Bastary Pandji IndraDirector for Public Private Partnership Development

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Infrastructure PPP in Indonesia

BAPPENAS

Bangkok, 15 February 2009

The Need for PPP in Infrastructure

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A means to bridge the infrastructure financing gap

To inject greater efficiency in the provision of infrastructure and related services Indonesia Infrastructure financing requirement between

2010 – 2014 is Rp. 1,429 trillion (USD 140 billion). Government funding capacity is Rp. 451 trillion (31%). The remaining Rp. 978 trillion (69%) financing gap is expected from other sources including PPP.

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Forecast of PPP Share in Various Sector (2010 – 2014)

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Based on PPP Project Proposals submitted by Contracting Agency To Bappenas for inclusion in the forthcoming PPP Book.The Total Project Cost is US $ 33.3 Billion

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Rp

Bill

ion

INVESTMENT VALUE 52.4 6,283.2 11,136.4 15,576.3 32,615.0 132,616.0 167,087.0

ASDP CLEAN WATER HARBOUR AIRPORT ELECTRIC RAILWAY TOLL

ROAD

PPP PROJECT STATUS IN INDONESIA

0

20

40

60

80

100

120

140Q

UA

NTI

TY

OPERATION 24 16 8 25 0 0 0 0CONSTRUCTION 4 11 1 2 0 1 0 0PREPARATION 54 130 27 17 10 3 15 2

TOLL ROAD

IND. POWER PROD

10000 MW

CLEAN WATER

HARBOUR

AIRPORT

RAILWAY FERRY

Note : Preparation is Pra-FS, FS, Tender, Land Acquisition, Contract Negotiation, 4

Transition from State to Private Provision of Infrastructure: Challenges

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Changing mind-set of politicians and government officialsNeed to create new institutions to implement PPPCapacity building of the new institution

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Perpres 67/2005: Cooperation between Government and Business Entity on Provision of Infrastructure

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Clear, Fair, Transparent, & Competitive Approach toPrivate Sector Participation;Based on General Principle of Partnership (Mutual Needs, Mutual Support, & Mutual Profitability) between Government & the Private Sector;Prescription on Project Due Diligence to be done by Government;Government Fiscal Support can be providedClear in Contract AgreementStrong Legal and Regulatory Support

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PPP Arrangements

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Contracting Agency (Sector Ministries, SOE, Local Govt.)

KKPPICMEA,

BappenasMOF

PPP Nodes (PPP Units)Project Identification, Preparation,

Monitoring & Quality Control:-- Screening-- Due Diligence-- Bid Documents-- Transaction & Post-transaction

Process

Secretariat/P3CUPolicy Analysis, Development

and Planning & Coord.Monitoring & Quality CtrlIdentify Projects requiring

Government SupportResolving cross-sector issues

Risk Mgt UnitAssess GSIssue &Manage

Guarantee

Guaran-tee Fund

ProjectDev.Fac.

Land Fund, etc.

SOEsProject Dev’tProject Impl. &

Monitoring

Local Gov’t & ROEsProject DevelopmentProject Impl. & Monitor

The Committee on the Policy for the Acceleration of Infrastructure Provision (KKPPI) established under Perpres 42/2005;A Risk Management Unit on Fiscal Support already up and running since 2006 in the Ministry of Finance. PPP Nodes established in the (MEMR, MPW and MOT)P3CU will be established soon in Bappenas

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DEFINITION OF P3 CENTRAL UNIT FUNCTIONS AND AUTHORITIES

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Government Commitment, Support and Risk Management

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PDF to fund project preparation and transactionsGovernment financial support can be made available (PMK 38/2006)Land acquisition fund for the toll road sectorIIFF (already set-up) and IGF (imminent) to provide catalyst for PPP project financingNational Land Agency (BPN) to produce action plan to accelerate land acquisitionGovernment Investment Center can invest in PPP projects

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Indonesia Infrastructure Financing Facility

IIFF recently set upInitial amount in IIFF Rp 3 trillion (Rp 1 trillion from GOI; Rp 2 trillion from WB/ADB)IIFF designed to provide longer term debt, equity and credit enhancements (contingent financial support) for PPP infrastructure projects

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PPP BookBappenas is producing a PPP BookPPP Book will contain 3 categories of PPP projects

Category 1: those requiring only a preliminary assessment of commercial issues (e.g. cost recovery)Category 2: those requiring comprehensive project preparation i.e. a Pre-FS or FSCategory 3: those ready for tender/transaction (after MOF in principle approval on government support)

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PPP Procurement Process

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Evaluation Committee Set upEvaluation Committee Set up

RFQRFQ

Preparing Bid DocumentationPreparing Bid Documentation

Pre Bid ConferencePre Bid Conference

PROJECT PREPARATIONPROJECT PREPARATION

PROCUREMENT STAGE

1st STAGEPre-qualification (min 3

participants) Pre-qualification (min 3

participants)

Bid Submission (min 3 bidders)Bid Submission (min 3 bidders)

Announcement of Preferred Bidder

Announcement of Preferred Bidder

NEGOTIATIONNEGOTIATION

Bid EvaluationBid Evaluation

2nd STAGE

RFPRFP

Unsolicited Proposals

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AllowedSubject to competitive tendering as for solicited projectsEither government buys the intellectual property contained in the project initiator’s proposal or gives the initiator a pre-defined advantage in the form of bonus point ( up to 10%)The value of compensation and bonus point to be determined by independent appraiser

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Projects Under Facilitation & Ready For Tender

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Around 27 applications for PDF (Project Development Facility) is now being processed

No Project Title Sector Values (US $ 000)

1 Tanah Ampo Cruise Terminal, KarangasemMarine Tranportation 24,040 2 Central Java Coal Fired Steam Power Plant

(Up to 2000 MW) Power 2,000,000 3 Palaci - Bangkuang Railway Railways 821,000 4 Soekarno Hatta Airport - Manggarai,

Railway Railways 740,000 5 Medan – Binjai Toll Road Toll road 109,305 6 Medan – Kualanamu – Tebing Tinggi Toll

Road Toll road 439,183 7 Cileunyi – Sumedang – Dawuan Toll Road Toll road 394,566 8 Bandung Municipal (Cimenteng) Water

Supply Water Supply 45,000

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Thank You!

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