk, design, etc. Since the way of Government organizing
transportation should evolve as the demands for transportation have been change.

2.2 TRANSPORT INFRASTRUCTURE FUNDING GAP 2018-2019

Transport faces a wide range of financial challenges across Indonesia such as aging
infrastructure, high distribution cost, low connectivity in the remote area, low budget allocation
and absorbent, etc. Thus, to be able to carry out policies, strategies and development programs
of the Ministry of Transportation, an adequate funding framework is required. The source of

29
funding should have derived from traditional government spending and other suitable source
with the applicable government regulation, this was since the amount of investment required
for transport infrastructure is projected to reach US$ 190 billion while the state budget can only
cover less than a half of which then trigger a transport infrastructure funding gap. It is expected
that 52% of the total budget required for transport infrastructure in developing areas that are
financially feasible should come from the private sector while other 48% of traditional
government spending should be allocated to build infrastructure in remotes area for the
maximum prosperity of peoples by building connectivity throughout all regions.

The annual transport infrastructure funding gap between 2018 – 2019 is explained in the table
below (In Billion):
Table 2.2: Transport Infrastructure Funding Gap
2018 2019
Sub Sector Budget Requirement Budget Requirement
Land Transport 4,058.65 13,814.46 3,855.72 13,802.29
Railway 23,082.62 33,436.26 29,776.58 71,529.62
Sea Transport 10,764.93 16,714.25 8,396.64 19,439.57
Air Transport 7,757.40 12,000.53 6,748.94 6,941.66

TRANSPORT INFRASTRUCTURE FUNDING GAP 2018 -

2019
120.000,00

100.000,00

80.000,00

60.000,00

40.000,00

20.000,00

-
Land Transport Railway Sea Transport Air Transport

Budget Requirement

Picture 2.3: Transport Infrastructure Funding Gap 2018-2017

Over US$ 6,6 Billion is required to fund transport infrastructure from 2018 to 2019, the
annual gap between investment need and available fund is 52% with the highest gap
exceeded within the railway sub sector which reach the amount of 53%, the high number of
transportation infrastructure funding gap once again has emphasized that to achieve the

30
 Ministry of Transportation Strategic plan of 2015- 2019, the internal government budget
alone will not be sufficient, based on the point of view(,) it is a necessary condition to have
a paradigm shift on how to fund transport infrastructure with sources other than the public
and fiscal space, while recognizing the importance of investment in infrastructure to help to
achieving its Strategic Plan, the private sector will contribute as an alternative additional
source of funding to meet the funding gap.

2.3 MINISTRY OF TRANSPORTATION PPPs FRAME WORK

Ministry of Transportation PPPs framework is the established procedure, rule and

institutional that determined on how MoT select, implement and manage PPPs project, the
purposed of the frame work is ensuring that projects are well structured and delivered in line
with (the) expectations, by outlining procedures and decision rules for internal unit
organization. The framework articulates its objectives, that make(s) explicit on what the MoT
wants the PPP framework to achieve. They also provide a basis for subsequent evaluation of
the framework. MoT Divided its PPP frame work into 4 key(s) which are:

1. Policy and Regulatory Frame Work

a. Deregulation that has been made to contribute to ease of doing business in
transport sector, it covers the policy on foreign ownership, transportation
business licences, tariff, certifications, etc.
b. Creating PPPs internal guideline regarding (to) the Implementation of PPPs for
Transport Infrastructure.

2. Institutional Frame Work

a. The establishment of Centre for Partnership Facilitation and International
organization as PPP node that responsible for formulate policy, coordination,
formulation and monitoring of PPPs
b. The establishment of project PPP team that responsible for the preparation
phase.
c. The establishment of project PPP procurement team that responsible for
transaction phase.
d. Increasing the capability of government agencies to deliver PPPs.
3. Operational / Business process Frame Work

31
 Creating clear process guideline to each phases of the PPPs project from planning,
preparation and expected transaction, it is the allocation of responsibilities within
MoT internal unit organization.
4. Industrial Frame Work
Building synergies with the stake holders that related for better coordination and
increase information transparency.

•Deregulation •MoT PPP Node

•Internal PPP Regulation •PPP Team / Project
•Selected PPP Pilot Projet •PPP Procuring Team
•Procuring Authority

Policy /
Institutional
Regulatory
Frame Work
Frame Work

Operational Industrial
Frame Work Frame Work

•Clreary Defined PPP •Project Assistance

Business Process •Inhouse Expert
•Practical Guidance and •Cooperation Frame
Methodology Work

Picture 2.4: MoT PPP Frame Work

2.3.1 CENTER FOR PARTNERSHIP FACILITATION AND INTERNATIONAL ORGANIZATION

In accordance with The Minister of Transportation Decree KP 145/2018 regarding the

establishment of PPP node in The Ministry of Transportation Republic of Indonesia, the head
of centre for partnership facilitation and International Organization, The Ministry of
Transportation was appointed as a Chief of Executive of PPP node that perform the task as it
follows:

1. Coordinating and monitoring the implementation of Public Private Partnership;

2. Formulation of PPP Policy in Transportation sector which cover activities as it follows:

a. Planning, identification, stipulation, budgeting and categorization of PPP project;

b. Preparing public consultation materials for PPP identification; and
c. Preparation, compilation, and dissemination of the PPP project list

32
 3. Assisting procuring authority in the preparation phase and assuring the implementation of
the PPP policy in transport sector, which required the reviews of:
a. Pre-Feasibility Study (Outline Business Case);
b. Plans on government support and government guarantees;
c. Returns on Investment scheme;
d. Land procurement plan for PPP
e. PPP concession model

4. Assist steering committee in coordination with Ministries / Agencies / other parties which
concerned with matters of a nature cross sector / field.

5. Carry out monitoring and evaluation for PPP implementation in the Ministry of
Transportation for the need of further development.

Picture 2.5: MoT PPP Institutional Frame Work

The Ministry of Transportation cq Centre for partnership facilitation and International

Organization has formulated an Internal Guidelines for the Implementation of Government
Cooperation with Business Entities (Public Private Partnership) that provides a comprehensive
overview and common perceptions related to the implementation of Public Private Partnership
in the transport sector. The guideline will focus on assigning values to each phase of the PPPs
project from planning, preparation, and expected transaction to reduce the chances of project
failure and setting up for project success.

2.4 MINISTRY OF TRANSPORTATION PPP PROCESS FRAME WORK

Subsector has responsibilities at each stage of the PPPs process accordance with their

33
function and duties which PPP process will assign responsibilities to unit organization starting
from the planning to preparation stage. Information and competence of each subsector related
to the process and clearly inter-unit organization relationship will make sure a better project
delivery.

PLANNING PHASE
Ministry of National
Procuring Authority Planning Bureau CPFIO
Planning

PPP Project
Congeniality
Identification and
Evaluation
Proposal

Adjustment / Evaluation
No
Rejection Result

Yes

Preparation of Budget Allocation

Preliminary Study Synergy

Review of
Preliminary Study

Preliminary
No Review Result
Adjustment

Yes

Propose the PPPs Categorization of

Project to Minister the Proposed PPPs
of Planning Project

Ensure that the Recommendation

Procuring authority of Budget
allocates Budget for allocation plan for
the next PPPs Stage next phase of PPP

Picture 2.6: MoT PPP Phase Phase Work Flow

34
The above picture is the explanation of the planning phase of the PPP project along with the
duties of each related work unit:

Procuring Authority

Based on the Ministry of Transportation Strategic Plan, procuring authority identifies the
project that will be proposed using PPP scheme. Then the result of the project identification
is submitted to the Secretary General with a copied of the Planning Bureau and the Centre
for Partnership Facilitation and International Organization for reviewing.

Planning Bureau

If the results of the identification are approved by Secretary General, the project can be
recommended as PPP project and Planning Bureau will determine the budget for project
Preliminary Study and Public Consultation to Procuring Authority.

Centre for Partnership Facilitation and International Organization (CPFIO)

The preliminary study and public consultations that have been conducted by the procuring
authority, then submitted to the Centre for Partnership Facilitation and International
Organization for approval. The approval of preliminary study will be proceeding to the Ministry
of National Planning/National Planning Development Board (Bappenas) for the project
determination as the PPP projects and to be listed in the Bappenas PPP Book as potential project.
CPFIO will issues a recommendation letter for budget allocation plan of the PPP project to the
Planning Bureau to make sure the budgets availabilities for the next stage of the PPP project.

35
PREPARATION PHASE
Procuring Ministry of
PPP Team CPFIO
Authority National Planning

PPP Team
PPP Team Decree
Formation

Outline Business
Case & Market
Sounding

OBC and Market

Review OBC
Sounding Result

Review
OBC Adjustment No
Result

Yes

Final Business
Case

FBC Result Review FBC

Review
FBC Adjustment No
Result

Yes

Preparation of
Propose to The The proposed PPP
Environmental
Assessment, Land Minister of in the ready to
Procurement Plan, Planning offered
and Submission of
Locations Stipulation

Submission of
government
support plans and
guarantees (if
required)

Picture 2.7: MoT PPP Preparation Phase Work Flow

36
Procuring Authority

Based on the preliminary study results that have been evaluated, adapted and approved by
The Centre for Partnership Facilitation and International Organization, the procuring
authority form a PPP Team will continue the activities in the preparation stage. The
budgeting of the preparation stage should cover at least the honorarium and the activities
of PPP Team, the preparation of Outline Business Case, Final Business Case, Market
Sounding's, environmental studies and the study of land acquisition and settlement plans.

PPP Team

The PPP team prepare an Outline Business Case and Final Business Case, conducting Market
Sounding, environmental Impact Analysis study and land resettlement plans. The results of
Outline Business Case and Market Sounding are submitted to the Centre for Partnership
Facilitation and International Organization to be reviewed. If the Outline Business Case (OBC)
is approved, the PPP Team will prepare the Final Business Case (FBC).

Centre for Partnership Facilitation and International Organization

The Centre for Partnership Facilitation and International Organization reviews the Outline
Business Case if it required. It may request the procuring authority to make an adjustment
and refine the OBC. The Outline Business Case that has been approved is followed by a Final
Business Case study by the PPP Team which will be reviewed by the Centre for Partnership
Facilitation and International Organization later.

37
 TRANSACTION PHASE
Procuring Authority Procurement Team Law Bureau Business Entity

Form a Procurement Team Required

Procurement Team Decree Licensing

Market Sounding Pre Qualification

Location
Settlement, Land
Procurement

PPP Agreement
Draft Bid Winner
Evaluation,
adjustment and
refinement of PPP
Agreement Draft

Adjustment of Evaluation
No
Evaluation Results Result

Yes

PPP Agreement PPP Agreement

Signing

Financial Close

Construction and
Operation

Picture 2.8: MoT PPP Transaction Phase Work Flow

Procuring Authority

Activities at the transaction stage are carried out after contracting agency issues a
declaration that the PPP project is technically, economically and financially feasible based on
documents that are produced in the Preparation stage. Furthermore, the procuring authority

38
forms a procurement team and conduct market sounding activities. The procuring authority
is also responsible for the location settlement and land acquisition and also in charge of
drafting the PPP Agreement in consultation with the Legal Bureau.

The procuring authority allocates the budget at the transaction stage by considering at least
the budgeting for land acquisition, the implementation of the procurement committee's
honorarium activities, the market sounding and the transaction advisory service, as required.

Unit organization responsibilities at each stage of the PPPs Process is described in the
picture below

Picture 2.9: Business Case Apporval point

39
2.5 GENERAL FORM OF PRIVATE PARCIPATION IN TRANSPORT SECTOR

The Ministry of Transportation adopted 2 (two) classifications of return on investment

for private sector that has been explained extensively that is user-pays and government-
pays PPPs. This and other variations and types of PPPs that are consider other factors such
as ownership, scope, and so on. They are shown on the table below in an organized
manner, presenting the PPP types depending on specific factors.

User Pay PPPs Government Pay PPPs

(Availability Payment)

Source of Fund Based on Charge to user Based on the Government

Payment to the service
Ownership of the SPV 100% Private Ownership Publicly owned with 100 %
public ownership
Scope of the contract  Infrastructure PPP Include Significant Capital
Investment where the main objective is managing
and developing infrastructure over the long term.
 Integrated PPPs when, in addition to the
infrastructure the private party is granted the right
and obligation to operate a service.
 O&M PPPs or services PPPs when there is neither
capital investment nor development of new
infrastructure by the private partner.
Source: World Bank PPP Certification

2.5.1 User Pay PPP

1) Green Field Project
Green field project is the Investment Project that construct completely new facilities, such
as new port, new airport, new railway or new terminal by commissioning to the private
sector to Build, Operate and Transfer (BOT) or Build, Operate and Own (BOO). The
commercial risk of the investment project is responsible of the private constructor while
others risk such as exchange policy, political issues could be shared between the

40
 government and the private sector through various type of government support for PPP
project.

Picture 2.10: Green Field Project Structure

2) Concession/licenses with investment obligation

Under the concession/licenses contract the Ministry of Transportation is involved in a
long-term contract (usually 30 - 50 years) with the private sector to manage and
operate transport infrastructure with no significant or material initial investment. In
this case, most of the revenue comes from users. The concessions may be used for PPP
to contract out the operations of an existing asset that will be charged to users
(typically the concession of an existing port or airport) with the expectation of
receiving an upfront fee from the private partner (the situation sometimes is referred
as “monetization”). The private partner is regarded as the owner only in “economic
terms”, but the asset remains in legal terms under the ownership of the government.

41
 Picture 2.11: Concession/license Structure

2.5.2 Government Pay PPP (Availability Payment)

1. Government paying PPP project also known as availability payment is periodically
payment by the Minister / Head of Institution / Head of Region to the private sector
for the availability of Infrastructure services in which the quality and/or criteria of the
infrastructure are specified in the agreements. The government should only pay for
the asset as long as it is available.

The payment consists of 3 (three) components: first, covering the re-payment of the
principal, and interest of the senior debt, which may be exempted from any deduction
once the asset is built and commissioned; second, paying for the equity re-payment
and reward (subject to penalties or deductions in case of low performance), and third,
paying for Operation and Maintenance (O&M) costs (with limited potential
adjustments or deductions).

42
 Picture 2.12: Availability Payment Structure

3) Operation and Maintenance (O&M) PPP or Contract Management

O&M PPP or Contract Management usually refers to a transfer of the operation of
public service which allows the private sector to manage (operate and maintain) the
service of transports Infrastructure such as port, airport, railway and terminal that
already built by the Ministry of Transportation (exist before), with no Investment
obligation. Generally, the government continues to take all the risks involved in the
project except for the management risk.

43
 2.13: O&M PPPs or Contract Management Structure

2.6 Policy Frame Work

Government policies play a major role in setting up national competitiveness, especially
when doing a business under President Joko Widodo’s policies. Government of Indonesia has
much efforts to increase the ease of doing a business. The result, according the world bank,
the rank of ease of doing business in Indonesia has significantly increased from 91 in 2017 to
72 in 2018 which is above the Philippines and China and it is expected that the rank will
continue to 41 in 2019.

Picture 2.14: Ease of Doing Business in Indonesia

Source: World Bank

44
Government program feature such as Online Single Submission (OSS) is regulated under the
Presidential Regulation Number 91-year 2017 on Accelerating the Implementation of
Business. The regulation is expected to provide support in services, escort and an active role
upon completion of obstacles through formation of task force at the national level, Ministries
/ Institution, Province and Regency / City areas.

To support the implementation of Online Single Submission (OSS) and as a part of the task
force, The Ministry of Transportation has conducted a regulatory reform from 197 licensing
to 12 licenses, that comprise from sea transportation sector from 44 permits to 2 permits, air
transportation sector from 112 permits to 3 permits, land transportation sector from 27
permits to 3 permits and railway sector 14 licenses to 4 permits,

The 12 permits consist of:

Organization Unit Type of Regulation

Directorate General of Sea Transport
Directorate General of Civil Aviation
Directorate General of Land Transport
Directorate General of Railways
The Implementation of Public Port
Water Transportation
Air Transport License
Airport License
Regulated Agent (RA)
The Implementation River and Lake Port
The Ferry Port Operation
The Transportation of People
Infrastructure Operating Permit
The Operation of Railway Facilities
Special Railway
Railway Intersection

45
The form of regulatory licensing reform which has been done by the Ministry of
Transportation is omitting or simplifying of license, delegating of license implementation to
Indonesia Investment Coordinating Board (BKPM) or local government, changing license into
non-license such as form of certification, approval and registration while the other license
related to transportation safety and security aspects is under of Ministry of Transportation.

1 Removed 8 licensing requirement

2 Permission simplification of 32 permits (time: 10, process: 1, requirements: 4,
delegation: 12, extended duration: 5)
3 delegation to BKPM as many as 11 permits
4 Develop an acceleration program based on Presidential Regulation 91 of 2017
5 System Checklist as many as 24 permissions
6 Online Single Submission System (OSS) of 37 permissions

Simplification or deregulation of permits and licenses enable the government to mitigate the
risk in PPP project, since it creates obstacle to timely construction and operation. As a result,
the financial close could not perform and eventually creates a perpetual pending project.

Ministry of Transportation will fully commit to support the implementation of ease of doing
business, especially in the field of transportation to open more opportunities for investors in
developing the transportation sector in Indonesia.

46
Chapter 3 CHAPTER 3
SUB SECTOR OVERVIEW
SUB SECTOR OVERVIEW

3.1 Railway Sector

According to National Railway Master Plan (RIPNAS) the
government has been committing over USD 88,16 Billion from 2011
to 2030 using a combination of state budget and equity investment
with the ratio of (30%): (70%). The government is establishing a 11-year allocation for funding
that will delivered USD 682 Million / year. The plan seems to be rationale with the budget
allocation trend reaching USD 571,857 Million per year.

Inviting private sectors to mobilize their financial resource into the government infrastructure
projects requires extra hard work since state budget and SOE investment cannot be rely on
achieving national railway development target. Practically current investment that has been
made by PT. KAI and its subsidiaries are estimated around USD 715 Million in 2014 (source:
Annual Report, PT KAI, 2014) and current development by private investment are estimated
about USD 2,8 Billion in the last 5 years. The situation has emphasized the need for better
PPP project preparation, stronger PPP node institutionalization or investment in the
Directorate General of Railways, and support from government (cq Ministry of Finance), and
the application of alternative funding schemes to meet private financing needs

3.1.1 Railway Sector Investment Needs 2015-2019

The railway is looking to invest approximately USD 16,6 Billion over the period of 2015-
2019, with a growth rate of 23.9% per year. The biggest spending category will be for the
construction of railway infrastructure (account for 75.58% of the total fund), and priority
infrastructure (account for 15.20% of the total fund). While Traffic and transport activities
claims 5.07%, this also include the payment for Public Service Obligation (PSO) and subsidies
on pioneer, and 3.41% will allocate for procurement of facilities, especially for the

47
procurement of economy class trains, commuter line and diesel commuter line.
Source: Directorate General of Railways Strategic Plan, 2015-2016).

RAILWAY ESTIMATED INVESTMENT NEEDS 2015-2019

The construction of Railway

4%
Infrastructure
5% Priorities Infrastructure

15% Traffic and Transport

Facilities Procurement

76%

Picture 3.1.1: Railway Investment Need 2015-2019

The funding scenario for railway

between 2015 and 2019 assumed 2015-2019 RAILWAY FUNDING
that the government will invest over
SCHEME
State
USD 893 Million per year (that only Budget
27%
can cover about 26.6% from the total Other
Source
requirement). State Owned 48%

Enterprise (SOE) investment (PT. KAI) SOEs

6%
will invest approximately USD 1
Billion (5.9 %) that leave railway PPP
19%
infrastructure funding Gap between Picture 3.1.2: Railway Funding Scheme 2015-2019

2015 and 2019 around USD 3,1 Billion, equity investment trough Public Private Partnership is
then expected to cover the gap. ( Source: Directorate General of Railways Strategic Plans
Review, 2017)

48
3.1.2 Contracting Agency

Ministry of Transportation Grant approvals on alignment; set design

PT KAI (Indonesian Railway Company)
PT Raillink
Local Government / Municipality
criteria, technical specifications, and
permits, responsible for cooperation
projects within the scope of National
SOEs that Build, operate and maintained
railway facilities and infrastructure
SOEs that Build, operate and maintained
Airport railway facilities and infrastructure
responsible for cooperation projects within
the scope of regions, districts /
municipalities

3.1.3 Foreign Participation

Maximum allowed foreign ownership of equity 100 %

3.1.4 Unsolicited Bid

Acceptance of Unsolicited Proposal Yes

Eligibility of Project Proponent to have
• Competitive advantage a bid Evaluation Yes
• Swiss Challenge / right to match Yes
• Compensation of project development cost Yes

• Government Support for Land Acquisition and Resettlement Yes

cost
• Direct Appointment Yes

• Government Support in VGF Yes

Source: ADB PPP Monitor

Unsolicited proposals can be submitted by business entities under the conditions that the
projects are economically and financially feasible; technically integrated with the sector
master plan; and the project proponent has the capacity to finance the project. The project

49
proponent is entitled to receive one of three forms of compensation: 10% additional points,
right to match the offer of the first-ranked bidder or compensation of development cost.

3.1.5 Tariff

According to Article 396 of PP 56/2009 on Railways Operation, in providing railway

services to the public, the railway operator must provide equal treatment to every member
of the community within the limits on the availability of railway infrastructure and facilities.
The railway operator will charge the service received by the user based on the tariff imposed
by the railway operator. The Tariff rate should be reported and approved by Director General
of Railways which emphasize that the private partner has the legal right to charge the user at
their set price.

3.1.6 Railway PPPs Project Potential

Potential Railway infrastructure development using Public Private Partnership (PPP)

scheme:
Project
1 Development of Railway Track Tanjung Enim – Tanjung Api Api
2 Light Rail Transit Medan
3 Light Rail Transit Batam
4 Development of Railway Track Tanjung Karang – Panjang Port
5 Development of Soekarno – Hatta International Airport Railway
6 LRT Jabodebek
7 LRT Jakarta
8 Development of Kulonprogo Airport Railway
9 Elevated Loop Line Jabodetabek
10 Development of Access Railway teluk Lamong Port
11 Metro capsule Bandung
12 Development of Railway Track Tabang – Maloy
13 Development of Railway Track West Kutai – Paser- Balik Papan
14 Development of Railway Track Gunung Mas – Kantingan

50
 15 Development of Makassar Pare Pare Railway Infrastructure
16 Extension of MRT Line Jakarta – South Tanggerang

3.1.7 form of cooperation

According to Transport Ministerial Regulation Number 15/2016 on Concession and

other Cooperation form between the Government and Business Entity in the field of Railway,
the form of cooperation between the Ministry of Transportation and Railway business entity
are divided into 2 (two) types i.e. the Design-Build-Finance-Operate-Maintained (DBFOM) or
Build-Operate-Transfer (BOT) and Operation and Maintenance (O&M) concession with
investment obligation. The selection method of business entity will be done by direct
appointment or competitive international bidding.

DBFOM BOT O&M Procurement

Railway Infrastructure √ √ √
Rolling Stock /Vehicle √ √

Concession Fee 2.50% Form Net Income

Cooperation Business Entity Selection

1. The construction of new railway Competitive Bidding / Direct Appointment
infrastructure
2. Cooperation for Operation
Maintenance and cultivation of:
Public Railway Infrastructure Competitive Bidding
Train Depot or Service Center Assignment / Direct Appointment
Train Station Facilities Assignment / Direct Appointment
3. The cooperation for the use of Assignment / Direct Appointment
Government-owned railway
infrastructure with investment
obligation

51
 4. The
• use of Government owned Competitive Bidding/Direct Appointment
infrastructure for public railway by a
•
Railway Business Entity or
•
special railway operators
5. Procurement, O&M and Cultivation Competitive Bidding/Direct Appointment
•
of Railway Means
•
6. public railway on the initiative of Competitive Bidding/Direct Appointment
the business entity

3.1.8 Railway Business Entity

Legal Entity Railway Business Entity

Railway Infrastructure
• Providing proof of ownership of paid-up
capital amounting at least USD 16 Million
for the implementation of urban public
railway infrastructure and USD 67 Million
for the implementation of public intercity
railway infrastructure; and

Vehicle /Rolling Stock

• Providing proof of ownership of paid-up
capital amounting at least USD 10 Million
for the implementation of urban railway
facilities and USD 16 Million, for the
implementation of intercity railway
facilities

3.1.9 Sector Regulation

Types of Regulation Granting Authority Information

Railway Infrastructure
Trace track line assignment Minister of PM 66/2013
Transportation PM 11/2012

52
 Establishment of Railway Minister of PM 66 2013
Infrastructure Provider Transportation
Public Railway Operating License Minister of PM 66/2013
Transportation
Approval of the Public Railway Minister of PM 66/2013
Infrastructure Technical Plan Transportation
Ratification of Technical Minister of PM 66/2013
Specification of Railway Transportation
Infrastructure Implementation
Construction Permit for general Minister of PM 66/2013
Railway Infrastructure Transportation
Public Railway Infrastructure Minister of PM 66/2013
Operating License Transportation
Railway Means
Business License for Public Minister of PM 31/2012
Railway Facility Transportation
Operation Permit for Public Minister of PM 31 / 2012
Railway Facilities Transportation
Approval of Technical Minister off PM 31/ 2012
Specifications of Public Railway Transportation
Facilities

3.1.10 Land Procurement

The government is obliged to provide land procurement for the use of public interest
as it mandates in Article 11 of Law 2/2012 on Land Acquisition for Public Infrastructure and
the land is subsequently owned by the Government or Local Government

53
 3.2 Airport Sector
The Air Transportation Management and operation program of 2015-
2019 aims to provide reliable, integrated and comfortable air
transportation through increasing the efficiency of people and goods
movement and also minimizing the inter-regional air service gap strategies that will improve
the quality of air transportation while promoting national economic growth.

The action program is stated in the strategic planning of national airports, namely the
National Airport Master Plan (TKN) as set forth in the regulation of the Minister of
Transportation Number 69/2013 on National Airport Masterplan is enacted on 16 August
2013 and valid for 20 years with the review option in every 5 years to accommodate possible
change in line with strategic environmental condition. The current number of public airports
is 238 airports consisting of 27 commercials airport (manage by Angkasa Pura I and Angkasa
Pura II) and 211 non-commercial airport (UPBU). Until the year 2030, the Directorate General
of Civil Aviation plans to build 62 new airport that sum up to a total of 299 airports throughout
Indonesia that will increased the needs of investment of airport infrastructure projects
undertaken by the private sector through various cooperation schemes between the
government and private with priority to support growth, poverty reduction, and employment.
(Source: Directorate General of Civil Aviation Strategic Plan, 2015-2016)

3.2.1 Airport Sector Investment Need 2015-2019

The Airport subsector is looking to invest approximately USD 21 Billion over the period
of 2015-2019 with details as follow:

54
AIRPORT ESTIMATED INVESTMENT NEED 2015-2019 Pioneer Air Transport Services

Development, Rehabilitation and

Maintenance of Airport Infrastructure

Development, Rehabilitation and

Maintenance of Aviation Security
Infrastructure
Supervision and Development of
Airworthiness and Aircraft Operation

Flight Navigation Development

Program

Management & Other Technical

Support

Picture 3.2.1: Airport Estimated Investment Need 2015-2019

The biggest spending category will be for the Development, rehabilitation and maintenance
of Airport Infrastructure (account for 74%), and Management & other Technical Support
(account for 14%). While Supervision and Development of Airworthiness and aircraft
operation claims 4%. (Source: Directorate General of Civil Aviation Strategic Plan, 2015-2019)

2015-2019 AIRPORT FUNDING The source of financing used for

SCHEME air transport investment
expected to derived from the
State Budget (account for 9 % of
9%
0% the total requirement), local
10%
State Budget government expenditure which
Local Government comprise from Tax Revenues
SOEs
81% and Non-Tax Revenue (account
PPP
for 0.17%), state-owned
(account for 9 %) and
Picture 3.2.2: Airport Funding Scheme 2015-2019 investments by private
enterprises which account for 81
% of total budget requirement. (Source: Directorate General of Civil Aviation Strategic Plan
Reviews, 2017 )

55
3.2.2 Contracting Agency

Ministry of Transportation Grant approvals on alignment; set design

PT Angkasa Pura I (Airport Company)
criteria, technical specifications, and
permits, responsible for cooperation
projects within the scope of National
SOEs that Build, operate and maintained
airport facilities and infrastructure
currently manages 13 (thirteen) airports in
central and eastern Indonesia,

PT Angkasa Pura II (Airport Company) SOEs that Build, operate and maintained
airport facilities and infrastructure,
currently manages 14 (fourteen) airports in
western Indonesia

Local Government / Municipality Responsible for cooperation projects within

the scope of regions, districts /
municipalities

PT Angkasa Pura I and PT Angkasa Pura II manage and operate all major airports in Indonesia
(total of 27 airports). Both of organizations Persero (limited liability state-owned companies)
are regulated by the Directorate General of Civil Aviation (DGCA) which is a part of the MOT.
The government contracting agency would most likely be the DGCA or another body of the
MOT, or PT Angkasa Pura I or PT Angkasa Pura II themselves as in 2015 PPP regulation, which
officially allowed SOE to act as GCA.

3.2.3 Foreign Participation

Maximum allowed foreign ownership of equity 49 %

3.2.4 Unsolicited Bid

Acceptance of Unsolicited Proposal Yes

Eligibility of Project Proponent to have
• Competitive advantage a bid Evaluation Yes

56
 • Swiss Challenge / right to match Yes

• Compensation of project development cost Yes

• Government Support for Land Acquisition and Resettlement Yes

cost

• Direct Appointment Yes

• Government Support in VGF Yes

Unsolicited proposals can be submitted by business entities under the conditions that the
projects are economically and financially feasible; technically integrated with the Airport
sector master plan; and the project proponent has the capacity to finance the project. The
project proponent is entitled to receive one of three forms of compensation: 10% additional
points, right to match the offer of the first-ranked bidder or compensation of development
cost.

3.2.5 Tariff

Based on Transport Ministerial Regulation Number 36/2014 on Procedure on Aero-Nautical

Tariff Establishment, the tariff of Aero-nautical shall be determined with a preference to the
structures and classes to be set forth as follows:
a. Aviation safety and security;
b. The interests of public services;
c. Improvement of service quality;
d. The interest of the service user;
e. Improved service delivery;
f. Level of Service assessment;
g. Refunds;
h. business development; and
i. the applicable accounting principles.

The aero tariff for commercial flights shall be determined by the Board of Directors of Airport
Business entity after consultation with the Minister for Transportation which emphasizes that
the private partner has the legal right to charge user at their set price.

57
3.2.6 Airport PPP Project Potential

Potential Brown field Airport infrastructure development using Public Private Partnership
(PPP) scheme:
a. Brown field
Under the concession/licenses contract the Ministry of Transportation is involved in a long-
term contract (usually 30- 50 years) with the private sector to Manage and Operate Transport
Infrastructure that is already built by Ministry of Transportation with significant or material

initial investment, in this case most of the revenue comes from users. Below is brown field
airports under the MoT that has potential to be offered as PPP project

Picture 3.2.3: MoT Airport PPP Brownfield Potential Projects

b. Green Field
Cooperative arrangement between the Ministry of Transportation and the Airport Business
Entity typically is a long-term cooperation in which the private Airport Business Entity builds
new airport infrastructure as well as operates and maintains it. The form of cooperation can
be the concessions with auction mechanism through assignment or direct appointment to the
Airport Business Entity. Below is a green field airport under the MoT that has potential to be
offered as PPP project

58
 Picture 3.2.4: MoT Airport PPP Greenfield Potential Projects
Picture 3.2.4: MoT Airport PPP Greenfield Potential Projects
3.2.7 Form Off Cooperation
3.2.7 Form Off Cooperation

According to Transport Ministerial Regulation 43/2015 on Concession and other Cooperation

According to Transport Ministerial Regulation 43/2015 on Concession and other Cooperation
form between the Government and Business Entity in the field of Airport, the form of
form between the Government and Business Entity in the field of Airport, the form of
cooperation
cooperationbetween the Ministry
between the MinistryofofTransportation
Transportation
andand airport
airport business
business entityentity are divided
are divided
into
into2 2types
types i.e.
i.e. the BOT/DBFOM(for
the BOT/DBFOM (forgreen
green field
field airport)
airport) and and
O&MO&M concession
concession with with
investment
investment obligation, which the
obligation, which theselection
selectionmethod
method of business
of business entityentity through
through direct direct
appointmentor
appointment or competitive
competitive international
internationalbidding.
bidding.

DBFOM
DBFOM BOTBOT O&M O&M
Aero Nautical √√ √ √ √
Aero Nautical √
Non-Aero Nautical √ √ √
Non-Aero Nautical √ √ √
Concession Fee 2.50% Form Net Income
Concession Fee 2.50% Form Net Income
Cooperation Business Entity Selection
Cooperation Business Entity Selection
The construction and Managements of New Direct Appointment/Competitive Bidding
Airport
The construction and Managements of New Direct Appointment/Competitive Bidding
Airport

59
 Operation and Maintenance (O&M) Aero Nautical Direct Appointment/Competitive Bidding
Facilities (PJP4U) such as landing, take off, taxy
way, apron and hangar
Operation and Maintenance (O&M) Aero Nautical Direct Appointment/Competitive Bidding
Facilities (PJP2U) Such as passenger terminal,
cargo terminal
Operation and Maintenance (O&M) Aero Nautical Direct appointment
Facilities such as electronics, electricity, water
and installation facilities
waste disposal
Operation and Maintenance (O&M) non- Aero Direct Appointment/Competitive Bidding
Nautical Facilities

3.2.8 Airport Business Entity

Legal Entity Airport Business Entity

Financial Requirement
Providing proof of ownership of paid-up
capital amounting to 30% of the total value of
assets with a minimum value of USD 25
Million. (Twenty-Five Million) for a domestic
airport, and a minimum of USD. 72 Million, -
(Seventy-Two Million) for international
airport.

3.2.9 Regulatory Agency

Details of airport sector regulatory agencies in Indonesia are shown below:

60
 Airport Organizing Unit (Unit is a unit under the Directorate General of

Penyelenggara Bandar Udara) Civil Aviation of the Ministry of

Airport Authority (Otoritas bandara)
Air Navigation (Airnav)
Aviation Security (Avsec)
Transportation which is responsible for
performing Aero and Non- Aeronautical
service which related to airports, safety,
security at non-commercial airports
is a Technical Implementation Unit within
the Ministry of Transportation which carries
out the regulation, control and supervision
on the safety, security, continuity, and
comfort of flights at the airport;
National air traffic control provider, and its
main business includes the provision of air
traffic services, aeronautical
telecommunications, dissemination of
aeronautical information as well as search
and rescue information and aviation
meteorology information.
Formed by PT Angkasa Pura (as the only
airport operator), it provides security
services and meets international and
national rules with regard to the provision
of security services at airport.

3.2.10 Land Procurement

Law No. 2 of 2012 sets out that land procurement for public interest shall be
conducted by the government in line with spatial or development plans and with adequate
and fair compensation. Its implementing regulation, President Regulation No. 71 of 2012,
defines and provides details of a four-stage process, consists of planning, preparation,
implementation, and handover stages. Under this framework, a maximum duration for land
acquisition is estimated to be 583 working days. The compensation, determined with an
independent appraiser, shall be sourced from the national budget and/or the regional
budget, although if a project is financially feasible, a winning bidder shall pay back some or
the entire cost of land (according to President Regulation No. 38 of 2015).

61
 3.3 Port Sector
Indonesia currently has 111 commercial port manage by PT Pelabuhan
Indonesia (Indonesia Port Company), 1481 non-commercial port and
Port Sector
3.3 of Transportation Regulation Number 414/2013 stipulates
800 special wharves. The Ministry
the National Port Master Plan (RIPN) as amended in the Ministry of Transportation Regulation
Indonesia currently has 111 commercial port manage by PT Pelabuhan
Number 901/2016. In the National Port Master Plan, port development is directed to involved
Indonesia (Indonesia Port Company), 1481 non-commercial port and
private sectors
800 to encourage
special competition
wharves. The in port business
Ministry of Transportation andNumber
Regulation empowerment of the role of
414/2013 stipulates
theuntil
port operator National Port Master
2030. Plan Port
National (RIPN)Master
as amended in the
Plan Ministry
(RIPN) hasof Transportation
also indicated Regulation
that only 31.7
Number 901/2016. In the National Port Master Plan, port development is directed to involved
% of the total Investment will be financed by the government while 68.3% will be funded by
private sectors to encourage competition in port business and empowerment of the role of
the private sector.
port operator until 2030. National Port Master Plan (RIPN) has also indicated that only 31.7
% of the total Investment will be financed by the government while 68.3% will be funded by
the private sector.
3.3.1 Port Sector Investment Need 2015-2019
Under the full scenario of Medium-term national development plan (RPJM), the budget
3.3.1 Port Sector Investment Need 2015-2019
estimation for Under
implementing service
the full scenario plan in port
of Medium-term sector
national is USD 40,2
development plan Billion forbudget
(RPJM), the the period of
estimation for implementing service plan in port sector is USD 40,2 Billion for the period of
2015-2019 while the allocated budget is USD 8,9 Billion. The received budget will be
2015-2019 while the allocated budget is USD 8,9 Billion. The received budget will be
distributed to 6 six categories with detail as follows:
distributed to 6 six categories with detail as follows:

PORT ESTIMATED INVESTMENT

PORT ESTIMATED NEED2015-2019
INVESTMENT NEED 2015-2019

Management Activities and

Operations in the Field of Traffic
14% Management
and Sea Transport Activities and
27% Operations
Management andin the Field of Traffic
Implementation
14% and Sea
Activities Transport
in Port and Dredging
27% Sector
Management and Implementation
Management and Implementation
30% Activities
Activities in thein Port
Field and Dredging
of Shipping
16% Sector
and Marine Affairs
Management and Operations
Management and Implementation
0% Activities in the Navigation Field
13% 30% Activities in the Field of Shipping
16% and Marine
Management and Affairs
Implementation
Activities in the Fieldand
Management of Coastal and
Operations
Coastal Protection
0% Activities in the Navigation Field
13% Management and Technical
Support
Management and Implementation
Picture 3.3.1: Ports Estimated Investment Need 2015-2019
Activities in the Field of Coastal and
Coastal Protection
Management and Technical
62 Support
Management and Implementation Activity in Port and Dredging Sector are the largest
spending categories which accounted for 29.67% of port budget allocation, second largest
expenditure is planned to Management and Other Technical Support which accounted for
26.68%, 15.69% to Management and Operation of Sea and Coast Guard, 14.63% to
Management and Operations of Traffic And Sea Transport, 13.08% to Management and
Navigation Operation and 0.25% to Management and Shipping Operations.

3.3.2 Port Funding Scheme

Based on the transport infrastructure development funding scheme issued by National
Development Planning Agency (Bappenas), optimization role of State Owned Enterprise
and private serve as positive alternatives for funding source, since the state budget has
not been optimal for providing equitable infrastructure developments. Based on the
Medium National Development Plan (RPJM), Directorate General of Sea Transport only
has the capacity of 2,5 % to cover the total funding requirement which remains port
infrastructure funding gap.

The role of private and state-owned enterprises is crucial in the provision of

Infrastructure, especially Sea Transport, to provide a multiplier effect on improving the
investment climate, as well as acceleration and enhancement of national and regional
economic growth that will affect the welfare and prosperity of the people.

3.3.3 Contracting Agency

Ministry of Transportation Grant approvals on alignment; set design

criteria, technical specifications, and
permits, responsible for cooperation
projects within the scope of National
PT Pelindo 1 (Indonesia Port Company 1) SOEs that Build, operate and maintained
port facilities and infrastructure currently
manages 16 port, Business Working Area of
PT Pelabuhan Indonesia I (Persero) covers
Provinsi Nanggroe Aceh Darussalam (NAD),
Sumatera Utara (SUMUT), Riau dan
Kepulauan Riau (KEPRI).

63
 PT Pelindo 2 (Indonesia Port Company 2) SOEs that Build, operate and maintained
port facilities and infrastructure currently
manages 12 port, locate in 10 Indonesian
Province from West Sumatera to West Java
PT Pelindo 3 (Indonesia Port Company 3) SOEs that Build, operate and maintained
port facilities and infrastructure currently
manages 43 port, Spread in 7 Province of
East Java, Central Java, South Kalimantan,
Central Kalimantan, Bali, West Nusa
Tenggara and East Nusa Tenggara
PT Pelindo 4 (Indonesia Port Company 4) SOEs that Build, operate and maintained
port facilities and infrastructure currently
manages 25 port, Spread from Kalimantan,
Sulawesi, Maluku, Ambon, Ternate to
papua and west papua
Local Government / Municipality Responsible for cooperation projects within
the scope of regions, districts /
municipalities

For PPP projects in the Indonesian port sector, the GCA is generally the relevant port authority
represented by the MOT. In addition, new PPP regulation officially allowed SOE to act as GCA.
For the port sector, there are Indonesian Port Corporations (IPC’s), named PT Pelabuhan
Indonesia (Pelindo) I, PT Pelabuhan Indonesia (Pelindo) II, PT Pelabuhan Indonesia (Pelindo)
III, and PT Pelabuhan Indonesia (Pelindo) IV.

3.3.4 Foreign Participation

Maximum allowed foreign ownership of equity in green field projects 95 %

3.3.5 Unsolicited Bid

Acceptance of Unsolicited Proposal Yes

Eligibility of Project Proponent to have
• Competitive advantage a bid Evaluation Yes
• Swiss Challenge / right to match Yes
• Compensation of project development cost Yes

64
  Government Support for Land Acquisition and Resettlement Yes
cost
 Direct Appointment Yes
 Government Support in VGF Yes

Unsolicited proposals can be submitted by business entities under the conditions that the
projects are economically and financially feasible; technically integrated with the port sector
master plan; and the project proponent has the capacity to finance the project. The project
proponent is entitled to receive one of three forms of compensation: 10% additional points,
right to match the offer of the first-ranked bidder or compensation of development cost.
However, most of the unsolicited proposal in port sector is fall within the criteria of direct
appointment whereas according to Minister of Transport regulation Number 15/2015 on
concession and other form of cooperation between the government and port business entity
in the field of port stated that direct appointment mechanism should be given to the port
business entity who meet the criteria’s and has majority (whole) owner of the land and not
to be given any government support related to the project . until now there are 18 port that
consist of 4 existing and 14 in the new location while 10 locations are still in process for direct
appointment mechanism.

3.3.6 Tariff
Based on Transport Ministerial Regulation Number 72/2017 on Type, Structure, Group
and Mechanism of Stipulation of Tariff for Port Services, Port Business entity also known as
“Badan Usaha Pelabuhan” should consult with Ministry of Transportation regarding the new
plan of tariff structure before it can set up and charge the user, this indicates that the private
sector has the freedom to set the tariff.

3.3.7 Port PPP Project Potential

a. Brown field

Under the concession/licenses contract the Directorate General for Sea Transport involve
in a long-term contract (usually 30- 50 years) with the private sector to Manage and
Operate - Transport Infrastructure that is already built by Ministry of Transportation with

65
 significant or material initial investment, in this case most of the revenue comes from
users. In the picture below is potential brown field PPP Port project that will be done at
12 potential locations once it’s approved by stake holders related.

Picture 3.3.2: MoT Seaport PPP Brownfield Potential Projects

3.3.8 Form of Cooperation

According to the Transportation Ministerial Regulation Number 15/2015 on concession

and other form of cooperation between the government and port business entity in the field
of port which has been amended by Regulation of the Minister of Transportation No. PM 166
of 2015 concerning the amendment of the Regulation of the Minister of Transportation No.
PM 15 of 2015 divined the form of cooperation between the Directorate General of Sea
transport and port business entity which are BOT (for green field port) and O&M concession
with investment obligation, where the selection method of business entity through direct
appointment or competitive international bidding.

66
 DBFOM BOT O&M
Vessel, Passenger and
Commodity Services √ √ √
Services related √ √ √
Concession Fee 2.50% From Net Income

Cooperation Business Entity Selection

The Construction and Managements of New Port Direct Appointment/Competitive Bidding

The Construction and Management of New Direct Appointment/Competitive Bidding

Terminal
Operation and Maintenance (O&M) Port Facilities Direct Appointment/Competitive Bidding

Operation and Maintenance (O&M) with Direct Appointment/Competitive Bidding

investment obligation of new terminal
Operation and Maintenance (O&M) of Private Direct appointment
Interest Terminal that shift into Public Terminal
Operation and Maintenance (O&M) of Private Direct Appointment
Interest Terminal that serve Public terminal
Operation and Maintenance (O&M) of Private Direct Appointment
Interest Terminal that shift into public port
Operation and Maintenance (O&M) of Fairway Direct Appointment/Competitive Bidding
/Channel and port basin

3.3.9 Sector Regulation

The port sector in Indonesia is largely regulated under Law No. 17/2008 on Shipping.
The 2008 Shipping Law (implemented in 2011), that partly refers to the Navigation Act,
provided the foundation for port reform in Indonesia. Prior to 2011, all the major commercial
ports in Indonesia were controlled by the four state-owned IPCs. The IPCs acted as both the
sole operator and port authority and had regulatory authority over private sector ports. The

67
law omitted the state-sector monopoly on ports and encourages participation by the private
sector. The law made a clear separation between the regulator and the operator in reducing
the role of the IPCs as port operator.
Other relevant regulations in the port sector are as follows:

 Government Regulation No. 64 of 2015 concerning Amendment to Government

Regulation No. 61 of 2009 concerning Harbours (“PP No. 64/2015”);
 Minister of Transport Regulation No. KM 62 of 2010 on Organization and Work of the
Implementing Unit of Port (“Minister Regulation No. 62/2010”);
 Government Regulation No. 20 of 2010 on Coastal Seas Transportation as amended by
Government Regulation No. 22 of 2011 on the Amendment of Government Regulation
No. 20 of 2010 on Coastal Seas Transportation (“Government Regulation No. 22/2011”);
 Government Regulation No. 21 of 2010 on Maritime Environmental Protection
(“Government Regulation No. 21/2010”); INDONESIA 183
 Government Regulation No. 64 of 2015 concerning Amendment to Government
Regulation No. 61 of 2009 concerning Harbours (“PP No. 64/2015”);
 Regulation of the Minister of Transport No. 51 of 2015 concerning the Implementation
of seaport (“PMP No. 51/2015”); and
 Regulation of the Minister of Transportation No. PM 15 of 2015 concerning Concession
and Other Cooperation Forms Between the Government and the Port Business Entity in
the Field of Harbours, which has been amended by Regulation of the Minister of
Transportation No. PM 166 of 2015 concerning the amendment of the Regulation of the
Minister of Transportation No. PM 15 of 2015 concerning Concession and Other
Cooperation Forms Between the Government and the Port Business Entity in the Field of
Harbours (“PMP No. 15/2015”).

68
3.3.10 Port Business Entity
Legal Entity Port Business Entity

Financial Requirement
Providing proof of ownership of paid-up
capital amounting to USD 71,4 Million of the
total value of assets for main port USD 14,2
Million for collection port and USD. 1,7
Million, - for Ferry Port.

3.3.11 Regulatory Agency

Details of port sector regulatory agencies in Indonesia are shown below:

Agency Function

Port Authority  Providing onshore and offshore land for

the port
 Providing and maintaining anchor, port
pool, cruise line, and road arrangement
 Providing and maintaining aids to
navigation
 Ensuring safety and order in the port
 Ensuring and maintaining the
sustainability of the port environment
 Preparing the port masterplan
comprising the port working area and
port interest area
o Suggesting a rate to be determined by
the Ministry of Transportation, for the
use of water or land, and port facilities
provided by the government as well as
port services convened by the port
authorities in accordance with the
prevailing laws and regulations
o Ensuring smooth distribution of goods

69
 Port Administration Unit Responsible for ports that are not yet
commercially operated

Harbour Master  Responsible for the safety and security

of the port, including implementation,
supervision, and law enforcement
 Responsible for the search and rescue
around in vicinity of the port

3.3.12 Land Procurement

Law No. 2 of 2012 sets out that land procurement for public interest shall be
conducted by the government in line with spatial or development plans and with adequate
and fair compensation. Its implementing regulation, President Regulation No. 71 of 2012,
defines and provides details of a four-stage process, consists of planning, preparation,
implementation, and handover stages. Under this framework, a maximum duration for land
acquisition is estimated to be 583 working days. The compensation, determined with an
independent appraiser, shall be sourced from the national budget and/or the regional
budget, although if a project is financially feasible, a winning bidder shall pay back some or
the entire cost of land (according to President Regulation No. 38 of 2015).

70
Chapter 4

CHAPTER 4
TRANSPORTATION INVESTMENT
TRANSPORTATION PROJECT
INVESTMENT PROJECT SUMARYSUMARY

PROJECT STATUS CONTRACTING PROJECT COST

AGENCY
RAILWAY SECTOR
Makassar Pare Pare Railway Already Tender Ministy of USD 75 Million
Transportation
Surabaya Tram Under City Government USD 870 Million
Preparation of Surabaya
LRT & BRT Medan Under City Government USD 168 Million
Preparation of Medan
Bandung Raya Metropolitan Monorail Under City Government USD 234 Million
Development Preparation of Bandung
AIRPORT SECTOR
Kuala Namu International Airport Already Tender PT Angkasa Pura II USD 1.533 Billion
Komodo Airport Under Ministry of USD 83 Million
Preparation Transportation
Lombok International Airport Under PT Angkasa Pura I USD 995 Million
Preparation
Soekarno Hatta International Airport 2 Under PT Angkasa Pura II USD 10.7 Billion
Preparation
Cargo Village Soekarno Hatta Under PT Angkasa Pura II USD 207.2 Million
International Airport Preparation
PORT SECTOR
Benoa Port Already
Under Tender
Preparation PT Pelindo III USD 158 Million
Anggrek Port Under Ministry of Finalize In OBC
Preparation Transportation
Bau Bau Port Under Ministry of USD 19.6 Million
Preparation Transportation
Kuala Tanjung International Hub Port Under PT Pelindo I USD 3.6 Billion
Preparation
Makassar New Port Under PT Pelindo IV Phase 1 USD 575
Preparation Million
New Deep Water Port Under PT Pelindo II USD 341Million
Development, Kijing Preparation
LAND TRANSPORT SECTOR
Transit Oriented Development Poris Already Tender Ministry of USD 120.5 Million
Plawad Terminal Transportation
Development of Proving Ground for Under Ministry of USD 133 Million
Vehicle Testing and Certification Preparation Transportation
Agency
Service Extension of MRT (Lebak Potential Ministry of Finalize In OBC
Bulus – South Tangerang) Transportation

71
Makassar New Port Under PT Pelindo IV Phase 1 USD 575
Preparation Million
New Deep Water Port Under PT Pelindo II USD 341Million
Development, Kijing Preparation
LAND TRANSPORT SECTOR
Transit Oriented Development Poris Already Tender Ministry of USD 120.5 Million
Plawad Terminal Transportation
Development of Proving Ground for Under Ministry of USD 133 Million
Vehicle Testing and Certification Preparation Transportation
Agency
Service Extension of MRT (Lebak Potential Ministry of Finalize In OBC
Bulus – South Tangerang) Transportation
Transit Oriented Development Jati Potential Ministry of Finalize In OBC
Jajar Terminal Transportation
Jakarta Elevated Loop Line Railway Potential Ministry of Finalize In OBC
Transportation

72
 ALREADY
TENDER

73
4.2 MAKASSAR PARE PARE RAILWAY PROJECT
South Sulawesi
4.2.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 75 Million 20 Years Ministry of Transportation
Project Returns Gearing Contact Person
IRR 15 % Equity 30% Mr Widianto
NPV USD 7.1 Million Debt 70% +6281333960498
Summary Project
Makassar- Parepare Railway is a railway network in the Indonesian island of Sulawesi that
will be built 142 KM route from Makassar to Parepare. The railway is divided into 6 (six)
segment which are segment A (22,8 Km track from Parepare towards Makassar), segment
B (27 Km track from the end of segment A towards Makassar), segment C (16,1 Km track
from the end of segment B towards Makassar), segment D (64 Km from the end of
segment C towards Makassar), segment E (12,1 Km that ends at Makassar), and segment
F (side tracks that connected to Bosowa and Tonasa Cement Factory).
For Phase-1, the Makassar Railway - Parepare project is offered for PPPs which includes
the operation and maintenance of a 111.7 km mainline (B-C-D segment) and Design-Build
-Finance-Operate- Maintained (DBFOM) for segment F.
Intended Procurement Method Procurement under Public Private
Partnership (PPP)
Competitive Advantage  Strategic National Priority Project (PSN)
 Economic center in south Sulawesi
Proximity to Steam Power Plan in Barru
 Proximity to Cement Factory (Fajar
Group, Tonasa, Bosowa, Maros)
 Near to New Port of Garongkong

74
  Cultivation Export and Fisheries
Scope of Overall Project  Segment F Line Construction namely
the construction of the railway line to
PT. Semen Tonasa and PT. Bosowa
Cement
 Construction of Station and Operating
Facilities in Segment F
 Procurement of Depo and Balaiyasa
Facilities located in Maros; and
 B-C-D-F Segment Infrastructure
Operation and Maintenance.
Proposed Structure Design – Build – Finance – Operate –
Maintained (DBFOM) with Availability
Payment (AP) for 17 years starting in year
4, Where the Government will take the
demand risk

4.2.2 Project Structure

75
4.2.3 Development Plan

Track Location Length (KM) Number of Station

Mainline
Segment B Barru - Palanro 27 2
Segment C Barru 16.1 4
Segment D Mandai - Barru 64 8
Siding Track
Segment B Mainline - Garongkong 4.7 1
Segment F Mainline - Bosowa 7.1 1
Segment F Mainline - Tonasa 6.8 1
Total ±125.7 17

The Ministry of Transportation will complete building segment B-C-D of the Makassar-
Parepare railway network infrastructure that will covers railway lines, train stations and
operating facilities. To improve financial feasibility of the project, the scope of the project
was expanded to building a siding track to Tonasa and Bosowa areas (Segment F). The total
length of the Makassar - Parepare Railway project is 111.7 km with additional 13.9 km siding
track to the PT. Semen Tonasa and PT. Bosowa Cement. Considering that the Makassar-
Parepare Railway is the first railway project in the Sulawesi Region that will serve as pioneer
transportation, the Ministry of Transportation has decided that the investment return
mechanism for business entities for Makassar-Parepare Railway PPP project is through
Availability Payment. through the mechanism Business Entities only receive income from the
government budget and does not borne the demand risk, the Ministry of Transportation will

76
optimize the existing units, namely the East Java BTP KA Work Unit to act as a paying agent
for availability payment

4.2.4 Traffic Projection and Preliminary Adjustment

4.2.4.1 Passengers demand

Based on passenger demand data from the 2016 Makassar - Parepare KA FS Review
Document, the average train passenger growth was 1.08% / year. Table below shows the
demand for Makassar-Pare-Pare railway passenger transport.

Passengers
Years Segment B Segment C Segment D Segment F Total Total
Pass/day Pass/day Pass/day Pass/day Pass/day Pass/Years

2019 40 40 - 80 28.921

2020 40 40 872 - 953 347.789

2021 41 41 889 - 972 354.638

2022 42 42 907 21 1.012 369.287

2023 43 43 925 21 1.032 376.559

2027 47 47 1.006 23 1.122 409.672

2033 53 53 1.146 26 1.281 467.634

2038 59 59 1.173 28 1.410 514.684

77
 Passengers Graph Demand
2019-2038

4.2.4.2 Goods Transport Demand

Goods transportation serving Makassar - Parepare mainline is divided into 2 types,
which are general goods transportation and industrial goods transportation (cement industry
from Bosowa and Tonasa cement factories). The average demand growth of railroad general
goods transport as the results of the analysis is 6.33% / year. Table below shows the demand
for freight transport of Makassar-Parepare trains. Analysis of public goods transportation

General Goods
Years Segment B Segment C Segment D Segment F Total Total
ton/day ton/day ton/day ton/day ton/day ton/day

2019 197 197 - 394 35.998

2020 211 211 1.458 - 1.879 171.489

2021 225 225 1.557 - 2.006 183.078

2022 240 240 1.662 24 2.166 197.640

2023 256 256 1.774 25 2.312 210.996

2027 330 330 2.286 33 2.980 271.884

2033 477 477 3.304 47 4.306 392.933

2038 649 649 4.491 64 5.853 534.070

78
 General Transport Goods Demand
2019-2038 (Ton)

The demand for industrial goods is assumed to be the same as the growth of public goods
transportation, which is 6.33% / year. Industrial goods transport is planned to use the siding
track of each cement factory (Bosowa and Tonasa) to the mainline for distribution. Analysis
of industrial goods transportation considers the existing mode of distribution of goods used
by the factory with the mode of transportation in the form of trucks. Bosowa cement factory
industrial freight route consists of:

1. Bosowa (factory) to Makassar (BSW - Mak);

2. Bosowa to Pare-Pare (BSW – Par);

3. Bosowa to Garongkong Port (BSW - Pel Gar);

4. Port Garongkong to Bosowa (Pel Gar - BSW).

4.2.5 Cost and Preliminary Assessment

4.2.5.1 Overall Railway project

79
4. Port Garongkong to Bosowa (Pel Gar - BSW).

4.2.5 Cost and Preliminary Assessment

4.2.5.1 Overall Railway project

Amount

Total Capex USD 75.357.143

Total Opex USD 139.714.286

4.2.6 Project Status

Makassar - Parepare railway project is currently in the procurement process where the
potential participants that qualified at pre – qualification (PQ) stage is already invited to
submitting their Request for Proposal (RFP).

the winning bidder will be announced November, 12 2018 any potential investor will invite
to join the Makassar – Parepare railway project as a member of consortium with join venture
agreement that will provide a portion of the company share or act as a debt provider for the
project delivery .

80
4.3 TRANSIT ORIENTED DEVELOPMENT PORIS PLAWAD
Tanggerang West Java
4.3.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 120.5 Million 30 Years Ministry of Transportation
Project Returns Gearing Contact Person
IRR 12.9 % Equity 70 % Mr. Harno
NPV USD 6,7 Million Debt 30 % +6282113118656
Summary Project
TOD concept in Poris Plawad terminal will be built on the area of ± 19,000 m2. Poris
Plawad Terminal is the main transportation node in Tangerang city and TOD concept is
support by Integrated terminal development; construction of LRT (Light Rapid Transit)
which connects the City of Tangerang with South Tangerang City; construction of the
Jakarta Outer Ring Road 2 (JORR 2) Toll Road; construction of the Soekarno Hatta Airport
Train; and construction of Elevated Busway. To accommodate the modal transfer and the
utilization of the surrounding mixed areas, the development of TOD in Poris Plawad
terminal were offered as Design-Build-Finance-Operate-Maintained (DBFOM) PPP’s
scheme that covered the commercial area, residential area / apartment, terminal, station
and others facilities
Intended Procurement Method Unsolicited PPP Project
Competitive Advantage  Tangerang City is one of the
investment locations
 Integrated Terminal development
 Provision of mix use areas with
adequate transit facilities
Scope of Overall Project  Terminal Development, 2 floors
with an area of 10,368 m2 plus
parking space of 4,406 m2

81
  Commercial Area Development, 3
floors with an area of 38,460 m2
plus parking space of 4,807 m2
 Residential Development
(Apartment), with a total of 3,840
units plus parking space of 5,050 m2
 Operate and maintain the ToD area
during concession period
Proposed Structure Design Build Operate Maintained
(DBFOM) of the TOD Concept

4.3.2 Project Structure

4.3.3 Development Plan

The development of TOD Concept in Poris Plawad terminal is focused on Accessible,
Design, Integrated and Synergy. Accessibility shows that areas are interconnected with high
accessibility and the design emphasizes the principles of efficiency and effectiveness.
Integrated means that there is integration between functions and activities while Synergy
represent a variety of activities that will improve the business and economic climate.

The vision of TOD development in the Poris Plawad Terminal area is to create "Transit Area
with Active, Vibrant, and Compact Movement"

82
With the mission as follow:
1. To Become one of the main core transportation transit areas in the Greater Jakarta area;
2. An integrated transit area with the optimization of connectivity between area functions;
3. Transit facilities that are integrated with the surrounding area.

4.3.4 Traffic Projection and Preliminary Adjustment

Potential passengers’ movement in the Poris Plawad TOD area are estimated by
looking for potential movements that will occur, among others modes of public transport
which comprise as follow:

a. Movement base on land use;

b. Share mode for public transport user;
c. AKAP (Inner City) and AKDP (With in the city) Bus Users;
d. Commuter line railway users;
e. Airport Train Users;
f. Trans Jakarta Passengers.

83
 Years 2.017 2.027 2.037 2.047

Total Passengers Movement / Day 61.177 87.514 125.647 180.536

Based on the passenger’s

Passengers Movement / Day movement / day in 2017-
2017-2047 2047. It is estimated that the
Poris Plawad TOD area will
180536 have 61,177 movements /

125647
day in 2017, divided the

87514
movement by the total of
active hours in the city (TOD
6177
typology) which is 18 hours,
2017 2027 2037 2047
then for the next 30 years
the estimated number of movements per hour is 3,399, the pattern will be continued to
result in 180,536 Movement / day and 1,030 movements / hours in 2047. movements per
hours.

4.3.5 Cost and Preliminary Assessment

Preliminary assessment of the capital expenditure for Development of Transit

Oriented Development (TOD), Poris Plawad Terminal - Tangerang City is USD 120,589,257
(one hundred twenty million five hundred eighty-nine thousand two hundred fifty-seven) that
will cover the construction of Shopping Centers / Malls, Apartments and others with items as
follow:

84
 No Item Total (USD 000)
1 Land Preparation 804
2 Permit & Legal Cost 201
3 Relocation Cost 236
4 Penalty Fee 236
5 License cost 5086
6 Utility 1794
7 Landscape 270
8 Engineering and Design 3040
9 Project Management 94
10 Insurance 507
11 Others License 2346
12 Building Cost 95857
13 Terminal Building 5491
14 Marketing Cost 1707
15 Overhead Cost 2919
Total USD 120,589,257

4.3.6 Project Status

Currently unsolicited proposals for TOD development in Poris Plawad terminal already
submitted by PT Mina Transindo Totabuan, the project now in its transaction stage and open
to other prospective investor for summiting their proposal.

85
4.4 KUALA NAMU INTERNATIONAL AIRPORT
North Sumatera
4.4.1. Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 1.533 Billion 30 Years PT. Angkasa Pura II Persero
Project Returns Gearing Contact Person
IRR 17.99 % Equity 30% Mr Awaluddin
NPV USD 164 Million Debt 70% +628121150168
Summary Project
The Kualanamu International Airport (KNO) Strategic Partnership Program was proposed
by the Indonesian Government and proceeded by PT Angkasa Pura II (AP II). Located at
Deli Serdang District, KNO serves air transportation for Medan City, connects North
Sumatera Province with the region, and plays a strategic role to be South East Asia’s
International Hub.

Not only transportation services, AP II will develop KNO as an Airport City by allocating
200 acres (out of total 1,350 acres airport area) for commercial area outside the terminal
building that will consist of both business and leisure area, such as mall, retail, transit
hotel, golf course, business park, and others. This Airport City concept is to integrate the
passengers and cargo demand and to support its function to be a secondary international
country hub in Indonesia
Intended Procurement Method Competitive Bidding for equity participation in
Joint Venture (JV) Company with AP II
Competitive Advantage  The second largest airport in west side of
Indonesia after Soekarno-Hatta
International Airport

86
  Official 4-Star Skytrax Airport.
 Connected by the North Sumatera Toll
Road
 Expected to Become the new international
transit center in south east Asia
 The first Airport in Indonesia with direct
rail link to / from city center (Medan City)
 Part of Government of Indonesia
Infrastructure Development Plan and
strategy for the Asean Single Aviation
Market

Scope of Overall Project  Airport Operator (Package 1)

 Aero City Developer (Package 2)
Proposed Structure  AP II will serve as an asset holding for the
asset for airport related services (retail) and
will establish an operation agreement with
the JV so that the JV reserves the right to
use AP’s assets in airport related services
(retail).
 AP will establish an Operation Agreement
with the JV so that the JV has the right to
manage AP's Airport in performing airport
related services

 Operation Agreement shall govern the

rights and obligations, the scope of the
parties and the management / operatorship
fee arrangements, and so on

4.4.2 Project Structure

87
 rights and obligations, the scope of the
parties and the management / operatorship
fee arrangements, and so on

4.4.2 Project Structure

4.4.3 Development Plan

Investment Package 1

88
 Investment Package 2

Investment Package 1

Investment Package 2

89
4.4.4 Traffic Projection and Preliminary Adjustment

Base Case
The existing volume of traffic is dominated by domestic movements, which
consist aeronautical, non-aeronautical, & cargo revenues. Aeronautical sector
is still the major contributing income for KNO business. Yet, Indonesia Central
& Local Government focuses on Sumatra and North Sumatra as one of the
main developments of infrastructure as the economy in the area continues to
grow.

Optimistic Case

The continuous development of Sumatera strengthens its positioning as a

destination, turning North Sumatra and Medan become a strong industrial
prospect and tourism attractions which are supported by the development of
government especially in infrastructure.
The impressive economic growth will drive the business activities in and to
Sumatra faster. Furthermore, KNO, as the largest and busiest airport in Sumatra,
will be the main gateway for international and domestic passengers coming to
the region. Supported by another six potential airports across Sumatra, operated
by AP II, which serve more than 15 million passengers (per 2015) per year.

90
4.4.5 Cost and Preliminary Assessment

NO Description Investment Package 1 (In Investment Package 2

Trillion) (in Million)
1 Runway IDR 3.00
2 Terminal IDR 10.08
3 Cargo IDR 0.85
4 Hangar IDR 1.00
5 Apron IDR 1.00
6 Lot IDR 970.387
7 Retail IDR 756.431
8 Cargo IDR 626.465
9 Golf & Driving Range IDR 519.693
10 Apartment IDR 493.751
11 5 Star Hotel IDR 229.541
12 Office Building IDR 202.582
13 4 Star Hotel IDR 139.251
14 3 Star Hotel IDR 74.182
15 Kids Edutainment IDR 46.772
16 Budget Hotel IDR 29.462
17 Hospital Lot IDR 26.636
IDR 15.93 Trillion IDR 4.10 Trillion
SUB Total USD 1.21 Billion USD 311.48 Million
IDR 20.03 Trillion
Total USD 1.533 Billion

4.4.6 Project Status

The development of Kuala Namu International Airport will be commencing trough B2B
Scheme with PT Angaka Pura II as procuring authority to date the project Pre-Qualification
process already result in 11 prospective investor which will continued the process by
submitting their Request for Proposal (RFP) documents. Other potential investor will invite as
part of consortium member or loan provider

91
4.5 PORT OF BENOA
Denpasar, Bali
4.5.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 158 Million 10 Years PT Pelabuhan Indonesia III (Persero)
Project Returns Gearing Contact Person
IRR 23,42 % Equity 30% Faruq Hidayat
NPV USD 399 Million Debt 70% 081259792976
Summary Project
The project value for Port of Benoa is USD158 Million (equivalent to IDR 2,12 Trillion). The
construction of Port of Benoa will be conducted in three phases, the first phase is targeted
to be completed by 2022, the second phase is targeted to be completed by 2025 and the
third phase is targeted for completion in 2036.
The Scope of Project Port of Benoa are Reclamation, Construction of Jetty, Marina
Terminal, Dredging, International Terminal, Commercial Area, etc.
Intended Procurement Method Competitive Bidding for equity participation in
Joint Venture (JV) Company with Pelindo III
Competitive Advantage Port of Benoa has strategic value as a supporter
of sea transportation connectivity in Bali
province especially in tourism and fishery
sector.
Scope of Overall Project Phases 1 :
1. Dredging
2. Retaining Wall
3. Extension of Passenger wharf

92
 4. Preparation of Marina Terminal and
Expansion of International Terminal
5. Liquid Bulk Jetty and Retaining Wall
6. Land Preparation for commercial Area
7. Breasting Dolphin
8. Land Preparation
Phases 2 :
12 Extention of Fishery Wharf
13 Liquid Bulk Jetty
14 Preparatiion for Commercial Area, PAI
and Marina
15 Extention of Commercial Area
Phases 3 :
1. Preparatiion for Commercial Area
2. Dredging of Marina Basin
3. Land Preparation of Marina with
floating jetty
4. Construction of Liquid Bulk Jetty
Extention of South Wharf for Passenger Wharf
Proposed Structure Project Owner as the infrastructure developer
and operator of the project and also act as the
off taker Investor as either financial or strategic
(providing assets or technology) and co-
operator Project either in JV or BOOT
Other option would be considered

4.5.2 Development Plan

93
 UNDER
PREPARATION

94
4.6 SURABAYA TRAM
East Java
4.6.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 870 Million Finalized in OBC City Government of Surabaya
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30% Tri Rismaharani
+6231 5312144
NPV Finalized in OBC Debt 70%

Summary Project
In order to accommodate more than 3.4 million Surabaya citizens in need of transportation
for daily mobility, The Surabaya city administration in East Java Indonesia has decided to
restore the city electric tram construction that consists of two main corridors, the North-
South corridor and the East-West Corridor. It will be planned to have 17 KM of track in phase
1 (North to South Corridor) and 5,5 KM in phase 2 (West to East Corridor) with 25 Stations
and 1 Depo in Joyoboyo and 20 unit of tram set within the varieties of length of 30 – 60 M,
Surabaya tram project will be financed under a Public-Private Partnership (PPP) scheme. The
cooperation will be established among the Central Government, Surabaya City
Administration, PT Kereta Api Indonesia (KAI), and a private company.
Intended Procurement Method  Procurement under PPP for equity
participation in joint venture company
with the assign SOE

95
Competitive Advantage / Potential  Surabaya is the second largest city in
Market Indonesia
 The first Tram project in Indonesia
 TOD Concept
 Bonus demography
Scope of Overall Project Phase 1
• 17 km track • 29 Tram Stops • 25 Tram set
• 1 Depot dan Stabling Yard • 1 Night stay
Phase 2
• 5.5 km track
Proposed Structure  Joint Venture with Indonesia SOE
through B2B Scheme
 Joint Venture with Indonesia legal entity
through B2B Scheme
 Private Sector will take the revenue risk

4.6.2 Development Plan

North – South Corridor
TERMINAL BASIC DESIGN

96
97
4.6.3 Traffic Projection and Preliminary Adjustment

The Average Passenger Incremental is 2 % per year, with the price of the ticket of Rp
5000 and with the escalation factor of 15 % every 2 years the operational hours are
from 05.00 – 23.00 WIB

NO Years Number of Passenger

1 I 129.363
2 II 131.950
3 III 134.584
4 IV 137.281
5 V 140.027
6 VI 142.827
7 VII 145.684
8 VIII 148.597

4.6.4 Cost and Preliminary Assessment

NO Investment Amount Mean Amount Total

1 Station development 2 Unit 15.000.000.000 30.000.0000.000
2 Trajectory 22,26 KM 65.500.700.000 1.458.045.582.000
3 Terminal 29 Unit 200.000.000 5.800.000.000
4 Pedestrian Bridge Unit
5 Socialization 1 Ls 300.000.000 300.000.000
6 Design, Study and 1 Ls 300.000.000 300.000.000
Supervision
7 Armada 22 Unit 10.000.000.000 220.000.000.000
Total Investment (RP) 11.649.250.000.000 1.705.445.582.000

98
4.7 LIGHT RAIL TRANSIT (LRT) AND BUS RAPID TRANSIT (BRT) MEDAN
North Sumatera
4.7.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 802 Million 34 Years City Government of Medan
Project Returns Gearing Contact Person
IRR 15.05 % Equity 30% Mr Wiirya Alrahman
NPV Finalize in OBC Debt 70% +6261 4517676
Summary Project
High traffic frequency and volume at City of Medan has caused congestion in several
roads. This problem was caused by limited public transport facilities which accounted only
for 1% from the total passenger car vehicle in Medan. Given the urgency, the project of
integrated urban transportation City of Medan which consist of Light Rail Train (“LRT”)
and Bus Rapid Transit (“BRT”) is proposed to become the solution to solve congestion
problem and to prevent potential gridlock on 2024 in the city. The LRT system is to be
built elevated with 11 Stations and 1 Depot, running from Pasar Lau Cih to Pasar Aksara,
along 17.4 Km. While the BRT system will connect Pinang Baris Terminal and Amplas
terminal with dedicated lane along 18 Km. The system has 31 bus stops and 2 bus
terminals. Both systems will be integrated at the downtown of Medan and provide
interconnection with other populated area surrounding of Medan city such as Deli
Serdang, Binjai, and Karo.
Intended Procurement Method PPP Bidding and concession scheme
Competitive Advantage  Growth center connectivity
 Compliance with Medan Urban Plans
 integrated city urban transportation
project in Medan

99
 Scope of Overall Project For LRT System
1. Procurement of rolling stocks
2. System integration of signals and
communication equipment
3. Operation and maintenance of
infrastructure and maintenance
facilities
4. Operation, lifecycle, and maintenance
of rolling stocks
5. Tariff collection service

For BRT System

1. Construction of segregated lane and
station facilities
2. Procurement, operation and
maintenance of BRT buses.
3. Operation, lifecycle, and maintenance
of segregated lane rolling stocks, and
station facilities
4. Tariff collection service
Proposed Structure The analysis built on the traffic projections
indicate that the project may not be
attractive to the private sector if it is to take
full traffic risk. The analysis hence proposes
that the government provides availability
payments (AP) in a DBFOM model

4.7.2 Project Structure

100
4.7.3 Development Plan

The construction of the LRT and BRT projects is expected to be started by the end of
2019, in which the LRT System will require 4 years starting from 2019 to 2024 for
completion while the BRT system require 2 years starting from 2020 to 2021 to
construct.

The Ministry of Transportation will complete the construction of LRT infrastructure

which include track work and operation system through State Budget (APBN) as a part
of government support, while the PPP scheme will only be apply to fund construction of
BRT system, rolling stocks and bus fleet. The local government will support for land
procurement and settlement relocation of existing utilities such as electricity, water
supply and gas. The project is the first urban transport project in Indonesia and will be
the pilot project for the land transport sector. As the nature of a green field urban
transport development which have a huge ramp-up demand risk, the city administration
has decided to apply Availability Payment (AP) scheme for the investment return

101
 mechanism. The payment will be making periodical by Medan city Government based
on the quality and/or criteria of the infrastructure that are specified in the PPP
agreement, the implementing business entity will receive the payment that include into
three components: one covering the re-payment of the principal and interest of the
senior debt income and does not borne the demand risk.

4.7.4 Traffic Projection and Preliminary Adjustment

Based on Basic Design Model (BDM) several disclaimers have been identified as
follow:

1. Basic Demand Model is generated based on tariff IDR 10000;

2. The model only exercises the demand with interchange on BRT and LRT. The demand
without interchange on BRT and LRT are developed based on index analysis by
considering the % of difference between the previous and current demand with
interchange on BRT and LRT;
3. There are no an exact number of interchange passenger of both LRT and BRT
therefore the demand without interchange on both LRT and BRT are developed
based on index analysis by considering the % of difference between the previous and
current demand without interchange on BRT and LRT;
4. Up to 18 hours of operational time (05.30 - 23.30);
5. Peak Hour Factor (PHF) is 0.118;
6. Fluctuation on daily demand peak & off-peak in weekend and weekday are measured
by referring the result of traffic counting survey on the weekday;
7. The LRT speed is 30 km/hour;
8. The BRT speed is 22.1 km/hour.

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Based on passenger demand data using projection data during the Peak Hour and Off-
Peak and the results of the Peak Hour Factor (PHF) of 0.118, the passenger demand
projection for weekend and weekday as follow:

Demand Weekday (Peak + Off-peak)

Passenger/Day 2024 2034 2044 2054
Total BRT 98,237 154,771 229,449 315,085
Total LRT 144,212 195,958 280,653 478,788
Interchange 89,173 128,193 189,215 267,899
Total BRT - LRT 242,449 350,729 510,102 793,873
Total BRT – LRT
Minus
Interchange 153,277 222,536 320,886 525,974
(Paying
Passenger)

Demand Weekend (Peak + Off-peak)

Passenger/Day 2024 2034 2044 2054
Total BRT 90,602 142,712 211,644 290,508
Total LRT 132,958 166,000 215,932 365,347
Interchange 82,236 112,689 157,953 221,967
Total BRT - LRT 223,559 308,712 427,576 655,856
Total BRT – LRT
Minus
Interchange 141,323 196,023 269,623 433,889
(Paying
Passenger)

103
4.7.5 Cost and Preliminary Assessment

104
4.8 BANDUNG RAYA METROPOLITAN MONORAIL DEVELOPMENT
West Java
4.8.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 234 Million 30 Years City Government of Bandung
Project Returns Gearing Contact Person
IRR 9.05 % Equity 30% Transport Agency of
West Java Province
NPV USD 108 Million Debt 70% (022) 7207257
Summary Project
The public transport services that exist within and around Bandung are no longer
sufficient to meet the growing demand for travel, the average travel time in the working
days at around 50 minutes, and more than one hour especially during weekend. Mass
transportation development is expected to provide a sustainable solution to meet the
massive growth of the demand for travel in Bandung Raya Metropolitan and public urban
railways has been selected to be the best mode of transport selection to solve the issue.
Bandung Raya Metropolitan Monorail Development will include 7 routes in Bandung City,
Bandung Regency, West Bandung Regency, Sumedang Regency, and Cimahi City, with the
total length of 20, 02 KM and 16 number of stations, the funding scheme of the project
will be proposed using Public Private Partnership (PPP).
Intended Procurement Method PPP Bidding and concession scheme
Competitive Advantage  Include as one of National Strategic
Project (PSN)
 Will be Integrated with Jakarta –
Bandung High Speed Train \
 Bandung First AMC Transport
 include 7 routes in Bandung city and
surrounding

105
 Scope of Overall Project  Land Acquisition
 Infrastructure development including
trains, stations and operating facilities
(signals, control and communication
systems, etc.)
 Procurement of vehicle / rolling stocks
 Operation & maintenance for
infrastructure and facilities
 Operation, life cycle and maintenance
of rolling stocks

Proposed Structure  B2B Scheme with the Assigned stated

Owned Company
 Build – Operate – Transfer (BOT) ,
private sector will borne the demand
risk /User Payment

4.8.2 Project Structure

106
4.8.3 Development Plan

Bandung Raya Metropolitan Monorail Development will include 7 routes in Bandung City,
Bandung Regency, West Bandung Regency, Sumedang Regency, and Cimahi City.
West Java Government will develop 5 out 7 monorail routes, which are:

• Route 1 (Leuwi Panjang – Jatinangor), length ± 21,01 Km

• Route 2 (Leuwi Panjang – Cimahi – Padalarang – Ciburuy), length ± 20,12 Km
• Route 3 (Leuwi Panjang – Soreang), length ± 12,58 Km
• Route 4 (Gedebage – Majalaya), length ± 18,17 Km
• Route 7 (Martadinata – Banjaran), length± 17,53 Km

Route 5 and 6 will be developed by Bandung City Government

• Route 5 : Leuwi Panjang – Babakan Siliwangi, length ±10,147 Km
• Route 6 : Cibeureum – Gedebage, length ±21,01 Km

107
4.9 KOMODO AIRPORT
4.9.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 79 Million 30 Years Ministry of Transportation
Project Returns Gearing Contact Person
IRR 15.65 % Equity 30% Mrs Polana B
NPV USD 21 Million Debt 70% +628161998731
Summary Project
Komodo Airport, previously named Mutiara II Airport, is an airport located in the city of
Labuan Bajo, province of Flores Island, Indonesia. Komodo airport currently are being
operate by the Airport Organizing Unit (UPBU) under the Ministry of Transportation. to
improve passenger services from the previous 150 thousand passengers per year to
expected more than 2,2 million passengers per year in 2025, the Ministry of
Transportation invite private sector for the concession/licenses agreement that will
involve a long-term contract to manage and operate all of the Komodo airport
infrastructure with significant or material initial investment, the approach are deemed
necessary considering the increase number of tourists coming to the island of Flores and
its surroundings and as an effort to provide better public services through improved
Airport operational efficiency
Intended Procurement Method PPP procurement for concession scheme
Competitive Advantage 1. More than 20 tourist destinations
2. Labuan Bajo is included in the 10 Priority
Tourism Destinations set by the
Indonesian Ministry of Tourism in 2016
in an area called the National Tourism
Strategic Area

108
 3. In 2016, the total number of tourists
has reached the number 90 thousand
people
Scope of Overall Project 1. Operation and Maintenance of Airport
Infrastructure
2. Extension of runway (45 x200) m
3. Extension of Apron 11.100 m2
4. Increased Runway and Taxiway
Supporting Capability
5. Expansion of Passenger Terminal
6. Construction of Cargo Warehouse 1.994
m2
7. Construction of an international
passenger terminal building
8. Expansion of the vehicle parking area
9. Construction/Development of other
Facilities
Proposed Structure Build Operate Transfer (BOT), private
sector will take the demand risk with
investment obligation during concession
period

4.9.2 Project Structure

109
4.9.3 Development Plan

1. Extension of Runway
2. Expansion of Domestic Passenger Terminal Building
3. Runway Pavement and Taxiway Pavement
4. Construction of an International Passenger Terminal Building
5. Construction of the Cargo Terminal Building
6. Apron Expansion
7. Vehicle Parking Area Expansion
8. Construction / Development of Other Facilities

110
4.9.4 Traffic Projection and Preliminary Adjustment
The number of passenger growth at Komodo Airport could be seen on the picture
below:

Picture above shows that the number of passengers at Komodo Airport is drastically growth,
with Compound Annual Growth Rate (CAGR) that reached 27, 04% in 2008 – 2017. The
physical development that occurred in the Komodo Airport in 2014 until 2015 automatically
increases the capacity of the airport. Before the development, Komodo Airport CAGR value
in 2013 – 2017 is 26, 53%. The condition has been shown that the flight to Komodo Airport
significantly increase and continue to increase as shown in the picture below:

111
Based on the existing historical data, overall passenger growth projection can be identified
as listed in the picture below:

Pessimistic curve is formed based on forecasting least square method, optimistic curve is
formed based on quadratic equation in 2013 until 2017 and for realistic curves is formed
based on the logistic curve method. The 3 methods use historical data from 2008 until 2017.
Based on the prediction, the number of airport passenger will significantly increase in 2020.

Komodo airport passengers is projected could reach up to 928 thousand people in 2020 and
by 2025 there are more than 2,2 million people going through the Komodo Airport. The
growth of Aircraft movement is affected by passenger movements and the type of aircraft. It
is estimated that many narrow body aircraft will be used to Komodo Airport with percentage
of 70% and the rest will use propeller plane. In 2031 the Komodo Airport will be used for

112
passenger from international flight will accounted for 5% from the total number of passengers
until 2035 and by 2045 will increase up to 10%.

The apron expansion that will be done in 2019 will enable narrower body aircraft coming to
Labuan Bajo Airport. In 2020 it is assumed that 70% of passengers will be transported using
narrow body aircraft. In addition to accommodate passenger activities, Komodo Airport also
served for logistic which emphasize the needs for an adequate cargo terminal in future
project development.

4.9.5 Cost and Preliminary Assessment

INVESTMENT 2020 2023 2028 2031 2037
Air Side
 Runway
 Taxiway
 Apron
Land Side
 Passenger
Terminal
Domestic
International
 Cargo Terminal
 Elevated
Parking
Other Facilities
Review Masterplan
Total Capex USD 79.054.054

113
 4.9 LOMBOK INTERNATIONAL AIRPORT
West Nusa Tenggara
4.10.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 995 Million Finalize in OBC PT. Angkasa Pura I Persero
Project Returns Gearing Contact Person
IRR Finalize in OBC Equity 30% Sardjono Jhony Tjitrokusumo
+62 813 11589671
NPV Finalize in OBC Debt 70%

Summary Project
Lombok International Airport (“LIA”) is the only international airport operating in West Nusa
Tenggara, which geographically consists of 2 large islands, Lombok and Sumbawa, and also
surrounded by 280 small islands. In order to capture the growing traffic of passengers, AP I
plan to develop both air side and land side of LIA. LIA will be developed into two stages,
where the last stage of development is scheduled to be done in 2033. The air side
development includes a runway extension, additions of taxiways, and expansion of
commercial apron in 2033. While the land side development will also result in expansion of
commercial space, public parking space, office buildings,

Intended Procurement Method Competitive Bidding for equity participation in

Joint Venture (JV) Company with AP I
Competitive Advantage  LIA has the highest passenger traffic
growth among AP I’s other airport, with a

114
 CAGR of 16.8% per year within period 2012
– 2016
 Lombok is the second most favourite
tourism destination in Indonesia after Bali.
 Lombok has shown a significant rise of its
tourism popularity in the last 3 years.
 a strategic geographical location near Bali
and East Nusa Tenggara
 The availability of free land space in LIA
surrounding can be utilized to develop an
aero city with the total area of 152 hectare
Scope of Overall Project Package 1
 Investment package 1 is to develop the
infrastructure and facilities for both the
airside and landside.
 In order to capture the growing traffic of
passengers, AP I plan to develop both
airside and landside of LIA.
 LIA will be developed into two stages,
where the last stage of development is
scheduled to be done in 2033.
 The airside development includes a
runway extension, addition of taxiways,
and expansion of commercial apron in
2033. While the land side development
will also result in expansion of
commercial space, public parking space,
office building, etc.
 LIA’s current yearly passenger traffic has
reached its maximum capacity of total
3.25 million passengers, hence it will be
developed to accommodate the
increasing traffic up to 18.2 million
passengers per year in 2033
Package 2
 Investment package 2 is to develop the
Lombok Airport City which will support
various activities for international and
domestic tourists on the area of 152 Ha
which is included in the total of 551 Ha
area owned by AP I.
 This airport planning is in line with
Government’s program in promoting
Lombok as main tourism destination. The
airport city strategically located to
connect the western part of Mataram City
with Mandalika Special Economic Zone
(SEZ).

Proposed Structure B2B scheme / AP will establish a Concession

Agreement with the Investor so that the

115
 investor has the right to manage AP's Non-
Aero Revenue

4.10.2 Project Structure

4.10.3 Development Plan

Investment Package 1

116
In order to capture the growing traffic of passengers, AP I plan to develop both the airside
and landside of LIA. LIA will be developed into two stages, where the last stage of
development is scheduled to be done in 2033.

EXISTING STAGE 1 STAGE 2

Aircraft Movement 32,804/year 47,925/year 146,000/year
Cargo 2,416 m² 5,000 m² 15,103 m²
Passenger Terminal 22.807 m² 37,442 m² 200,000 m²
Passenger Capacity 3.58 mppa 5.5 mppa 18.2 mppa

Investment Package 2

Lombok Airport City will support various activities for international and domestic tourists.
This airport planning is in line with Government’s program in promoting Lombok as main
tourism destination. The airport city strategically located to connect the western part of
Mataram City with Mandalika SEZ.

117
4.10.4 Traffic Projection and Preliminary Adjustment

West Nusa Tenggara showed a remarkable result of economic growth, an increase of

21% YoY (per 2015), where Indonesian economic growth was 4.8%. The significant growth
was mainly driven by huge demand of Tourism in Lombok. The island also offers unique
culture and customs of its people which increases The Island’s attractiveness. In relation to
Lombok’s popularity of its natural and cultural tourism, The Local Government has put a
target of 4 million international tourists as visitors in 2017.

The increasing popularity of Lombok

tourism also shown by the increasing
proportion of passengers with tourism
destination in LIA during period 2012 –
2016. As of 2016, passengers with tourism
destination had the highest proportion,
reaching 33% of total LIA’s passengers.

4.10.4.1 Air Traffic (2012-2017)

118
  Aircraft Movement in Lombok International Airport has grown with CAGR 7.4 % per
year over 2012-2017 period
 on average, domestic flight is always dominate the traffic (82%)

4.10.4.2 Passenger Traffic (2012-2017)

The passenger movement was growing during 2013-2017 period with CAGR 8.5%,

4.10.4.3 Cargo Traffic (2012-201)

119
AP I’s cargo movement is highly related to some external factors which trigger a mass cargo
shipping. Government’s regulation on marine product export also contribute to this cargo
traffic fluctuation.

4.10.5 Cost and Preliminary Assessment

Amount
Total Capex Package 1: ±USD 623 million
Package 2: ±USD 372 million

120
4.11 SOEKARNO HATTA INTERNATIONAL AIRPORT 2 (CGK)
Tanggerang – Banten
4.11.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 10.7 Billion 25 Years PT ANGKASA PURA (II) PERSER0
Project Returns Gearing Contact Person
IRR 14 % Equity 30% Mr Awaluddin
NPV USD. 888.49 Million Debt 70% +628121150168
Summary Project
Soekarno Hatta International Airport, ICAO Code WIII and IATA Code CGK is the biggest airport
in Indonesia, known also as the biggest domestic Hub in Indonesia. CGK plays important role to
Indonesia Air Transportation with 447 thousand aircraft movement per year and 63 million
passenger movement per year in 2017. It is compulsory to maintain the Service Level of CGK.
The capacity of CGK today is 62 million pax per year, it means that CGK has reach its breakeven
point within pax and capacity with existing terminal capacity.
CGK is in its progress to build the third runway and in 2021 will start to build the Terminal 4 to
maintain its service level and customer satisfaction. the land acquisition for development in
CGK is chalenging. The land acquisition for the 3rd runway is has been doing for 3 years and not
finished yet. Analyze the condition happens APII need to find strategy for CGK development in
the future.
CGK demands will keep growing rapidly in the future, the domestic market itself become the
strong point of CGK services but as CGK future strategy is to become the primary international
Hub in Indonesia then CGK will face another jump in international pax growth in the same time.
PT Angkasa Pura II needs to find alternative in CGK Development, outside CGK Existing Location
but Accessible to CGK to support CGK Growing Movement since CGK has the biggest market

121
share amongst the other branches in Traffic Movements (54%). AP II must build a new airport
to accommodate the demand. Alternative location based on considering the proximity access
from CGK1, as well as the extent and investment cost efficiency.
To find nearby location that will co-located with CGK is one of APII strategy in CGK future
development. APII has finished its pre Feasibility Study in this matter and found that the most
possible and beneficial location for CGK2 is in the Tanjung Burung Off Shore, Teluk Naga,
Tangerang – Banten Indonesia. CGK2 will build under reclamation area of 2000 Ha
The pre feasibiliy study also introduce the co-engineering approach for the CGK2, this eco-
engineering approach will enhance the environmental function of coastal and marine and at
the same times contributes education, comfort, and economic activities. AP II plans to build 2
runways (4,000 m x 60 m each) in CGK-2. The reclamation land area for CGK-2 is ± 2,000 Ha .

Intended Procurement Method PPP Procurement for equity participation in

Joint Venture (JV) Company with AP II
Competitive Advantage  High Demand on passenger movement
 CGK position as Domestic Hub
 CGK location in the capital city of
Indonesia
 Passenger movement prediction that still
grow for the next 10 years and ahead

Scope of Overall Project  Runway

 Terminal
 Parking Area
 Train Station
 Tower
 DPPU & Operational
 Cargo Area
 MRO Area
 Offices
Commercial Area
Proposed Structure Equity participation in a joint venture company
with AP II to Design – Build – Finance – Operate
Maintained (DBFOM) for the new CGK Airport
(Terminal 4)

122
4.11.2 Project Structure

4.11.3 Development Plan

1. Runway
2. Terminal
3. Parking Area
4. Train Station
5. Tower
6. DPPU & Operational
7. Cargo Area
8. MRO Area
9. Office
10.Commercial Area

123
4.11.4 Traffic Projection and Preliminary Adjustment
4.11.4.1 Passenger Demand Traffic (Terminal Capacities) -(Demand Analysis 10 year)

The massive capacity development of Soekarno-Hatta International Airport has been carried
out since the operation of Terminal 3 Ultimate in 2016, that the previous terminal capacity of
21 Mio/Year increased 105% to 43 Mio/Year. Then followed by the revitalization of Terminal
1 and Terminal 2, the terminal capacity will increase to 91 Mio/Year in 2021. Construction of
Terminal 4 will begin in 2021 and will be completed in 2026. It will add more capacity to CGK
to 131 Mio/year.

As graphic show above CGK passenger will keep grow in the next ten years with average
growth of 8%, and will reach 131 million pax per year in the same year of Terminal 4
operation. To anticipate the growing demand development of CGK2 will start by the year of
2021 parallel with the development of Terminal 4.

4.11.5 Passenger Forecast in CGK-2

124
The preliminary scenario for CGK2 is operates as international terminal only while CGK
existing will operates as domestic terminal. Above shown the projection of international
passenger movement in the next 10 years.

4.11.6 Cost and Preliminary Assessment

No Detail Of Works Government Private

1 Initiation
Revision of the Banten Province Spatial Plan √
Airport Location Study √
2 Planning
Revised RTRW Kab. Tangerang √
Airport Masterplan √
3 Design
Proposal of RZWP3K Kab. Tangerang √
Airport Location Proposal √
Airport DED √
4 Initiation of Environmental Permit
Reclamation Proposal √
Reclamation Location document √
AMDAL Documents √
Airport DED Approval √
5 Reclamation Licensing
Reclamation Location Permit √
Environmental Permit √
Reclamation Plan √
Submission of Reclamation Implementation
Permit √
Reclamation √
6 Construction √
Project Cost USD 10.7 Billion
Investment Opportunity USD 1,57 Billion

125
4.12 CARGO VILLAGE SOEKARNO HATTA INTERNATIONAL AIRPORT
Tanggerang – Banten
4.12.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD. 207.2 Million 25 Years PT ANGKASA PURA (II) PERSER0
Project Returns Gearing Contact Person
IRR 21 % Equity 30% Mr Awaluddin
NPV USD 264 Million Debt 70% +628121150168
Summary Project
Cargo is one of airport revenue stream which have great opportunity in boosting revenue. The
air cargo has high demand and opportunity in the future. APII has analyze the opportunity arise
in cargo and decide to pay specific attention to cargo revenue to meet the growing demand
ahead. This commitment showed by the establishment of APII subisidiary with core business in
Cargo.

PT Angkasa Pura Kargo is a subsidiary of PT Angkasa Pura II with a focus on cargo and logistics
services. To meet the growth of cargo capacity from 600,000 tons per year to 1.5 million tons
per year, Soekarno Hatta Airport plans to develop Cargo Village, which is the embodiment of an
integrated warehousing area. The warehousing area is expected to become the first integrated
warehousing center in Indonesia for Southeast Asia, namely by inviting the private sector to join
as partners in this project. Cargo Village serves first-rate services with three cargo terminals and
express and second-level operations support by providing terminals for delivery.
To strengthen the business growth strategy, increase value for shareholders and other
stakeholders, develop facilities
and airport business is deemed necessary. One such effort is to attract Cargo Terminal
Operators (Cargo Terminal Opertaor / CTO) for terminals 2 and terminal 3. This auction is held
by APK to appoint CTO as terminal 3 cargo manager.

126
 Intended Procurement Method PPP Procurement for equity participation in
Joint Venture (JV) Company with AP II
Competitive Advantage  The Biggest Airport in Indonesia with
highest passenger and aircraft
movement;
 Located in the suburb area of Indonesia
capital city, Jakarta
 Direct access to the cargo village via toll
road from several industrial area and
bonded zone
Scope of Overall Project  International Cargo Terminal Building;
 Airlines Offices Building
 Government Offices Building
 Regulated Agent Building
 Regulated Agent Area
 Forwarder Area includes Parking Area
 Cargo Domestic Terminal
 Forwarder Building
 Commercial Building
 Maintenance Building
 General Facilities Area
Proposed Structure Equity participation in a joint venture company
with AP II to Design – Build – Finance – Operate
Maintained (DBFOM) for CGK Village

4.12.2 Project Structure

Indicative Project Structure

Angkasa New Global Partner +

Pura Kargo Incumbents
Min. 51% Max. 49%

PROJECT

127
4.12.3 Development Plan

The development of Cargo village will divide in three phases:

a. Beginning phase development of cargo village
In this phase the growth in cargo will be organic
b. Facilties development in cargo village area
In this phase the CTO will start to operates
c. Advance development in cargo village area
In this phase the new CTO will be added

4.12.3 Traffic Projection and Preliminary Adjustment

128
 Until 2017, the cargo terminal capacity at Soekarno-Hatta Airport is about 500 Kilo
Tons, while the cargo movement in 2017 has reached 630 Kilo Tons. The demand of air cargo
domestic and international will continue grow in the future related to change of lifestyle and
growth of export-import activities. In order to meet the high demand of cargo and part of its
business transformation APII is going to build the Cargo Village with capacity 1500 kilo tons
per year and integrated end to end air cargo services. With the cargo village development
APII have

From the graphic above we will see that the cargo movement will reach the number of 1500
tons per year by the 2032.

4.12.4 Cost and Preliminary Assessment

Amount

Project Cost USD 207.2 Million

Investment Opportunity USD 30.4 Million

129
4.13 PORT OF BAUBAU
South East Sulawesi
4.13.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 19.6 Million 30 Years Ministry of Transportation
Project Returns Gearing Contact Person
IRR 10.85% Equity 30% Bp. Ciptadi DP
NPV USD 8.3 Million Debt 70% (021-3811308 ext 4175)
Summary Project
Port of Baubau serves as gateway of Southeast Sulawesi to other areas in eastern
Indonesia such as Maluku, North Maluku, Luwuk and the surrounding areas. Baubau has
high potential of various natural resources such as fisheries, plantations and forestry as
main commodities in trade between regions, regional and national.
Intended Procurement Method PPP Bidding and concession scheme
Competitive Advantage  Strategic Location in Sulawesi
Economic Corridor
 Tourism potential (5 best tourism
destination – trip advisor, 2018)
 Transit Hub for cargo handling and
passenger trip
 Deep water depth -9 until -12mLWS
Scope of Overall Project  Development of Cargo Terminal
 Development of Passenger Terminal
 Development of Container Terminal

130
  To Operate and maintain the
infrastructure during concession
period
Proposed Structure The funding structure and arrangement
will be finalized with the completion of
review Final Business Case (FBC) study on
2018

4.13.2 Project Structure

4.13.3 Development Plan

Port of Baubau Infrastructure development and provision of additional facilities will be done
in 3 phases by considering demand growth, which detail can be seen as follow:
a. Stage 1: Rehabilitation is carried out in 2018-2019, so it can be fully operated by 2020.
With the consideration that the PPP auction begins in mid-2016, so that the auction until
the financial close process is completed at the end of 2017.
b. Stage 2: Development of the first phase will carried out in 2020-2023.
c. Stage 3: Development of the second phase will be carried out in 2030-2033.

4.13.4 Traffic Projection and Preliminary Adjustment

Baubau City connecting several areas between the Regions West Indonesia (KBI) and
Eastern Indonesia (KTI). It also plays a role as a collection area for production and distributors
from hinterland in the region of Kab. Buton, Kab. Muna, Kab. Wakatobi, and Kab. Bombana.

131
Potential commodities from Baubau and the hinterland include fisheries, sea grass
cultivation, pearl cultivation, agriculture, plantation, livestock, trade, industry and tourism.
During the period of 2010-2013, container loading and unloading has showed significant
growth in the average of 37.73% (TEUS) / 42.14% (Ton) for unloading crates boxed and an
average of 41.12% (TEUS) / 33.10% (Ton) for loading containers.

Based on the conditions and the plan for the City of Baubau to become the capital of province,
the development of Baubau Port is deemed necessary
.

Cargo Volume Projection

900.000
800.000
700.000
600.000
500.000
Ton

400.000
300.000
200.000
100.000
-
2022

2033
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
barang bongkar barang-muat Year

Passenger Projection

700.000
600.000
500.000
400.000
People

300.000
200.000
100.000
-
2015

2026
2008
2009
2010
2011
2012
2013
2014

2016
2017
2018
2019
2020
2021
2022
2023
2024
2025

2027
2028
2029
2030
2031
2032
2033

Year
penumpang turun penumpang naik

132
 Container Volume Projection

45.000
40.000
35.000
30.000
25.000
TEUS

20.000
15.000
10.000
5.000
-
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Year
peti kemas-bongkar peti kemas-muat

4.13.5 Costs and Preliminary Assessment

Referring to the Minister of Transportation Regulation No. 78/2014 concerning Cost
Standards in the Ministry of Transportation, a unit price per m2 for deck on pile buildings is
Rp. 9,669,150.00, with the city of Baubau proficiency index of 1.0493. Based on the price
reference, it is estimated that the cost of construction of dock construction in Baubau City is
as follows.

NO Work Unit Price/ Unit

A Reclamation M3
B Container M2
Infrastructure Area
C Means for Container Unit
Terminal
TOTAL (USD)
19.681.991

133
4.14 Port of Anggrek
North Gorontalo
4.14.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
Finalize in OBC Finalize in OBC Ministry of Transportation
Project Returns Gearing Contact Person
IRR Finalize in OBC Equity 30% Bp. Ciptadi DP
NPV Finalize in OBC Debt 70% (021-3811308 ext 4175)
Summary Project
In the context of developing North Gorontalo District, Port of Anggrek in the future will
be used to support international trading based on special economic zone (KEK) in North
Gorontalo. Port of Anggrek has good potential and plays an important role in the
international trade route.
Intended Procurement Method PPP Bidding and concession scheme
Competitive Advantage 1. Supported by Special Economic Zone
(KEK) Gopandang in North Gorontalo
2. Close to the border country of
Philippines
3. Deep water, draft face line -10mLWS
Scope of Overall Project 1. Developing Container and Cargo
Terminal
2. Operate and maintain the
infrastructure during concession
period
Proposed Structure The funding structure and arrangement
will be finalized with the completion of
prefeasibility study on 2018

134
 4.14.2 Development Plan

(Based on Draft Master Plan Port of Anggrek, the masterplan will be updated on

4.15.2 Traffic Projection and Preliminary Adjustment

Will be Finalize in Outline Business Case

4.15.3 Costs and Preliminary Assessment

Will be finalized in Outline Business Case

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4.15 KUALA TANJUNG INTERNATIONAL HUB PORT
North Sumatera
4.15.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 3.6 Billion 25 Years Ministry of Transportation

Project Returns Gearings Contact Person

IRR 11.87% Equity 25% Robert M.P. Sinaga
NPV USD 25.5 Mio Debt 75% +62 8126008161
Summary Project
The development of Kuala Tanjung International Hub Port is integrated with the Industrial
Estate in one area. The development will be done in multi phases. Pelindo 1 already started
the Phase I, namely Multipurpose Terminal since 2015, and will be operated in this year
(2018). The Phase II and next phases will include the development of 3000 Ha Industrial
Estate and 10 million TEUs of Container Terminal

Intended Procurement Method Direct appointment to Pelindo 1

Competitive advantages  Strategic location, Malacca Strait, the busiest

shipping route in the world
 Supported by Indonesian government, announced
as National Strategic Project, by Presidential Decree
no. 58 year 2017

136
  Has large space (3000 Ha) to develop large scale of
industries
 Access to deep water (-25 mLWS)
 Integrated of port and industrial estate, driver to
decrease logistic and production cost
Scope of overall Project The development of Kuala Tanjung International hub
port and Industrial Estate includes the following
items:
 The construction of Breakwater
 The construction of open piled jetty for liquid bulk
and dry bulk terminal
 The construction of quay wall for container and
breakbulk terminal
 The construction of roads and drainages
 Land acquisition and levelling for Industrial Estate
 Land reclamation for container and breakbulk
terminal
 Dredging of access channel and basin
 River diversion
Proposed Structure Pelindo 1 as Master developer will provide basic
infrastrucure, namely jetty, quay wall, land and roads
to attract industrial players in Industrial Estate and
Terminal Operators in International Hub Port

4.15.2 Project Structure

137
4.15.3 Development Plan

4.15.4 Traffic Projection and Preliminary Adjustment

138
 Base Case:
Includes the trading volume generated by the gateway then container and non-
container traffic of the aluminium industry, power plants, palm oil and cement. No
transhipment volume is assumed in this scenario. GDP growth is assumed to be 5%
per year. Belawan and Kuala Tanjung remain operate and complement each other

Optimistic Case:
Includes trading volume generated by the gateway (gateway) container traffic, traffic
transhipment and non-container traffic from industry aluminium, power plants, palm
oil, rubber and cement. The biggest contributor to an increase from Base Case is the
volume of cargo generated by traffic transhipment. GDP growth is assumed at 7% per
year. Belawan and Kuala Tanjung still operates and complementary

4.15.5 COST AND PRELIMINARY ASSESSMENT

Indicative of Investment Cost:

Description Cost estimate (USD M, pp. 2017)
Breakwater 417
Land Reclamation 816
Dredging 745
Quay Walls 649
Jetties 426
Onshore Land Levelling 80
Roads & Drainage 90
River Diversion 57
Land Acquisition/Resettlement 365
Total Investment (pb. 2017) 3,645

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4.16 MAKASSAR NEW PORT
South Sulawesi
4.16.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
Phase I USD 575 Phase I 35 year Ministry of Transportation
Million
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30% Mr. Farid Padang
+6281355623375
NPV Finalized in OBC Debt 70% Mr Arwin
+6281342712416
Summary Project
The TPM container carrying capacity will soon reach its maximum capacity and it is
estimated that by 2017 the throughput of Makassar Port will reach 700.000 TEUs (TPM
maximum capacity is 700.000 TEUs) so it needs to be developed in the form of a new
container port.The current location of TPM is less likely to be undertaken once again
due to the narrow back-up of the land area and limited accessibility due to being in the
center of the city.

MNP will be built in 2 stages, where the first phase will be divided into stages IA, IB, IC
and ID within the period 2015-2022 and Phase II will begin to be built in 2022 - 2032
with the largest area of 106 H.a

140
In the future, MNP will be integrated with the planned freight train in South Sulawesi
and is expected to become a catalyst for the growth of ship flow in KTI

The existence of MNP is necessary in addition to anticipating the growth of container

in Makassar which currently almost reaches the maximum capacity of TPM, but also
because Makassar is the main gateway of KTI so that MNP will play a role in supporting
economic growth, especially in KTI

Currently, container services are still handled at TPM until MNP Phase IA starts
operations in 2019, when MNP Phase IA operates throughput of containers will
gradually switch to MNP so that Phase IA will directly operate full capacity, while the
remaining throughput will still be handled in TPM. The IB phase will begin to be
constructed when Phase IA commences operations in 2019 and the TPM will be
completely discontinued when Phase IB commences operations in 2021
The IC phase begins to operate one year after the IB Phase operates in 2022 because
there is already excess throughput in Makassar Port even though the first two phases
are operated. By 2027, it is estimated that the throughput has exceeded 1.5 million
TEUs which is the combined capacity of MNP Phases IA, IB and IC so that the preparation
of MNP development of the next stage
Intended Procurement Method Project assignment to Pelindo 4,
where Pelindo 4 will commence
an International Bidding for B2B
scheme

Competitive Advantage / Potential Market  Located at Sulawesi Strait

 Deep Water Draft -16 m LWS
 Nearest from export
destination such as Tiongkok,
Japan, Hongkong, Korea
Scope of Overall Project  Phase IA - Container Terminal
with 320 m Wharf and 16 Ha
CY
 Phase IB - Container Terminal
with 330 m Wharf and 16 Ha
CY
 Phase IC - Container Terminal
with 350 m Wharf and 16 Ha
CY
 Phase ID – LNG Storage
Facility with 520 m Wharf
Proposed Structure Pelindo 4 as Indonesian SOE shall
seek Strategic partner for Joint
Venture

141
4.16.2 Project Structure

4.16.3 DEVELOPMENT PLAN

142
4.16.4 Traffic Projection and Preliminary Adjustment

Makassar container traffic is expected to grow at 5,5% a year. The growth is due to
the increase in population and earning power in the east indonesian region. Makassar will
become a hub for good for sulawesi, maluku and papua. By year 2020, the makassar container
traffic will surpass the capacity of makassar port.

The current Makassar port, TPM has a capacity of 700.000 TEUs/year and is becoming more

congested and reachiing its limit

4.16.5 COST AND PRELIMINARY ASSESSMENT (MNP Phase IA)

INFORMATION PACKAGE A PACKAGE B PACKAGE C

Contract of MNP Phase IA June 3th 2015 September 5th 2016 September 30th
2016
Value of Contract IDR 340,1 Bn IDR 1.076,77 Bn IDR 226, 72 Bn
Development Progress until 39,38 % 39,21 % 34,95 %
September 2017
Average 38,66 % From est. 38.37 % or deviation + 0,29 %
Activity 1. Secant pile iron 1. Revertment 1. Armour
production 2. Reclamation Production
2. Reclamation 3. Armour 2. Material
production Delivery
3. Core break
water

143
4.17 NEW DEEP PORT DEVELOPMENT IN KIJING PHASE I
Kijing, West Kalimantan
4.17.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 341 Million Finalized in OBC Ministry of Transportation
Project Returns Gearing Contact Person
IRR 11,4 % Equity 30% Rio T.N. Lasse
(021)4301080 ext 1160
NPV USD 44 Million Debt 70% Wahyu Pradityo
(021)4301080 ext 1413
Summary Project
Pontianak Port, strategically located in the center of the city of West Kalimantan, produces
high cargo traffic which significantly contributes to the climate trade of the city. However, the
limitation of channel depth and existing land for further development have restricted the port
capability to serve larger vessels size. Thus, a New Deep-Water Port in Kijing, located next to
the open sea, is designed to handle growing market demand and acts as catalyst to stimulate
development of mining and plantation industries in the surrounding area. Development of New
Deep-Water Port in Kijing Phase I (one) is designed with the capacity up to 1 million TEUs of
containers, 8,3 million Ton of CPO, and 15 million ton of dry bulk.
Intended Procurement Method Open Bidding (International Firms
Participation is expected)

144
Competitive Advantage / Potential Market
Scope of Overall Project
Proposed Structure
 Dredging work is not required
due to deep draft;
 Located within international
shipping corridor;
 High GDP Growth (5,02%);
 Supported by a large industrial
area.
 Container Terminal;
 Multipurpose Terminal;
 Dry Bulk Terminal;
 Liquid Bulk Terminal.
 Project Owner acts as the off
taker and responsible for
infrastructure development and
terminal operator;
 Investor as either financial or
strategic partner (provides assets
or technology) and co-operator;
 Project either JV or BOOT.

145
4.18 DEVELOPMENT OF PROVING GROUND FOR VEHICLE TESTING AND CERTIFICATION
AGENCY
Bekasi, West Java
4.18.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 133 Million 30 Years Ministry of Transportation
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30% Mr Jonter Sitohang
NPV Finalized in OBC Debt 70% +628111916510
Summary Project
Vehicle Testing and Certification Agency (BPLJSKB) is located in Bekasi, West Java covering
an area of 92 Ha. The testing of the type of motorized vehicle is carried out outdoors and
indoors. Currently most of the tests conducted at BPLJSKB are indoor tests. Whereas
according to the UNECE Standard, the testing of the type of motorized vehicle is mostly
done outdoors. This condition requires a test track facility (Proving Ground). Test track
has a variety of functions, depending on test requirements, including the need for brake
testing and noise testing. To carry out all the tests required for motorized vehicles, the
existing facilities must be developed, equipped and rehabilitated according to
international standards (UNECE Regulation). This project is offered through Public Private
Partnership (PPP) scheme where the Minister of Transportation acts as the Government
Contracting Agency (GCA). The return on investment mechanism is Availability Payment.
Intended Procurement Method Procurement under Public Private
Partnership (PPP)
Competitive Advantage  The sole non – periodic Vehicle Testing
and Certification Agency in Indonesia

146
  Improve road safety by ensuring the
safety and reliability of the vehicle
before mass production
 Conserve the environment from
possible pollution caused by the use of
motorized vehicles on the road
 Provide public services to the
community
 Realize the phase 1 ASEAN MRA
(Mutual Recognized Arrangement)
activities in the automotive sector
Scope of Overall Project  Design of Proving Ground
 Contruction of Proving Ground
Infrastructure and facilities
 Maintenance of proving ground
infrastructure and facilities, including
test equipment and management
information system
 Provide regular training to enhance
the capability of government staff as
operator within concession period
Proposed Structure Availability Payment (AP) for 20 years

4.18.2 Project Structure

147
4.18.3 Development Plan

In accordance with UNECE R 13, R 13H, R39, R40, R 41, R51, R79 and R83 regulations. Track
to be used in the proving ground is to have special types and characteristics. Some of the
trajectories needed in the testing process for motor vehicles and passenger cars are as
follows:
a. High Speed Track
This type of track is needed for the brake testing. In accordance with UNECE R 13H
and R 13 regulations, the shape and length of this track must allow motorized vehicles
to accelerate to speeds of 100 and 120 km / h because this speed is the initial speed
for the brake testing process.
b. Climbs and Down
This trajectory is needed for the brake testing process, especially to determine the
performance of the motorized vehicle brake. Several slopes with different slopes are
needed for this brake testing process such as 12% (for trailers), 18% (for trucks), and
20% (for passenger cars). In accordance with the DED Final Report of the BPLJSKB
Bekasi Master Plan Design in 2010, the technical specifications of this test facility are
200 mx (6.0 m x 7 lanes) 42 m.
c. Wet Handling (Slippery) test track
This trajectory is needed for the brake testing process specially to find out the stability
of motorized vehicle control. In accordance with the DED Final Report on the Design
of the BPLJSKB Bekasi Master Plan in 2010, the technical specifications of this test
facility are 500 mx 30 m.
d. Track for ABS test
This trajectory is needed for the process of testing the brakes of motorized vehicles
equipped with ABS systems. This path must consist of several parts that have different
levels of adhesion.
e. Straight Track

148
 This trajectory is needed for the noise testing process. Actually, noise testing can take
advantage of high speed test tracks. However, the track must have a surface in
accordance with the provisions in ISO 10844.

Proving Ground Track Design

4.18.4 Traffic Projection and Preliminary Adjustment

According to the Central Statistics Agency, in 2016 the growth of motorized vehicles
in Indonesia continued to increase. The number of motorbikes dominates more than 81 % of
the number of national motor vehicles which have reached more than 129 million units.
Second biggest was the passenger car type which account 11.27 % (14.58 million units),
followed by freight / truck cars by 5.46 % (7.06 million units), and buses 1.92 % (2.49 million
unit). It’s affects the increase in Non-Tax State Revenues (PNBP) at the Directorate General of
Land Transportation, especially in the Directorate of Land Transportation Facilities and an
increase in Non-Tax State Revenues (PNBP) from Motorized Vehicle Type Tests at BPLJSKB
Centers. With the development of technology and the level of production of various brands
and types of motorized vehicles, it is now a driving factor for the government to immediately
improve and develop a type test facility.

149
The following is the number of motorized vehicles that were tested for the type of vehicle in
the PLJSKB Hall per type of vehicle from 2013 to 2017, as follows:

Years
Types of Vehicle 2013 2014 2015 2016 2017
Passengers 377 365 254 215 261
Goods 133 98 79 39 59
Bus 16 22 3 2 9
Anvil 77 89 55 83 83
Specific 15 19 8 10 13
Motorize Wheels 3 26 27 28 22 19
Motor Bikes 2018 197 248 141 181
Total 862 817 675 512 625

NUMBER OF VEHICLES TEST IN BPLJSKB

400

350

300

250

200

150

100

50

0
2013 2014 2015 2016 2017
Passengers Goods Bus Anvil Spesific Motorize Wheels 3 Motor Bikes

150
4.18.4.1 Potential Income from Export Market
The improvement of vehicle testing and Certification Agency (BPLJSKB) will open up
market opportunities for the country's new revenue sources where motorized vehicles
produced in Indonesia and which will be exported to other countries will be tested for overall
roadworthiness. Considering the potential of Indonesia as the second largest country in
ASEAN in term of automotive export.

4.18.5 Cost and Preliminary Assessment

Amount

Total Capex IDR 1.972 Billion

Total Opex N/A

151
 POTENTIAL

152
4.19 SERVICE EXTENSION OF MRT (LEBAK BULUS-SOUTH TANGGERANG)
Tanggerang
4.19.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
Finalized in OBC Finalized in OBC Ministry of Transportation
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30% Mr. Harno
NPV Finalized in OBC Debt 70% +6282113118656
Summary Project
Ministry of Transportation Republic of Indonesia trough Greater Jakarta Area Transport
Authority (BPTJ) has planned adding the Mass Rapid Transit or Jakarta MRT line, to the
South Tangerang area. This access is expected to be able to unravel congestion that often
occurs in the Jakarta-South Tangerang. The selection of rail-based public transport aims
to meet the needs of public transportation that is safe, secure, comfortable, affordable
and fast.
Intended Procurement Method Procurement under Public Private
Partnership (PPP)
Competitive Advantage  Faster alternative mode of
transportation to the center of Jakarta
 Increasing accessibility for South
Tangerang residents, especially for
Pamulang, Ciputat, East Ciputat and
Pondok Aren areas
 Support in the form of feeders to
increase demand is a major support in
encouraging passenger ridership

153
 Scope of Overall Project
Proposed Structure
 Land Acquisition
 The construction of the Service
Extension Line /MRT line
 Construction of Station and Operating
Facilities
 Development of Depo
 Procurement of Depo and Balaiyasa
Facilities
 Procurement of Rolling Stock
 M & E Works
 Preliminary approval has been given to
project as PPP where the private sector
will form SPV company with the
assigned SOE to the DBFOM contract
 Others alternative will be competitive
PPP procurement without any SOE
involvement

4.19.2 Development Plan

The MRT extension to South Tangerang has been indicated in the RITJ (Presidential decree
no. 55 year 2018), the Plan will be connected to the LRT as the MRT feeder to BSD, Alam
Sutera to Tangerang.In line with RITJ, the MRT extension plan to South Tangerang is indicated
by changes in the South Tangerang Spatial Plans (RTRW), There are 4 MRT Corridors in the
amendment of the South Tangerang Spatial Plans (RTRW) which are
I. Inter-City Rail-Based Mass Transport Lines:

154
 a. Lebak Bulus Corridor - Serua (According to RITJ)
b. Serua Corridor – Cisauk
c. Corridor - Alam Sutera
II. 1 Inter City-based Mass Transport Line:
Ciputat - Bintaro - Gading Serpong - Alam Sutera

4.19.3 Traffic Projection and Preliminary Adjustment

In this data it can be seen that the traffic performance on road-based transport is not
sufficient enough so that the presence of MRT is expected to trigger modal shifts from private
vehicles to public transport, in this case the MRT for extension of services from Lebak Bulus -
Tangerang Selatan.

155
4.20 Transit Oriented Development (TOD) Jatijajar Bus Terminal
Bogor, West Java
4.20.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
Finalized in OBC Finalized in OBC Ministry of Transportation
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30% Mr. Harno
NPV Finalized in OBC Debt 70% +6282113118656
Summary Project
Jatijajar Terminal is located on, Jatijajar, Tapos, Depok City, West Java Province,
with land area: ± 103,721 m2 consisting of operational areas for public
transportation, commercial areas, management / administration areas and
connecting areas between terminals. The terminal is a terminal that serves inter-
city transport to another province.

Intended Procurement Method Procurement under Public Private

Partnership (PPP)
Competitive Advantage  Faster alternative mode of
transportation to the center of Jakarta
 Increasing accessibility for Bogor
residents, Support in the form of
feeders to increase demand is a major

156

Scope of Overall Project
Proposed Structure
support in encouraging passenger
ridership
 Terminal Development,
 Commercial Area Development
 Operate and maintain the ToD area
during concession period
 Design Build Operate Maintained
(DBFOM) of the TOD Concept

4.21 JAKARTA ELEVATED LOOP LINE RAILWAY

Jakarta
4.21.1 Project Summary

Project Detail
Project Cost Duration Project Implementation Agency
USD 644 Million Finalized in OBC Ministry of Transportation
Project Returns Gearing Contact Person
IRR Finalized in OBC Equity 30%
NPV Finalized in OBC Debt 70%
Summary Project
The increase in the number of passengers using the train mode from year to year has
experienced a significant increase. With the pattern of commuter / shuttle trips in the
Jabodetabek region, the mode of rail transportation is a popular choice compared to
road-based public transport modes. Especially with the target of 1.2 million passengers
per day in 2019 Jakarta Elevated Loopline Railway consists of the track of Pondok Jati-

157
 Manggarai-Tanah Abang-Kampung Bandan-Rajawali-Pondok Jati. That were plan to use
PPP scheme in Built Operate Transfer Scheme

Intended Procurement Method Procurement under Public Private

Competitive Advantage
Scope of Overall Project
Proposed Structure
Partnership (PPP)
 Faster alternative mode of
transportation in Jakarta
 Increasing accessibility for Jakarta
residents and encouraging passenger
ridership
 Loopline railway infrastructure
Construction
 Procurement of rolling stock
 Provide Operating Facilities
 Infrastructure Operation and
Maintenance
 Built Operate Transfer (BOT)

4.21.2 Development Plan

Infrastructure Development Concept Private Government

Railway Track Build double rail at 8.50
meters level
land surface at East Section
and level 15.00 meters
in West Section.

158
 Feeder Track Feeder Railway
Interconnection with a
circular line
not a plot. Transit passengers
between lines with
escalator / elevator facilities.
Station Building stations at 8.50
meters in East Section and
15.00 meters in West while
adjusting station locations to
provide better access and
modes. Provides a platform
with a length of 10 carriages
or 200 meters

4.21.3 Cost and Preliminary Assessment

NO Amount
ITEM (USD)
1
Pondok Jati- Rajawali station 190.945.946
2
Shortcut Pondok Jati- Manggarai 46.148.649
3 Shortcut Rajawali- Kampung
Bandan 32.162.162
4
Stasiun Manggarai-Tanah AbangKampung Bandan 361.891.892
5
Engineering Services and Technical Assistance 13.513.514

TOTAL 644.662.162

159
 BLIBLIOGRAPHY
BIBLIOGRAPHY

1. (World Bank, The APMG Public-Private Partnerships Certification

Program, England, 2018)

2. (Asian Development Bank (ADB),Public Priate Partnership Monitor,

Manila, 2017)

3. (Bappenas, Public Private Partnership Book 2018, Jakarta, 2018)

4. (Directorate General of Civil Aviation, Directorate General of Civil

Aviation Strategic Plan 2015-2019, Jakarta 2015)

5. (Directorate General of Railway, Directorate General of Railway Strategic

Plan 2015-2019, Jakarta 2015)

6. (Directorate General of Sea Transportation, Directorate General of Sea

Transportation Strategic Plan 2015-2019, Jakarta 2015)

7. (Directorate General of Land Transportation, Directorate General of Land

Transportation Strategic Plan 2015-2019, Jakarta 2015)

8. (Indonesia Invesment Coordinating Board, Regional Investment Potential

Information System , Jakarta, 2017 )

9. (Indonesia Infrastructure Initiative, Technocratic Script of Ministry of

Transportation 2015-2019 Strategic Plan, Jakarta, 2014)

10.(Ministry of Transportation, Ministry of Transportation Republic of

Indonesia Strategic Planning 2014-2019 ,Jakarta, 2014 )

160