Republic of Indonesia
Presented at :
2nd Joint Task Force Meeting ROI - ROK
Bambang Susantono, Ph.D.
Vice Minister for Ministry of Transportation
Deputy Minister for Infrastructure and Regional Development, CMEA
Seoul, 26 March 2010
12/8/2011
Global Macroeconomy
• With the GDP of US$500 billion and total World and Indonesia GDP Growth Rate
inhabitants of 240 million, Indonesia is South GDP Growth Rate (%)
7
East Asia’s largest economy, owning 1/3 of 6 6.1
World GDP Growth Rate (%)
ASEAN’s total GDP and 2/5 ASEAN’s population.5 5.5
4.5
4 3.9
• In 2009, Indonesia’s economic growth rate 3 3
slowed at a significantly lower rate than the 2
slowdown of the world’s average. It decreased 1
0
by 30%, compared to the world’s economic
2008
2009
2010F
-1 -0.8
growth that declined by 160%. -2
10
Perubahan PDB riil (yoy)
5
0
-5
-10
-15
Indone Vietna Philippi Australi South South Malaysi Argenti Thailan Singap
China India Brazil US UK Japan Mexico Russia
sia m nes a Korea Africa a na d ore
Q2 7.9 6.1 4 4.5 1.2 0.6 -1.2 -2.5 -2.8 -3.9 -3.9 2 -4.9 -5.5 -6.4 -3.5 -10.3 -10.9
2009 8.7 5.6 4.5 4.2 1.5 0.5 -0.4 -1.6 -2.2 -2.5 -3 -3.5 -4.3 -4.8 -5.3 -6 -6.8 -9
12/8/2011
Indonesia Macroeconomy
• After the turbulence in 2008, the
country's economy was relatively stable in 3,000 18
2009. The growth rate touched 4.5% in 17.1
2009, surpassing the target of the 2009 2,539 16
2,456
state budget of 4.3%, and was also higher 2,500
2,271 14
than the projection of several
international organizations’. 2,000 1,937 12
11.03
• GDP per capita exceeds US$2,400 and is 1,658
10
expected to rise up to 3.4% in 2010. 1,500
GDP/Capita (US$)
1,312
8
6.6 6.59
• With the 2009 GDP of US$500 billion, 1,000
6.4
6
GDP Growth Rate
(%)
Indonesia is a member of G-20 whose PPP 5
is in the world’s top 20. 4
500 Inflation (%)
2.78
• The country's inflation in 2009 was 2.78% 2
or the lowest in the past decade.
0 0
2004 2005 2006 2007 2008 2009 2010F
12/8/2011
Fiscal, Monetary, and Investment Performance
•The size of Indonesia’s economy has been of
Rp/US$ Rp/US$ JCI Poly. (Rp/US$) Poly. (JCI) JCI
interest to investors. 12500 3000
12000
2500
11500
• Indonesia expects to reach investment grade 11000 2000
within one or two year. Current sovereign 10500
1500
credit rating stands at BB (S&P) and BB+ 10000
9500 1000
(Fitch). 9000
500
8500
8000 0
•Strong stability was recorded in the rupiah
exchange rate. Toward the end of 2009, the
rupiah gained to reach the level of 9,400 per
3
dollar. Rupiah strengthening of 15.4% was
highest in Asia in 2009. 2.5 2.5
2
1.5 1.6
•Lowered Foreign Debt against GDP ratio, 1.3
large foreign exchange reserves (US$66 1
0.6 0.5
billion), healthy state budget and strong 0.5 0.3 0.2
0.1
economic fundamentals have directed the 0
2007 2008 2009 2010*
country’s optimistic economic outlook.
Foreign Debt/GDP (%) Deficit/GDP (%)
12/8/2011
Fiscal, Monetary, and Investment Performance
•In 2009, the country’s stock exchange
performance obtained a positive trend.
At the closing of 30 December 2009, the
index had risen by 87% compared to
2008. This number is the second
highest in Asia Pacific, below Shenzhen
Stock Exchange.
•Political stability: the President Susilo
Bambang Yudhoyono returned to power
with 60% of the vote, laying a solid
foundation for political and social
stability.
•Strengthened purchasing power: BI rate
stayed at 6.5%, while inflation reached
2.78% (lowest in a decade).
12/8/2011
INFRASTRUCTURE DEMAND & SUPPLY
12/8/2011
Electricity Demand
• Coupled with the growth in economy, Indonesia Electricity Production (Gwh)
will need more than 320 TWh of electricity by 2008 117,815
150,447
the end of 2018 or rising on an average of 121,247
2007
8.98% annually, with 77% of the amount 142,440
contributed from JAMALI (Jawa Madura Bali) 2006 112,609
133,107
system 2005 107,032 Consumption
127,370
Production
• During 2009-2018, electricity demand in the 2004 100,097
120,244
JAMALI system rise from 108 TWh to 251 TWh 90,441
2003
with a CAGR of 9.5%, while increasing faster 113,030
outside the JAMALI system from 31 TWh to 74 0 50,000 100,000 150,000 200,000
TWh or a CAGR of 10.3%. (GWh)
(GWh)
400,000
• Because the sheer size of demand, new 350,000 Projection for Electricity Production
investment is needed for this field. A project of 300,000
(Gwh)
10,000 MW has been established to answer this 250,000
need. This kind of project needs US$ 1 – 1.2 200,000
million of investment per MW. The first phase 150,000
of this project at Labuan has been completed. 100,000
The 2nd phase is being planned, focusing on the 50,000
diversification of energy sources and on the 0
balance of electricity used for household and 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
industry consumption. Geothermal PS Hydro Coal LNG Gas Fossil Fuel
12/8/2011
Air Travel
• With total 80mn passenger/year (2008), Air Passenger CAGR: 6.52%
International Domestik
and less than 6% of total Indonesia
population took air travel, Indonesia is 13,114,959
11,337,024
the most promising country in the 11,181,972 11,084,192
region
• With economic growth in the future,
this could pass the increase of Indonesia 59,326,036
66,337,029
58,082,897
67,007,371
passenger traffic to higher than 9% per
year
• Three biggest airports in Indonesia have
2005 2006 2007 2008
experienced over-capacity. At Jakarta’s
Soekarno-Hatta airport, the over- Airport Capacity VS Demand Airport Crowdiness in 2009
capacity reached 68%, while in Bali’s (mio passengers)
Ngurah Rai airport, the number touched 40 37
the staggering 300%. 35
30
• Airport infrastructure will need to grow
25 22
for more than 32% per year, by
20 Capacity
considering the increasing amount of 15 # of passengers
the passengers 10
10 7
4.5
• This will be even higher with the 5 1.5
openning chanel of new airlines 0
Soekarto Juanda Ngurah Rai
operations as an impact to the ASEAN Hatta (domestic)
open sky policy
12/8/2011
Traffic conditions
•In 2008, the number of ‘vehicles/km’ 160
Vehicle/km (excl. motorcycle) Motorcycle/km Road accident145
100,000
reached 58, which is significantly 140
90,000
129
increased from only 13 in 1995. 80,000
120
Motorcycle increased bombastically 100
105 70,000
by about 67% from 2004 to 2008. 100
87 60,000
80 50,000
58 40,000
•In the last 7 years, the average 60
43 46 49
30,000
39
vehicle speed has declined by 25%, 40
20,000
from 26 km/hour to 20 km/hour, 20
10,000
while the number of motorcycles 0 0
have tripled. 2004 2005 2006 2007 2008
12,000,000
Large Truck
Truk Besar Large Bus
Bus Besar Small/medium truck
Truk kecil/sedang
Medium Bus Small Bus Passenger car
•47% of the population spends 20% of 10,000,000 Bus Sedang
Motorcycle
Bus Kecil Mobil penumpang
Sepeda motor
its income for transportation, while
8,000,000
another 16% spends as much as 30%.
6,000,000
•Economic loss caused by inefficient 4,000,000
transportation system is Rp. 5.5 2,000,000
trillion per year, and that caused by
poor air quality is Rp. 2.8 trillion per -
2001 2002 2003 2004 2005 2006 2007 2008 2009
year.
Moda Split - Jabodetabek
Transport modalities – Urban Transport
100%
Pembagian Moda Transportasi
90%
80% (38)
70%
60% Cars (10)
50%
Motorcy
40% cles (24)
30%
20%
(27) Public
10%
Transportation
0%
London New York Seoul Jabodetabek
Bus and other Personal vehicles
Railway
Kereta Api Bis dan Angkot Kendaraan Others (on (jalan
Lain-lainfoot,
smaller
(cars &
Pribadi (mobil bikes, sepeda, dll)
kaki, etc)
transportation
motorcycles)
dan motor)
• Jakarta needs Mass Rapid Transit (MRT), railway revitalization and property development.
• The Ministry of Transportation has planned the National Railway Revitalization program for 2010-2014.
12/8/2011
PLANNED INDONESIA ECONOMIC CORRIDORS
12/8/2011
Six economic corridors across Indonesia defined
Medan
1 3 4
Manado
Gorontalo
Pekanbaru
Pontianak Samarinda Manokwari
Jambi Jayapura
Palu
6
Palembang Palangkaraya
Mamuju
Banjarmasin
Lampung
2 Makassar
Jakarta
Serang Semarang
Surabaya 5
Bandung Mataram
Denpasar
Mega hub 3 Kalimantan
Hub/provincial capitals 4 Western Sulawesi
1 Eastern Sumatra-North West Java 5 East Java-Bali-NT
2 Northern Java 6 Papua
Note: Area of corridor defined at all kabupaten/ kota that lie, in full or in part, within 50 km of hub and that lie, in full or in part along the path connecting hubs in a corridor.
50 km distance based on World bank study of economic activity vs. distance to centre in Indonesia
Source: BCG analysis
12/8/2011
Indonesia EDC: connecting economic centres & industry nodes, SEZs and
spread out the development along the way
Proposed SEZs will
form new nodes or
align with existing
nodes or hubs
SEZ
SEZ
Hubs and nodes Supporting infrastructure Connections
Economic centres (hubs) Connection between hubs
Airport, ports
Industry node Connection between hubs and
Power, water industry nodes
Area of industry focus
Developing and connecting power
SEZ Special Economic Zones and water plant, to hubs and
industry nodes
ource: BCG analysis
12/8/2011
Example: Six potential pilots in ESNWJ identified for further analysis
S. Sumatera rail, Dumai/Panjang/Palembang port, mine mouth power plant, Dumai-Pekanbaru road
Project prioritization matrix assessing impact and
Impact 5.0 feasibility1 Toll Roads
Coal mine mouth Railways
power plant Sumatera Coal Rail
4.5 Medan-Pekanbaru Water Supply
Port
Pekanbaru-Dumai
tollroad Power
4.0
South Sumatera Power plant
Medan-Jakarta Railway Dumai port
7 Palembang port
3.5 8 15
24 28 2
33 Panjang port
27 34 13
3.0 22
25 $1Bn
Medan port 14 23 investment
26 Medan Pekanbaru Rail
2.5
12
1
2.0
2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4
Feasibility
Note 1: While the list of projects have been prioritised in order to identify the pilot projects, all the identified projects are crucial to achieving the objectives of the master plans and should be implemented. The
prioritisation is based on existing available data, incorporating quantitative date and qualitative insights from BCG experiences, benchmarks, expert interviews, as well as inputs from the working group and Steering
Committee. It does not take into account potential aspects such as investor interests, political/strategic considerations and the availability of funding for each project. Detailed understanding of the impact and
feasibility of each project will need to be carried out in the context of a technical feasibility study
Note 2: Numbers associated with data points represent unique numbers as provided in the overall list of projects
1. 22 PPP projects and 12 proposed projects from sector analysis, hub-to-hub connectivity and stakeholder inputs in ESNWJ prioritized using impact-feasibility framework. Non-PPP projects have an estimated
investment value based on similar project types relative to project scope and based on industry benchmarks
Source: PPP book data; Government data; Expert Interviews; Literature search; Province government website; BCG analysis
12/8/2011
Example: ESNWJ Corridors
Different infrastructure focus identified for the three key focus sectors
Type of infrastructure Palm oil Rubber Coal
• Ports projected to • Ports projected to • Significant growth in
Ports become key
bottlenecks – capacity
become key
bottlenecks – capacity
volumes requires step
change in port capacity
addition required addition required
Railways • Limited requirement
give disperse nature of
• Limited requirement
give disperse nature of
• Critical to have rail
infrastructure to make
plantation and mills plantation and mills coal mining
economically viable
• Required to support
Toll roads downstream industry
• Power plants can be
• Required to support
built next to the mines
Power plants downstream industry
to improve power
supply in Sumatera
Airports
Water supply
1. Power plants are not required for coal mining per se, but it is an opportunity to utilize the coal in Sumatera by building thermal power plants next to them
Source: Sector masterplans; Expert interviews; BCG analysis
12/8/2011
INFRASTRUCTURE PROGRESS AND DEVELOPMENT
12/8/2011
Infrastructure Policy Road Map
Status
Infrastructure Road Map 2005-2009 Done
Policy and Sectoral Restructurization (Rearranging for Regulator and Operator) On Going
Regulation
Reformation New Sectoral Laws Done
New Implementation Regulation On Going
Improving State Budget On Going
Improving
the Multi-year contract for priority projects On Going
Effectivity of
E-Procurement to accelerate the procurement On Going
State Budget
Projects Implementation of Medium Term Expenditure Framework (MTEF) On Going
Infrastructure Fund (PT. Sarana Multi Infrastruktur) Done
Risk Management Unit under Ministry of Finance Done
Government Guarantee Fund (PT. Penjaminan Infrastruktur Indonesia) On Going
Support for
PPP projects Land Revolving Fund and Land Capping On Going
(Public-Private
Land Freezing and Independent Land Appraisal On Going
Partnership)
Project Development Facility – PDF to improve FS quality On Going
Guidelines of Doing Business in Infrastructure Not Started
12/8/2011
Infrastructure Allocation Fund 2010-2014
Total PPP implementation ability projection
Rp Rp.365.36 Tn (USD34.8bn)
trillion
69%
31%
Estimated Fund Required (2010-2014)
Rp1,429 T
Rp978 T Private Sector Source: Bappenas
Rp451 T Gov. Budget Allocation
12/8/2011
Indonesia Infrastructure Fund and Guarantee Fund
1. Indonesia Infrastructure Fund (PT. Sarana Multi Infrastruktur - PT. SMI)
PT. SMI was founded on 23 February 2009;
Initial capital is Rp. 1 Trillion which is allocated from State Budget, ADB and WB
are willing to inject US$ 100 M as Loan and US$ 40 M as Equity; DEG is going to
Rp
inject US$ 20 M;
Indonesia Infrastructure Financing Facility (IIFF) is still under discussion now with
related stakeholders
2. Guarantee Fund (PT. Penjaminan Infrastruktur Indonesia - PT. PII)
Based on Gov. Regulation No. 35/2009, Government of Indonesia allocated Rp 1
Trillion from 2009 State Budget as Government Investment;
World Bank agrees to provide backstop facility amounted to Rp. 1.5 Trillion.
PT. PII has been launched on 30 December 2009.
12/8/2011
Strategic Infrastructure 2010-2014
12/8/2011
Public Private Partnerships (PPP) Book
Projects Ready to Offer
Total Project Total Investment
(US$ 000)
Toll Road
1. Medan – Binjai (USD 129 mio)
2. Medan - Kualanamu - Tb. Tinggi
Project 4,518,000 (USD 476 mio)
8 Project
Ready to Offer 3. Cileunyi - Sumedang – Dawuan
(USD 395 mio)
Sea Transportaton
4. Tanah Ampo Ferry Terminal,
3,094,000 Karangasem (USD 24 mio)
Priority Project 18 Project
Railway
5. Palaci – Bangkuang (USD 740 mio)
6. Soekarno Hatta Airport-
Manggarai (USD 700 mio)
Potential Project 61 Project 26,527,500
Water
7. Bandung Municipal Water Supply,
Cimenteng (USD 54 mio)
Electricity/Power
TOTAL 87 Project 34,139,500 8. Central Java Power Plant
(2000 MW) (USD 2 Billion)
Source : Bappenas
THANK YOU
12/8/2011
12/8/2011
Global Macroeconomy
• Following the deepest global downturn in
recent history, economic growth solidified in
the second half of 2009. The world output is
expected to reach 4% in 2010.
• This forecast represents an upward revision
of ¾ percentage point from IMF previous
World Economic Outlook in 2009.
• Global production and trade bounced back
in the second half of 2009.
• Growth in the advanced economies is
expected to rise by 2% in 2010, while the
output in emerging and developing
economies is expected to expand by 6%.
These projections reflect an upward revision
of ¾ percentage point and 1 percentage
point, respectively, from previous outlook in
2009.
12/8/2011
Investment and Business Climate
1. Non-restrictive investment regime.
• Availability of fiscal incentive for foreign investors;
• Simplified investment approval process;
• Non-restrictive repatriation regime;
• Tax treaties with over 50 countries, incl. South Korea;
• Few limitation on the value of investments; and
• The possibility for foreign investors to wholly or majority own investments in most sectors.
• The Corruption Perception Index score from 1.07 (2000) to 2.06 in (2008)*. In the last 4
years, the KPK has handled more than 550 cases and has brought more than 1,400 private
and government officers to court.
• In 2010 national budget, the Government has included a plan to continue its reform
programs and to improve the investment climate in Indonesia (incl. bureaucracy reforms,
improvements in governance, business processes and HRD, as well as the introduction of
tax and customs incentives).
2. Stable government with proven commitment to a market economy
• The political will to carry out the reforms to bring about better investment climate and to
reduce corruption is well recognized by the international society and business community.
• Indonesia has made “the most spectacular movements” resulting in a nine-rank jump in its
latest Competitiveness Yearbook to 42nd place from 2008’s 51st position (IMD leading Indonesia is now
global business school)
• The World Bank report on the ease of doing business also noted a marked improvement in
fully recovered
Indonesia’s business climate and its standards of corporate governance. from the damaging
• Indonesia had successful presidential and legislative elections in April and July 2009. The impacts, and more
incumbent regained its power with 60% of the vote, while his party and its coalitions also open for business
won the parliamentary elections, laying a solid foundation for political and social stability
*where an index of 10 is given to a
totally clean country/government
12/8/2011
Electricity Demand
• National Electricity Company, PLN, has 45
40 million customers; 20 million of 40
which are from the lower-income 40
bracket.
35
• The average consumption of this group
is 120 kWh per day (approximately 30 20
enough to operate 1 refrigerator, 1 TV 25
S1 - S3 - R1 (up tp 450 kVA)
and 4 light bulbs).
> 450 kVA (household,
• It is estimated that only 41 million 20 commercial, industry)
people are served by electricity, while 15
in 2018 it will reach 68.1 million people
or growing in average by 2.7 million 10 20
per year. 5
• This would lead to an improvement in 0
Total PLN customers (million)
the electrification ratio from 64.8% in
2008 to 95.5% in 2018.
12/8/2011
Two corridors chosen for first phase implementation
Nominated corridors put Two corridors identified for
through sequencing framework first phase implementation
Sequencing based on assessment along two dimensions: 1st Phase: Eastern Sumatra-North West Java and Northern
Java
• Fit with existing RPJP and spatial Medan Eastern Sumatra-North West Java
• GDP: Rp 1,026.8 tn1
planning Pekanbaru • Population: 45 mn2
• Corridor impact3: GDP to double
1 Socio-economic • Environmental sustainability Jambi by 2020
attractiveness • Income and growth disparity Palembang
Lampung
• Need to improve infrastructure
Serang Jakarta
• Rural development
Jakarta Northern Java
• Market size Semarang • GDP: Rp 1,940 tn1
• Population: 118 mn2
• Fit with sector priorities Bandung Surabaya • Corridor impact3: GDP to double by
• Number of hubs linked 2020
2 Economic
attractiveness • Availability of factors of production
• Investment risk 2nd Phase: Kalimantan and Western Sulawesi
3rd Phase: Papua and East Java-Bali-NT
1. 2007. 2. 2006
Source: BCG analysis
12/8/2011
Example – ESNWJ Corridor: Coal Production
Lower production driven by poor infrastructure making inland lower quality coal not viable
High potential with large But produces only ~20MnT of
resource in South Sumatera coal annually Driven by 3 key reasons
Coal resources, 2009 (in Bn T) Coal production in Indonesia, 2009 (in Mn T) Three key reasons driving Sumatera's
120 200
current low production levels
170 190
51.9 0.4 104.8 • Most mines are inland
1 – High transportation cost by
90 150 roads/ trucks make the mines
economically infeasible
• Lower quality reserve compared to
60 100
1.8 1.4 52.4 Kalimantan
47.1 2.2
2 – Relatively lower price
30 50
realisation making inland coal
economically not viable
20
• Lack of rail infrastructure
0 0 – Makes transportation costly
3
Total
South
Others
Kalimantan
Others
Riau
Sumatera
Jambi
Sumatera
Sumatera Kalimantan Total for inland low quality coal,
making mining not viable
Waterways, with 1/4th the transportation costs as that for
roads help reduce transportation cost in Kalimantan,
45% 2% 2% 1% 50% 49% 1% making inland mining viable
Sumatera has the potential to achieve production levels
similar to that in Kalimantan
% of total resource in
X%
Indonesia
Source: Directorate General Mineral, Coal and Geothermal Resources; Indonesia Coal Book 2008/2009; Literature search; Expert interviews; BCG analysis
12/8/2011
Example: ESNWJ Corridor
Lowering transportation costs through railway would bring most resources in Sumatera in the 'feasible' zone
Railway would bring most mines in Sumatera within ... as it has in many other
"economically feasible range"... parts of the world
Railways typically help in coal
transportation in two major
Scattered resource in Riau
and Jambi makes railway
ways
Daerah Istimewa Aceh
economically challenging • Cuts through difficult
terrain like mountains
North Sumatera making mines accessible
• Significantly reduces the
Riau
unit cost of transportation
Proposed rail from mines in
South Sumatera to Lampung
West Sumatera
2 and Palembang ports (~250-
350
2
Jambi kms in all)3
2
South Sumatera
Bengkulu
Very attractive to build rail 2
infrastructure in South
Sumatera with high Lampung Economically viable regions by road transport1
density of mines 10 Economically viable regions only by railway2
1. Based on transportation cost analysis, regions up to 50kms inland considered as economically viable 2. Distance up to 350-400 kms considered economically viable by rail transport 3. Exact path of the rail to be
determined in feasibility study phase. Distance estimated based on location in map and current PTBA rail expansion project of ~300kms
Source: Expert interviews; Indonesian Coal Book 2008/2009; BCG analysis
12/8/2011
Example:
Building railway infrastructure will make low to mid quality coal economically viable
Operating cost (including land transport) over distance in South Sumatera
Operating cost1 ($/T) Coal price levels at
100 various calorific
value
(kj/kg)
Limited benefit in
Significant cost advantage Typical range for distance of ports
80 serving areas under
through railway, making low-mid from mines in
100 kms from ports
CV coal feasible South Sumatera
by rail
6500 3 Bn T
60 6300
(>6,100)
5800
40 25 Bn T
5500 (5,100 –
5300 6,100)
20
24 Bn T
(<5,100)
0
0 50 100 150 200 250 300 350 400 450 500
Distance from port (in kms)
Resource base in
Extensive railway network would nearly take away "large distances X Bn T
Sumatera
from mine" disadvantage from Sumatera
1. Based on cost structure of PTBA. Assumes both road and railway transportation available to transport coal – road transportation has higher cost at $0.10/T/km as opposed to railway at Road
$0.030/T/Km. Prices for different coal grades is as observed in market in Q42009
Source: Expert interviews; Analyst reports; BCG analysis Railway
12/8/2011
Infrastructure Regulations
Completed In Progress
Law No. 7/2004 on Water Resources
LAWS Law No. 38/2004 on Road and Toll Road
Law No. 23/2007 on Railways
Law No. 30/2007 on Energy
Law No. 11/2008 on Information & Electronic Transaction
Law No. 17/2008 on Sea Transportation
Law No. 18/2008 on Garbage Management
Law No. 1/2009 on Aviation
Law No. 4/2009 on Mineral and Coal
Law No. 22/2009 on Road Traffic
Law No. 30/2009 on Electricity
GR No. 15/2005 on Toll Road GR Draft on Operational of Information and
Government GR No. 28/2005 on Non-Tax Government Revenue Electronic Transaction
Regulation GR No. 16/2005 on Drinkwater Provision System Development
GR No. 3/2005 on Electricity Provision and Utilization
GR Draft on Lawful Interception
GR Draft on Strategic Data Processing
GR No.1/2008 on Government Investment
GR No.38/2008 on Asset Management GR Draft on Swam
GR No. 42/2008 on Natural Resources Management GR Draft on River
GR No. 43/2008 on Ground water GR Draft on Basin and Dam
GR No. 75/ 2008 on Capital Injection of Government of Indonesia for GR Draft on Sea and Coast Guard
Establishment of Infrastructure Financing Corporation GR Draft on Sea Accident Investigation
GR No. 35/2009 on Capital Engagement of Government of Indonesia for GR Draft on Multimodal Transportation
Establishment of Infrastructure Guarantee Corporation GR Draft on Crew Welfare and Passengers’ Health
GR No. 56/2009 on Operational on Railways Infrastructure GR Draft on Search and Rescue
GR No. 61/2009 on Seaport GR Draft on Airports
GR No. 72/2009 on Railways Traffic GR Draft on Air Sovereignty
GR No. 5/2010 on Navigation GR Draft on Indonesian Aviation Navigation
GR Draft on Road Traffic and Land Transportation
GR No. 20/2010 on Water Transportation GR Draft on Passenger Ship Health Facility
GR No. 21/2010 on Maritime Environment Protection GR Draft on Seaman
12/8/2011
Fiscal Stimulus on Infrastructure Spending as of Dec 2009
Source: BKF-Depkeu
Rp billion Rp billion % % 2009, analyzed
8000 93.6 93.8 7351.8 100
7000 90
76.9
80
6000 68 65.2
60.9 60.6 60.3 70
5000 4490 53.8 60
48.6
4000 50
3000 40
24.8 30
2000 1433.6
20
1000 467.8 307.7 10
60.9 145.9 140.7 180.2 60.6 64.4
0 0
MPW MOT MEMR MPH MMAF MMT MMT MT MCSME MA Total
Ministry of Public Works MPW
Ministry of Transportation MOT
Ministry of Energy and Mineral Resources MEMR
Ministry of Public Houses MPH
Ministry of Marine Affairs and Fisheries MMAF
Ministry of Manpower and Transmigration MMT
Ministry of Health MMT
Ministry of Trade MT
Ministry of Cooperation and Small Medium Enterprise MCSME
Ministry of Agriculture MA
12/8/2011
Land Facilities
1. Land Capping;
The Government of Indonesia has allocated State Budget with the total amount of IDR
4.89 T to support the Land Acquisition Process for 28 toll roads; (Based on MPW
Regulation No. 12/PRT/M/2008, dated 28 July 2008)
In 2008, the realization of Land Capping is IDR 264,937 B and IDR 235.01 B by 16 Dec
2009, which was used by 3 sections (Bogor Ring Road, Semarang – Solo, and Cinere-
Jagorawi);
In 2009, Land Capping Fund has been allocated for IDR 1 T , and 1.2 T has been allocated
for 2010.
Ministry of Public Works (MPW) has asked the Ministry of Finance (MoF) to expand the
Land Capping allocation which will be ended in 2010 to 2013.
2. Land Revolving Fund;
To support the land acquisition process, GoI has also prepared the Land Revolving Fund; Policy and
The Allocation for the Land Revolving Fund is IDR 1.44 T; instruments to
that will be used for financing 23 toll road sections;
(based on the agreement between BPJT (MPW) – PIP (MoF) accelerate the
Until now, IDR 800 B has been allocated, and more than IDR 700 B has been disbursed. land
3. Land Freezing acquisition
Land that has been appointed to be used as a project by government is not allowed to be traded that will
unless there is a permission from governor/major support
infrastructure
development
12/8/2011
Indonesia Infrastructure Fund
Minister of Finance
Indonesia
PP 66/2007 Juncto PP 75/2008
Infrasructure
100% ownership
Fund (PT. SMI)
PT. SMI
Third Parties: Founder:
JV JV IIFF*
•Public, private sector •PT. SMI
•State Owned Enterprises *Indonesia
•ADB
Infrastructure
•Banking Financing •IFC
Facility
•Local Government •DEG
Benefits of the third parties involvement: •Other Private
•Multilateral Organization
(World Bank, ADB, etc.) • Increase the capability of financial sources Sector Investors
•Private Funds • Increase the reputation & credit rating
• Absorb the expertise, experience & other resources
12/8/2011
Indonesia Infrastructure Fund Framework
Improving the capacity of Infrastructure Development Acceleration
Related Parties PT SMI Goals
Regulator: FACILITATOR/CATALYSATOR
Government for Project Owner & Investors Job Creation
Bodies
I
Internal Capacity Building
•Fund Management N
Project Owner: D
•Ministry/Bureau •Fund Raising F
•Development of the fee-based income, E Poverty Reduction
•Local Government R
•SOE/LGOE e.g.: Investment advisory V
A
•BPJT E
External Capacity Building S
•etc L
•Identification of Infrastructure Project T Human Resources
Priority O
R Development
•Inter-departmental Coordination P
Investors: U
•Partnership with other entities to form M
•Lenders JVs specializing in the infrastructure C
•Local Investor E Industrial
financing T
•Foreign Investor N Competitiveness
•Direct financing to other legal entities, in U
•Multilateral the form of loan or equity T Improvement
•Private Sectors R
•Partnership with other parties in the
•Banking form of BOT or BOO E
•Infrastructure •Socialization on the infrastructure Distribution
Pool of Fund financing activities Improvement
•PIP
12/8/2011
Guarantee Fund
GF is established as a separate legal MOF
entity (SOE)
Risk Management
GF is fully owned by the Government and Unit
the initial capital will be provided from
APBN. Set up
Policies
The RMU will focus on setting policies Proposal for
(eg. risk sharing, valuing CL, operation of Guarantees
GF) and on supervising the GF. Guarantee Contracting
The GF will review proposals, calculate Fund Agency
CL, decide the guarantee provision, enter Approvals
Management PPP
into guarantee contracts, manage assets, Contractor
prepare financial reports to the MoF and Contract
Appendix
Counter Guarantee
public, pay claims, and monitor CL of
projects Guarantee
Contract
The MoF will be the GMS (RUPS) and will Investors
appoint BoD and BoC of the GF. Backstop
Facility
Multilateral Development Agencies will
provide backstop facility.
Multilateral
Development
Agency
12/8/2011
PPP Book Projects Lists
Priority Projects
Projects Ready to Offer
Toll Road
1. Pekanbaru - Kandis - Dumai
Toll Road 2. Palembang - Indralaya
1. Medan – Binjai 3. Tegineneng - Babatan
2. Medan - Kualanamu - Tb. Tinggi 4. Sukabumi - Ciranjang
3. Cileunyi - Sumedang – Dawuan 5. Pasir Koja - Soreang
6. Pandaan - Malang
Sea Transportaton 7. Serangan - Tanjung Benoa
4. Tanah Ampo Ferry Terminal, 8. Manado - Bitung
Karangasem
Water
Railway 9. Medan Municipal
5. Palaci – Bangkuang 10. Bandar Lampung Municipal
6. Soekarno Hatta Airport- Manggarai 11. DKI Jakarta - Bekasi - Karawang
12. West Cikarang & Cibitung Bekasi Regency
Water 13. Bandung Regency
7. Bandung Municipal Water Supply, 14. Sumedang Regency
Cimenteng 15. Indramayu Regency
16. Cirebon
Electricity/Power
8. Central Java Power Plant (2000 MW) Sanitation
17. Integrated Solid Waste Final Disposal & Treatment Facility for greater
Bandung Area - West Java
18. Integrated Solid Waste Final Disposal & Treatment Facility for Bogor &
Depok Area - West Java (Nambo)
12/8/2011
PPP Book Projects Lists
Potential Projects Potential Projects
Toll Road Land Transportation
1. Kisaran - Tebing Tinggi 25. Bojonegara - Ketapang (Jawa - Sumatera) Ferry Terminal
2. Bukit Tinggi - Padang Panjang - Lubuk Alung - Padang
3. Batu Ampar - Muka Kuning - Bandara Hang Nadim Marine Transportation
4. Terbanggi Besar - Menggala - Pematang Panggang 26. Bojonegara Port
5. Bakauheni - Terbanggi Besar 27. Expansion of Kumai Port, Kotawaringin Barat Regency
6. Cilegon - Bojonegoro 28. Development Lupak Dalam Port, Kapuas Regency
7. Kamal - Teluk Naga - Batu Ceper 29. Expansion of Teluk Sigintung Port, Seruyan Regency
8. Kemayoran - Kampung Melayu 30. Expansion of Anjir Kelampan & Anjir Serampan Canal
9. Sunter - Rawa Buaya - Batu Ceper
10. Ulujami - Tanah Abang Railways
11. Pasar Minggu - Casablanca 31. Kualanamu
12. Sunter - Pulo Gebang - Tambelang 32. West Sumatera
13. Duri Pulo - Kampung Melayu 33. Simpang - Tanjung Api-api
14. Tanjung Priok Access 34. Tanjung Enim - Batu Raja
15. Terusan Pasteur - Ujung Berung - Cileunyi 35. Lahat - Kertapati
16. Ujung Berung - Gedebage - Majalaya 36. Railway Facilities - Blue & Green Line (Jakarta Monorail)
17. Semarang - Demak 37. Gedebage, Bandung Municipal, Integrated Terminal
18. Yogyakarta - Bawen (Railway)
19. Yogyakarta - Solo 38. Bangkuang - Lupak Dalam
20. Bandara Djuanda - Tanjung Perak 39. Kudangan - Kumai
21. Probolinggo - Banyuwangi 40. Puruk Cahu - Kuala Pembuang
41. Tumbang Samba - Nanga Bulik
Air Transportation 42. Kuala Kurun - Palangkaraya - Pulau Pisau - Kuala Kapuas
22. Kertajati International 43. East Kalimantan Railway (Puruk Cahu - Balikpapan
23. Sentani
24. Juwata Tarakan
12/8/2011
PPP Book Projects Lists
Potential Projects
Water Supply
44. Pondok Gede, Bekasi Municipal
45. Surakarta - Sukoharjo Central Java Province
46. Klungkung Regency (Tukad Unda)
47. Maros Regency
48. West Bandung (Alternative 1), Water Conveyance
49. West Bandung (Alternative 2), Water Conveyance
50. East Bandung (Alternative 1), Water Conveyance
51. East Bandung (Alternative 2), Water Conveyance
52. Semarang (Alternative 1), Water Conveyance
53. Semarang (Alternative 2), Water Conveyance
54. Semarang (Alternative 3), Water Conveyance
Power
55. New North Sumatera Coal Fired Steam Power Plant
(2 X 200 MW)
56. South Sulawesi New Coal Fired Steam Power Plant
(200 MW)
57. North Sulawesi Coal Fired Steam Power Plant
(2 X 55 MW)
58. North Sulawesi New Coal Fired Steam Power Plant
(55 MW)
59. North Sumatera (Infrastructure) (2 X 100 MW)
60. Sumatera Mine Mouth HFDC Coal Fired Steam Power
Plant (2 X 200 MW)
61. East Kalimantan (Infrastructure) Coal Fired Steam Power
Plant (2 X 65 MW)
12/8/2011
Why Private Guarantee?
Private investments are required to accelerate infrastructure
provision and government can only provide about 31% from
USD 120 B required
Experience shows that government support/guarantees is
required to mobilize private capital, for example:
Monorail
Program 10.000 MW Stage I
Cirebon IPP
JORR II Toll Road project