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Study on Economic Partnership Projects

in Developing Countries in FY2014

Study on Makassar Airport Upgrade Project through

the Indonesian Aviation Network Reconfiguration

Final Report

February 2015

Prepared for:

Ministry of Economy, Trade and Industry

Ernst & Young ShinNihon LLC

Japan External Trade Organization

Prepared by:

Mitsubishi Heavy Industries, Ltd.

Nippon Koei Co., Ltd.

Reproduction Prohibited

Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network Reconfiguration Preface

Preface

This report summarizes the results of the " Study on Economic Partnership Projects in Developing Countries in

FY2014" entrusted as a business project in FY2014 to Mitsubishi Heavy Industries, Ltd. and Nippon Koei Co.,

Ltd. by the Ministry of Economy, Trade and Industry.

This study entitled "Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network

Reconfiguration" proposes the introduction of the BB/RH Network (Broad-Band/Regional-Hub Network) as a

newly conceived aviation network to meet the specific needs related to the worsening of the air traffic and airport

congestion in the Indonesian metropolitan area due to the increase in air traffic demand accompanying the

economic growth of Indonesia. Furthermore, this study targets Soekarno-Hatta Airport and Makassar Airport,

which is the gateway to eastern Indonesia, and has been implemented to examine the feasibility of constructing

the BB/RH Network and accomplishing the 71.4 billion yen project to upgrade Makassar Airport as a

regional-hub airport through the renovation, increase, and construction of facilities, which include airside facilities,

utility facilities, passenger and cargo terminals, and a system for connecting the terminals.

It is our hope that this report aids in the achieving of the above mentioned project and becomes a reference to the

relevant parties in Japan.

February 2015


Nippon Koei Co., Ltd.

Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network Reconfiguration Map of the Project Site

Map of the Project Site

Location Map of Makassar Airport (1)

Location Map of Makassar Airport (2)

Source: Created by the study team Via Google Maps

Makassar Airport

Makassar

Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network Reconfiguration List of Abbreviations

List of Abbreviations

Abbreviations Long Forms

APM Automated People Mover

AMDAL Analisa Mengenai Dampak Lingkungan

ANA All Nippon Airways Co., Ltd.

ANDAL Analisis Dampak Lingkugan Hidup

AP-I PT. Angkasa Pura I

AP-II PT. Angkasa Pura II

ASEAN Association of South-East Asian Nations

ATM Air Traffic Management

BOT Build Operate Transfer

BAPPENAS Badan Perencanaan Pembanguan Nasional

(National Development Planning Agency)

BB/RH Broad-Band/Regional-Hub

BPS Badan Pusat Statistik

CDM Clean Development Mechanism

DGCA Directorate General Civil Aviation(Indonesia)

EIA Environmental Impact Assessment

EIRR Economic Internal Rate of Return

FIRR Financial Internal Rate of Return

F/S Feasibility Study

GAAP Generally Accepted Accounting Principles

GDP Gross Domestic Product

HIV Human Immunodeficiency Virus

IATA International Air Transport Association

ICAO International Civil Aviation Organization

IDR Indonesia Rupiah

IMB Izin Mendirikan Bangunan

IMF International Monetary Fund

JBIC Japan Bank for International Cooperation

JETRO Japan External Trade Organization

JFK John F. Kennedy

JICA Japan International Cooperation Agency

JOIN Japan Overseas Infrastructure Investment Corporation

for Transport & Urban Development

LCC Low Cost Carriers

Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network Reconfiguration List of Abbreviations

LTO Landing/Take-off

MD Merchandising

MOSE Ministry of State-Owned Enterprises

(Indonesia)

MOT Ministry of Transportation(Indonesia)

MPA

Master Plan for Establishing Metropolitan

Priority Area for Investment and Industry in

Jabodetabek Area

MP3EI Master Plan for the Acceleration and Expansion of

Indonesia’s Ministry for Economic Development

NPV Net Present Value

PPP Public Private Partnership

RDTRK Rencana Detail Tata Ruang Kota

RENSTRA Rencana Strategis

RKL Rencana Pengelolaan Lingkungan Hidup

RPJM Rencana Pembangunan Jangka Menengah

RPL Rencana Pemantauan Lingkungan Hidup

RTBL Rencanan Tata. Bangunan dan Lingkungan

RTRK Rencanan Teknik Ruang. Kawasan

SPC Special Purpose company

SSC Shared & Service Center

STP Sewage Treatment Plant

ToR Terms of Reference

USD United States Dollar

VFR Visual Flight Rules

VIP Very Important Person

WECPNL Weighted Equivalent Continuous Per Ceived Noise

Level

WHO World Health Organization

Study on Makassar Airport Upgrade Project

through the Indonesian Aviation Network Reconfiguration Table of Contents

i

TABLE OF CONTENTS

Preface

Map of the Project Site

List of Abbreviations

Table of Contents

Executive Summary

(1) Background and Necessity of the Project 0-1

(2) Basic Policy regarding Project Content Determination 0-2

(3) Project Overview 0-4

(4) Planned Project Schedule 0-10

(5) Feasibility of Implementation 0-12

(6) The Technical Advantage of Japanese Companies 0-13

(7) Maps indicating the project implementation site 0-14

Chapter 1 Overview of the Host Country and Sector

(1) Economic and Financial Status of Host Country 1-1

(2) Overview of the Targeted Sector for this Project 1-2

(3) Region Conditions 1-3

Chapter 2 Study Methodology

(1) Study Contents 2-1

(2) Research Methodology and Structure 2-2

(3) Research schedule 2-4

Chapter 3 Justification, Objectives and Technical Feasibility of the Project

(1) Background and Necessity of the Project 3-1

(2) Required Studies in the Content Determination of the Project 3-12

(3) Outline of Project Formulation 3-27

Chapter 4 Evaluation of Environmental and Social Impacts

(1) Present Environmental and Social Conditions 4-1

(2) Positive Environmental Impacts of the Projects 4-9

(3) Adverse Environmental and Social Impacts of the Projects 4-10

(4) Outlines of Relevant Environmental Laws, Rules, and Regulations in Indonesia 4-22

(5) Matters to be Completed by Related Authorities in Indonesia to Realize the Projects 4-25


through the Indonesian Aviation Network Reconfiguration Table of Contents

ii

Chapter 5 Financial and Economic Feasibility

(1) Project Cost 5-1

(2) Results of the Preliminary Financial and Economic Analyses 5-3

Chapter 6 Planned Project Schedule

(1) Planned Project Schedule 6-1

(2) Tasks related to the Planned Project Schedule 6-3

(3) Setting a Schedule related to Environmental Impact Issues 6-3

Chapter 7 Implementing Organization

(1) AP-I 7-1

Chapter 8 Technical Advantages of Japanese Companies

(1) Expected Roles of Participating Japanese Companies (financing, supply of machinery

and equipment, facility management, etc.) 8-1

(2) The Superiority of Japanese Companies when Implementing this Project

(from a Technical and Economic Viewpoint) 8-3

(3) Further Collaboration to apply Japanese Technologies 8-9


through the Indonesian Aviation Network Reconfiguration Executive Summary

0-1

Executive Summary

(1) Background and Necessity of the Project

1) Background of the Project

The economic growth in Indonesia has created a growing problem of congestion at the Soekarno-Hatta

International Airport (hereafter referred to as Soekarno-Hatta Airport) due to an increase in air traffic demand.

The Indonesian government, as a method to alleviate air traffic and airport congestion in Jakarta, has planned

and promoted measures such as upgrading Soekarno-Hatta Airport and enhancing facilities at the Karawang

Airport, but these plans have not proceeded as planned due to land acquisition problems and other issues.

Currently, the Soekarno-Hatta Airport has been forced to operate at about three times its passenger terminal

capacity. These congestion problems related to the air routes and airports in the Jakarta metropolitan area are

not limited to the Jakarta metropolitan area only, but the growth in Indonesian air transport has, in turn,

created a situation for a potentially large bottleneck with regards to achieving sustained economic growth in

Indonesia.

This project proposes, as a method to alleviate air traffic and airport congestion in Jakarta, the transporting of

a large quantity of air passengers via a small number of airport slots by connecting large-sized jets (twin aisle

aircraft) to Soekarno-Hatta Airport and Sultan Hasanuddin International Airport (hereafter referred to as

Makassar Airport), which is the gateway airport for eastern Indonesia, while simultaneously positioning

Makassar Airport as a regional-hub airport so as to introduce a newly conceived aviation network

(Broad-Band/Regional-Hub Network; hereinafter referred to as the "BB/RH Network") that connects highly

convenient frequent operations for Makassar Airport and regional airports located in eastern Indonesia

through the use of small-sized jets (regional jets and turbo props). The introduction of this BB/RH Network is

expected to greatly reduce air traffic and airport congestion in Jakarta.

2) Necessity of the Project

Indonesia has up until now been able to achieve a large growth in air traffic demand, but faces the problem of

not having sufficient aviation infrastructure to support this growth. Indonesia currently has no prospects for

creating a fundamental solution to the air traffic and airport congestion in Jakarta that have become a

bottleneck for air transportation growth throughout Indonesia, while the country also faces the problem of

excessive airport capacity at Makassar Airport. The BB/RH Network proposed by this project would help

alleviate congestion of air routes and airports in the Jakarta metropolitan area via aviation network

reconfiguration, which can be implemented without overly relying on the need to develop the airports in the

Jakarta metropolitan area. In addition, the project facilitates the upgrade of Makassar Airport by allowing it to

function as a regional-hub airport, which increases the connectivity of the Jakarta metropolitan area with

airports in eastern Indonesia and makes it possible to meet the future demand of increased air traffic demand

in Indonesia.



0-2

(2) Basic Policy regarding Project Content Determination

1) Basic Policy of the Research

This study investigates the construction of the newly conceived BB/RH Network as a method to alleviate

congestion at Soekarno-Hatta Airport, and based on these results, investigates the scalability of Makassar

Airport to operate as a regional-hub airport. Based on the assumption of a future project, JICA overseas

investment and other financial means will be utilized with regards to Makassar Airport upgrade development,

and project formulation is an objective based on infrastructure development projects in anticipation of the use

of the superior technology and know-how of Japanese companies.

Makassar Airport, which is the subject of this study, commenced service of a new passenger terminal in 2008,

but due to strong demand, the terminal is already facing a situation in which it is exceeding its passenger

terminal capacity, and as a result, upgrade of Makassar Airport has become a pressing issue. PT. Angkasa Pura

I (hereafter referred to as AP-I), the company that operates Makassar Airport, is currently updating its master

plan that it drafted in 2009, and is planning an airport upgrade in consultation with outside consultants.

This study is being carried out independently of the master plan of AP-I with the intent of proposing to local

stakeholders an upgrade plan for Makassar Airport that incorporates the requirements of a regional-hub

airport needed in the realization of the BB/RH Network, and thereafter, an integration planning draft will be

created to propose the integration of the network with the master plan of AP-I.

2) Required Studies in the Content Determination of the Project

a) Demand Forecasting

Based on the results of consultation with local stakeholders and in consideration of factors that could

impact air traffic demand, an air traffic demand forecast for Makassar Airport has been established at

an air traffic demand forecast value of 21 million passengers a year (14.5 million domestic flight

passengers, 800 thousand international flight passengers, and 5.7 million transit passengers) for the

year 2024, which is the air traffic demand forecast value planned by the current master plan. This air

traffic demand forecast value has been used as the baseline of the airport upgrade project.

b) Makassar Airport Capacity Study Accompanying the Introduction of the BB/RH Network

In this project, a short haul domestic flight service via twin aisle aircraft, which have a long history of

utilization in Japan, will be adopted as a model under the assumption of frequent operations via twin

aisle aircraft between Soekarno-Hatta Airport and Makassar Airport. The results of passenger route

choice analysis and the initial aviation network analysis indicate that many airline passengers traveling

between Soekarno-Hatta Airport and airports in eastern Indonesia will choose a transit flight by way

of Makassar Airport. In such a case, since it is expected that the transit passengers using Makassar

Airport will greatly increase, this project has considered it appropriate to make classification of two

functions: (i) a function related to the BB/RH Network (BB/RH Function) that connects

Soekarno-Hatta Airport with airports in eastern Indonesia by way of Makassar Airport and (ii) an

existing function that connects Makassar Airport with the other main airports (including international

air routes).



0-3

(i) BB/RH Function

This function seeks to maximize transit convenience for the transit passengers of Makassar Airport by

connecting Soekarno-Hatta Airport with airports in eastern Indonesia by way of Makassar Airport. The

results of the initial network analysis show that there will be a need in the year 2024 to process

approximately 11 million passengers a year via the BB/RH Function. In particular, in order to support

3-4 twin aisle aircraft per hour between Soekarno-Hatta Airport and Makassar Airport during peak hours,

it will be necessary to operate flights between Makassar Airport and the airports in eastern Indonesia

using small-sized jets at a rate of 15-20 flights per hour.

(ii) Existing Function

This function mainly handles direct flight passengers between Makassar Airport and other main airports

(including international air routes). The results of the initial network analysis based on the assumption

of the operation of mostly single aisle aircraft, as has been the case until now, show that there will be a

need in the year 2024 to process approximately 10 million passengers a year via the Existing Function.

In order to reduce the investment costs, airport operations that maximize the utilization of existing

facilities are required.

c) Regional Requirement Specifications Formulation

Based on the results of task extraction via field surveys at Makassar Airport, case studies at American

hub airports, and interviews with local stakeholders, formulation has been established as follows

below for the requirement specifications needed for the regional-hub airport proposed in this airport

upgrade plan.

i) Passengers: Transit should be stress free.

Minimization of walking distances

Minimization of level changes

Appropriate arrangement of inspection areas for transfer screening

Securing a sufficient number of transfer desks

Less "narrow paths" throughout transfer route

Easy-way-finding by instructions

ii) Facilities: Realization should be made of simple airport facilities / efficient aircraft operation.

Reducing initial investment through use of the simplest airport facilities / reducing operating

costs

Passenger terminal in consideration of large aircraft / small aircraft that can reduce transit

times

Reduction of transfer time of checked-in baggage from large aircraft to small aircraft

Reduction of taxiing distances

Arrangement of apron and taxiways that do not cause congestion

iii) Scalability: Guarantee should be made of flexible airport upgrade in the future.



0-4

Phased-approach that can respond to variations in the number of passengers and changes in

the market environment

Extensibility (including the Aero City concept) that can respond to increased air traffic

demand in the future

iv) Other considerations (including the unique characteristics of Makassar Airport)

Development of commercial facilities for expansion of non-aero revenue

Consideration of not only passengers in transit, but also passenger flow for departing and

arriving flights at Makassar Airport

Responding to cargo increases due to the operation of twin aisle aircraft

Securing conformity with existing land acquisition plans

Development of local airports in eastern Indonesia that connect to Makassar Airport via the

BB/RH Network (night time departure and arrival support operation capability)

Consideration of military aircraft operation restrictions for Makassar Airport

(3) Project Overview

1) Overview of the Project

The business scope assumed by this project includes the upgrade of Makassar Airport based on the results of

the air traffic demand forecast, as well as the new construction/upgrade of passenger terminal facilities

incorporating the requirement specifications needed of a regional-hub airport, apron upgrade, baggage

handling system construction, and roads and parking lots around the terminal building. Based on the results

of various studies and consultation with local stakeholders, the conceptual design of Makassar Airport will be

carried out in accordance with the following basic policy.

This project incorporates the regional-hub airport requirement specifications of Makassar Airport and

investigates the airport upgrade project estimating 21 million passengers per year for the year 2024

based on the air traffic demand forecast value.

We have ensured future gross potential by taking into consideration the possibility of an increase in

future air traffic demand in Indonesia in excess of the current estimation.

This projects adopts a phased-approach in which study is made starting with the year 2024 (Phase 1)

and ending with the grand design of the year 2044 (Phase 2). In moving toward the operation start in

the year 2024, consideration has been made of the implementation potential of the introduction phase

(Phase 0) to confirm beforehand the feasibility of the BB/RH Network.

Since two different roles will be required of Makassar Airport as it transitions into being a regional

hub, the study is classified into the BB/RH Function and Existing Function which have greatly

improved transit convenience as an airport function.

In consideration of the land acquisition difficulties, it is assumed that upgrade will utilize the existing

premises up to the year 2024. Furthermore, since measures can be made to cope with the existing



0-5

capacity of two runways, and since AP-I is planning to increase facilities for a third runway starting in

the year 2024, this study does not assume runway facilities will be increased.

In consideration of the evaluation results of the passenger terminal concept, the current airport operations at

Makassar Airport, and land acquisition issues, study was made of an airport conceptual design that satisfies

the requirements of a regional-hub airport. The south side satellite concept was selected for this project based

on consultation with local stakeholders, fulfillment of the requirement specifications for the BB/RH Network,

and options that provide the most value to Makassar Airport and the airline passengers of Indonesia. This

project will proceed based on this selected concept. The development facilities overview and airport plan

drawing assumed for the year 2024 (Phase 1) based on the south side satellite concept are as follows.



0-6

Table 0-1 Outline of Facilities for the Year 2024 (Phase 1)

Item Target of

Development Details of Development

Size of

Facilities Remarks

Satellite

terminal (New

construction)

Satellite

terminal

Satellite terminal and appurtenances

Departure/arrival gate lounges,

Concession area,

Transfer security check area,

Transfer baggage check area,

Check-in baggage sorting area,

Boarding bridge, etc.

Total floor

area:

88,000 m2

Main terminal (Expansion)

Main terminal

Main terminal and appurtenances


Chick-in area,

Concession area,

Airport security area,

Baggage claim area,


Total floor

area:

60,000 m2

Expansion of

existing passenger

terminal

Terminal

appurtenances (New

construction)

Connecting

system between

terminals

Connection underpass, APM,

Baggage handling system for transfer

Connection

distance

1 km

Study of alternative

connecting methods

other than APM

Utility facilities

Utility building,

Power receiving-transformer/

air conditioning/ water supply/

water treatment equipment

-

Airside

infrastructure (Expansion)

Apron

Apron upgrade

Development of cargo terminal and

aircraft maintenance area

Area:

596,200 m2

Excluding hydrant

(included in AP-I

plan)

Taxiway

Area:

115,000 m2

Other

Air Cargo

terminal

Total floor

area:

10,000 m2

Transfer after new

facilities

Aircraft

maintenance

area

-

New facilities

(development to be

done by airlines)

Parking area

and roads

Area:

114,000 m2

Increased facilities

Source: Created by the study team



0-7

Figure 0-1 General Plan of Airport (Year 2024: Phase 1)


New satellite terminal

facilities

Main terminal upgrade



0-8

2) Project total cost

Based on the plan of the previous items, the results of calculating the costs of this project amount to a total

cost of 73,020.5 billion IDR (71.4 billion Japanese yen) as shown in Table 0-2.

Table 0-2 Calculation of Project Costs


3) Outline of results of the preliminary financial and economic analysis

The development project for the upgrade of Makassar Airport, evaluated based on the preliminary financial

analysis, covers the entire airport project for the year 2024 for introducing the BB/RH Network.

In the case of an evaluation period of 29 years from 2016 to 2044 by combining the construction period of the

new facilities and equipment (2016-2023) and the subsequent 20 years of operation, the FIRR of the project

is 14.8%. Although, cash flow will deteriorate during the construction of the airport upgrade, it is expected

that the period ending balance will turn profitable during the implementation period of the project. Non-aero

revenue at the early start of the project will be 36% of total revenue, but the enhancement of commercial

facilities via the upgrade of Makassar Airport and the introduction of business know-how to the improved

airport is expected to raise this percentage to about 53%. The NPV during the evaluation period will be

2,030,005 million IDR.

Furthermore, in consideration of the results of the preliminary economic analysis, indirect effects

accompanying commercial revenue inside the terminal and related to the facility construction, as well as the

regional economic effects to the eastern regions of Indonesia, EIRR will result in a large economic effect of

28.0%.

4) Study on Environmental and Social Aspects

a) Applicable Scope and Background

A study on environmental and social aspects was implemented with regards to the period after the

upgrade of Makassar Airport. This study covered the facilities and equipment and materials for the

development required of a regional-hub airport in eastern Indonesia, which included the new

passenger terminal facilities, apron upgrade, construction of roads and parking lots around the

terminal building, as well as the BB/RH Network. Other facilities including the proposed third runway

Unit: millions

Portion of local currency Portion of foreign currency Total

Construction of the passenger terminal building 1 60,000 m2 11,000 107 860,113 267,165 1,127,278

Construction of the passenger terminal satellite 2 88,000 m2 15,000 146 1,172,881 364,316 1,537,197

Terminal building equipment and materials costs 1, 2 1 LS 4,200 41 328,407 102,008 430,415

Construction of utility facilities 1 1 LS 2,000 20 156,384 48,575 204,960

Construction of underpass (tunnel only) 3 1 LS 10,000 98 781,921 242,877 1,024,798

APM/underground transportation 2 10,000 98 781,921 242,877 1,024,798

Construction of new apron facilities 3 596,200 m2 8,945 87 699,428 217,254 916,682

Construction of new taxiway facilities 3 115,000 m2 1,725 17 134,881 41,896 176,778

Road construction 3 60,000 m2 300 3 23,458 7,286 30,744

Parking lot construction 3 54,000 m2 270 3 21,112 6,558 27,670

Construction of cargo terminal 1 10,000 m2 1,500 15 117,288 36,432 153,720

Construction costs subtotal 64,940 634 5,077,794 1,577,244 6,655,038

3,247 32 253,890 78,862 332,752

3,247 32 253,890 78,862 332,752

71,434 697 5,585,574 1,734,968 7,320,542

IDR conversion

Money in reserve

Design costs

Project costs total

PackageItem Quantity Unit Yen conversion USD conversion

Construction

costs



0-9

have not been incorporated into this study. Only the preliminary study results are shown as tasks for

the future. In addition, environmental monitoring based on the formulated ANDAL in 1995 has been

implemented for Makassar Airport, and twice a year a report is submitted to the Directorate General of

Civil Aviation (hereafter referred to as DGCA) by the airport's operator AP-I.

b) Current State of the Analysis

Makassar Airport is an international airport located in a suburb 17 km from the city of Makassar,

which is the provincial capital of South Sulawesi Province. It is a major airport for eastern Indonesia

with 9.65 million airline passengers using it per year as of 2013. The area surrounding the airport is

subject to little undulation, and nearby nature reserves and mangroves for the coastal habitat are all

located about 10 km from the airport.

In addition, according to the results of the current environmental monitoring (June 2014), the area

generally meets the environmental standards with respect to noise and air and water quality.

On the other hand, it is expected that the population of Indonesia will increase nationwide including in

the city of Makassar. Therefore, the issue of alleviating congestion, not only with respect to

Soekarno-Hatta Airport, but also for Makassar Airport, for which there is a high possibility that it will

exceed its airport capacity in the future, has become a growing problem, and if the project is not

undertaken, it is expected that this growth in congestion will adversely affect the social and economic

conditions of the surrounding regions.

c) Environmental and Social Impact and Measures Required for the Future

An environmental checklist has been created based on the JICA checklist "Guideline for

Environmental and Social Considerations" and in consideration of the JBIC checklist "JBIC Guideline

for Confirming Environmental and Social Considerations" and the characteristics of the upgrade

project of the airport (excavation of a tunnel underneath the terminal, etc.). Based on this

environmental checklist, the results of the study on the environmental and social impact due to the

upgrade project of the airport show that the overall impact is expected to be limited, although some

items of the project cannot be predicted at the current time.

However, monitoring and evaluation is needed for items whose impact cannot be specified at the

current time. These items especially include the impact of noise created by aircraft on the surrounding

residents, impact of the tunnel excavation on the water conditions surrounding the airport with regards

to groundwater, impact of construction waste related to the terminal facilities, and other waste such as

surplus soil created by the tunnel excavation. Depending on the results of the monitoring and

evaluation, appropriate conservation measures should be sought as required.

In addition, since the upgrade plan for the airport corresponds to the airport sector size requirements of

Indonesia's environmental impact evaluation (AMDAL), implementation procedures are needed. After

approval is obtained of the master plan, which includes the upgrade plan of the airport, an

environmental impact statement will be created and approval will be sought from the central



0-10

government based on the implementation of AMDAL prior to the start of construction. Furthermore, it

is expected that some residents will need to be relocated with regards to the proposed third runway

and other facilities that could possibly be constructed following the upgrade plan of the airport. In

such a case, separate formulation is required with respect to the plan to relocate residents.

(4) Planned Project Schedule

This upgrade plan for the airport includes the development of multiple passenger terminals and annexed

facilities, as well as an apron and taxiway. In addition, the construction of these new facilities must proceed in

parallel with the operation of existing passenger terminals. In consideration of these issues, the currently

expected implementation schedule is as follows in Table 0-3.

It should be noted that the implementation schedule is subject to change with regards to any of the facilities

based on the intentions of local stakeholders such as AP-I and DGCA, as well as due to variations in the air

traffic demand forecast.



0-11

Table 0-3 Planned Project Schedule


1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Airline network verification

Study of regulations

Overall plan F/S

Selection of consultant

Basic plan

Bidding for concession

Detailed design

Bidding for construction

Civil engineering work

Business operation

Detailed design


Construction work /

System installation / Test run

Business operation

Detailed design


Construction work / Equipment installation /

Transfer / Training

Business operation

Detailed design



Transfer / Training

Business operation

Detailed design



Transfer / Training

Business operation

Legend : BB/RH Network plan

: Makassar Airport overall upgrade plan

:

:

: Implementation in terms of software such as test run, transfer, training, etc.

: Business operation

： Workflow

Apron /

Taxiway

Adjustment period within development in terms of hardware such as

construction work, equipment installation, etc.

Development in terms of hardware such as construction work and equipment

installation

Cargo terminal /

Utility facilities

Terminal connecting

underpass /

APM

Main terminal

(Expansion)

Satellite terminal

(New construction)

BB/RH Network plan

Makassar Airport upgrade plan

2020 2021 2022 2023 2024

Quarter

Year 2015 2016 2017 2018 2019



0-12

(5) Feasibility of Implementation

1) Implementing Organization

The implementor of this project for the entire upgrade plan for Makassar Airport is AP-I, the operator of the

airport and implementing agency in Indonesia. AP-I is a state-owned enterprise established in 1964 with

100% of its funding provided by the Indonesian government. It currently oversees the operations of 13

airports in eastern Indonesia including Makassar Airport, which is the subject of this project.

AP-I performs its airport operation duties with financial independence and issues financial accounting

guidelines in accordance with the standard financial accounting methods (GAAP) of Indonesia with respect to

its financial situation. In recent years, profitability has been maintained for Makassar Airport, which has a

large number of passengers.

In addition, AP-I is proceeding with the development of terminal facilities at the airports it manages and has

opened Terminal 2 of Surabaya Airport in February 2014 and the new passenger terminal of Balikpapan

Airport in March 2014. AP-I is considered to have sufficient capability as an implementing agency for this

project in light of its financial situation, organizational structure, financial base, and project track record.

2) Roles Assumed for Participating Japanese Companies

Figure 0-2 shows the business scheme for setting standards for the entire upgrade project of the airport.

Figure 0-2 Basic Business Scheme for the Project


AP-I currently operates Makassar Airport with financial independence and has been creating its own master

plan, but due to the special nature of this project with respect to the use of large-scale civil engineering

resources and the introduction of the BB/RH Network, study has been made to package the assets of this

project as shown in Table 0-4 in order to promote the project in a smooth manner. Among the implementation

Mitsubishi Heavy Industries, Ltd., Trading companies, etc.

Angkasa Pura 1

Investment

Overseas investment

Export

Usage payments

Service provision

Investment

<Japan> <Indonesia>

Investment companies, InvestorsInvestment

Airport management company, Airport design consultants

Technical assistance

for operation

and maintenance

Investment

JICA

Airport-related facilities, Equipment manufacturers

Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development

(Government infrastructure fund)

PPP Study Team

Commercial banks

Financing

AP-I(Makassar Airport operating company)

Special Purpose Company (SPC)(Increase of facilities, ownership,

operation, and maintenance management

of terminals)



0-13

of these packages, it is expected that SPC, with the participation of Japanese companies, will proactively carry

out Package (2).

Table 0-4 Business Package List


(6) The Technical Advantage of Japanese Companies

The following items are mentioned with regards to the technical advantage of Japanese companies.

With respect to the special nature of this project, integration technology should be noted for its ability to

implement the plan to achieve the BB/RH Network through integrating the know-how related to airport

facilities and operation with the future needs of the project.

a) BB/RH Network configuration technology and management

b) Airport related special facilities

c) APM

d) Environmental technology

e) Construction management

f) Airport operations

Package (1) (Upper objects 1) Package (2) (Upper objects 2) Package (3) (Lower objects)

Passenger terminal main building and annex

facilities

Cargo terminal

Utility facilities

Passenger terminal satellite and annex facilities

Connecting system between terminals

(Underground connection APM / Bus,

Underground baggage handling system, etc.)

Utility facilities

Expand apron

Expand taxiway

and annex equipments (guiding lights, etc.)

Fuel hydrant facilities

Underpass connecting terminals

Roads and parking lots

AP-I project PPP-BOT AP-I project or public undertaking

AP-I SPC AP-I

AP-I SPC AP-I

1,660 billion IDR (16.6 billion yen) 2,710 billion IDR (27.1 billion yen) 2,120 billion IDR (21.2 billion yen)

- Includes utility facilities (energy center)

- Does not include aircraft maintenance hanger

to be developed by the airlines


- Connecting transportation method (including

alternatives) to be decided in the plan of SPC

- Underground baggage handling system

included in Package (2)

- Fuel hydrant facilities are to be managed by a

local fueling company

Remarks

Common remarks- GSE / ramp bus to be considered separately

- Does not include reserve fund or design costs

*As of January 5, 2015, 1 JPY = 100 IDR

Classification

Applicable assets

Project type

Ownership

Implementing entity

Project costs *

(excluding reserve fund and design costs)



0-14

(7) Maps indicating the project implementation site

Figure 0-3 Location Map of Makassar Airport (1)

Figure 0-4 Location Map of Makassar Airport (2)

Source: Created by the study team via Google Maps

Makassar Airport

Makassar Airport

Study on Makassar Airport Upgrade Project Chapter 1

through the Indonesian Aviation Network Reconfiguration Overview of the Host Country and Sector

1-1

Chapter 1 Overview of the Host Country and Sector

(1) Economic and Financial Status of Host Country

The Indonesian economy has made a smooth recovery following the Lehman shock. Its GDP rose 5.8%

year-on-year from 2012 to 2013. The following are considered to be the reasons for the robust economic

growth.

• Support via strong private consumption

• Stability of exchange rate

• Low and stable inflation and interest rates

In order to maintain and expand economic growth into the future, there needs to be training and support

available for the labor intensive manufacturing industry. Also, as one example, it is very important that there

be sufficient infrastructure such as roads, seaports, and airports to support the receiving of materials and

shipping of goods that underpin the manufacturing activities of factories and the construction of industrial

parks.

Furthermore, it is important to cultivate the tourism industry through use of Indonesia's rich nature, while

also striving to attract foreign companies and increase the prosperity of the middle class through the

development of the country. There needs to be an increase in the transportation methods to safely,

conveniently, and comfortably transport people to tourist attractions.

In order to achieve these tasks, it is vital to have infrastructure for air transportation.

1) Social-Economic Conditions

Foreign companies, including those of Japan, are choosing Indonesia for their business activity destinations

because of the attractiveness of its cheap labor force and consumer market, which is supported by its large

population, being the fourth largest in the world. In the future, one large task will be the development of

social infrastructure, which includes but is not limited to the air transportation sector, in order to promote and

sustain foreign investment.

a) Population

Indonesia has the world's fourth largest population following China, India, and the United States. As

of 2013, Indonesia had a population of 248.82 million people. Indonesia's population density is as

follows: 58% are concentrated on Java Island, 21% on Sumatra Island, 7% on Sulawesi Island, 7% on

Kalimantan Island, 6% on Bali Island and Nusa Tenggara Island, and 3% on Papua. Over the past 10

years, the population of Indonesia has grown by 1.49% per year.

b) Gross Domestic Product (GDP)

Indonesia's real GDP is shown in Table 1-1 below. Real GDP in 2013 was 2,770 trillion IDR, which is

a growth of 5.8% year-on-year. Since 2004, real GDP growth has been sustained between 5.0-6.5%

over the past 10 years, so it has become clear that Indonesia has been sustaining large economic

growth.



1-2

Table 1-1 Real GDP in Indonesia

Year Real GDP

(trillion IDR)

Annual Growth Rate

(%)

2000 1,390 -

2001 1,440 3.6

2002 1,505 4.5

2003 1,577 4.8

2004 1,657 5.0

2005 1,751 5.7

2006 1,847 5.5

2007 1,964 6.3

2008 2,082 6.0

2009 2,179 4.6

2010 2,314 6.2

2011 2,465 6.5

2012 2,619 6.3

2013 2,770 5.8

Source: IMF, World Economic Outlook 2014

(2) Overview of the Targeted Sector for this Project

Indonesia spans a wide distance of 5,110 km from east to west and 1,800 km from north to south. It is an

island nation, composed of about 17,000 islands. It is also one of the world leading aviation powers. As a

result, air travel is a very important means of travel in Indonesia. It was announced by the Airport Authority

during this year's October seminar that the nation has 299 airports, of which 29 of them are international

airports.

Figure 1-1 shows the number of airline passenger for Indonesia. In recent years due to economic growth, air

traffic demand in Indonesia has increased quickly. In particular, the growth of domestic flights has been

remarkable, accounting for more than 80% of the overall growth.

Figure 1-1 Number of Airline Passengers in Indonesia

Source: Created by the study team via BPS (Indonesia Central Statistics Agency)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Number of

Indonesian airline

passengers (ten

thousands of

passengers)

Year

International

route

Domestic

route



1-3

Figure 1-2 shows the percentage of passengers using each of the commercial airports in Indonesia in 2012.

Soekarno-Hatta Airport occupies more than 30% of the total number of passengers for the whole country.

Furthermore, Soekarno-Hatta Airport, Surabaya Airport, and Bali Airport occupy more than 50% of the total

domestic airline passengers for Indonesia. These three airports act as major airports with a large concentration

of passengers.

In particular, Soekarno-Hatta Airport maintains the function of a hub for Indonesia's domestic aviation

network, as well as the function of a gateway for international flights, recently, the airport facilities are

considerably congested.

Figure 1-2 Percentage of Passengers Using Each of the Airports in Indonesia (results from 2012)


(3) Region Conditions

1) Conditions regarding the City of Makassar

The city of Makassar is the provincial capital of South Sulawesi province in Indonesia. It has a population of

1,334,090 people (according to the 2010 census), and about 2.5 million people reside in the Makassar

metropolitan area. The city has an area of 175.77 km2 and a population density of 7,600 people per km

2. It is

the largest city in the South Sulawesi province and eastern Indonesia. The city's economy relies heavily on the

service sector such as restaurants and hotels.

2) Conditions regarding Makassar Airport

Makassar Airport is an international airport located 17 km from the city center of Makassar City, and as of

2013, a total of 9.65 million airline passengers use the airport each year.

35.1%

10.1%

9.0%

5.1%

4.1%

3.9%

3.2%

2.4%

2.4%

1.9%

22.8%

ジャカルタ・スカルノハッタ

スラバヤ

デンパサール

メダン

マカッサル

バリクパパン

ジョグジャカルタ

バタム

バンジャルマシン

セマラン

その他

Jakarta Soekarno-Hatta

Surabaya

Denpasar

Medan

Makassar

Balikpapan

Yogyakarta

Batam

Bandjarmasin

Semarang

Others



1-4

Photo 1-1 Photo of Current Conditions at Makassar Airport

Source: Google Map

Number of passengers

Figure 1-3 shows the recorded number of passengers using Makassar Airport.

Figure 1-3 Recorded Number of Passengers Using Makassar Airport

Source: Created by the study team via AP-I data

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011 2012 2013

Number of usage

passengers

(ten thousands of

passengers)

Year

Transfer

International

route

Domestic

route



1-5

AP-I

Flight destinations

Makassar Airport provides the flights of 6 domestic airlines and 2 international airlines, and it supports

24 domestic routes in Indonesia and 2 international routes.

Airport facilities

The current airport site is approximately 7.6 km2 and has two runways. It has a passenger terminal

building, cargo terminal building and other airport related facilities. At the east of the airport is a military

base.

Figure 1-4 shows the floor plan of Makassar Airport, and Table 1-3 lists its main facilities.



1-6

Figure 1-4 Floor Plan of Makassar Airport

Source: AP-I



1-7

Table 1-2 List of the Main Facilities at Makassar Airport

Source: AIP INDONESIA and AERODROME MANUAL

c) Airside facilities

There are two runways, and operations at the main runway started in 2010. The main runway is 3,100

m×45 m (with bearings 03-21, north-northwest - south-southwest). It also has a parallel taxiway and a

high-speed evacuation taxiway.

The other runway is 2,500 m×45 m (with bearings 13-31, west-northwest - east-southeast), and since

its parallel taxiway is sectional, it has a turning pad on both sides. It has VFR (visual flight) that only

approaches runway 31.

The current method of operating the runways depends on the direction of the wind, but 90-95% of

flights takeoff and land on the main runway. Currently, 81,000 flights takeoff and land at the airport

per year.

Item

Airport name Makassar/ Sultan Hasanuddin International Airport

Operation International, domestic flights

Airport code IATA:UPG - ICAO:WAAA

Airport coordinates 05°03' 39" S/ 119°33' 16" E

Reference around elevation 47 feet (14.31m) MSL

Temperature Average 33.5°C

Operation 24 hours

Operator PT. Angkasa Pura I

Runway No Dimensions PCN Slope Strip Dimension

13

31

3

21

Taxiway No Dimensions PCN Slope Type

A 158×23m 63/F/C/X/T 1.40% Asphalt

B 217×26.50m 68/F/C/X/T 1.40% Asphalt

C 800×23m 34/F/C/X/T 1.40% Asphalt

West Parallel

(WP)3,100×23m 77/F/C/X/T 1.40% Asphalt

South Parallel

(SP)

968×23m

945×23m

68/F/C/X/T

77/F/C/X/T1.40% Asphalt

D 385×23m 77/F/C/X/T 1.40% Asphalt

E 335×23m 77/F/C/X/T 1.40% Asphalt

F 335×23m 77/F/C/X/T 1.40% Asphalt

H 127.5×23m 77/F/C/X/T Asphalt

I 204×23m 77/F/C/X/T Asphalt

J 182×23m 77/F/C/X/T 1.40% Asphalt

Apron Name Dimensions PCN Type No

Old 450×125m 63/F/C/X/U Concrete 1-15

New 939×169m 74/R/C/X/T Concrete B01-28

Cargo 110×100m 74/R/C/X/T Concrete

Airport

specifications

Sub item

2,500×45m

3,100m×45m

63/F/C/X/U

77/F/C/X/T

0.000%

0.032%

2,620×300m

3,202×300m



1-8

d) Terminal facilities

The passenger terminal building was completed in 2008, and there is an apron in front of the west side

of the main runway. The terminal building has a 1-floor basement and is 3 floors above ground in

some areas of the airport. The terminal building is used for both domestic and international flights.

Figure 1-5 shows the terminal facility layout.



1-9

Figure1-5 Terminal Facility Layout at Makassar Airport

Source: AP-I

[1st

Flo

or]

[2nd

Flo

or]



1-10

• Curbside / departure and arrival lobby

Curbside is available for departing passengers in front of the departure lobby, and there is an area for taxis

and space for drop-offs. There are two lanes. One is used for stopped vehicles and the other for driving.

Curbside for arriving passengers is located at the 1st floor basement. This road is separated from the

curbside used by departing passengers.

• Transit hotel

There is a hotel located on the 1st and 2nd floor of the terminal building, which is located between the

arrival gates. The hotel began providing accommodations in 2014 and can be used by transit flight

passengers. The entrance is located between the departure and arrival gates and the road in front of the 1st

floor hotel check-in has a drop-off space for hotel guests to use.

• Departure gate

There is security located at the entrance of the terminal building for departing passengers, and passengers

can enter after showing their airplane tickets. Only airline passengers are allowed to enter the check-in

area.

The check-in area has a passenger lounge, information desk, airline ticket booths provided by each airline,

convenience stores, and so on.

Photo 1-2 Photo of Current Conditions of the Arrival Gate Facilities

Arrival gate (building exterior) Arrival gate (building interior)

Source: Photo taken by the study team



1-11

• Check-in area

There are island shaped check-in counters (2 islands and 48 counters), which passengers can use to

check-in. There is no distinction between domestic and international flights. All departing passengers

check-in at this location.

Baggage for check-in is placed on a conveyor belt located behind the check-in counter, and screening

(X-ray inspection) is performed in-line. If the inspection of the baggage fails, the passenger is called and

the baggage is opened and manually inspected in front of the passenger.

Photo 1-3 Photo of Current Conditions of the Check-in Counter Facilities

Check-in counter Conveyor belt


• Departing passenger security check

After check-in, passengers proceed to the security check located in the center of the 1st floor. After this,

they can take an escalator to the 2nd floor departure lounge.

The security check inspects carry-on luggage using an X-ray device, and there are 3 metal detector

systems installed for inspecting passenger belongings.

Photo 1-4 Photo of the Current Conditions of the Security Check Facilities

Security check Security check




1-12

• Departure lounge for domestic flights

The departure gates are arranged from Gate 1 to Gate 6, and passengers traveling domestically must show

their boarding passes at boarding time to board their flights. Up to the time of boarding, passengers can

spend their time in the terminal building stores and lounge.

Photo 1-5 Photo of Current Conditions of the Domestic Departure Gate Facilities

Domestic departure Gate 4 Domestic departure Gate 1


• Departure lounge for international flights

The departure gate used for international flights is Gate 7. It is positioned horizontally with Gate 6 and

has its own separate space. It also has a gate lounge. Passengers traveling internationally walk along the

same path as domestic flight passengers up to the gate lounge. International flight passengers must

proceed through Immigration and the security gate to enter.

The boarding bridge is shared with the domestic flight lines and a walkway for international flight

passengers is located next to departure Gate 6, which connects to the boarding bridge.

Photo 1-6 Photo of Current Conditions of the International Departure Gate Facilities

International Departure Gate 7 International Departure Gate 7




1-13

• Boarding bridge, bus gate

Passengers passing through the gate can board their flights by either using the boarding bridge or by using

the business operations stairs located from the fixed bridge section of the boarding bridge to walk down to

the apron and then take a ramp bus to a remote spot to board their parked aircraft by means of a ramp.

Photo 1-7 Photo of the Current Conditions of the Boarding Bridge Facilities

Boarding bridge exterior view Boarding bridge interior

Stairs for walking down to the apron Bottom of stairs for walking down to the apron


• VIP lounge

There is a local government VIP lounge located on the 3rd floor of the terminal building. The lounge can

be accessed by the stairs or escalator located on the 2nd floor of the terminal building.



1-14

Photo 1-8 Photo of the Current Conditions of the VIP Lounge Facilities

VIP lounge VIP lounge


• Arriving passenger flow

Arriving passengers enter the terminal building from the boarding bridge, and then walk to the center of

the building via a walkway that is separated from the area for airside departing passengers on the 2nd

floor of the building. There are two escalators servicing Gates 1-3 and Gates 4-6 respectively, as well as a

staircase leading down to the 1st floor. After going down to the 1st floor, passengers will meet up with a

bus gate, from which a walkway connects to the baggage claim area. Restrooms are located along the

walkway, as well as a Prayer Room.

Photo 1-9 Photo of the Current Conditions of the Arriving Passengers Walkway

From the boarding bridge to the arriving

passengers walkway

Arriving passengers walkway (arriving

passengers, transit passengers)

Escalator and stairway from the 2nd floor to the

1st floor

Connection with the bus gate (passengers making

access from a remote spot)




1-15

• Transit passengers counter (Transit Desk)

Transit passengers proceed to the transit passengers counter (Transit Desk) located in front of the baggage

claim area, and then pass through a security check and to go up to the 2nd floor.

The security check inspects carry-on luggage using an X-ray device, and there are 3 metal detector

systems installed for inspecting passenger belongings.

Photo 1-10 Photo of the Current Conditions of the Transit Passenger Facilities

Transit passengers counter (Transit Desk) Security check area for transit passengers


• Baggage claim area

There are 4 turntables, of which Turntables 1-3 are for domestic flights and Turntable 4 is for

international flights. Turntables 3 and 4 are separated by a door.

Photo 1-11 Photo of Current Conditions of the Baggage Claim Area Facilities

Baggage Claim 1 and 2 Baggage Claim 2 and 3


• Arriving passengers exit

Security staff is on duty at the arriving passengers exit of the terminal building and passengers who exit

the building are not allowed to enter again. There are taxi counters lined up in front of the outside of the



1-16

terminal building, but since this section is divided by a fence, only arriving passengers are able to enter

this area.

Photo 1-12 Photo of the Current Conditions of the Arriving Passengers Exit

Arriving passengers exit Outside terminal building of the arriving

passengers exit


a) Control tower

The control tower is located at the northeast of the current passenger terminal. The two runways and

the current passenger apron are viewable from the tower.

Photo 1-13 Photo of Inside the Control Tower

Existing terminal direction (southwest direction) New runway direction (southeast direction)


b) Refueling facilities

Currently, there are four 2,000 kL airline fuel tanks, supplying a total amount of 8,000 kL of fuel.

Additional land for tanks has already been obtained in preparation of a future facilities upgrade.

Aircraft are currently refueled using the refueling method, but hydrant development, with the

exception of piping, has been completed, and procurement of piping material has been made so that

construction can be carried out in connection with AP-I's apron upgrade work.

As a safety measure, spraying equipment for water and fire extinguishing agents (foam) have been

prepared, and storage warehouses have been installed to hold hazardous material.



1-17

Photo 1-14 Photo of Current Conditions of the Refueling Facilities

Panoramic view of refueling facilities Pipe (for pipeline)

Fuel tanks and fire extinguishing equipment Hazardous materials storage warehouse




1-18

c) Planned site for future upgrade

Figure 1-6 shows the land acquisition diagram obtained from AP-I. According to Figure 1-6, the

current passenger terminal building is planned to undergo upgrade for both sides.

Figure 1-6 Conditions of Airport Upgrade Land Acquisition

Source: AP-I

The photo shows the conditions of the land acquisition located at a position up to the refueling

facilities at the southwest of the passenger terminal building.

Photo 1-15 Conditions of the Airport Upgrade Land

Southwest side of the terminal doorway Between the terminal and the refueling facilities

(land already acquired)

Landscape: Planned construction location of the

3rd runway

(terminal southeast direction)

Terminal northeast upgrade section


AP-I completed acquisition



1-19

3) Conditions surrounding AP-I

AP-I is a 100% state-owned enterprise, and manages and operates 13 airports located in the eastern part of

Indonesia, when dividing Indonesia into eastern and western sections. AP-I is financially independent and

receives no subsidies from the government, and therefore, in the case of the airport upgrade, AP-I must ensure

profitability after acquiring the necessary funding on its own.

Figure 1-7 shows the organization chart of AP-I. As of 2011, AP-I has 360 staff members at its headquarters

and a total of 3,554 staff members when including the staff at each airport.

Figure 1-7 Organization Chart of AP-I


Marketing and

Business

Development

Director

President Director

General Affair

Group Head

Office

Administration

Department

Head

Asset

Management

Department

Head

Office

Facilities,

Operation &

Maintenance

Department

Head

Organization

Dev. &

Change

Management

Department

Head

Human

Capital Group

Head

Compensatio

n & Industrial

Relation

Department

Head

Career &

Talent

Management

Department

Head

Training &

Development

Group Head

Training

Module

Development

Department

Head

Tax

Management

Department

Head

Training

Management

Department

Head

Training

Facilities

Department

Head

Treasury

Department

Head

Finance

Group Head

Account

Receivable

Management

Department

Head

Fund

Management

Department

Head

F & B

Marketing

Department

Head

Network &

Infrastructure

Department

Head

IT Operation

Department

Head

Software

Development

Department

Head

IT Planning &

ERP

Department

Head

Information

Technology

Group Head

Property &

Advertising

Department

Head

Accounting

Group Head

Cost

Accounting

Department

Head

Finance

Accounting

Department

Head

Business

Development

Group Head

Business

Planning &

Development

Department

Head

Subsidiary &

Partnership

Department

Head

Customer

Service

Department

Head

Budget

Management

Department

Head

Aviation

Marketing

Group Head

Airline

Marketing

Department

Head

Cargo

Marketing

Department

Head

Non Aviation

Marketing

Group Head

Retail

Marketing

Department

Head

Non Terminal

Security

Department

Head

Electricity

Department

Head

Electronic

Department

Head

Project

Management

Office Group

Head

Project

Program

Department

Head

Project

Portofolio

Department

Head

Head of Internal Audit

Head of Procurement

Head of Corporate Social

Responsibility

Passenger,

Airline &

Cargo

Services

Department

Head

Airport

Services

Group Head

Fire Fighting &

Rescue

Department

Head

Airport

Compliance,

Performance

& Quality

Assurance

Department

Head

Airport

Security

Group Head

Screening

Check Point

Department

Head

Terminal

Security

Department

Head

Operational Audit Department Head

Engineering Audit Department Head

Marketing and Business Development

Audit Department Head

Finance Audit Department Head

Human Capital & General Affair Audit

Department Head

Material Procurement Department

Head

Corporate Secretary

Head of Corporate

Planning & Performance

Head of Risk Management

and Compliance

Corporate Administration Department

Head

Corporate Communication

Department Head

Legal Department Head

Corporate Planning Department Head

Corporate Performance Monitoring &

Evaluation Department Head

Quality Management Department

Head

Risk Management Department Head

Safety, Health

&

Environment

Department

Head

Safety, Health

&

Environment

Group Head

Airport

Facilities

Readiness

Group Head

Civil Airside

Department

Head

Civil Landside

Department

Head

Airport

Equipment

Readiness

Group Head

Mechanical,

HB & Water

Technique

Department

Head

Human Capital

and General Affair

Director

Finance and IT

DirectorTechnical DirectorOperation Director

Compliance Department Head

Safety

Management

System

Department

Head

Service Procurement Department

Head

Procurement Planning and

Administration Department Head

Corporate Social Responsibility

Cooperation Department Head

Corporate Social Environment

Department Head



1-20


through the Indonesian Aviation Network Reconfiguration Study Methodology

2-1

Chapter 2 Study Methodology

(1) Study Content

This study investigates the construction of the newly conceived BB/RH Network as a method to alleviate

congestion at Soekarno-Hatta Airport, and based on these results, investigates the scalability of Makassar

Airport to operate as a regional-hub airport. Based on the assumption of a future project, JICA overseas

investment and other financial means will be utilized with regards to Makassar Airport upgrade development,

and project formulation is an objective based on infrastructure development projects in anticipation of the use

of the superior technology and know-how of Japanese companies.

Makassar Airport, which is the subject of this study, commenced service of a new passenger terminal in 2008,

but due to strong demand, the terminal is already facing a situation in which it is exceeding its passenger

terminal capacity, and as a result, upgrade of Makassar Airport has become a pressing issue. AP-I, the

company that operates Makassar Airport, is currently updating its master plan that it drafted in 2009, and is

planning an airport upgrade in consultation with outside consultants.

This study is being carried out independently of the master plan of AP-I with the intent of proposing to local

stakeholders in Indonesia an upgrade plan for Makassar Airport that incorporates the requirements of a

regional-hub airport needed in the realization of the BB/RH Network, and thereafter, an integration planning

draft will be created to propose the integration of the network with the master plan of AP-I.

The methodology of the study was to first hold consultation with local stakeholders including DGCA, AP-I,

and PT. Garuda Indonesia (hereafter referred to as Garuda Indonesia), and then perform, in the case that the

BB/RH Network is applicable, an air traffic demand forecast for Makassar Airport, while also clarifying the

requirements needed for a regional-hub airport in order to effect the usage of the BB/RH network. After this,

we implemented field surveys at Makassar Airport, and after extracting the challenges that are facing the

current airport, we carried out a conceptual design of a future Makassar Airport that fulfills the airport

requirement specifications of a regional-hub airport. Following this, we calculated the project costs. Lastly,

we carried out funding plans, economic and financial analysis, and business scheme studies, and then devised

a business schedule, while investigating the feasibility of the project.

The following figure shows the relationships between the study team and the stakeholders.



2-2

Figure 2-1 Stakeholders of Indonesia and Japan related to this Research and the Relationship of the Stakeholders


(2) Research Methodology and Structure

1) Research Methodology

Related materials and information collected from relevant domestic and international stakeholders

Analysis and study of collected information

Field surveys

Regular meetings held with local stakeholders and preparatory consultation for the meetings

Creation of proposal content

Presentation, proposal, and opinion exchange for the local stakeholders



2-3

2) Research structure

Figure 2-2 Research structure




2-4

(3) Research schedule

1) Overview of local and national study

The study was implemented from September 25, 2014 to February 27, 2015. During this time, we did two

field surveys and had three local consultation sessions and debriefings. The study schedule is as shown

below.

Figure 2-3 Research Schedule


September October November December January February March

2014 2015

Field survey

Domestic operations

1st local consultation

and field survey

2nd field survey

(environment)

2nd local consultation

(executive debriefing)

Air traffic demand

forecast and collection of

airport information

Interim report #1

Project environment study and

outline design

Submission of draft report

Project cost calculation and economic evaluation

Creation of draft report

Debriefing

session

Submission of report

Report summary

Interim report #2

3rd local consultation



2-5

2) Field surveys

The field surveys and local consultation were carried out according to the following schedule.

Table 2-1 Field Survey Schedule

Visitation date Visitation location Interviewees

1st local consultation and 1st field survey

10/16 (Thurs.) Garuda Indonesia Garuda Indonesia: EVP, Operations, six other participants

AP-I AP-I: Technical Director

10/17 (Fri.) DGCA DGCA: Sub Director Airport Management

10/20 (Mon.) -

10/22 (Wed.)

Small and Emerging

Airport Seminar 2014

(at Bali)

DGCA: Secretary of DGCA, Director of Airport

AP-I: President Director

AP-II: President Director, etc. and many aviation officials

10/23 (Thurs.) Garuda Indonesia

(Overall coordination

meeting)

Garuda Indonesia: VP, Strategic Planning, three other participants

AP-I: Technical Director, three other participants

AirNav: ATM Officer, one other participant

10/24 (Fri.) DGCA DGCA: Director of Airport

Garuda Indonesia Garuda Indonesia: VP, Ground Service

Makassar Airport

(Field survey)

AP-I: Head of Airport Operation, one other participant

10/25 (Sat.) Kendari Airport

(Field survey)

Site visit only

10/30 (Thurs.) DGCA DGCA: Secretary of DGCA, one other participant

AP-II AP-II: Head of Strategic Planning

10/31 (Fri.) Hong Kong Aviation Consultant

2nd field survey (environment)

11/19 (Wed.) DGCA DGCA: Airport Environmental Specialist

11/20 (Thurs.) AP-I

AP-I: Safety Health & Environment Department Head, three other

participants

11/21 (Fri.) Makassar Airport

(Field survey)

AP-I: Airport Manager

AirNav: General Manager Makassar ATSC

2nd local consultation

12/1 (Mon.) Garuda Indonesia Garuda Indonesia: VP, Strategic Planning, two other participants

AP-I AP-I: Technical Director

12/9 (Tues.) DGCA

DGCA: Deputy Director for Scheduled Flight Service

Garuda Indonesia: EVP, Operation

12/11 (Thurs.)

Garuda Indonesia

(Executive Debriefing)

DGCA: Directorate of Airport, one other participant

Garuda Indonesia: SM, Network Planning, two other participants

AP-II: Head of Strategic Planning, one other participant

AirNav: ATM Officer, one other participant

12/12 (Fri.) DGCA DGCA: Acting Director General, two other participants

3rd local consultation

1/12 (Mon.) DGCA DGCA : Director of Airport

1/13 (Tues.) AP-I AP-I: Technical Director, two other participants

1/20 (Tues.) AP-I AP-I: President Director, Seven other participants

1/21 (Wed.) Garuda Indonesia Garuda Indonesia: EVP, Operation, Four other participants




2-6


through the Indonesian Aviation Network Reconfiguration Justification, Objectives and Technical Feasibility of the Project

3-1

Chapter 3 Justification, Objectives and Technical

Feasibility of the Project

(1) Background and Necessity of the Project

1) Background and Overview of the Project

The economic growth in Indonesia has created a growing problem of congestion at the Soekarno-Hatta

Airport due to an increase in air traffic demand. The Indonesian government, as a method to alleviate air

traffic and airport congestion in Jakarta, has planned and promoted measures such as upgrading

Soekarno-Hatta Airport and enhancing facilities at the Karawang Airport, but these plans have not proceeded

as planned due to land acquisition problems and other issues. Currently, the Soekarno-Hatta Airport has been

forced to operate at about three times its passenger terminal capacity. These congestion problems related to

the air routes and airports in the Jakarta metropolitan area are not limited to the Jakarta metropolitan area only,

but the growth in Indonesian air transport has, in turn, created a situation for a potentially large bottleneck

with regards to achieving sustained economic growth in Indonesia.

In light of this situation, our analysis results show that the congestion problems at Soekarno-Hatta Airport,

from the perspective of an aviation network, are really caused by two reasons: (1) Air routes in Jakarta are

extremely concentrated, and (2) a massive number of small and medium sized aircraft (single aisle aircraft)

using the airport.

Therefore, this project proposes, as a method to alleviate air traffic and airport congestion in Jakarta, the

transporting of a large quantity of air passengers via a small number of airport slots by connecting large-sized

jets (twin aisle aircraft) to Soekarno-Hatta Airport and the new regional-hub airport, while simultaneously

introducing a newly conceived aviation network (Broad-Band/Regional-Hub Network; hereinafter referred to

as the "BB/RH Network") that connects highly convenient frequent operations for the regional-hub airport

and local airports through the use of small-sized jets (regional jets and turbo props). The introduction of this

BB/RH Network is expected to greatly reduce air traffic and airport congestion in Jakarta.

Figure 3-1 BB/RH Network Concept


(1) Current Network (2) BB/RH Network

Downtown

Jakarta

Area

Downtown

CGK

JKT Airports

Local Airport Local AirportJakarta

Area

Easy Access

Regional Hub

International

Flight

Single Aisle

Regional Jet

Broad-BandTurobo Prop

Twin Aisle



3-2

The results of our consultation with local stakeholders in Indonesia have confirmed the appropriateness of

upgrading Makassar Airport to be a regional-hub airport that utilizes the BB/RH Network since it is already

positioned as the gateway with eastern Indonesia and is expected to have increased demand in the future as

the Sulawesi provincial capital.

Makassar City is a central city in eastern Indonesia located about 1,500 km east of the Jakarta metropolitan

area. Makassar Airport is an international airport located 17 km from the city, and as of 2013, a total of 9.65

million airline passengers use the airport each year. Operations of a new shared passenger terminal started in

2008, but due to strong aviation demand, the terminal is already exceeding its passenger terminal capacity.

This study investigates the construction of the BB/RH Network as a method to alleviate congestion at

Soekarno-Hatta Airport, and based on these results, investigates the scalability of Makassar Airport to operate

as a regional-hub airport.

Figure 3-2 Position of Makassar and Makassar Airport


Furthermore, the goals and effects of this project are not limited to alleviating air traffic and airport

congestion in Jakarta and upgrading the facilities at Makassar Airport. Indonesia is aiming at obtaining the

status of a developed nation by the year 2025 based on its master plan (MP3EI) for accelerating and

expanding economic development in Indonesia. The country is divided into six economic corridors (Sumatra,

Java, Kalimantan, Sulawesi, Bali - Nusa Tenggara, and the Papua - Maluku Islands), and the development is

expected to improve the potential of regional economies and promote domestic connectivity enhancements.

Jakarta Downtown

Airport

Makassar

1,434km

17km

Highway

Source: 2014 Google



3-3

Figure 3-3 Economic Corridors Map

Source: Indonesia Economic Development Acceleration and Expansion Master Plan (MP3EI)

Indonesia's land area spans approximately 2,000 km north to south and 5,100 km east to west for a total of

area of 1.91 million km2 (5.1 times larger than Japan) including sea areas. In addition, Indonesia is an island

nation composed of 17,000 large and small islands, and as a result of this, it requires a lot of cost to develop

infrastructure to connect each of the regions. In consideration of the land situation of Indonesia, correction of

the extreme concentration of air traffic in the Jakarta metropolitan area will naturally lead the country into

prosperity, and it is expected that the advocated BB/RH Network will be able to contribute to the economic

development of eastern Indonesia by increasing the connectivity of regions in eastern Indonesia with the

extremely concentrated Jakarta metropolitan area, while also contributing to correcting the domestic income

inequality problems faced by Indonesia. Furthermore, after confirming the effectiveness of the BB/RH

Network in this project, it is expected that it will be able to be applied to not only eastern Indonesia, but to all

of Indonesia. Therefore, this project is consistent with the policy of the new government listed "emphasis on

infrastructure development in order to correct the domestic income inequality between Java and non-Java".

2) Positioning of the Makassar Airport Upgrade with regard to the Upper Level Plan and related Plans

a) Relationship with the Government's Development Plan

Indonesia's national development plan is composed of a 20-year long-term national development plan,

a 5-year mid-term national development plan, and an implementation plan. The descriptions of the

long-term national development plan for each field are strictly conceptual, showing the 20-year vision

and policy direction. In other words, no description is given of individual projects. Indonesia's

government announced the above mentioned "Economic Development Acceleration and Expansion

Master Plan" (MP3EI) in May 2011, as the backbone of 2010 - 2025 long-term plan.

The Indonesian government, based on the above national long-term development plan, has proceeded

under the vision of "A Prosperous, Democratic, and Fair Indonesia" to improve its business

environment and develop its infrastructure, while continuing to stabilize its overall macroeconomic

position in the midst of increasingly intense international competition. Accordingly, it formulated the

national mid-term development plan (RPJM2010 - 2014) with the aim of sustaining and accelerating



3-4

its steady economic growth, and based on this national mid-term development plan, the Ministry of

Transportation and DGCA created the mid-term strategic plan (RENSTRA 2010 - 2014).

Currently, the national development planning agency (BAPPENAS) is concentrating its efforts on

implementing the revision work for the next national mid-term development plan (2015 - 2019).

Makassar Airport is positioned as the gateway to eastern Indonesia and is specified as one of

Indonesia's airports in the ASEAN Open Sky. It occupies an important position in air transportation in

Indonesia, and based on this background, the Ministry of Transportation, in order to facilitate the

revision of mid-term strategic plan, has shown in its PM69 Tahun 2013 that it is preparing Makassar

Airport to be a 4F class (Code 4: runway length of 1,800m or more; Code F: wing span between 65m

and 80m (supporting the A380)) airport by the year 2020.

b) AP-I's Master Plan for Makassar Airport

AP-I is currently managing and operating 13 airports in eastern Indonesia, but among these airports

under AP-I's jurisdiction, Makassar Airport has been positioned as the gateway to eastern Indonesia

and it boasts of being in the No. 3 position for number of airline passengers following only Surabaya

Airport and Bali Airport. After the enactment of the Aviation Law No. 1/2009 directive, airport

operators including AP-I are required to be financially independent and profitable and to procure their

own means of funding for airport development projects. AP-I is currently moving forward with its

plans to obtain foreign investment including PPP, expand its non-aero revenue, and promote its future

initiative project Airport City.

AP-I formulated its master plan for Makassar Airport in 2009, but as of 2013, the number of airline

passengers using the airport already exceeds the passenger terminal capacity, so it started revising the

master plan from April 2014. AP-I's current master plan for Makassar Airport (as of November 2014)

aims to increase non-aero revenue, enhance commercial facilities inside the airport terminal, promote

its airport plan incorporating the Airport City Concept, with combining general aviation, cargo,

logistics bases, and free trade areas.

This study is being carried out independently of the master plan of AP-I with the intent of proposing to

local stakeholders in Indonesia an upgrade plan for Makassar Airport that incorporates the

requirements of a regional-hub airport needed in the realization of the new BB/RH Network, and

thereafter, adjustment and coordination work will be implemented to conform the network with the

master plan of AP-I.



3-5

Figure 3-4 AP-I's Future Plan for Makassar Airport

Source: AP-I



3-6

3) Recorded Number of Airline Passengers in Indonesia

a) Recorded Number of Airline Passengers in All of Indonesia

When looking at the movement in the recorded number of airline passengers in all of Indonesia over

the past 10 years (2003 - 2013), the strong growth of the economy as well as the launch and expansion

of LCC (Low Cost Carriers) such as Lion Air have contributed to the recording of a very high growth

of passengers on average of 14% per year (14% for domestic flights and 12% for international flights).

Figure 3-5 Changes in the Number of Airline Passengers in Indonesia

Source: Created by the study team via BPS (Indonesia Central Statistics Agency)

b) Recorded Number of Airline Passengers Using Soekarno-Hatta Airport

Soekarno-Hatta Airport is located in Tangerang in Banten Province in the suburbs of the Jakarta

metropolitan area in Indonesia. It is Indonesia's gateway for international flights and occupies a very

important position as the only international airport in the Jakarta metropolitan area. The southern

runway and Terminal 1 were constructed for the Soekarno-Hatta Airport in 1985, and Terminal 2 and

the 2nd runway on the north side were constructed in 1993. Since then, no major renovation work has

been done to the airport facilities. In order to respond to the strong airline demand growth in Indonesia,

the newly built Terminal 3 was opened in 2009 and is currently undergoing upgrade construction

(planned to be completed in 2015). Following this, Terminal 1 and Terminal 2 are scheduled to be

renovated, and this development work of Terminals 1, 2, and 3 is planned to increase the passenger

terminal capacity of Soekarno-Hatta Airport to 62 million passengers per year by 2018.

On the other hand, Soekarno-Hatta Airport had a yearly airline passenger number of 37 million people

in 2008, but with a passenger growth of about 13% per year, the number of airline passengers has

already reached about 60 million passengers per year as of 2013. As of 2013, the airport boasts of

having the world's 10th largest airline passenger number. Currently, the quick population growth and

urbanization of the Jakarta metropolitan area are expected to cause an even larger increase in the

number of airline passengers using Soekarno-Hatta Airport in the future.

0

5,000

10,000

15,000

20,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Number of Airline

Passengers in

Indonesia

(ten thousands of

passengers)

Year

International

route

Domestic

route



3-7

Figure 3-6 Recorded Number of Yearly Passengers Using Soekarno-Hatta Airport

Source: Created by the study team via ACI data

In addition, the number of aircraft departing and arriving at Soekarno-Hatta Airport was around

400,000 per year as of 2013 and this is approaching the capacity of the runway. In the future, the

capacity limitations of the runway at Soekarno-Hatta Airport will create a situation where connections

will not be able to be freely made with local airports, and this will also create a large impact on the air

traffic demand at Makassar Airport in the future.

In order to alleviate the air traffic and airport congestion in Jakarta, various studies and initiatives have

been taken up until now, but the root solution required to alleviate the air traffic and airport congestion

in Jakarta is to either upgrade Soekarno-Hatta Airport or to build a new airport in the Jakarta

metropolitan area. However, there are currently no prospects for resolving land acquisition problems.

The following is a summarization of the efforts being made against the air traffic and airport

congestion problem in the Jakarta metropolitan area.

i) Optimizing Operations of the Runway at Soekarno-Hatta Airport1

AP-II has worked in cooperation with AirNav Indonesia and DGCA to introduce a new operating

procedure for improving the existing system, and this has shortened the amount of time aircraft

occupy the runway. The result has been an increase from 64 aircraft departures and arrivals per

hour to 72 aircraft departures and arrivals per hour on the runway (as of June 2014). In the future, a

goal is to achieve 86 aircraft departures and arrivals per hour, but it will be quite difficult to expand

runway capacity beyond these flight improvements.

1 Investor Daily, “Soetta Runway Capacity Goes up to 72 Movements”, 26 June, 2014

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2010 2011 2012 2013

Number of airline

passengers

(ten thousands of

passengers)

Year



3-8

ii) Operation of Halim Airport in the Metropolitan Area of Indonesia2

The Indonesian government started on January 10, 2014 the commercial use of Halim Airport,

which had been used by the Indonesian Air Force and VIPs, as a temporary solution until the

completion of Karawang Airport in the Jakarta metropolitan area. As of November 2014, Citilink, a

subsidiary of Garuda Indonesia, began operating flights at a rate of 20 aircraft departures and

arrivals per day for its regular passengers, so it does not seem possible to alleviate the fundamental

congestion problems at Soekarno-Hatta Airport. On the other hand, Lion Air is showing interest in

purchasing operating rights to use Halim Airport, which is currently operated by AP-II, and there

are also studies being done, which should be complete by July 2015, regarding how to expand the

airport terminal capacity from the current capacity of 4 million passengers to 12 million

passengers3. Furthermore, AP-II, which currently holds the operating rights, is waiting for the

decision by the Indonesian government4.

iii) Upgrade Plan for Soekarno-Hatta Airport

As a response to the passenger terminal capacity shortage at Soekarno-Hatta Airport, upgrade of

Terminal 3 is currently underway. With current operations at 3 times that of passenger terminal

capacity, this upgrade is expected to somewhat alleviate congestion. The upgrade work at

Terminal 3 is planned to be completed in 2015, and after this, Terminal 1 and Terminal 2 are also

planned to undergo renovations. All of the passenger terminal development work is expected to be

completed by 2018. On the other hand, plans for creating a new Terminal 4 and a 3rd runway in

order to respond to future air traffic demand have not materialized due to land acquisition and

funding problems. In particular, there are a great number of impoverished residents occupying the

land planned to be used for the 3rd runway. It is expected that an enormous amount of time will be

needed to just resolve rights issues, so in all practicality, land acquisition will be extremely

difficult.

iv) New Airport Construction in the Metropolitan Area (Karawang Airport, Lebak Airport)

JICA, in its "Jakarta Metropolitan Special Area and Investment Promotion Master Plan Research

(MPA)", which started in May 2011, raised the issue regarding the urgency of carrying out an

upgrade plan for Soekarno-Hatta Airport or constructing a new airport. Among the proposals made

was the idea of developing a new airport for domestic and international flights in the southern area

of the Karawang region. In this proposal, a 3-stage upgrade is planned utilizing the PPP scheme

under the assumption that air traffic demand will be 100 million passengers per year in the future5.

Currently, procedures are being undertaken in accordance with the procedure for installing and

operating new airport facilities defined by the Indonesian Aviation Law. According to the Aviation

Law, Article 200 specifies the position of domestic airport systems; Article 201 specifies the

determination of the position of the airport (including coordinate points and a master plan); Article

2 Investor Daily, “Waiting for Spatial Planning Revision: Karawang Airport Replaces Halim”, 11-12 January,

2014 3 Jakarta Post, “Lion to spend $436m to take over Halim airport”, 15 October, 2014

4 Investor Daily, ”AP II Ready to Leave Halim”, 20 October, 2014

5 Investor Daily, “Construction of Karawang Airport Expedited”, 25 January, 2014



3-9

215 specifies airport construction permits; and Article 217 specifies airport operation permits. The

plan is proceeding in accordance with the stipulations of these articles, and currently determination

of the positioning of the domestic airport system pursuant to Article 200 has already been

completed for Karawang Airport.

Additionally, Lion Air has invested 2.6 billion IDR in Rebaku in Banten Province in southern

Jakarta, and has announced a plan for developing a new airport. This plan sets forth the

construction of 4 runways on a land area of 5,500 ha, which is twice the size of Soekarno-Hatta

Airport. It also aims at being able to accommodate 50 million airline passengers per year, with a

schedule to start construction next year.6 Recently inaugurated President Joko Widodo is also

positive about the future of this plan in an attempt to connect it with a reduction of infrastructure

costs in Indonesia7. On the other hand, it is positioned away from the Jakarta metropolitan area and

would require an enormous amount of funding, so it will be important to watch for future

developments, including those related to Karawang Airport.

c) Recorded Number of Airline Passengers Using Makassar Airport

After AP-I was given operating jurisdiction over Makassar Airport in 1987, the area saw the economic

growth of Makassar City, as the Sulawesi provincial capital, and the development into a trading hub

connecting with regions in eastern Indonesia. Makassar Airport started operations of its first

international route for Malaysia Airlines in 1995 and has since steadily expanded. On August 20, 2008,

service began for the new passenger terminal, which is currently the main terminal, in order to make

replacement with the old passenger terminal, and in January 2010 operation began for the 2nd runway,

which is 3,100m long. As of 2014, it is the only major airport in Indonesia besides Soekarno-Hatta

Airport to possess two runways.

By looking at the change in the number of airline passengers of Makassar Airport from 2008 when it

started operations in the new passenger terminal, it is apparent that the airport has experienced rapid

growth with 9.65 million passengers per year as of 2013, of which approximately 70% are domestic

travelers. Over the past 5 years, the average increase per year of passengers is 17% (from 2008 - 2013).

International flights only account for 1-2% of the total percentage, but have also grown 23% per year

over the past 5 years. Furthermore, Makassar Airport is positioned as the gateway to eastern

Indonesian regions and is characterized by transfer passengers, which account for approximate 25% of

its total usage.

6 Jakarta Globe, “Lion Group to Start Building Lebak Airport Next Year”, 13 November, 2014

7 New Straits Times, “Lion Group plans IPO for new Banten airport”, 30 November, 2014



3-10

Figure 3-7 Recorded Number of Airline Passengers Using Makassar Airport

Source: Created by the study team via AP-I data

Figure 3-8 Passenger Purpose Ratio for Major Airports in Indonesia8

Source: Created by the study team via materials from DGCA and AP-I

As mentioned above, Makassar Airport reached 9.65 million airline passengers for the year 2013, and

it is currently exceeding its passenger terminal capacity (domestic flights: 7.6 million passengers;

international flights: 1 million passengers). In addition, Makassar Airport is currently processing

approximately 25 aircraft departures and arrivals per hour during peak hours (8:00am-9:00am), but is

8 The airline passenger numbers for 2012 only make use of Soekarno-Hatta Airport.

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011 2012 2013

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assa

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irpo

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ikpap

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purpose ratio

Major airports in Indonesia

Transfer

International

route

Domestic route



3-11

dealing with a shortage of spots during this time period. On the other hand, runway capacity, including

the 1st runway and 2nd runway, is still considered to have room to grow at the current time.

Figure 3-9 Aircraft Movements per Hour at Makassar Airport

Source: Created by the study team based the Makassar Airport timetable (December 2014)

4) Necessity of this Project and Business Scope

As mentioned above, Indonesia has up until now been able to achieve a large growth in air traffic demand,

but faces the problem of not having sufficient aviation infrastructure to support this growth. Indonesia

currently has no prospects for creating a fundamental solution to the air traffic and airport congestion in

Jakarta that have become a bottleneck for air transportation growth throughout Indonesia, while the country

also faces the problem of excessive passenger terminal capacity at Makassar Airport. The BB/RH Network

proposed by this project would help alleviate congestion of air routes and airports in Jakarta via aviation

network reconfiguration, which can be implemented without overly relying on the need to develop the

airports in the Jakarta metropolitan area. In addition, the project facilitates the upgrade of Makassar Airport

by allowing it to function as a regional-hub airport, which increases the connectivity of the Jakarta

metropolitan area with airports in eastern Indonesia and makes it possible to meet the future demand of

increased air traffic demand in Indonesia.

The business scope assumed by this project includes the upgrade of Makassar Airport to the scale of 21

million passengers for the year 2024 based on the air traffic demand forecast described hereafter, as well as

the new construction/upgrade of passenger terminal facilities incorporating the requirements needed of a

regional-hub airport, apron upgrade, baggage handling system construction, and roads and parking lots

around the passenger terminal. With regards to the addition of the 3rd runway, since it is possible to deal with

the existing air traffic demand with the current two runways, and since AP-I is planning to increase facilities

starting in the year 2024, this study does not assume runway facilities will be increased.

0

5

10

15

20

25

30

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Aircraft

movements

per hour

Time

Departure

Arrival



3-12

(2) Required Studies in the Content Determination of the Project

As a study required in the content determination of the project, an air traffic demand forecast was

implemented for Makassar Airport in order to determine the scale of the upgrade of Makassar Airport.

Following this, a study was carried out, after taking into account the airport capacity limits at Soekarno-Hatta

Airport, with regards to the capacity of Makassar Airport as it relates to the introduction of the BB/RH

Network. Finally, airport requirement specifications needed of a regional-hub airport were formulated based

on field studies, study of case studies of hub airports in the United States, and consultation with local

stakeholders.

1) Demand Forecast

At the time of making the air traffic demand forecast for Makassar Airport, we carried out an environmental

analysis regarding factors that could impact air traffic demand, and after having consultation with local

stakeholders and based on the results of air traffic demand forecasts of other airline related agencies, we

established the air traffic demand forecast values for Makassar Airport to use in this project.

a) Environmental Analysis regarding Factors that could Impact Air Traffic Demand

The number of airline passengers in all of Indonesia has grown on an average of 14% per year over

the past 10 years (2003 - 2013), and strong air traffic demand growth is expected to continue in the

future. In this section, analysis is made of the environmental factors that could influence air traffic

demand in Indonesia and at Makassar Airport.

i) Growth in Population and Income of the Middle Class

The population of Indonesia as of 2013 was 248.82 million people (BPS: Central Board of

Statistics of Indonesia), which is the fourth largest in the world and occupies 40% of the total

population among ASEAN10 countries. According to the Central Board of Statistics of Indonesia,

9population is expected to continue to grow at about 1% per year on average, and from 2010 to

the middle of the 2020s the working population is anticipated to expand, with Indonesia

expecting to enjoy a population bonus period by the year 203010

. In addition, the potential for

middle-class income to rise is extremely high, and the increase in middle-class income will make

it possible for the middle-class to utilize air transportation, which, in turn, is expected to

contribute to strong air traffic demand growth.

ii) Economic Growth

Growth in GDP is expected to occur with the increase of Indonesia's population. The real GDP of

Indonesia grew 5.8% year-on-year in 2013, and it is expected that it will continue to grow at an

average of about 6% per year up until 201911

. It is also anticipated that GDP per capita will rise

from 36.64 million IDR in 2013 to 65.46 million IDR in 2019.

9 Indonesia Population Projection 2010-2035

10 JICA Republic of Indonesia Overview, February 2014

11 IMF, World Economic Outlook, 2014



3-13

Figure 3-10 Changes and Expectations in Indonesia's GDP per Capita

Source: IMF, World Economic Outlook, 2014

iii) Strengthening the Hub Function of Makassar Airport

Eastern Indonesia is expecting to experience remarkable economic growth in the future in light of

its rich abundance of natural resources and tourism attractions. The development of eastern

Indonesia also brings the prospects of a significant increase in air traffic demand for Makassar

Airport as the gateway. In particular, one of the assumptions in constructing the BB/RH Network,

which is being studied in this project for alleviating the congestion of Soekarno-Hatta Airport, is

that it will strengthen the hub function of Makassar Airport. In particular, it is expected to achieve

two things: (1) increase the number of transfer passengers at Makassar Airport making

connections between airports in eastern Indonesia and airports in the Jakarta metropolitan area,

and (2) increase the number of transfer passengers as a result of the transfer of control to

Makassar Airport to carry out transit function operations between airports in eastern Indonesia

and airports in western Indonesia, a function that is currently being carried out by Soekarno-Hatta

Airport.

iv) ASEAN Open Sky

Aviation liberalization in ASEAN regions (liberalization of the 3rd, 4th, and 5th “Freedom of the

Air”) is planned to be implemented in 2015. The increase in business activity, business travel,

and tourist travel accompanying the improved connectivity in the ASEAN region will most likely

afford Indonesia's airlines and airport operators with great business opportunities. Indonesia is

also planning on opening up its 5 international airports, which include those in Jakarta, Surabaya,

Bali, Medan, and Makassar, and this is anticipated to further develop the economics of the

regions surrounding Makassar Airport and also greatly increase the number of international

passengers using Makassar Airport.

b) Air Traffic Demand Forecast for Makassar Airport

Based on the results of consultation with local stakeholders and in consideration of factors that could

impact air traffic demand, an air traffic demand forecast for Makassar Airport has been established at

0

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3-14

an air traffic demand forecast value of 21 million airline passengers a year (14.5 million domestic

flight passengers, 800 thousand international flight passengers, and 5.7 million transit passengers) for

the year 2024, which is the air traffic demand forecast value planned by the current master plan. This

air traffic demand forecast value has been used as the baseline of this project.

Figure 3-11 Air Traffic Demand Forecast for Makassar Airport (AP-I)

Source: Created by the study team via AP-I materials

This air traffic demand forecast value assumes a growth of 7.3% per year, but the number of airline

passengers for domestic flights between the years 2008 and 2013 rose greatly at a rate of 17% per year.

As a result, some of the local stakeholders desire a future gross potential that can respond to even

greater air traffic demand, as well as a phased-approach that can correspond to the increased air traffic

demand. Therefore, the airport upgrade plan for Makassar Airport requires that emphasis be placed on

"future gross potential" and a "phased-approach".

Furthermore, the results of analyzing the growth rate in the number of airline passengers in regions of

Indonesia, which was a study carried out by aviation related agencies, shows that the forecast values

of AP-I adopted in this study are mostly identical to the forecasts provided by other aviation related

agencies.

Figure 3-1 Forecast of the Growth Rate in the Number of Airline Passengers Provided by the related Agencies

Boeing12

Airbus13

IATA14

AP-I (adopted

this time)

Forecast of the growth rate in

the number of airline passengers

(% / year)

7.7 6.9 6.4 7.3


12

Boeing, Current Market Outlook 2014 (South East Asia-South East Asia) 13

Airbus, Global Market Forecast 2014 (Domestic Asia Emerging) 14

IATA, Indonesia Domestic Market, Oct, 2014

Base Case Forecast in UPG Passenger

2013

9.6M

2024

21M

2044

40M 2013 - 2024

GDP Growth: 5.4%/year

Traffic Growth: 7.3%/year

UPG Passenger

2024 (2013)

Demand 21mil (9.6mil)

Domestic 69% (75%)

International 4% ( 2%)

Transit 27% (23%)



3-15

2) Makassar Airport Capacity Study Accompanying the Introduction of the BB/RH Network

After analyzing the current airport network at Makassar Airport, we studied the amount of airport capacity

required for Makassar Airport when introducing the BB/RH Network under the assumption of the air traffic

demand forecast of the year 2024. The study on airport capacity implemented a route analysis between

Soekarno-Hatta Airport and Makassar Airport as the constraint of the future airport network, and thereafter,

carried out a broader analysis for the network between Makassar Airport and airports in eastern Indonesia.

a) Current Airport Network Analysis for Makassar Airport

Makassar Airport currently has 24 domestic routes mostly for flights to eastern Indonesia and 2

international routes for flights to Kuala Lumpur and Singapore for a total of 26 established routes. It

operates approximately 260 scheduled aircraft departures and arrivals per day.

Figure 3-12 Current Airport Network Connecting Makassar Airport

Source: Created by the study team from the December 2014 Makassar Airport timetable

The flight frequency share among the different airlines and aircraft fleet operating at Makassar Airport

shows that 3 large airline companies occupy nearly 100% of the flights with the LCC Lion Air holding

a share of 51%15

, the state-owned airline Garuda Indonesia holding a share of 32%16

, and Sriwijaya

Air, which is in the third position for domestic flights, holding a share of 16%. Classified by aircraft

fleet, the flight frequency share for single aisle aircraft such as the B737 and A320 occupies 73%,

regional jets and turbo props such as the CRJ1000 and ATR72 occupy 26%, and twin aisle aircraft

such as the A330 currently occupies 1%.

15

Includes the subsidiary companies Wings Air and Batik Air 16

Includes the subsidiary company Citilink



3-16

Figure 3-13 Flight Frequency Share at Makassar Airport by Airline / Fleet


Next, the flight frequency share among the different airlines and aircraft fleet operating between

Soekarno-Hatta Airport and Makassar Airport shows that between Soekarno-Hatta Airport and

Makassar Airport frequent operation of flights currently accounts for approximately 34 round-trip

flights per day on average, of which approximately 33 of the round-trip flights are made using single

aisle aircraft such as the B737 and A320. In the future, congestion will worsen at Soekarno-Hatta

Airport and if flight frequency does not rise above this level, a bottleneck will form for routes between

Soekarno-Hatta Airport and Makassar Airport and this would most likely greatly hinder not only the

expansion of Makassar Airport, but also the expansion of the network in eastern Indonesia.

Figure 3-14 Flight Frequency Share between Soekarno-Hatta Airport and Makassar Airport


b) Broad-Band (Twin Aisle Aircraft) Flights between Soekarno-Hatta Airport and Makassar Airport

Twin aisle aircraft are usually utilized for long haul international flights, but in order to effectively use

the limited airport slots at congested airports, the seating capacity of twin aisle aircraft is being used to

the greatest extent possible for short haul domestic flights so as to transport a large number of airline

passengers at one time.

i) Example of Short Haul Domestic Flight Operation of Twin Aisle Aircraft in Japan

Lion Air

51% Garuda

Indonesia

32%

Sriwijaya

Air

16%

Others

1% A330

1%

B737

69%

A320

4%

CRJ1000

10%

ATR72

16%

Lion Air

Garuda

Indonesia

Sriwijaya Air

B737

A320

A330

0

5

10

15

20

25

30

35

By airline By aircraft

Number of

round-trip

flights

(flights / day) Single aisle

aircraft



3-17

In Japan, since airport slots are limited at Tokyo International Airport (Haneda), many twin aisle

aircraft are being introduced for main routes regardless of whether the flights are short-haul

domestic flights. Although these aircraft are currently retired, the short-distance SR model (short

range) of the large B747 and 400D model (D for domestic) were both widely utilized for

domestic flights. Currently, All Nippon Airways, Japan Airlines, and Skymark Airlines make

frequent flight use of twin aisle aircraft such as the B777, B787, B767, and A330 for main routes

that include Haneda Airport to Chitose Airport (894 km), Haneda Airport to Itami Airport (514

km), Haneda Airport to Fukuoka Airport (1,041 km), and Haneda Airport to Naha Airport (1,687

km).

ii) Current Situation of Short Haul Domestic Flight Operation of Twin Aisle Aircraft in Indonesia

Indonesia is also seeing an increase in the use of a fleet of twin aisle aircraft in hopes of

alleviating congestion caused by limited airport slots at Soekarno-Hatta Airport. In an interview

with local officials, we learned that DGCA took the initiative 4 years ago to recommend the use

of twin aisle aircraft for the main routes of domestic flights, but airlines were reluctant to

introduce the use of twin aisle aircraft for domestic routes.

However, now with the worsening of the air traffic and airport congestion in Jakarta, Garuda

Indonesia has started introducing twin aisle aircraft to its domestic routes (as of December 2014,

it has started introducing twin aisle aircraft for Jakarta - Bali, Jakarta - Surabaya, Jakarta -

Balikpapan, Medan - Makassar, and Jakarta - Makassar, which is the subject of this study). In

addition, Lion Air is also making investigation as to whether introduce twin aisle aircraft for

domestic flights and had ordered 5 B787s (however, it was announced that in January 2014 the

order for the B787s was canceled and replaced with an order for B737-900ERs17

).

Furthermore, during the "The Ministry's National Working Meeting" held on December 9, 2014,

the new Minister of Transportation Ignasius Jonan announced that "there would be a 50%

reduction in landing fees for the use of twin aisle aircraft for domestic flights at major airports18

",

so it has become clear that the government in Indonesia is promoting the operation of twin aisle

aircraft for domestic flights.

c) Future BB/RH Network Assumptions and Airport Capacity according to Function

This project assumes the adoption of twin aisle aircraft for frequent operations between

Soekarno-Hatta Airport and Makassar Airport as a model based on Japan's long history of using twin

aisle aircraft for short haul domestic flights. We carried out the aviation network analysis for this

project based on the results of consultation with local stakeholders and under the following

assumptions.

i) We set the flight frequency between Soekarno-Hatta Airport and Makassar Airport to be the

same as the number of current flights.

17

Jakarta Globe, “Lion Air to Cancel Order of Dreamliners for Smaller 737 Aircraft”, 28 January, 2014 18

Jakarta Post, “Incentive Prepared for widebody aircraft”, 10 December, 2014



3-18

As described by the air traffic demand forecast, conservative assumptions have been made

regarding efforts to upgrade airport capacity at airports in the Jakarta metropolitan area, so

instead of overly relying on airport development in the Jakarta metropolitan area, we established

a goal of achieving the transportation of passengers in eastern Indonesia, which includes those

using Makassar Airport. Also, even if airport capacity is increased for the Jakarta metropolitan

area, the extreme concentration in the Jakarta metropolitan area still needs to be corrected, and

from the perspective of eastern Indonesian development, it is considered that the effectiveness of

the BB/RH Network will remain unchanged either way.

ii) The use of twin aisle aircraft between Soekarno-Hatta Airport and Makassar Airport establishes

a high-density seat configuration.

Garuda Indonesia has already adopted the use of twin aisle aircraft for domestic flights. However,

the cabin configuration of the flights is suited for long haul international flight operations, and

has not yet been optimized for short haul domestic flight operations. This study made reference to

the cabin configurations of the twin aisle aircraft of Japanese airlines and it was assumed that

high-density seat configuration for the number of seats on small twin aisle aircraft such as the

A330 and B787 is between 300 to 400 seats, and the number of seats on large twin aisle aircraft

such as the B777 is between 400 and 500 seats. By adopting the high-density seat configuration

of twin aisle aircraft, not only is it possible to increase the number of available seats per flight,

but it is also possible to reduce the operating costs of airlines per seat, and therefore, will

contribute to improvement in the operating economics of airlines.

iii) In addition this will basically reduce the direct flight frequency between Soekarno-Hatta Airport

and airports in eastern Indonesia and allow passengers to make use of connecting flights at

Makassar Airport. It is also possible to improve convenience for passengers by using small

aircraft (regional jets and turbo props) for frequent operations between Makassar Airport and

airports in eastern Indonesia.

According to the results of a previous field survey carried out beforehand by this study project

with regards to the preferences of airline passengers in Indonesia with respect to direct flights and

transit flights, we have learned that airline passengers will actively choose flight routes with

transit flights when the fare of routes with transit flights is relatively cheaper than direct flight

routes and when transit convenience is improved (high flight frequency, convenience timetables

with lots of departures and arrivals, etc.). Based on the preference analysis of airline passengers

undertaken by this study, we have determined that the convenience of passengers can be

increased by offering frequent operations of small aircraft between Makassar Airport and airports

in eastern Indonesia, and have furthermore, established an airport capacity (passenger terminal,

number of spots) based on the analysis results of passengers choosing transit flights via Makassar

Airport as opposed to direct flights.



3-19

Based on the above assumptions, the results of passenger route choice analysis and the initial aviation

network analysis indicate that many airline passengers traveling between Soekarno-Hatta Airport and

airports in eastern Indonesia will choose a transit flight by way of Makassar Airport. In such a case,

since it is expected that the transit passengers using Makassar Airport will greatly increase, this

project has considered it appropriate to make classification of two functions: (i) a function related to

the BB/RH Network (BB/RH Function) that connects Soekarno-Hatta Airport with airports in eastern

Indonesia by way of Makassar Airport and (ii) an existing function that connects Makassar Airport

with the other major airports (including international air routes).

(i) BB/RH Function

This function seeks to maximize transit convenience for the transit passengers of Makassar

Airport by connecting Soekarno-Hatta Airport with airports in eastern Indonesia by way of

Makassar Airport. The results of the initial network analysis show that there will be a need in the

year 2024 to process approximately 11 million passengers a year via the BB/RH Function. In

particular, in order to support 3-4 twin aisle aircraft per hour between Soekarno-Hatta Airport and

Makassar Airport during peak hours, it will be necessary to operate flights between Makassar

Airport and the airports in eastern Indonesia using small-sized jets at a rate of 15-20 flights per

hour.

(ii) Existing Function

This function mainly handles direct flight passengers between Makassar Airport and other main

airports (including international air routes). The results of the initial network analysis based on

the assumption of the operation of mostly single aisle aircraft, as has been the case until now,

show that there will be a need to process approximately 10 million passengers via the Existing

Function. In order to reduce the investment costs, airport operations that maximize existing

facilities are required.



3-20

Figure 3-15 Conceptual Diagram of Future Airport Functions at Makassar Airport


3) Airport Requirement Specifications Needed in a Regional-Hub Airport

The field survey extracted the tasks currently facing Makassar Airport, and then, based on the investigation of

case studies at hub airports in the United States and after consultation with local stakeholders, we summarized

the airline requirement specifications needed for the BB/RH Function.

a) Field Survey Extraction of Tasks Currently facing Makassar Airport

The field survey and materials obtained from AP-I were used to extract the tasks facing the current

facilities of Makassar Airport, the subject of this study.

i) Issues related to the Area Layout of the Passenger Terminal

Among the 65,000m2

of floor space in the passenger terminal building, the departure gate

lounge occupies almost 50% of the area, so even though there is plenty of space in front of

the gate, the area around the check-in counter is congested due to the uneven distribution of

space.

There are island type check-in counters in the check-in lobby, but since the escalator up to

the 2nd floor is located in the center of the passenger terminal, passenger flow is

concentrated among passengers waiting and finishing to check-in and passengers entering

from the passenger terminal doors, thus making the area congested.

Since there are only 1-2 international flights per day, the departure and arrival gate for

international flights is positioned next to Gate 6, but when implementing the facilities

Makassar Airport

Makassar

Airport Capacity

(2024）

11 Million Soekarno-Hatta

AirportBB/RH

Function

Eastern

IndonesiaCentral/Western

Indonesia

(Surabaya, Medan, etc)

International

(Singapore, etc)

Existing

Function10 Million

21 Million

Twin Aisle

Single Aisle

Small Aircraft



3-21

upgrade, there needs to be a plan to prevent the passenger flow of the international and

domestic lines from mixing with each other.

ii) Issues related to the Flow of Transfer Passengers

After transfer passengers arrive at Makassar Airport, they need to use the boarding bridge to

walk from the 2nd floor section into the passenger terminal by going down to the 1st floor,

and then after gathering in the center area to undergo transfer screening, they need to go

back up to the 2nd floor again to enter the departure lounge. In other words, they have to

perform two floor level changes. As a result, the walking distance for the transfer is very

far, and this design is not very accommodating to transfer passengers.

Among the spots for parking aircraft, there are 6 spots that connect with a boarding bridge.

All of the other spots are remote spots, so the overall percentage of spots that connect with a

boarding bridge is small. When using a remote spot, passengers need to be transported using

a ramp bus, and this can make it difficult to process transfer passengers quickly. In addition,

passengers that depart from remote spots need to walk down to the apron from the fixed

bridge section of the boarding bridge via a business operations staircase, and then take a

ramp bus to a remote spot to board. However, since the business operations staircase is steep,

it raises the issue of safety.

iii) Issues related to the Flow of Transfer Passengers

The absence of a baggage handling system makes it necessary for transfer passengers to

manually sort out their checked-in baggage, and it is difficult to sort through baggage within

a short period of time.

b) Research of Case Studies at Hub Airports in the United States

Long-time established major airlines operating in the aviation powerhouse of the United States have

constructed a network for concentrating the flights of each airline with hub airports via a

"hub-and-spoke system" in order to ensure the efficient operation of their aircraft. Since it was learned

through interviews with local stakeholders that "there are currently no airports in Indonesia that take

into consideration transit flights", we carried out this case study of hub airports in the United States.

Traditional airlines (legacy carriers) in the United States have recently been consolidated into 3 major

airlines following the mergers of Delta Airlines/Northwest Airlines in 2008, United

Airlines/Continental Airlines in 2010, and American Airlines/US Airways in 2013. These airlines have

been able to construct a hub-and-spoke system by linking partnering regional airlines with each of the

hub airports.



3-22

Table 3-2 Hub-and-spoke System in the United States

Traditional airlines United Airlines American Airlines

US Airways Delta Airlines

Hub airports Chicago O’Hare

Denver

Houston George Bush

Los Angeles

Newark Liberty

San Francisco

Washington Dulles

Charlotte

Chicago O’Hare

Dallas/Fort Worth

Los Angeles

Miami

New York-LaGuardia

New York-JFK

Philadelphia

Phoenix

Washington, D.C

Atlanta

Cincinnati

Detroit

Minneapolis-St. Paul

New York-LaGuardia

New York-JFK

Salt Lake City

Seattle

Regional brand United Express American Eagle Delta Connection

Regional airlines Skyewest Airlines

Expressjet Airlines

Republic Airlines

Shuttle America

Trans States Airlines

GoJet Airlines

Mesa Airlines

Commutair

Envoy

PSA Airlines

Piedmont Airlines

Skywest Airlines

Expressjet Airlines

Republic Airlines

Air Wisconsin

Mesa Airlines

Endevor Air

Skywest Airlines

Expressjet Airlines

Republic Airlines

Shuttle America

Chautauqua Airlines

GoJet Airlines

Compass Airlines

Source: Created by the study team via airline websites and the ASCEND database

A hub airport has multiple runways in order to deal with a large number of departing and arriving

aircraft, and the passenger terminal is positioned in the center of these runways so that the ground

running distance of the aircraft is reduced to the greatest extent possible. The passenger terminal is

composed of access facilities such as the passenger loading apron, passenger terminal building, and

parking lots, but arrangement of these facilities is made so as to secure a smooth flow between

passengers, goods, and vehicles.

Passenger terminals are broadly classified into centralized terminals and distributed terminals.

Centralized terminals are composed of one large main terminal and associated satellite terminals,

whereas distributed terminals are divided into multiple main terminals.

Atlanta Airport is an example of a centralized airport. Atlanta Airport is used as a hub of Delta

Airlines and between the international main terminal and the domestic terminal there are 5 satellite

terminals A-E. The satellite terminals are positioned approximately 300m from each other, and

connection between the main terminals with the satellite terminals is made via a tram (subway) or

pedestrian underground walkway.

Chicago O'Hare Airport and Dallas-Fort Worth Airport are examples of distributed terminals. Chicago

O'Hare Airport is composed of four passenger terminals, 1, 2, 3, and 5 and each passenger terminal is

connected by ATS (monorail between terminals). Linkage with Terminal 1, a main terminal, and

satellite terminals, positioned about 300m away from each other, is made via a pedestrian



3-23

underground walkway (moving walk). Dallas-Fort Worth Airport is composed of 5 terminals A-E to

which each satellite terminal is connected by means of APM (Automated People Mover, Skylink).

In the case of centralized terminals, even though transfer passengers can easily move for transit, the

size of the main building increases and construction work is difficult when gradually making

upgrades.

In the case of distributed terminals, if movement between terminals is necessary for transfer, a

transportation system such as APM is required. However, it also has the benefit of providing departing

and arriving passengers of the airport a short traveling distance from the city to aircraft that have

landed at the airport. The arrangement of spots for large and small aircraft has two types of formations.

In the case of the Chicago O'Hare Airport used by United Airlines, both large and small aircraft make

use of the same satellite terminals, whereas in the case of Dallas-Fort Worth Airport used by American

Airlines or Atlanta Airport used by Delta Airlines, large and small aircraft make use of different

passenger terminals. The arrangement of aircraft is carried out by each airport to optimize its

operations depending on the number of flights and number of airlines.

Figure 3-16 Terminal Arrangement by Delta Airlines at Atlanta Airport

Source: Delta Airlines website



3-24

Figure 3-17 Terminal Arrangement at Chicago O'Hare Airport

Source: United Airlines website

Figure 3-18 Terminal Arrangement at Dallas-Fort Worth Airport

Source: Dallas-Fort Worth Airport website

Furthermore, Miami Airport and New York JFK Airport have large aircraft connected to the main

terminal, whereas small aircraft make access from the main terminal through corridors, and this

arrangement allows transit between large and small aircraft to be achieved in a small amount of time

and for a small amount of investment.



3-25

Figure 3-19 Example of the Corridor Concept in the United States

Miami Airport New York JFK Airport

Source: Google Maps

c) Regional-Hub Airport Requirement Specifications Formulation

As mentioned above, based on the results of task extraction via field surveys at Makassar Airport, case

studies at hub airports in the United States, and interviews with local stakeholders, formulation has

been established as follows below for the requirement specifications needed for the regional-hub

airport proposed by this project.

i) Passengers: Transit should be stress free.

Minimization of walking distances

Minimization of level changes

Appropriate arrangement of inspection areas for transfer screening

Securing a sufficient number of transfer desks

Less "narrow paths" throughout transfer route

Easy-way-finding by instructions

ii) Facilities: Realization should be made of simple airport facilities / efficient aircraft operation.

Reducing initial investment through use of the simplest airport facilities / reducing operating

costs

Passenger terminal in consideration of large aircraft / small aircraft that can reduce transit

times

Reduction of Transfer time of checked-in baggage from large aircraft to small aircraft

Reduction of taxiing distances

Arrangement of Apron and Taxiways that do not Cause Congestion

iii) Scalability: Guarantee should be made of flexible airport upgrade in the future.

Phased-approach that can respond to variations in the number of airline passengers and

changes in the market environment

Extensibility (including the Aero City concept) that can respond to increased air traffic

demand in the future



3-26

iv) Other considerations (including the unique characteristics of Makassar Airport)

Development of commercial facilities for expansion of non-aero revenue

Consideration of not only transfer passengers, but also passenger flow for departing and

arriving flights at Makassar Airport

Responding to cargo increases due to the operation of twin aisle aircraft

Securing conformity with existing land acquisition plans

Development of local airports in eastern Indonesia that connect to Makassar Airport via the

BB/RH Network (night time departure and arrival support operation capability)

Consideration of military aircraft operation restrictions for Makassar Airport



3-27

(3) Outline of Project Formulation

1) Approach to project formulation

The business scope assumed by this project includes the upgrade of Makassar Airport based on the results

of the air traffic demand forecast, as well as the new construction/upgrade of passenger terminal facilities

incorporating the requirement specifications needed of a regional-hub airport, apron upgrade, baggage

handling system construction, and roads and parking lots around the terminal building. Based on the results

of various studies and consultation with local stakeholders, the conceptual design of Makassar Airport will be

carried out in accordance with the following basic policy.

This project incorporates the regional-hub airport requirement specifications of Makassar Airport and

investigates the airport upgrade project estimating 21 million passengers per year for the year 2024

based on the air traffic demand forecast value.

We have ensured future gross potential by taking into consideration the possibility of an increase in

future air traffic demand in Indonesia in excess of the current estimation.

This projects adopts a phased-approach in which study is made starting with the year 2024 (Phase 1)

and ending with the grand design of the year 2044 (Phase 2). In moving toward the operation start in

the year 2024, consideration has been made of the implementation potential of the introduction phase

(Phase 0) to confirm beforehand the feasibility of the BB/RH Network.

Since two different roles will be required of Makassar Airport as it transitions into being a regional

hub, the study is classified into the BB/RH Function and Existing Function which have greatly

improved transit convenience as an airport function.

In consideration of the land acquisition difficulties, it is assumed that upgrade will utilize the existing

premises up to the year 2024. Furthermore, since measures can be made to cope with the existing

capacity of two runways, and since AP-I is planning to increase facilities for a 3rd runway starting in

the year 2024, this study does not assume runway facilities will be increased.

2) Conceptual design and specifications of applied facilities

According to the approach above, the conceptual design of airport facilities, the passenger terminal in

particular, is studied. Several options which meet specifications required for a regional-hub airport are

examined, taking into consideration the current conditions of airport operation and land acquisition.

a) The Study Team compared and evaluated several passenger terminal concepts that have been

adopted by other international airports, so as to analyze a passenger terminal which may embody a

regional-hub airport most practically in the BB/RH Network. The evaluation results are presented

in Table 3-3.



3-28

Table 3-3 Comparison of Typical Passenger Terminal Concepts




3-29

The passenger terminal concepts were examined, placing importance to the following three points in

relation to a regional-hub airport in the BB/RH Network, taking into consideration the airport scale

(number of passengers and aircraft movements), aircraft types, and air traffic demand prediction:

1) Transfer passenger convenience,

2) Future growth potential/phased approach, and

3) Cost (initial investment/operating cost).

In terms of transfer passenger convenience and future growth potential/phased approach, the satellite

concept has few constraints imposed by the main terminal and enables a flexible layout design, since

the satellite terminal can be located independently of the existing main terminal. However,

connection between the satellite and the main terminal needs to be considered, hence there is an

apprehension that the equipment and operation necessary for the connection and conveyance would

be costly.

In terms of cost, the linear/pier concepts are desirable, which have a close affinity with the existing

terminal. However, it is pointed out that there would be more limitations not only on transfer

passenger convenience and future growth potential but also on equipment handing due to the

constraints imposed by the existing terminal.

b) Comparison of airport conceptual design options

The options of airport conceptual design, which meet the requirements of the regional-hub airport,

were examined, in consideration of: (i) the abovementioned evaluation results of passenger terminal

concepts and (ii) the current conditions of airport operation and land acquisition at Makassar Airport.

This study has selected the option which meets the specifications required by the BB/RH Network

and is most valuable to Makassar Airport and aircraft passengers in Indonesia, based on discussions

with local stakeholders.

In the evaluation of the options of airport conceptual design, four options are compared as presented

in Table 3-4.



3-30

Table 3-4 Comparison of Regional-Hub Airport Options


Options 1 and 2 are plans, where the design of the expansion is centered on the existing terminal

building. Options 3 and 4 are plans, where a new passenger terminal is independently constructed.

The major characteristics of each option are described below.

Option 1: Simple extension

This option extends the existing passenger terminal to the right and left and uses the right part

for the BB/RH function, and the existing passenger terminal and the left part for the existing

function.

For the BB/RH function, Code-E stands (for twin aisle aircraft) are to be located along the right

extension of the existing passenger terminal, and Code-C light stands (for regional jets and

turbo props) are to be concentrated in the right end area.

Since the existing passenger terminal is simply extended, the cost is low.

Future growth potential is low because limited land and only a few connection stands with

boarding bridges are available.

Option 2: Pier extension

This option extends the existing passenger terminal to the left, and uses the extended part for

the BB/RH function and the existing passenger terminal for the existing function.



3-31

For the BB/RH function, Code-E stands (for twin aisle aircrafts) are to be closely laid out along

the left extended part, and the number of Code-C stands (for regional jets and turbo props)

connected to boarding bridges is maximized by adopting the pier extension.

The cost is low because this option will only require an extension of the existing passenger

terminal, and the connection slots with boarding bridges are available.

Future growth potential is low because of limited land and in particular, equipment handling on

the taxiway in the apron is complicated.

Option 3: Dedicated satellite (South Side Satellite)

This option extends the existing passenger terminal to the right and left, and constructs a new

satellite terminal to the south of this passenger terminal (at the opposite site of the existing

runway).

The new satellite terminal shall have a BB/RH function. The existing passenger terminal holds

the existing function and the main terminal function (check-in counter, baggage claim area,

etc.). Both terminals are to be connected through an underpass.

The satellite terminal will serve as the passenger terminal which places full importance to

transfer passenger convenience, and excels in consistency with any future expansion plan since

this new terminal is near the 3rd runway to be planned in the future.

The construction cost of the underpass between both terminals is high. The issue for this option

is how to provide convenience for the passengers who will use the satellite terminal for

departure from/arrival at Makassar Airport.

Option 4: Landside integration (North Side Satellite)

This option extends the existing passenger terminal to the left and constructs a new satellite

terminal along the existing road situated to the north of the existing passenger terminal.

The new terminals shall have the BB/RH function and the existing satellite terminal shall have

the existing function.

The satellite terminal is a passenger terminal which pays close attention to transfer passenger

convenience. Both terminals are connected without a runway crossing.

The future growth potential of this option is low because of limited land, and there is a long

taxiing distance between the new satellite terminal and the runway.

Through discussions with local stakeholders about the abovementioned comparison results of the

four options, it has been agreed to promote “Option 3: Dedicated Satellite”. This option places

importance to: (i) transfer passenger convenience, which is the most important requirement of the

BB/RH Network and (ii) future growth potential, which is a requirement to be a gateway airport of

the Indonesian eastern region where continuous growth is greatly expected. Regarding the selected

dedicated satellite concept, the AP-I leaders have appreciated that expansion in the current available

land has some limitations, hence, this concept, which envisages construction of the 3rd runway in the



3-32

future stage and the layout of a new satellite terminal between the existing and the 3rd runway, fully

ensures consistency with the existing AP-I master plan.

c) Plan of airport facilities

The plan of airport facilities for the selected dedicated satellite concept is stated below.

i) Scale of passenger terminal

The scale of passenger terminal, hereinafter expressed as an index of total floor area, is set at

210,000 m2 by using: (i) a basis of 10,000 m

2 per one million airline passengers/year and (ii) 21

million passengers/year predicted air traffic demand in 2024. Since the total floor area of the existing

passenger terminal is 65,000 m2 that of the new and expanded passenger terminals is roughly

estimated at 150,000 m2. In due consideration of the specific condition wherein Makassar Airport

has a high percentage of transfer passengers, this study plans: (i) a 60,000 m2 expansion of the total

floor area for the existing passenger terminal, and (ii) construction of a new satellite terminal having

a total floor area of 88,000 m2.

Table 3-5 Scale of Passenger Terminal

Airport function

Phase 1 (2024) Annual

number of

passengers

(million) Scale of passenger terminal

Satellite terminal

(BB/RH function) New 88,000 m

2 11

Existing main terminal

(Existing function)

Existing 65,000 m2

10 Expansion 60,000 m

2

Total Total 213,000 m2 21


ii) Number of slots

The required number of slots is calculated by airport function, estimating the number of passengers

per hour during peak operation hours from the annual number of airline passengers at Makassar

Airport. The number of slots has been calculated for: (i) Code E (wing width: more than 52 m and

less than 65 m, wheel track: more than 9 m and less than 14 m) for twin aisle aircraft like B777,

B787, and A330, and (ii) Code C (wing width: more than 24 m and less than 36 m, wheel track:

more than 6 m and less than 9 m) for B737, A320, major regional jets, and turbo props.

Table 3-6 compiles the number of slots in Phase 1 (2024) by airport function. Airport expansion

compatible with the required slots is needed.



3-33

Table 3-6 Required Number of Slots by Airport Function/Size

Airport Function

Phase 1 (2024) Annual

Number of

Passengers

(million) Slot Size Number of Slots

BB/RH function Code C 20

11 Code E 5

Existing function Code C 26

10 Code E 2

Total Total 53 21


iii) Connection underpass between terminals

The project plans an approximately 1 km long underpass crossing the runway so as to connect the

existing passenger terminal and the satellite terminal within a short time. The underpass shall enable

not only conveyance of passengers and checked-in baggage but also passage of ground support

equipment (GSE) and vehicles. In addition, introduced are Automated People Mover (APM) for

passenger transfer between the existing and satellite terminals and a baggage handling system for

smooth transfer.

iv) Cargo terminal

The total floor area of the air cargo terminal is set at 10,000 m2 so as to handle 94,900 ton of cargo

volume in 2024, which is the predicted air cargo demand by AP-I, based on a typical rate of 10-20

ton/m2 (cargo volume/floor area).

v) Road/parking area

A parking area is prepared in front of the passenger terminal as a means of airport access since no

track system will be provided in Phase 1 (2024).

3) Contents of proposed project

a) Summary of facility plan in Phase 1 (2024) and general airport plan

The facilities planned in Phase 1 (2024) are summarized in Table 3-7.



3-34

Table 3-7 Outline of Facilities for the Year 2024 (Phase 1)

Item Target of

Development Details of Development

Size of

Facilities Remarks

Satellite

terminal (New

construction)

Satellite

terminal

Satellite terminal and appurtenances


Concession area,

Transfer security check area,

Transfer baggage check area,

Check-in baggage sorting area,


Total floor

area:

88,000 m2

Main terminal (Expansion)

Main terminal

Main terminal and appurtenances


Chick-in area,

Concession area,

Airport security area,

Baggage claim area,


Total floor

area:

60,000 m2

Expansion of

existing passenger

terminal

Terminal

appurtenances (New

construction)

Connecting

system between

terminals

Connection underpass, APM,

Baggage handling system for transfer

Connection

distance

1 km

Study of alternative

connecting methods

other than APM

Utility facilities

Utility building,

Power receiving-transformer/

air conditioning/ water supply/

water treatment equipment

-

Airside

infrastructure (Expansion)

Apron

Apron upgrade

Development of cargo terminal and

aircraft maintenance area

Area:

596,200 m2

Excluding hydrant

(included in AP-I

plan)

Taxiway

Area:

115,000 m2

Other

Cargo terminal

Total floor

area:

10,000 m2

Transfer after new

facilities

Aircraft

maintenance

area

-

New facilities

(development to be

done by airlines)

Parking area

and roads

Area:

114,000 m2

Increased facilities




3-35

Figure 3-20 General Plan of Airport (Year 2024: Phase 1)


New satellite terminal

facilities

Main terminal upgrade



3-36

a) General plan of airport (Phase 2: 2044)

The general plan of the airport in Phase 2 (2044) is presented in Figure 3-21 as a future grand design.

It is predicted that 40 million airline passengers/year, which are roughly equivalent to four times the

current volume, would use Makassar Airport in 2044 and the capacities of the runway and passenger

terminal would be inadequate. The AP-I future plan also includes the 3rd runway located parallel to

the existing runway to the south and a new satellite terminal between both runways. This upgrade

project envisages the addition of the 3rd runway at the same location as in the AP-I plan and

symmetrical expansion of the satellite terminal in Phase 2 (2044), and therefore ensures consistency

with the AP-I master plan on the whole.

Figure 3-21 General Plan of Airport (Phase 2: 2044)


3rd Runway

Expansion of Satellite

Terminal



3-37

4) Issues on proposed technology/system and solutions

a) Participation in BB/RH Network operation of local airlines

In this project, the prospect of project feasibility has been brought about through verification of the

possibility of the BB/RH Network and reasonableness of the regional hub airport with local

stakeholders. Meanwhile, participation of the local airlines that will actually operate this network is

essential to the successful implementation of the BB/RH Network. Lion Air (LCC), Garuda

Indonesia (state-owned airline), and Sriwijaya Air (third-ranked local airline in Indonesia) have

shared 80% of the Indonesian domestic airline market. Therefore, aviation network reconfiguration

involving these local airlines is needed in the case where the current BB/RH Network is incorporated

into project implementation However, Lion Air and Garuda Indonesia have already ordered a large

number of single aisle aircraft in their expectation of future increase in air traffic demand.

Table 3-8 Aircraft Operated/Ordered by Major Indonesian Airlines

Source: Created by the study team based on ASCEND database (November 2014)

19

Including subsidiaries of Wings Air, Batik Air 20

Including subsidiary of Citilink

Airline Aircraft class Aircraft

Nos. of

Aircraft

Operated

Nos. of

Aircraft

Ordered

Lion Air19

Turboprop ATR72 30 17

Dash 8 Q300 2 -

Single aisle aircraft B737 115 280

A320 3 231

Twin aisle aircraft B747 2 0

Total 152 528

Airline Aircraft class Aircraft

Nos. of

Aircraft

Operated

Nos. of

Aircraft

Ordered

Garuda Indonesia20

Turboprop ATR72 8 22

Regional jet CRJ1000 15 3

Single aisle aircraft B737 80 52

A320 32 49

Twin aisle aircraft

A330 20 15

B777 6 4

B747 3 -

Total 152 528

Airline Aircraft Class Aircraft

Nos. of

Aircraft

Operated

Nos. of

Aircraft

Ordered

Sriwijaya Air Single aisle aircraft B737 38 -

Total 38 -



3-38

Due to the situation where Soekarno-Hatta Airport, the only airport in Jakarta Metropolitan Area, is

experiencing overcapacity due to continuing economic growth but its passenger handling capacity is

limited, the way to securing the operation lines for a large number of single aisle aircraft is a big

issue for each airline. On the contrary, in case the BB/RH Network is introduced, proper measures

will be needed which include changing the orders from single aisle to twin aisle aircraft or small

aircraft, although a large number of single aisle aircraft has already been ordered as mentioned

above.

b) Integration with AP-I master plan

Through hearing of AP-I’s intention during the course of this study, it is confirmed that AP-I has also

formulated their master plan independently. Therefore, discussions and a detailed plan are needed in

the next stage to integrate the existing AP-I master plan and the dedicated satellite concept having

the BB/RH Network concept.

AP-I has fully understood the BB/RH Network concept and studied the increase of the Code E slots

for twin aisle aircraft among others. However, AP-I has made no detailed plan of the said part and

has not considered any necessary overall airport plan for materializing the BB/RH Network. AP-I

has an aim to increase non-aero revenues by increasing concession areas, and the project needs to

coordinate the plan in detail so as to reconcile the BB/RH Network concept and AP-I’s intention.


through the Indonesian Aviation Network Reconfiguration Evaluation of Environmental and Social Impacts

4-1

Chapter 4 Evaluation of Environmental and Social

Impacts

This chapter presents an evaluation of the potential environmental and social impacts associated with the

upgrading of Makassar Airport including the construction of the new terminal building (for passengers) and cargo

handling system, the expansion of the apron, the construction of roads (around the terminal building) and parking

areas, and the arrangement of essential facilities for BB/RH Network in eastern Indonesia. In this chapter, there is

just a preliminary evaluation for the 3rd runway and other facilities, which will be planned at a later stage.

Environmental monitoring has been implemented based on the Environmental Impact Study, more commonly

referred to as Analisis Dampak Lingkungan: AMDAL in the context of Indonesian environmental planning

procedures and regulations, detailed description in (4)1) in April 1995 for Makassar Airport. AP-I submits reports

for environmental monitoring twice a year. Some parts of this chapter refer to the reports submitted in the first half

of 2014.

(1) Present Environmental and Social Conditions

Present environmental and social conditions around Makassar Airport, as well as future prospects without the

projects, are described as follows:

1) Status

a) Natural Environment

The natural environment of Indonesia and the area around Makassar Airport is described as follows:

Location and Topography

Makassar Airport is an international airport which is located on the border of Makassar and

Maros, approximately 17 km from the center of the city of Makassar, the provincial capital of

South Sulawesi. This is the main airport in the eastern part of Indonesia (6.3 million passengers

per year in 2012).

Figure 4-1 shows a photograph of the terminal building and apron from the control tower, while

Figure 4-2 and Figure 4-3 show the topographic map around the airport. Makassar Airport is

located approximately 10 km from the sea and its elevation is 14.4 m (above sea level). The

surrounding lands are relatively flat and open facing the sea.



4-2

Figure 4-1 Makassar Airport (From the control tower toward the terminal building and apron)


Figure 4-2 Topographic Map (South Sulawesi)

Source: Created by the study team (based on the map from “Badan Informasi Geospasial”)

Terminal Building

Apron

2nd Runway

Makassar Airport



4-3

Figure 4-3 Topographic Map (Around Makassar Airport)


Climate

Sulawesi Island is located in central Indonesia and right on the equator, so this island has a

tropical monsoon climate (Am) according to the Koppen Climate Classification Sub-type

(high-temperature and humidity). Consequently, Makassar has a relatively low annual average

temperature range. In 2013, the average highest temperature per month was 33.2 °C and the

average coolest temperature per month was 23.5 °C (Figure 4-4).

Total precipitation in 2013 was approximately 3,200 mm (one of the highest levels of

precipitation in the world). Makassar has distinct wet and dry seasons with the amount of

precipitation in December and January accounting for half the total annual rainfall. Meanwhile,

precipitation per month from June to October is less than 30 mm (Figure 4-5).

The average wind speed per month in 2013 was 4.6 knots and stronger winds tend to be

experienced during the monsoon season between December and February (Figure 4-6).

Plantｓ

Paddy Field

Rainfed Paddy Field

Garden

Forest

Thicket

Dry Fields / Field

Makassar

2nd Runway

Terminal Building

Control Tower



4-4

Figure 4-4 Monthly Average Temperature in 2013


(based on Badan Pusat Statistik Kota Makassar, “Makassar dalam angka 2014”)

Figure 4-5 Monthly Precipitation in 2013


(based on Badan Pusat Statistik Kota Makassar, “Makassar dalam angka 2014”)

Figure 4-6 Monthly Wind Speed in 2013

Source: Created by the study team (based on Directorate of Conservation, Ministry of Forestry,

“Peta Kawasan Hutan Konservasi Provinsi Sulawesi Selatan Bagian Selatan”)

20.0

22.0

24.0

26.0

28.0

30.0

32.0

34.0

1 2 3 4 5 6 7 8 9 10 11 12

Tem

pe

ratu

re (℃

)

Month

Average

Maximum

Minimum

0

200

400

600

800

1000

1200

1 2 3 4 5 6 7 8 9 10 11 12

Rai

nfa

ll (M

m)

Month

0

5

10

15

20

25

30

35

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1 2 3 4 5 6 7 8 9 10 11 12

Max

imu

m W

ind

Sp

ee

d(m

/s)

Ave

rage

Win

d S

pe

ed

（m

/s）

Month

Average Wind Speed

Maximum Wind Speed



4-5

Natural Forests and Conservation Area

There are no conservation areas near Makassar Airport and the nearest protected forest (Hutan

Lindung) is approximately 10 km from the airport. Bantimurung Bulusaraung National Park,

which is one of the largest limestone karst ecosystems on earth, is located within 20 km from the

airport.

Figure 4-7 shows the conservation area of the south part of South Sulawesi.

Figure 4-7 Map of Forest and Conservation Areas (Southern South Sulawesi)


Mangroves

With a coastline of 81,000 km, Indonesia has the second largest area of mangrove coverage in the

world after Brazil. The total extent of mangroves amounted to 7.7 million ha in 2006. However, it

decreased to 5.5 million ha in 2011. In South Sulawesi, mangrove cover amounts to 77,000 ha,

but only 31.90% are in good condition and 33.50% are damaged.

The airport is located approximately 10 km from the sea. Therefore, the projects have no direct

impact on growing environment of mangrove.

b) Environmental Contamination and Pollution

Relevant environmental contamination and pollution issues in Indonesia and the area around Makassar

Airport are as follows:

Noise

The Decree of the State Minister of Environment, Number: KEP-48/MENLH/11/1996 regarding

Noise Level Standard set the standards for noise emissions in Indonesia. Enforcement of airport

noise standards is the responsibility of the Minister of Transportation.

10km

Makassar Airport

Keterangan: Legend

Kawasan Hutan: Forest Area APL: Other Land Use / Not Forest Area

Kawasan Konservasi: Conservation Area

Danau; Tubuh Air: Lake; Body of Water

Hutan Lindung: Protected Forests

Hutan Produksi: Production Forest

Hutan Produksi Konversi: Production Forest Conversion

Hutan Produksi Terbatas: Limited Production Forest



4-6

Reports on environmental monitoring described that environmental monitoring for noise has been

implemented at six points around Makassar Airport and one point did not meet the standard in the

first half of 2014 (adopting WECPNL as index for evaluation).

Air Pollution

The Government Regulation of the Republic of Indonesia No.41/1999 on Air Pollution Control

was enacted in May 1999.

Based on the environmental monitoring report documents, atmospheric measurements have been

taken at six points around Makassar Airport and all points met the required standard in the first

half of 2014.

Water Pollution

The Government Regulation of the Republic of Indonesia No.82/2001 (on the Management of

the Water Quality and Control over Water Pollution) was enacted in December 2001. Moreover,

the Decree of the State Minister of Environment, Number: KEP-51/MENLH/10/1995 set

standards for liquid waste quality for industrial activities.

Environmental monitoring reports showed water quality measurements (e.g., pH, BOD5, COD,

TSS, DO, Total Coliform) are taken regularly and that water quality measurements after the

sewage treatment plant (STP) met the required standard in the first half of 2014.

Waste

The Government Regulation of the Republic of Indonesia No.18/1999 (on the Management of

the Waste of Hazardous and Toxic Materials) was enacted in February 1999. In this regulation,

disposal methods of “Hazardous Waste (Limbah Bahan Berbahaya dan Beracun) called “B3” are

defined.

At Makassar Airport, according to the interview results, hazardous waste is collected at the

exclusive-use facility (in the fuel station) and processed in accordance with Indonesian

regulations. Domestic waste is incinerated in the airport area and carried to the local waste center.



4-7

c) Social Environment

Population, land use, and industry of Indonesia and the area around Makassar Airport are as follows:

Population

The population of Indonesia is expected to increase from 241 million in 2010 to 257 million by

2015 and 271 million by 2020. The population in South Sulawesi is projected to increase from

8.1 million in 2010 to 8.5 million by 2015 and 8.9 million by 2020 (Table 4-1).

Table 4-1 Population Growth (from 2010 to 2035)

Province 2010 2015 2020 2025 2030 2035

Jakarta 9,787 10,277 10,694 11,037 11,268 11,381

South Sulawesi 8,137 8,546 8,906 9,206 9,444 9,603

Indonesia 240,673 256,621 271,237 284,315 295,624 304,896

Source：Created by the study team

(based on the Ministry of Environment, “State of the Environment Report Indonesia 2012”)

Land use

The land around Makassar City is mostly used for agriculture (e.g., irrigated paddy fields,

unirrigated paddy fields, corn and cow grazing). The area around Makassar Airport is also

used for agriculture excluding the residential area in the southwest part of the airport. There

are also industrial parks in the suburbs. Figure 4-8 below illustrates the existing land use in

and around Makassar Airport.



4-8

Figure 4-8 Spatial Map (2008-2028)

Source: Created by the study team (based on Spatial Map, South Sulawesi Province)

Industry

According to the Makassar government statistics (2014), the agricultural processing industry

accounts for 45.15% of the total production value in Makassar. Secondly, forest industry accounts

for 7.53% and textile industry accounts for 5.92%.

Vegetables are the main agricultural products of the area (e.g., beans and chilli). Moreover, fish

production was 9,373 tons in 2011 and 11,924 tons in 2012.

- Settlement areas - Commodity Irrigated Paddy Fields, Unirrigated

Paddy Fields, Corn and Cow Grazing - Industrial Areas

Makassar Airport



4-9

2) Future Prospects without the Projects

If the projects are not realized, impacts are considered as follows:

Congestion at Soekarno-Hatta Airport will not be reduced. Therefore, it will have a negative

impact on the Indonesian economic development in the future. Meanwhile, Makassar Airport,

which is already considered a gateway to eastern Indonesia and with fewer restrictions for

expansion, is considered as a suitable regional hub airport.

Population in South Sulawesi will increase rapidly (similar to other areas in Indonesia), therefore,

Makassar Airport will rapidly reach the limit of its capacity in the future. Congestion at Makassar

Airport will occur and it will have a negative impact on the social and economic development of

the eastern Indonesia region.

(2) Positive Environmental Impacts of the Projects

Predicted value of passengers and operation for airline routes through the projects has not been estimated yet.

Therefore, the possibility of environmental improvement effects through the utilization of large aircraft

between Jakarta and Makassar is described in this section.

The amounts of emission before and after the utilization of large aircraft are calculated under the following

conditions:

One large aircraft carries passengers currently being transported by three representative aircraft.

Large aircraft is a general one which has three times as many seats as current representative

aircraft.

These conditions are just to simplify calculation and there is no plan to reduce the total flights to one-third of

the current number.

1) Representative aircraft

There are approximately 34 round-trip flights between Jakarta and Makassar and approximately 31 round-trip

flights are by B737s. Therefore, the B737, which has approximately 180 seats, is set as the representative

small aircraft.

Large aircraft should be a general one having approximately 500 seats, three times as many seats as the

representative aircraft. The B777-300, which has 500–514 seats (2-class) in Japan, is selected as the

representative large aircraft.

2) Amount of Emission

The amount of emission from the aircraft is classified into two kinds, i.e., during landing/take-off cycles (LTO

cycles) and during flights. Data on fuel consumption is necessary to calculate the amount of emission during

flights. Therefore, the amount of emission during LTO cycles is calculated by a simple equation in this

section.



4-10

Table 4-2 shows the emission factors for LTO cycles as well as fuel consumption per aircraft type based on

the International Civil Aviation Organization (ICAO) database. Carbon dioxide (CO2) is the only greenhouse

gas (GHG) in the table and the amount of CO2 emission per one LTO of a B737 is 2,454.5 kg-CO2, whereas,

that of a B777-300 is 7,588 kg-CO2.

Table 4-2 Emission Factors for LTO Cycles as well as Consumption per Aircraft Type

Emission Factors as well as Fuel Consumption for LTO Cycles kg/LTO Seats

CO2 NOx CO HC H2O PM2.5 Burnt

Fuel (2-class)

B737 2454.5 9.1 8.0 0.9 958.4 0.1 779.2 Approx. 180

B777-300 7588.0 63.3 17.7 2.0 2962.9 0.1 2408.9 Approx. 500


(based on “EMEP/EEA Air Pollutant Emission Inventory Guidebook 2013 (updated in July 2014)”,

European Environment Agency)

3) GHG Emission Reduction and Possible Application to Clean Development Mechanism (CDM)

Table 4-3 shows that the amount of CO2 emissions of three B737s is 7.4 t-CO2, whereas that of one B777-300

is 7.6 t-CO2. It means that there is no significant GHG emission reduction under the conditions in this section.

Other reviews are necessary to reduce GHG emission by the projects (e.g., to change to large aircraft which

have better emission factors, to monitor the fossil fuel consumption and calculate the detailed CO2 emission

including during flights, and to review the entire network of eastern Indonesia).

Table 4-3 CO2 Emission Before and After Utilization of Large Aircraft

CO2 Emission (t-CO2)

Emission Factors for LTO Cycles（kg-CO2/LTO）× Number of LTOs（LTO）

Before 2,454.5 kg-CO2/LTO × 3 LTO = 7,364 kg-CO2 = 7.4 t-CO2

After 7,588.0 kg-CO2/LTO × 1 LTO = 7,588 kg-CO2 = 7.6 t-CO2


For CDM projects, there is no restriction for domestic aviation, whereas international aviation is excluded.

However, for the majority of developing countries excluding Brazil, China, India, and so on, international

flights constitute the vast majority of GHG emissions from aviation activities and no relevant methodologies

have been approved. Moreover, in the High-level Meeting on International Aviation and Climate Change in

October 2009, there is a comment that a specific methodology needs to be developed for more efficient Air

Traffic Management (ATM) planning and terminal operations (departure and arrivals). It is necessary to

consider these present situations when applying for CDM.

(3) Adverse Environmental and Social Impacts of the Projects

Adverse environmental and social impacts of the projects and a comparative review of the alternatives are

described in this section based on the environmental checklist. Consultations with DGCA and AP-I were

conducted to collect and verify the detailed information.



4-11

1) Environmental and Social Impacts

Table 4-4 shows the environmental checklist for the projects based on the Japan International Cooperation

Agency’s (hereafter referred to as JICA) environmental checklist for Airports, the Japan Bank for

International Cooperation’s (hereafter referred to as JBIC) one and characteristic features of the projects

especially the tunnel under the terminal building. The result is that the projects have limited impacts on the

natural and social environment.

Table 4-4 Environmental Checklist

Category Environmental

Item Main Check Items

Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems

Confirmation of Environmental

Considerations

1 Permits and

Explanation

(1)

EIA and

Environmental

Permits

(a) Have EIA reports been

already prepared in official

process?

To be prepared - EIA (AMDAL in Indonesia) should

be implemented for the proposed

projects by the Ministry of

Environmental Regulation No.

5/2012.

EIA has not yet been conducted as

of end-December 2014.

(b) Have EIA reports been

approved by authorities of

the host country’s

government?

To be prepared -

(c) Have EIA reports been

unconditionally approved? If

conditions are imposed on

the approval of EIA reports,

are the conditions satisfied?

To be prepared -

(d) In addition to the above

approvals, have other

required environmental

permits been obtained from

the appropriate regulatory

authorities of the host

country’s government?

- - No additional environmental

permits should be obtained because

there is no plan to convert forest

land or relocate important buildings

(e.g., cultural heritage).

(2)

Explanation to

the Local

Stakeholders

(a) Have contents of the

project and the potential

impacts been adequately

explained to the local

stakeholders based on

appropriate procedures,

including information

disclosure? Is understanding

obtained from the local

stakeholders?

- - Meetings to explain the project with

local stakeholders have not yet been

held as of end-December 2014.

(b) Have comments from the

stakeholders (such as local

residents) been reflected in

the project design?

- -

(3)

Examination

of Alternatives

(a) Have alternative plans

for the project been

examined with social and

environmental

considerations?

- - Alternatives are being reviewed.

2 Pollution

Control

(1)

Air Quality

(a) Do pollutants such as

SOx, NOx, and dusts in

Unclear Air pollution

caused by

The report for environmental

monitoring in the first half of 20141

1 Dokumen RKL & RPL Bandar Udara Sultan Hasanuddin Makassar Semester I Tahun 2014, AP-I,June 2014



4-12



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

effluents from aircrafts, cars,

and related facilities comply

with the country’s effluent

standards? Is there a

possibility that the effluents

from the project will cause

areas not to comply with the

country’s ambient air quality

standards?

effluents from

aircrafts

showed that environmental

monitoring activities on air quality

are implemented at six points

around the airport twice a year.

Atmospheric measurements (e.g.,

SO2, NO2, O3, CO, Pb, and TSP)

met the criteria determined by the

South Sulawesi Governor

Regulation No.69/ 2010.

However, the kinds of aircraft and

the number of airlines will be

changed. Detailed review and

monitoring should be implemented

continuously and adequate

mitigation measures should be

considered if it does not meet the

standard.

(b) In case the atmospheric

measurements do not

comply with the country’s

ambient air quality standards

around the airport and

related facilities, will the

project worsen the air

quality? Are adequate air

control measures taken?

Low Ditto

(2)

Water Quality

(a) Do pollutants such as

suspended solids (SS), and

oils contained in effluents


effluent standards (BOD,

COD, etc.)? Is there a

possibility that the effluents

from the project will cause

areas not to comply with the

country’s ambient water

quality standards?

Low Water pollution

caused by

effluents from

related facilities

and the apron




monitoring activities on water

quality are implemented for

effluents from the airport facilities

twice a year. Water quality

measurements (e.g., temperature,

pH, BOD5, COD, TSS, DO and

Total Coli) after sewerage treatment

plant (STP) meet the criteria

determined by South Sulawesi

Governor Regulation No.69/2010.

Proposed projects have no

significant impacts on water quality.

(3)

Waste

(a) Are wastes generated

from the airports and other

project facilities properly

treated and disposed of in

accordance with the

country’s regulations?

Low Waste from the

airports and

related facilities

Wastes generated from the airports

and other facilities are incinerated

and carried to the local waste center

based on the regulation (e.g.,

Government Regulation of the

Republic of Indonesia No.18/1999).

Hazardous waste is collected from

the exclusive use facility (in the

fuel station) and processed in

accordance with Indonesian

regulations.

(4)

Soil

Contamination

(a) Has the soil in the project

site been contamined in the

past? Are adequate measures

taken to prevent soil

contamination by leakage of

fuels?

Low Soil

contamination

caused by leakage

of fuels from oil

stations

The soil at the project site has not

been contaminated in the past.

There are four fuel tanks (2,000 kL)

in the fuel station, but adequate

measures to prevent soil

contamination (e.g., fuel barrier)

have been prepared.

(5)

Noise and

Vibration

(a) Does noise from aircraft


standards?

Significant /

Low

Noise from

aircraft




monitoring activities on noise are



4-13



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

implemented at six points around

the airport twice a year.

Noise measurements excluding one

point met the criteria determined by

the South Sulawesi Governor

Regulation No.69/2010. Proposed

projects have no significant

impacts.

Moreover, aircraft noise pollution is

different from usual standards of

environmental noise; and the

monitoring, assessment, and

adequate mitigation measures

should be implemented based on

international standards (including

Japanese standard) if necessary.

(b) Is there a possibility that

noise and vibrations from

various sources, such as

airport user’s vehicles and

vehicles for airport

operations will adversely

affect ambient noise levels?

If impacts are anticipated,

are adequate noise

mitigation measures

considered?

Low Noise and

vibration from

airport user’s

vehicles and

vehicles for

airport operations

There is a possibility that proposed

projects could cause an increase in

traffic around the airport. Adequate


considered, if necessary.

(c) In the case of tunnel

excavation inside or outside

the airport, is there a

possibility that the tunnel

excavation will have a

negative impact on noise or

vibration on the environment

around the airport?

Low Noise and

vibration from

tunnel during

construction or

operation

Proposed projects include tunnel

excavation under the terminal

building.

However, the projects have low

impacts because they are located at

the center of the airport area

without land acquisition.

(6)

Subsidence

(a) In the case of extraction

of a large volume of

groundwater, is there a

possibility that the extraction

of groundwater will cause

subsidence?

Unclear Subsidence

caused by the

extraction of

groundwater for

tunnel excavation

Proposed projects include tunnel


building.

The projects may have low impacts

because the length of the tunnel is

approximately 1 km. However,

extraction of groundwater may be

planned, therefore, the monitoring,

assessment, and adequate


implemented, if necessary.

(7)

Odor

(a) Are there any odor

sources? Are adequate odor

control measures taken?

No - There are no odor sources with the

projects.

3 Natural

Environment

(1)

Protected

Areas

(a) Is the project site located

in protected areas designated

by the country’s laws or

international treaties and

conventions? Is there a

possibility that the project

No - The nearest conservation area is

located approximately 10 km from

the project site and there are no

impacts from the construction

phase. Impacts during the

implementation phase should be



4-14



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

will affect the protected

areas?

checked as there will be an increase

in low level landing / take-off

flights over the conservation

area(((1)1)a).

(2)

Ecosystem

(a) Does the project site

encompass primeval forests,

tropical rain forests,

ecologically valuable

habitats (e.g., coral reefs,

mangroves, or tidal flats)?

No - There are no primeval forests,

tropical rain forests, ecologically

valuable habitats (e.g., coral reefs,

mangroves, or tidal flats) around

the airport.

(b) Does the project site

encompass the protected

habitats of endangered

species designated by the

country’s laws or

international treaties and

conventions?

No - There are no protected habitats of

endangered species.

(c) If significant ecological

impacts are anticipated, are

adequate protection

measures taken to reduce the

impacts on the ecosystem?

No - No significant ecological impacts

are considered in accordance with

the projects.

(d) Is there a possibility that

the amount of water (e.g.,

surface water, groundwater)

used by the project will

adversely affect aquatic

environments, such as

rivers? Are adequate

measures taken to reduce the

impacts on aquatic

environments, such as

aquatic organisms?

No - Water use by the projects has no

significant impacts on the aquatic

environments around the airport.

(3)

Hydrology

(a) Is there any possibility

that alteration of drainage

system due to the

construction of airports and

related facilities will

adversely affect surface

water and groundwater

flows?

Low Tunnel excavation Proposed projects include tunnel


building.

The length of the tunnel is

approximately 1 km, however, there

is a possibility that alteration of

drainage system may have an

impact on the groundwater flows.

Therefore, usage situation of the

groundwater around the airport

should be surveyed and adequate


implemented, if necessary.

(b) Do the facilities affect

adversely flow regimes,

waves, tides, currents of

rivers, etc., if the project

facilities are constructed

on/by the sea?

No - The project site is not located in a

marine area.

(4)

Topography

and Geology

(a) Does the project require

large scale change of

topographic/ geographic

No - The project site is located on land

that has already been developed and

there is no large scale change of



4-15



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

features? topographic/geographic features.

(b) Is there a possibility that

civil works, such as cutting

and filling will cause slope

failures or landslides?

No - The projects include no civil works.

(c) Is there a possibility that

soil runoff will result from

cut and fill areas, waste soil

disposal sites, and borrow

sites? Are adequate

measures taken to prevent

soil runoff?

Low Soil runoff caused

by the projects

(especially tunnel

excavation)

The projects have low impacts

because it is located at the center of

the airport area without land

acquisition.

However, adequate measures for

waste soil disposal (e.g., from the

tunnel excavation) will be

necessary.

(d) In the case of offshore

projects, is there any

possibility that the project

will erode natural beaches?

No - The project site is onshore and well

away from natural beaches.

4 Social

Environment

(1)

Resettlement

(a) Is involuntary

resettlement caused by

project implementation? If

involuntary resettlement is

caused, are efforts made to

minimize the impacts caused

by the resettlement?

No - The project site is located at the

center of the airport area without

land acquisition. Therefore, no

involuntary resettlement will be

caused.

(b) Is adequate explanation

on compensation and

resettlement assistance given

to affected people prior to

resettlement?

No -

(c) Is the resettlement plan,

including compensation with

full replacement costs, and

restoration of livelihood and

living standards, developed

based on socioeconomic

studies on resettlement?

No -

(d) Are the compensations

going to be paid prior to

resettlement?

No -

(e) Are the compensation

policies prepared in the

document?

No -

(f) Does the resettlement

plan pay particular attention

to vulnerable groups or

people, including women,

children, the elderly, people

below the poverty line,

ethnic minorities, and

indigenous peoples?

No -

(g) Are agreements with the

affected people obtained

prior to resettlement?

No -

(h) Is the organizational

framework established to

No -



4-16



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

properly implement

resettlement? Are the

capacity and budget secured

to implement the plan?

(i) Are any plans developed

to monitor the impacts of

resettlement?

No -

(j) Is the grievance redress

mechanism established?

No -

(2)

Living and

Livelihood

(a) Is there any possibility

that the project will

adversely affect the living

conditions of inhabitants?

Are adequate measures

considered to reduce the

impacts, if necessary?



land acquisition. Therefore, there

are no impacts on the living

conditions of inhabitants.

(b) Is there any possibility

that the project causes the

change of land use in

neighboring areas to

adversely affect the

livelihood of local people?

Significant /

Low

Congestion of

secondary roads

associated with

the increase of

passengers

The project site is located at the


land acquisition. Therefore, there

are no significant impacts on the

land or water uses in neighboring

areas.

However, an increase in traffic

around the airport may be

considered.

When the detailed plan is

considered, adequate measures

should be prepared if necessary.

(c) Is there any possibility

that diseases, including

infectious diseases such as

HIV, will be brought due to

influx of workers associated

with the project? Are

adequate considerations

given to public health, if

necessary?

Significant /

Low

Risk of diseases

associated with

the increase of

passengers and

workers

Change of airlines will be

considered in accordance with the

projects; and workers will increase

during construction.


considered, adequate mitigation

measures should be prepared for the

risk of diseases.

(d) Is sufficient

infrastructure (e.g., roads)

available for the project

implementation? If the

existing infrastructure is

insufficient, is a plan

developed to construct new

infrastructure or improve the

existing infrastructure?

Significant /

Low

Expansion of

access roads

associated with

the demand

increase in the

future

Two-lane access road currently

exists, but the increase in

population and passengers may

require the widening of roads or

further road construction.

(e) Is there any possibility

that the airports and other

project structures will cause

a sun shading and radio

interference?

No - The projects have no impacts on

sunshading and radio interference.

(3)

Heritage

(a) Is there a possibility that

the project will damage the

local archeological,

historical, cultural, and

No - There is no local archeological,

historical, cultural, and religious

heritage around the project site.



4-17



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

religious heritage? Are

adequate measures

considered to protect these

sites in accordance with the

country's laws?

(4)

Landscape

(a) Is there a possibility that

the project will adversely

affect the local landscape?

Are necessary measures

taken?

No - The local landscape will not be

adversely affected by the proposed

structures.

(5)

Ethnic

Minorities and

Indigenous

Peoples

(a) Are considerations given

to reduce impacts on the

culture and lifestyle of

ethnic minorities and

indigenous peoples?



land acquisition.

Therefore, the projects have no

impacts on the culture and lifestyle

of ethnic minorities and indigenous

peoples.

(b) Are all of the rights of

ethnic minorities and

indigenous peoples in

relation to land and

resources respected?

No -

(6)

Working

Conditions

(a) Is the project proponent

not violating any laws and

ordinances associated with

the working conditions of

the country which the

project proponent should

observe in the project?

- Degradation of

working condition

Regulations related to working

conditions of Indonesia should be

adhered to.

If necessary, international standards

(e.g., the World Health

Organization (WHO)) and Labor

Standards Act (in Japan) should be

referred to.

(b) Are tangible safety

considerations in place for

individuals involved in the

project, such as the

installation of safety

equipment which prevents

industrial accidents, and

management of hazardous

materials?

Low Safety risk for

workers

There are four fuel tanks (2,000 kL)

in the fuel station, but adequate

measures to prevent fire (e.g., water

for firefighting, firefighting foam)

have been prepared.

Moreover, hazardous waste is

restricted for the exclusive use

facility (in the fuel station).

(c) Are intangible measures

being planned and

implemented for individuals

involved in the project, such

as the establishment of a

safety and health program,

and safety training

(including traffic safety and

public health) for workers

etc.?

Significant /

Low

Safety risk for

workers


considered, the establishment of a

health and safety program and

safety training should be planned

for each phase.

In particular, adequate measures to

decrease the risk of pneumoconiosis

(e.g., sprinkling, air exhaust system,

and dust mask) should be

considered if tunnel excavation is

planned. Moreover, a place to rest is

shown to be beneficial.

(d) Are appropriate measures

taken to ensure that security

guards involved in the

project do not violate safety

of other individuals

involved, or local residents?

Significant /

Low

Safety risk for

residents

associated with

the security

guards

The project site is located at the


land acquisition.

Therefore, the projects will have

low safety risks for residents

associated with the security guards,



4-18



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

but adequate measures should be

prepared if necessary.

5 Others (1)

Impacts

during

Construction

(a) Are adequate measures

considered to reduce impacts

during construction (e.g.,

noise, vibrations, turbid

water, dust, exhaust gases,

and wastes)?

Significant /

Low

Negative impacts

on the social

environment

during

construction

- Noise

The working place is located at the

center of the airport and far from

the residential zone. However,

adequate measures such as

construction methods with low

noise and vibration, and working

time (e.g., excluding night work)


- Muddy Water

Adequate measures (e.g., grit

chamber) to mitigate the impacts on

hydrology from muddy water

during construction should be

prepared.

- Dust

The working place is located at the


the residential zone. However,

adequate measures such as watering


- Exhaust gas

If necessary, detailed construction

plan should be prepared not to

cause the increase in traffic in

accordance with construction

vehicles.

- Waste

Waste disposal plan for the sand

production and construction waste

of the terminal building (and soil

disposal polluted by heavy metals

or oil, if necessary) should be

prepared.

(b) If construction activities

adversely affect the natural

environment (ecosystem),

are adequate measures

considered to reduce

impacts?

No - The project sites are located at the


the natural or important ecological

habitats.

The projects have no significant

impacts on the natural environment.

(c) If construction activities

adversely affect the social

environment, are adequate

measures considered to

reduce impacts?

Low Negative impacts

on the social

environment

during

construction

The project sites are located at the


the residential zone.

The projects have no significant

impacts on the social environment,

but indirect impacts (e.g., increase

in traffic in accordance with

construction vehicles) will be

considered.

(2)

Monitoring

(a) Has the proponent

developed and implemented

monitoring program for the

environmental items that are

- - Reports for environmental

monitoring are submitted to DGCA

by AP-I twice a year based on the

environmental management and



4-19



Significance of

Potential

Environmental

Impacts

Potential

Environmental

Issues and

Problems


Considerations

considered to have potential

impacts?

monitoring plan (RKL & RPL) in

1995.

(b) What are the items,

methods and frequencies of

the monitoring program?

- -

(c) Has the proponent

established an adequate

monitoring framework

(organization, personnel,

equipment, and adequate

budget to sustain the

monitoring framework)?

- - AP-I has persons in charge in the

head office and Makassar branch.

Environmental monitoring activity

has already been implemented.

The organizational chart is attached.

(d) Have any regulatory

requirements pertaining to

the monitoring report system

been identified, such as the

format and frequency of

reports from the proponent

to the regulatory authorities?

- - Regulatory requirements pertaining

to the monitoring report system are

identified based on the

environmental management and

monitoring plan (RKL & RPL) in

1995.

6 Note Reference to

Checklist of

Other Sectors

(a) Where necessary,

pertinent items described in

the Roads, Railways, and

Bridges checklist should

also be checked.

- - It is unnecessary because the

proposed projects do not include

roads, railways, or bridges.

(b) If the airport is

constructed on the sea,


the Ports and Harbors

checklist should also be

checked.

- - It is unnecessary because the

location of the proposed projects is

not on the sea.

(c) Where necessary,


the Forestry Projects

checklist should also be

checked (e.g., projects

including large areas of

deforestation).

- - It is unnecessary because there is no

significant deforestation.

Note on Using

Environmental

Checklist

(a) If necessary, the impacts

to transboundary or global

issues should be confirmed,

if necessary (e.g., the project

includes factors that may

cause problems, such as

transboundary waste

treatment, acid rain,

destruction of the ozone

layer, or global warming).

- - There is a possibility that proposed

projects have impacts on GHG

emissions (described in (2)).

Other impacts to transboundary or

global issues are not considered.


(Based on checklists of JICA, “Guidelines for Environmental and Social Considerations” and JBIC,

“Guidelines for Confirmation of Environmental and Social Considerations)



4-20

2) Proposed Projects and Alternative Layouts

Proposed projects do not require additional land acquisition and have limited negative environmental and

social impacts, whereas the alternatives require additional land acquisition. Table 4-5 shows the different

layouts being considered for the proposed projects (Option 3 is the layout being proposed).

Options 1, 2 and 3 have the apron extension plan inside the airport area. On the other hand, Option 4 has the

apron extension plan outside the area. Option 4 has negative impacts on social environment caused by land

acquisition. Table 4-6 shows the impacts of proposed projects, alternatives and the case without the projects.

Option 3 has a comparative advantage over the other options considering the result of environmental checklist

(Table 4-4), congestion at Soekarno-Hatta Airport and the increase in demand at Makassar Airport in the

future.

Table 4-5 Comparison of Regional-Hub Airport Options

Source: Created by the study team (Option 3: Proposed Projects)



4-21

Table 4-6 Comparative Table for the Proposed Projects and Alternative Layouts

Environmental Items Proposed Project

Layout (Option 3) and

Option 1 and 2

Alternative Layouts

(Options 4)

Case w/o the Projects

Outline Land acquisition is

NOT necessary

Land acquisition is

necessary

No projects

Mitigation for Congestion at

Soekarno-Hatta Airport Good Good No

Adaptation to Increase in Demand

at Makassar Airport in the Future Good Good No

2. Pollution

Control

-

Negative Impact

Negative Impact

(especially for noise /

vibration)

-

3. Natural

Environment

- Negative Impact Negative Impact -

4. Social

Environment

Resettlement - Negative Impact -

Living and

Livelihood - Negative Impact -

Heritage/

Landscape/ Ethnic

Minorities and

Indigenous People

- - -

Working

Conditions Negative Impact Negative Impact -

5. Others Impacts during

Construction Negative Impact Negative Impact -

Monitoring Negative Impact Negative Impact -


3) Results of Interviews with DGCA and AP-I

Table 4-7 shows the contents of the interviews with DGCA and AP-I and the results are as follows:

The Environmental Department of DGCA has approximately 20 members and 70% of them are

specialized staff.

Projects at large airports including Makassar Airport should submit reports on environmental

monitoring based on the monitoring plan (RKL & RPL) to DGCA twice a year.

The criteria of AMDAL for airports are: (i) Length of the runway >1,200 m or (ii) Area of

terminal buildings (for passengers or cargo) >10,000 m2 unless the projects do not need land

acquisition such as the proposed projects.

Environmental departments of AP-I are at the Jakarta Head Office (Safety, Health, and

Environmental Group/Department: four members) and the local airports (Makassar Airport

Branch: two members). Reports for environmental monitoring are prepared by the members at

the local airports.

Site survey was implemented to collect detailed information (e.g., B3 waste disposal method, the

condition of fuel station, cargo terminal building, and control tower).



4-22

Table 4-7 Contents of Interviews with DGCA and AP-I

Date Location Members Interview Contents

Interviewee Study Team

2014/11/19

09:20-10:30

DGCA Mr. Emrizal, Airport

Environmental Specialist

Nippon Koei Co.,Ltd.

Mr. Yoshida

Mr. Hisakawa

Mr. Nakagawara

Organization for

environmental and social

consideration

Case example (e.g.,

AMDAL, mitigation)

Application of AMDAL

2014/11/20

09:00-10:00

AP-I

(Jakarta Head

Office)

Mr. Dedi Ruhiyat, Safety,

Health and Environment

Department Head

Ms. Karina Pravitasari,

Safety Health, and

Environment Officer


Ms. Fukuhara

Nippon Koei Co.,Ltd.

Mr. Uehara

Mr. Yoshida

Mr. Hisakawa

Mr. Nakagawara

Organization for

environmental and social

consideration

Detailed information of

Makassar Airport

2014/11/21

10:00-15:00

AP-I

(Makassar

Branch)

Person in charge for each

facility


Ms. Fukuhara

Nippon Koei Co,. Ltd.

Mr. Yoshida

Mr. Hisakawa

Mr. Nakagawara

Interviews regarding

Environmental and Social

Considerations for each

facility


(4) Outlines of Relevant Environmental Laws, Rules, and Regulations in

Indonesia

1) Outline of Environmental Laws, Rules, and Regulations for EIA

Environmental laws, rules, and regulations for Environmental Impact Assessment (AMDAL in Indonesia), as

well as related laws for resettlement plan and other environmental guidelines to be complied with are

summarized as follows:

a) EIA system and related laws

Outline

In Indonesia, Law No. 4/1982 concerning environmental management represents the country’s

first and primary legislation on environmental management and planning. The method of

environmental management is determined by this law to preserve and conserve the environmental

resources (revised in 1997 and 2009).

Indonesia’s EIA system, called AMDAL, was initiated in 1986 and institutional responsivities for

environmental protection were determined. In 1993, a drastic revision, including reduction of the

screening process, was determined by Government Regulation No. 51/1993. Moreover, project

proponents are required to undertake AMDAL and obtain an environmental permit if the projects

have a possibility of significant impacts on the environment by Article 15 of Law No. 23/1997

concerning environmental management. The specific requirements for AMDAL and

environmental permits are stipulated in Law No. 32/2009 and Government Regulation No.

27/2012, respectively. The Ministry of Environmental Regulation No. 5/2012 imposes a “positive

list” for projects and/or activities that require a full AMDAL according to the type, scale, and

location of the activity for a variety of sectors. The specific procedures for AMDAL and the

public involvement are regulated under the Ministry of Environmental Regulations No. 16 and

No. 17/2012.



4-23

Environmental Criteria

The South Sulawesi Governor Regulation No. 69/2010 shows the environmental criteria that the

projects at Makassar Airport need to meet. Table 4-8 shows the outline of the regulation.

Table 4-8 Outline of South Sulawesi Governor Regulation No. 69/2010

Category Item Environmental Criteria

Air Quality SO2 900 μg/m3 (1-hour)

NO2 400 μg/m3 (1-hour)

O3 230 μg/m3 (1-hour)

CO 30,000 μg/m3 (1-hour)

Pb 2 μg/m3 (1-hour)

TSP 230 μg/m3 (24-hour)

Water Quality pH 6.0-9.0

BOD5 50 mg/L

COD 100 mg/L

TSS 200 mg/L

DO -

Total Coli 5,000 mg/L

Noise

(Airport)

For Residents 75 dB(A)

For Activities and/or Buildings 80 dB(A)

Source: Created by the study team (based on South Sulawesi Governor Regulation No. 69/2010)

AMDAL System and Procedures

With reference to the airport sector, Regulation No. 5/2012 requires that the construction of

airports where the (i) Length of the runway >1,200 m or (ii) Area of terminal buildings (for

passengers or cargo) >10,000 m2 must undergo an EIA.

AMDAL includes the following documents shown below and obtaining and submitting the

environmental permit is required.

i. Action plans on environmental impact analysis (ToR: KA-ANDAL);

ii. Environmental impact analysis (ANDAL);

iii. Environmental management plans (RKL);

iv. Environmental monitoring plans (RPL); and

v. Summary.

The first step of the AMDAL process is the preparation of the ToR: KA-ANDAL and approval by

the AMDAL Commission.

Before preparing the ToR: KA-ANDAL, the proponent is required to make a public

announcement of the proposed project through publication in a local newspaper, and the

stakeholders have a month in which to submit their comments and suggestions for the ToR:

KA-ANDAL. A public consultation meeting is held prior to finalizing the ToR: KA-ANDAL.

During this meeting the project proponent is expected to present a full description of the project

and the potential impacts associated with it.

Based on the approved ToR: KA-ANDAL, the proponent prepares the ANDAL, RKL, and RPL

documents and submits them for evaluation. AMDAL evaluation is a two-step process. In the

first round, the documents are reviewed by the Technical Committee. Based on the committee’s

comments, the documents will be revised by the proponent and re-submitted. If the revised report

is accepted by the Technical Committee, it is forwarded to the Appraisal Committee, and the

same review and revision process will take place as necessary. During the review process, an

additional public consultation is held to disclose the project assessment and to obtain feedback

from the stakeholders. Comments received from the AMDAL Commission and the public are

considered when the project proponent revises the reports.

Once the review finds the AMDAL process satisfactory, the relevant government agency (in this

case, MOE) will issue a letter of “approval to proceed with the project”. Once the AMDAL

document is approved by the AMDAL Commission and the project receives environmental



4-24

feasibility approval, then the project proponent is required to obtain an environmental permit and

other required permits such as a permit for clearing the land before commencing construction.

The environmental permit becomes invalid if the proposed project is not undertaken within three

years of the issuance of the permit according to Government Regulation No. 27/2012 (Article

50).

b) Related Laws for Land Acquisition and Resettlement

The proposed projects do not involve land acquisition, but the expansion projects of Makassar Airport

in the future may require land acquisition including resettlements. Related laws for land acquisition

and resettlement are described as follows:

The principal laws and acts of the Government of Indonesia in regard to land acquisition,

compensation, and resettlement include the following: i) Law of the Republic of Indonesia No. 2/2012

concerning Land Acquisition for Construction in the Public Interest; ii) Presidential Regulation No.

71/2012 concerning Implementation of Land Acquisition for Construction in the Public Interest (PP

No. 71/2012); and iii) Indonesian Appraising Standard 306 (Standar Penilian Indonesia 306: SPI 306)

(valid since April 2013).

Law No. 2/2012 and Presidential Regulation No. 71/2012, which provide guidance on the

implementation of the law, were promulgated in January 2012. The transitional provisions of the law

stipulate that land acquisition undertaken prior to the promulgation of the Act will be completed by

referring to the previous regulations/provisions. Therefore, there are only a few examples in which

land acquisition is carried out under the new Law No. 2/2012. However, the law provides clear

procedures and time frame for land acquisition, and fills several important gaps between the

Indonesian requirements and donors’ requirements that had existed in previous laws and regulations.

Major improvements from previous laws/regulations include the following: i) clear time frame for

land acquisition; ii) clear procedures by phasing of land acquisition from planning and preparation to

implementation and handing over of the land acquisition results; iii) clear budget allocation for all

phases of land acquisition stated in the regulations of the Ministry of Finance and Ministry of Home

Affairs; iv) evaluation of compensation amounts by an independent appraiser; and v) expanded

eligibility for compensation. In particular, the law recognizes that residents who manage and utilize

land are entitled to compensation and that all kinds of losses (loss of land and non-land assets, and

other losses that can be valued) are to be appraised by a professional appraiser plot by plot. The

remaining gaps include the principle of no depreciation for compensation of loss of structures, clear

provisions on livelihood restoration programs for severely affected persons and vulnerable groups to

ensure that their living standards do not decline, assistance for relocation (transition allowance), and

requirements for external monitoring.



4-25

c) Environmental Criteria for Aircraft Noise (in Japan)

Aircraft noise is a general problem associated with projects around airports. In Japan, the

environmental criteria for aircraft noise are determined as follows:

Table 4-9 Environmental Criteria for Aircraft Noise (in Japan)

Type of Area Environmental Criteria

I1)

57dB or less

II1)

62dB or less 1) Type I is an area mostly used for residents. Whereas Type II is an area which is necessary to preserve the usual living conditions excluding Type I.

Moreover, airports which do not have more than 10 LTOs, ones for police, fire, or self-defense force or ones at isolated islands are excluded.


(based on South Sulawesi Governor Regulation No.69/2010)

d) JICA’s or JBIC’s Guidelines for Environmental and Social Considerations

Projects by JICA or JBIC are classified based on JICA’s “Guidelines for Environmental and Social

Considerations” or JBIC’s “Guidelines for Confirmation of Environmental and Social Considerations”,

respectively. Projects which have significant impacts on the environment are classified as Category A

and some actions are required (e.g., disclosure of EIA reports).

2) Projects and Activities where EIA is needed

The first step is to prepare the “Action plans on environmental impact analysis (ToR: KA-ANDAL)” after the

approval of the Master Plan for Makassar Airport. Stakeholders’ conference will be held based on comments

which are submitted within a month after the public announcement. ToR will be finalized after the conference.

Detailed review of related laws and impacts on the environment in this chapter is necessary to make the ToR.

(5) Matters to be Completed by Related Authorities in Indonesia to

Realize the Projects

As already described in Section (4)2), the first step is to prepare the “Action plans on environmental impact

analysis (ToR: KA-ANDAL)” after the approval of the Master Plan for Makassar Airport. AMDAL and

environmental permits should be implemented and prepared before construction. Meanwhile, the proposed

projects do not require permits for forest clearances because there is no deforestation involved. Table 4-10 shows

the structure and the provisional ToR, Figure 4-9 shows the EIA system and procedures while Figure 4-10 shows

the system and procedures for land acquisition.

The 3rd runway which may be planned after the proposed projects requires resettlement associated with land

acquisition. Therefore, the resettlement plan and negotiation for compensation are necessary based on detailed

information on land acquisition (e.g., landowner, land use). Estimation of compensation, conference with

landowners and negotiation will be required. Furthermore, increase of LTO will cause negative impacts associated

with aircraft noise. Mitigation measures should be required (e.g., sound insulation wall, buffer zone).



4-26

Table 4-10 Structure and Provisional ToR

Structure Provisional ToR

Chapter-1 Preface

1.1 Background i) Necessary expansion of the terminal building and apron in accordance with

the increase in demand at Makassar Airport in the future.

ii) Necessary change for Makassar Airport as a regional-hub airport for the

purpose of congestion reduction at Soekarno-Hatta Airport.

1.2 Purpose and Effect of the

Projects

(a) Background of the necessity of the projects and present problems

i) Population around Makassar City will increase rapidly (similar to other

areas in Indonesia), therefore, Makassar Airport will rapidly reach the limit

of its capacity in the future. Congestion at Makassar Airport will occur.

ii) Congestion at Soekarno-Hatta Airport, the main airport for Jakarta, is

caused by operating over the limit of its capacity.

(b) Necessity of the projects based on the present problems.

i) To reduce the number of aircraft movements at Soekarno-Hatta Airport.

ii) To make a plan for Makassar Airport in accordance with the number of

passengers in the future.

(c) The purpose and effect of the projects based on the demand.

i) To change Makassar Airport, the main airport in eastern Indonesia, to a

regional-hub airport. It will reduce the number of aircraft movements from

local airports in eastern Indonesia and congestion at Soekarno-Hatta

Airport.

ii) To expand the terminal building and apron for passengers at Makassar

Airport in the future.

1.3 Relevant Laws EIA, related environmental laws, rules, and regulations in Indonesia

Chapter-2 Scope of the Survey

2.1 Outline of the Projects To show the results of AMDAL in the past (KA-ANDAL established in 1995

for this project).

KA-ANDAL established in 1995 will be reviewed. The result of this review

should be shown.

To show the spatial map (Makassar and Maros)

To show the activities which will adversely affect the environmental and social

impacts of the projects in each stage (planning stage, construction stage,

operation stage and the stage after the operation)

i) Planning Stage

The proposed projects do not involve activities which have significant impacts

(e.g., additional land acquisition).

ii) Construction Stage

Main impacts in the construction stage are considered as follows:

・ Negative impacts in the area around Makassar Airport caused by noise and

vibration

・ Water contamination caused by construction effluents and the stoppage of

the water treatment system during construction.

・ Dust pollution caused by construction.

・ Waste caused by construction (e.g., debris from the terminal building and

sand production)

・ Impacts caused by construction vehicles (e.g., increase in traffic)

iii) Operation Stage

Main impacts in the operation stage are considered as follows:

・ Noise pollution associated with the change of airlines

・ Adverse impacts on hydrology (e.g., groundwater) especially associated

with tunnel excavation

iv) The stage after the operation

Proposed projects have continuity.

Increase in traffic around the project site associated with the change of airlines

will occur and the size of the impact should be considered.

2.2 Present Environmental and

Social Conditions

To show the present environmental and social conditions at the project site.

Results of the measurements (e.g., for noise, air, and water) based on



4-27

Structure Provisional ToR

KA-ANDAL established in 1995 should be shown.

If necessary, additional monitoring should be considered.

2.3 Scope of AMDAL

Main items which should be considered in the projects are as follows:

i) Survey and monitoring to verify the impacts of aircraft noise associated

with the change of airlines and adequate mitigation measurements (if

necessary).

ii) Survey and monitoring to verify the impacts on hydrology (e.g.,

groundwater) associated with tunnel excavation and adequate mitigation

measurements (if necessary).

i) iii) Adequate waste disposal methods for the waste during construction

(e.g., debris from the terminal building and sand production).

Chapter-3 Method of the Survey and Monitoring

3.1 Data Acquisition and

Analysis

Aircraft Noise

To survey the aircraft noise as follows:

- Height: 1.2 m–1.5 m

- Measurement Period: a couple of weeks (from the start and end of flights)

*Weather should be considered

- Points: Points which have already been monitored based on the ANDAL in

1995 and a point in/near the expansion area of the apron.

- Relative methods to adopt the Weighted Equivalent Continuous Perceived

Noise Level (WECPNL) as index for evaluation.

Hydrology

To survey the groundwater level as follows:

- Points: Area near tunnel excavation

- Status of utilization of groundwater (e.g., well water) around the airport, if

adverse impacts are considered.

Waste (during construction)

To estimate the amount of debris from the terminal building and sand

production. Survey the capacity of the disposal site.

3.2 Forecast Measurements

Aircraft Noise

Experts should make a noise contour in the future based on the demand at

Makassar Airport.

Hydrology

Experts should survey the groundwater level in and around the airport and the

status of utilization of groundwater.

Water (during construction)

Experts should compare the capacity of the disposal site and the amount of

waste from the cities around the project site. Moreover, experts should evaluate

whether adequate waste disposal will be conducted or not.

3.3 Evaluation Monitoring forms and environmental checklists based on the environmental

monitoring plan that will be established.

Regular monitoring based on the environmental monitoring plan that will be

established.

Chapter-4 Monitoring System

4.1 Project Proponent AP-I

4.2 Investigation Agency Consultants (to be determined)

4.3 Investigation Cost To be determined

4.4 Investigation Period To be determined

References References (e.g., background materials) which are referred to establish

KA-ANDAL

Attachments (a) Detailed description of the information related to the projects. (b) Results of consultations with stakeholders.

(c) Curriculum vitae of the representative of the investigation agency.

Source: Created by the study team (based on the Ministry of Environmental Regulations No.8/2006)



4-28

Figure 4-9 EIA System and Procedures

Source: Created by the study team (based on No.27/2012)



4-29

Figure 4-10 Procedures for Land Acquisition

Source: Created by the study team (based on Decree No.2/2012)



4-30

Research n Makassar Airport Upgrade Project Chapter 5

through Indonesian Aviation Network Reconfiguration Financial and Economic Feasibility

5-1

Chapter 5 Financial and Economic Feasibility

(1) Project Cost

1) Estimated Project Cost for Makassar Airport Upgrade Project

The construction costs of this project are estimated as shown in Table 5-1.

As described in Chapter 8, this project was divided into several Packages, taking into consideration the

peculiarities of the introduction of BB/RH Network, a large-scale of the project, an autonomy of AP-I, and

airport management and operation concessioned to SPC.

The table below provides a division of Package 1-3, which will be analyzed in Chapter 8 in details

Table 5-1 Results of Estimated Construction Costs


Main Passenger Terminal 1 60,000 m2

Satellite Passenger Terminal 2 88,000 m2

Terminal Equipment 1, 2 1 LS

Utility Facilities 1 1 LS

Underground Passage Construction (Only Tunnel) 3 1 LS

APM・Undergrand Bagehan 2

New Apron Construction 3 596,200 m2

New Taxiway Construction 3 115,000 m2

Road Construction 3 60,000 m2

Parking Construction 3 54,000 m2

Cargo Terminal Construction 1 10,000 m2

Contraction Total

Physical Contingency

Design

Total Project Cost

Item Quantity UnitPackage

Co

nstr

ucti

on

Co

st

Domestic Portion Foreign Portion Total

11,000 107 860,113 267,165 1,127,278

15,000 146 1,172,881 364,316 1,537,197

4,200 41 328,407 102,008 430,415

2,000 20 156,384 48,575 204,960

10,000 98 781,921 242,877 1,024,798

10,000 98 781,921 242,877 1,024,798

8,945 87 699,428 217,254 916,682

1,725 17 134,881 41,896 176,778

300 3 23,458 7,286 30,744

270 3 21,112 6,558 27,670

1,500 15 117,288 36,432 153,720

64,940 634 5,077,794 1,577,244 6,655,038

3,247 32 253,890 78,862 332,752

3,247 32 253,890 78,862 332,752

71,434 697 5,585,574 1,734,968 7,320,542

IDR JPY USD



5-2

2) Assumptions on Cost Estimate

The assumptions on project cost estimate are shown in Table 5-2.

Table 5-2 Assumptions on Cost Estimate

Assumptions on Project Cost Estimate

Construction

Cost

・ Unit cost of the construction of the main passenger terminal is set at JPY

160,000/m2, based on examples of other airport projects in Indonesia.

・ It is assumed that equipment costs at terminal buildings include boarding

bridges, baggage handling, security, and flight information display.

・ Apron expansion work is assumed as concrete pavement construction and

is set at JPY 15,000/m2.

・ Unit cost of the construction for the satellite passenger terminal building

is set at JPY 180,000/m2, based on the specifications of buildings from

other airports in Indonesia, and JPY 150,000/m2 for other parts of the

satellite building.

・ It is assumed that equipment at terminal buildings consist of boarding

bridge, baggage handling, security, flight information display.

・ It is assumed that the construction of utility facilities will consist of

power, water supply, and sewage works.

・ Apron expansion is assumed as concrete pavement, taxiway is expected

to be asphalt pavement, and construction cost is set at JPY 15,000/m2.

・ The road sand parking area is assumed to be asphalt pavement and

construction cost is set at JPY 5,000/m2.

・ Unit cost of the construction of cargo terminal is set at JPY 150,000/m2.

Physical

Contingency

・Estimated at 5% of direct construction cost

Design Cost ・Estimated at 5% of direct construction cost




5-3

(2) Results of the Preliminary Financial and Economic Analyses

1) Current Financial Situation of Makassar Airport

According to the Annual Report of Makassar Airport, although the operating income in 2009 was in deficit,

the income statement from 2010 to 2013 showed a pre-tax profit. The revenue in 2013 was recorded at IDR

271 million, which was around 2.3 times more than the revenue in 2009. The non-aero revenue in 2013 was

39.1% of the total revenue. In the past five years, there were remarkable increases in parking and concession

revenues (growth of 40% and 31%, respectively), and the percentage of concession revenue to the total

revenue has been gradually increasing (14% in 2013).

Table 5-3 Income Statement of Makassar Airport 2009-2013(IDR in millions)

Source：Created by the study team, based on the Annual Report of Makassar Airport

2) Results of Preliminary Financial Analysis

This preliminary financial and economic analysis for the Makassar Airport Upgrade Project evaluates the

entire airport project that will introduce a full-scale BB/RH Network. Financial and economic analyses of this

project are based on the following assumptions:

2009 2010 2011 2012 2013

I

A Aero Revenue 68,984 87,294 124,431 147,451 165,353

Passenger Service (Domestic) 48,067 62,224 90,547 106,148 117,782

Passenger Service (International) 2,036 2,370 3,439 4,028 6,773

Landing, Positioning, and Stationing

(Domestic) 11,317 14,648 19,570 27,129 26,395

Landing, Positioning, and Stationing

(International) 1,205 1,513 3,246 2,628 2,650

Aviobridge 6,360 6,540 7,629 7,518 11,754

B Non-Aero Revenue 49,236 60,913 69,383 87,500 106,345

Check-in Counter 5,246 6,659 7,888 9,172 13,694

Telephone/Water/Electricity 4,077 4,137 4,174 4,946 6,499

Parking 3,549 6,395 10,269 11,778 13,778

Lease 18,305 19,257 21,214 23,232 27,991

Advertisement 5,176 7,621 6,337 6,222 6,482

Concession 12,882 16,844 19,499 26,497 37,900

Others 5,651

118,220 148,207 193,813 234,951 271,698

II

A Personnel 45,249 39,346 45,092 44,548 48,807

B, C Maintenance/Equipment 10,836 13,195 18,949 16,623 19,590

D Telephone/Water/Electricity 16,091 15,568 19,315 21,218 26,684

E Rental Expense 3,570 3,630 4,071 5,208 6,059

F Passenger Service Cost 13,641 20,828 25,252 31,612 37,274

G Insurance Expense 367 414 268 382 137

H Tax 6,091 7,193 8,938 9,848 9,721

Property Tax 2,753 2,943 2,934 2,964 3,338

Tax Incured from Services 2,566 2,544 2,138 2,689 1,020

Local Tax 5,251

I General Expense 4,741 7,369 7,688 7,315 9,378

L Depreciation 29,565 29,533 38,677 55,692 61,302

Others 1,688 523 374 382 169

131,473 137,184 168,355 192,447 218,986

Operating Profit -13,253 11,022 25,459 42,504 52,712

Total Expense

Revenue

Total Revenue

Expense



5-4

a) Assumptions

Evaluation Period： 2016-2044 (29 years)

Price level・Exchange rate： 5 January 2015, (End day price)

USD 1 = IDR 12,484 ≒ IDR 12,500

Initial Investment： Project costs are distributed as shown in Table 5-4

Table 5-4 Assumptions on Initial Investments

Unit: JPY in millions


Proportion of domestic/foreign portions： 76.3% of construction cost is set as domestic portion

76.3% of equipment is set as domestic portion

76.3% of design cost is set as domestic portion

Discount rate： 12％

Implementation agent： Makassar Airport Operating Company (AP-I) and Newly

Established Special Purpose Company（SPC）

Tax： Local tax, value-added tax (VAT) (10%), and corporate tax are not

included in the financial analysis (but included in economic

analysis)

b) Assumptions on Revenues

・ It is assumed that the revenues from Passenger Service Charges (PSC) would be changed

according to the results of passenger demand forecast.

・ The current PSCs are maintained initially (IDR 150,000 for international flights, IDR 50,000 for

domestic flights), but taking into account the inflation rate and the improvement of airport

services, it is assumed that PSCs will increase in 2018, 2024, and 2034. PSC for domestic flights

will increase from IDR 50,000 to IDR 75,000 →IDR 100,000 →IDR 125,000, respectively, and

PSC for international flights will increase from IDR 150,000 to IDR 200,000 →IDR 250,000

→IDR 300,000, respectively. Since PSC for domestic flights contains a VAT, aero revenue is

estimated by deducting the VAT.

・ Although landing, positioning, and stationing charges vary by aircraft type, an average charge per

aircraft is applied in this analysis based on historical data. Initially, the current charge (IDR

2,000,000 for international flights, IDR 300,000 for domestic flights) is maintained, but in order to

promote BB/RH Network, it is proposed that landing and other charges will be reduced by

18%-25% in 2018 (IDR 1,500,000 for international flights, IDR 250,000 for domestic flights).

Total 2016 2017 2018 2019 2020 2021 2022 2023 2024

Total (include inflation) 86,313 81 162 487 4,422 12,537 20,853 21,406 21,635 4,730

Foreing Portion 18,480 966 2,751 4,502 4,560 4,540 989

Domestic Portion 67,833 3,456 9,786 16,351 16,847 17,094 3,741

Construction Cost 64,940 3,247 9,741 16,235 16,235 16,235 3,247

Foreign Portion 15,391 770 2,309 3,848 3,848 3,848 770

Domestic Portion 49,549 2,477 7,432 12,387 12,387 12,387 2,477

Physical Contingency 3,247 162 487 812 812 649 325

Foreing Portion 770 38 115 192 192 154 77

Domestic Portion 2,477 124 372 619 619 495 248

Design Cost 3,247 81 162 487 406 649 487 487 325 162

Foreing Portion 770 19 38 115 96 154 115 115 77 38

Domestic Portion 2,477 62 124 372 310 495 372 372 248 124

Inflation (Construction) 14,879 607 1,660 3,319 3,872 4,426 996

Foreing Portion 1,551 62 173 346 404 462 104

Domestic Portion 13,329 545 1,486 2,973 3,468 3,964 892



5-5

With the increase of large aircraft through the introduction of BB/RH Network, the reduction of

landing charges is expected to encourage the airlines to fly more frequently to Makassar Airport.

・ As commercial areas will be expanded through the expansion of Makassar Airport, non-aero

revenue would increase accordingly. It is assumed that lease and advertisement revenues will

increase according to the increase in floor areas from the airport expansion and the inflation rate.

Floor occupancy rate in the existing and new terminals are assumed to be 80%.

・ Due to the improvement of commercial facilities and the introduction of SPC’s know-how on

airport management and operation, the unit sale per passenger spent at the airport would increase.

It is assumed that concession revenue per international passenger would increase to the current

level of Airport of Thailand that operates Suvarnabhumi International Airport in Bangkok (USD

3.48 = IDR 42,744 in 2014). The concession revenues for domestic and transit passengers are

expected to increase by one-half of the level in Airport of Thailand.

・ For non-aero revenue after the airport expansion, concession and parking revenues are assumed to

be increased by passenger demand and inflation rate, and other revenues would be changed based

on inflation rate.

c) Assumptions on Expenditure

・ Between 2019 and 2023, passenger service cost is assumed to increase by 10%, while the rest of

the costs, such as personnel, maintenance, electricity, water, and telephone, would increase on the

basis of the inflation rate.

・ At the time of the airport expansion in 2024, an increase in costs caused by the expansion of floor

areas at the terminals is anticipated. The costs of electricity, water, and telephone are expected to

increase on the basis of increased floor areas at the terminals, while the rest of the costs, such as

costs of personnel, maintenance and equipment, passenger services, and general expenses, would

increase by one-half of the increased floor areas. After the airport expansion, the cost of passenger

service is expected to increase on the basis of passenger demand and inflation rate, while the rest

of the costs would increase on the basis of inflation rate.

・ Between 2019 and 2023, the construction and investment for this project will be implemented

(Table 5-4). In addition to construction, physical contingency, and design costs, inflation cost

during the construction is included in financial and economic analyses. The total project costs

including inflation are estimated at JPY 86.3 billion.

・ The fund for initial investment is distributed by each project Package1, as shown in the following

table. Package 1 will be financed by Private Sector Investment Finance (PSIF), Package 2 will be

covered by equity from a Special Purpose Company (SPC) and other stakeholders and PSIF, and

Package 3 will be financed by equity (tax) from AP-I and others, international financial agents

such as the International Bank for Reconstruction and Development (IBRD), and commercial

banks. Of the required fund in Package 2, 70% is assumed to be covered by PSIF. The

amortization period and grace period of PSIF are set at 15 years and 5 years, respectively.

・ As for the fund required for Package 3, the proportion of equity, IBRD, and commercial banks are

set at 10%, 50%, and 40%, respectively. The amortization and grace period for IBRD’s fund are

1 See Chapter 8 for the details on Project Package.



5-6

assumed to be at ten years and five years, respectively. The amortization period for commercial

banks is set at ten years with 10% interest.

Table 5-5 Financial Plan for Initial Investment

Unit: JPY in millions


・ Depreciation of newly built facilities is calculated separately from the existing ones. Depreciation

of the existing facilities is set at the same level as in 2013, which will be maintained up to 2037

(30 years of useful life). Depreciation of newly built facilities is calculated on the basis of 30

years of useful life.

d) Results of Preliminary Financial Analysis

Based on the above assumptions, the FIRR of this project was found to be 14.8% if the airport

expansion of Makassar Airport was implemented. Although the cash flow during the airport

construction deteriorated, the closing cash balances were positive throughout the entire project

implementation period. While non-aero revenue at the initial year of project was 36% of the total

revenue, this percentage is expected to increase to 53% by 2030 due to the improvement of

commercial facilities after the airport expansion and the introduction of improved know-how on

airport management and operation. Net present value (NPV) of this project is IDR 2,030,005 million.

Total

% of Total

in Package 2018 2019 2020 2021 2022 2023 2024

Total 88,000 212 4,107 12,233 22,630 23,851 20,330 4,637

Total Equity 13,798 212 666 2,056 3,126 3,598 3,126 1,013

Total Loan 74,202 0 3,440 10,177 19,504 20,252 17,204 3,625

AP 1: Package (1) 22,063 2,206 6,619 6,619 5,516 1,103

Loan (1) PSIF 22,063 100% 2,206 6,619 6,619 5,516 1,103

SPC: Package (2) 36,019 68 5,134 8,937 9,410 8,937 3,534

Equity 10,806 30% 68 1,352 2,634 3,106 2,634 1,013

Design 1,355 68 407 271 271 271 68

Package (2) 9,451 945 2,363 2,835 2,363 945

Loan (1) PSIF 25,213 70% 3,782 6,303 6,303 6,303 2,521

Package (2) 25,213 3,782 6,303 6,303 6,303 2,521

Public Work: Package (3) 29,917 212 4,039 4,893 7,074 7,822 5,877 0

Equity (AP-1, etc.) 2,992 10% 212 598 705 492 492 492 0

Design 1,062 212 212 319 106 106 106 0

Package (3) 1,930 386 386 386 386 386 0

Loan (2) IBRD 14,959 50% 0 2,244 2,992 2,992 3,740 2,992 0

Package (3) 14,959 2,244 2,992 2,992 3,740 2,992 0

Loan (3) Commercial Bank 11,967 40% 0 1,197 1,197 3,590 3,590 2,393 0

Package (3) 11,967 1,197 1,197 3,590 3,590 2,393 0



5-7

Table 5-6 Income Statement and Cash Flow (1) 2016-2030


NP

VT

ota

l1

23

45

67

89

10

11

12

13

14

15

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Aer

o R

even

ue

7,7

03,5

71

37,1

57,0

37

286,6

03

311,2

49

468,0

23

509,2

25

541,5

62

568,5

89

594,8

21

618,1

76

893,2

85

937,7

88

986,0

86

1,0

38,6

72

1,0

96,1

10

1,1

59,0

54

1,2

46,6

07

Pas

senger

Ser

vic

es (

Inte

rnat

ional

)1,3

42,3

79

8,7

31,8

60

12,0

73

15,0

21

24,9

17

31,0

00

37,6

58

45,7

45

55,5

69

67,5

03

102,5

00

118,8

55

137,8

19

159,8

09

185,3

08

214,8

75

238,0

38

Pas

senger

Ser

vic

es (

Dom

estic)

5,1

00,5

21

22,6

99,9

09

201,8

91

217,7

57

352,3

05

379,9

91

399,9

98

413,6

47

424,6

85

430,8

50

654,8

40

677,1

84

700,2

91

724,1

86

748,8

96

774,4

50

795,1

15

Lan

din

g,

Posi

tionin

g,

and S

tationin

g (

Inte

rnat

ional

)143,6

40

898,1

14

3,0

62

3,7

89

3,5

16

4,3

50

5,1

58

6,1

17

7,2

54

8,6

02

10,2

00

11,6

65

13,3

39

15,2

55

17,4

45

19,9

50

29,3

63

Lan

din

g,

Posi

tionin

g,

and S

tationin

g (

Dom

estic)

361,9

67

1,4

79,8

69

32,8

60

35,1

18

31,2

76

33,4

25

34,9

75

36,5

96

38,2

92

40,0

68

41,9

25

43,0

75

44,2

57

45,4

71

46,7

18

48,0

00

49,2

08

Avio

bri

dge

216,3

34

937,7

61

13,8

83

14,8

69

15,9

31

17,0

75

17,9

17

18,8

08

19,7

51

20,7

51

26,1

75

27,0

12

27,8

88

28,8

08

29,7

76

30,7

95

37,0

15

Counte

r538,7

29

2,4

09,5

24

22,8

35

24,6

96

40,0

79

43,3

84

45,8

56

47,6

76

49,2

71

50,4

04

57,6

45

59,9

98

62,4

92

65,1

43

67,9

67

70,9

84

97,8

68

Non-A

ero R

even

ue

7,6

64,5

52

42,6

41,8

20

158,2

22

182,9

46

219,6

78

249,6

31

284,6

25

325,5

96

373,6

64

430,1

66

966,3

37

1,0

28,0

52

1,0

93,9

06

1,1

64,1

87

1,2

39,2

00

1,3

19,2

75

1,4

04,7

63

Conces

sion

4,8

19,0

97

27,7

41,8

31

76,8

61

92,2

33

110,6

80

132,8

15

159,3

79

191,2

54

229,5

05

275,4

06

579,5

69

621,5

60

666,5

93

714,8

89

766,6

84

822,2

32

881,8

05

Lea

se1,1

20,9

89

5,5

69,9

99

34,2

70

37,6

97

46,1

11

48,6

47

51,3

23

54,1

46

57,1

24

60,2

66

165,7

37

172,3

67

179,2

62

186,4

32

193,8

89

201,6

45

209,7

11

Par

kin

g1,1

27,9

20

6,3

23,1

72

30,7

67

35,3

82

40,6

89

44,7

58

49,2

34

54,1

58

59,5

73

65,5

31

131,0

61

140,5

57

150,7

41

161,6

62

173,3

75

185,9

36

199,4

08

Adver

tise

men

t251,4

61

1,2

49,2

44

7,6

74

8,1

18

10,2

19

10,8

32

11,4

82

12,1

71

12,9

02

13,6

76

37,1

66

38,6

53

40,1

99

41,8

07

43,4

79

45,2

19

47,0

27

Tel

ephone/

Wat

er/E

lectr

icity

345,0

85

1,7

57,5

74

8,6

51

9,5

16

11,9

79

12,5

78

13,2

07

13,8

67

14,5

60

15,2

88

52,8

03

54,9

15

57,1

12

59,3

96

61,7

72

64,2

43

66,8

13

Oth

ers

0

Oper

atin

g I

ncom

e15,3

68,1

23

79,7

98,8

58

444,8

26

494,1

95

687,7

02

758,8

56

826,1

87

894,1

84

968,4

85

1,0

48,3

43

1,8

59,6

22

1,9

65,8

40

2,0

79,9

93

2,2

02,8

59

2,3

35,3

11

2,4

78,3

29

2,6

51,3

70

Oper

atin

g E

xpen

se9,3

77,8

24

44,2

72,5

71

260,7

02

276,8

41

326,1

17

353,9

58

401,9

70

476,1

68

584,3

39

687,3

76

1,5

27,4

56

1,5

74,4

48

1,5

94,8

82

1,6

17,9

13

1,6

43,6

95

1,6

72,3

89

1,7

04,1

69

Per

sonnel

1,4

42,7

92

6,9

57,9

46

54,9

61

57,1

80

71,9

81

75,5

80

79,3

59

83,3

26

87,4

93

91,8

67

204,5

82

212,7

65

221,2

76

230,1

27

239,3

32

248,9

05

258,8

61

Mai

nte

nan

ce/

Equip

men

t506,0

43

2,4

40,4

19

22,0

60

22,9

51

25,2

46

26,5

09

27,8

34

29,2

26

30,6

87

32,2

21

71,7

55

74,6

25

77,6

10

80,7

14

83,9

43

87,3

01

90,7

93

Tel

ephone/

Wat

er/E

lectr

icity

1,4

16,8

03

7,2

16,0

01

35,5

17

39,0

68

49,1

80

51,6

39

54,2

21

56,9

33

59,7

79

62,7

68

216,7

92

225,4

63

234,4

82

243,8

61

253,6

16

263,7

60

274,3

11

Pas

senger

Ser

vic

e C

ost

2,0

50,0

54

11,5

15,6

16

49,6

12

54,5

73

68,6

99

75,5

69

83,1

26

91,4

38

100,5

82

110,6

41

246,3

88

263,6

36

282,0

90

301,8

36

322,9

65

345,5

72

369,7

63

Gen

eral

Expen

se352,0

82

1,6

97,9

36

12,6

34

13,9

54

17,5

65

18,4

44

19,3

66

20,3

34

21,3

51

22,4

18

49,9

24

51,9

21

53,9

98

56,1

57

58,4

04

60,7

40

63,1

70

Oth

ers

(Ren

tal, e

tc.)

213,3

59

982,4

53

8,6

02

9,8

18

11,2

06

12,7

90

14,9

73

16,4

70

18,1

17

19,9

29

21,9

22

29,4

93

30,6

73

31,9

00

33,1

76

34,5

03

35,8

83

Dep

recia

tion (

Exis

ting F

acili

ties

)451,5

39

1,1

64,7

44

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

Dep

recia

tion (

New

Fac

ilities

)2,1

53,9

16

5,9

81,5

16

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

Tax

(P

roper

ty,

Ser

vic

es,

Local

Tax

)646,4

41

3,5

24,5

80

16,0

14

17,9

94

20,9

37

23,3

37

27,0

04

30,2

87

34,1

37

38,6

64

81,6

19

86,5

63

91,8

39

97,4

69

103,4

79

109,8

94

116,7

43

Inte

rest

Expen

se1,0

76,5

22

2,7

91,3

61

00

08,7

88

34,7

85

86,8

52

170,8

90

247,5

65

288,3

38

283,8

46

256,7

79

229,7

11

202,6

44

175,5

77

148,5

10

Pro

fit

bef

ore

Tax

5,9

90,2

99

35,5

26,2

86

184,1

24

217,3

53

361,5

84

404,8

98

424,2

17

418,0

16

384,1

47

360,9

66

332,1

66

391,3

91

485,1

10

584,9

45

691,6

16

805,9

40

947,2

01

Corp

ora

te T

ax8,8

81,5

72

8,8

81,5

72

46,0

31

54,3

38

90,3

96

101,2

25

106,0

54

104,5

04

96,0

37

90,2

42

83,0

42

97,8

48

121,2

78

146,2

36

172,9

04

201,4

85

236,8

00

Pro

fit

afte

r T

ax4,4

92,7

24

26,6

44,7

15

138,0

93

163,0

15

271,1

88

303,6

74

318,1

63

313,5

12

288,1

10

270,7

25

249,1

25

293,5

44

363,8

33

438,7

09

518,7

12

604,4

55

710,4

01

Cas

h F

low

Fin

ancia

l D

eman

d

Initia

l In

ves

tmen

t5,7

06,1

81

8,5

58,2

79

8,1

18

16,2

35

48,7

05

442,1

83

1,2

53,7

07

2,0

85,3

05

2,1

40,6

25

2,1

63,4

76

472,9

82

Inic

ial In

ves

tmen

t (E

conom

ic p

rice)

5,1

68,2

55

7,7

50,9

73

400,7

10

1,1

36,2

76

1,8

89,0

90

1,9

38,4

65

1,9

58,3

42

428,0

91

Oper

atin

g E

xpen

se8,3

01,3

02

41,4

81,2

10

260,7

02

276,8

41

326,1

17

345,1

70

367,1

85

389,3

16

413,4

49

439,8

11

1,2

39,1

18

1,2

90,6

03

1,3

38,1

04

1,3

88,2

02

1,4

41,0

50

1,4

96,8

12

1,5

55,6

59

Corp

ora

te T

ax1,4

97,5

75

8,8

81,5

72

46,0

31

54,3

38

90,3

96

101,2

25

106,0

54

104,5

04

96,0

37

90,2

42

83,0

42

97,8

48

121,2

78

146,2

36

172,9

04

201,4

85

236,8

00

Inte

rest

1,0

76,5

22

2,7

91,3

61

00

08,7

88

34,7

85

86,8

52

170,8

90

247,5

65

288,3

38

283,8

46

256,7

79

229,7

11

202,6

44

175,5

77

148,5

10

Rep

aym

ent

(Pri

ncip

al)

2,0

76,6

70

7,4

20,2

49

00

00

119,6

69

119,6

69

119,6

69

119,6

69

219,3

93

534,5

73

534,5

73

534,5

73

534,5

73

534,5

73

414,9

04

Tota

l18,6

58,2

49

69,1

32,6

71

314,8

51

347,4

15

465,2

18

897,3

65

1,8

81,4

01

2,7

85,6

46

2,9

40,6

70

3,0

60,7

63

2,3

02,8

73

2,2

06,8

69

2,2

50,7

33

2,2

98,7

23

2,3

51,1

72

2,4

08,4

47

2,3

55,8

73

Fin

ancia

l S

upply

Sal

es15,3

68,1

23

79,7

98,8

58

444,8

26

494,1

95

687,7

02

758,8

56

826,1

87

894,1

84

968,4

85

1,0

48,3

43

1,8

59,6

22

1,9

65,8

40

2,0

79,9

93

2,2

02,8

59

2,3

35,3

11

2,4

78,3

29

2,6

51,3

70

Cap

ital

1,1

88,2

19

2,1

61,1

57

00

06,7

75

135,1

58

263,3

70

310,6

24

263,3

70

101,2

83

1,0

80,5

78

00

00

0

Loan

4,1

31,9

12

6,2

23,5

59

00

0224,3

79

898,0

10

1,5

91,4

14

1,6

66,2

07

1,4

81,0

97

362,4

52

00

00

00

Tota

l20,6

88,2

54

88,1

83,5

74

444,8

26

494,1

95

687,7

02

990,0

11

1,8

59,3

54

2,7

48,9

68

2,9

45,3

16

2,7

92,8

09

2,3

23,3

57

3,0

46,4

18

2,0

79,9

93

2,2

02,8

59

2,3

35,3

11

2,4

78,3

29

2,6

51,3

70

New

Cas

h F

low

2,0

30,0

05

19,0

50,9

03

129,9

75

146,7

80

222,4

83

92,6

45

-22,0

46

-36,6

78

4,6

46

-267,9

54

20,4

84

839,5

49

-170,7

40

-95,8

64

-15,8

61

69,8

82

295,4

97

Clo

sing B

alan

ce

129,9

75

276,7

55

499,2

38

591,8

83

569,8

37

533,1

59

537,8

06

269,8

52

290,3

36

1,1

29,8

85

959,1

45

863,2

81

847,4

20

917,3

02

1,2

12,7

98

FIR

R14.8

%176,0

06

201,1

18

312,8

79

-37,2

85

-829,4

90

-1,6

67,2

89

-1,7

56,4

79

-1,8

02,5

10

-140,8

16

391,3

91

485,1

10

584,9

45

691,6

16

805,9

40

947,2

01

Unit

:ID

R i

n m

illi

ons



5-8

Table 5-7 Income Statement and Cash Flow (2) 2031-2044


NP

VT

ota

l1

61

71

81

92

02

12

22

32

42

52

62

72

82

9

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

20

41

20

42

20

43

20

44

Aer

o R

even

ue

7,7

03

,57

13

7,1

57

,03

71

,31

2,3

78

1,3

72

,21

81

,43

6,3

31

1,7

97

,68

01

,84

8,3

11

1,9

01

,20

21

,95

6,4

82

2,0

14

,28

62

,07

4,7

61

2,1

30

,40

22

,18

8,2

13

2,2

48

,29

82

,31

0,7

67

2,3

75

,73

4

Pas

sen

ger

Ser

vic

es (

Inte

rnat

ion

al)

1,3

42

,37

98

,73

1,8

60

26

3,6

98

29

2,1

24

32

3,6

15

43

0,2

00

45

7,5

45

48

6,6

29

51

7,5

62

55

0,4

60

58

5,4

50

61

6,6

52

64

9,5

17

68

4,1

34

72

0,5

95

75

9,0

00

Pas

sen

ger

Ser

vic

es (

Do

mes

tic)

5,1

00

,52

12

2,6

99

,90

98

16

,33

28

38

,11

58

60

,47

91

,10

4,3

00

1,1

20

,33

11

,13

6,5

96

1,1

53

,09

61

,16

9,8

36

1,1

86

,81

91

,20

3,5

53

1,2

20

,52

31

,23

7,7

32

1,2

55

,18

31

,27

2,8

81

Lan

din

g,

Po

sitio

nin

g,

and

Sta

tio

nin

g (

Inte

rnat

ion

al)

14

3,6

40

89

8,1

14

32

,41

33

5,7

80

39

,49

74

3,6

00

46

,19

34

8,9

40

51

,85

05

4,9

33

58

,20

06

1,1

30

64

,20

76

7,4

39

70

,83

47

4,4

00

Lan

din

g,

Po

sitio

nin

g,

and

Sta

tio

nin

g (

Do

mes

tic)

36

1,9

67

1,4

79

,86

96

0,5

35

62

,05

86

3,6

19

65

,22

06

6,5

45

67

,89

76

9,2

76

70

,68

47

2,1

20

73

,37

77

4,6

57

75

,95

87

7,2

83

78

,63

0

Av

iob

rid

ge

21

6,3

34

93

7,7

61

38

,14

83

9,3

31

40

,56

74

1,8

60

42

,86

04

3,8

89

44

,94

84

6,0

39

47

,16

34

8,1

52

49

,16

85

0,2

10

51

,28

05

2,3

78

Co

un

ter

53

8,7

29

2,4

09

,52

41

01

,25

11

04

,80

91

08

,55

31

12

,50

01

14

,83

71

17

,25

21

19

,74

91

22

,33

41

25

,01

01

27

,53

81

30

,14

11

32

,82

51

35

,59

21

38

,44

5

No

n-A

ero

Rev

enu

e7

,66

4,5

52

42

,64

1,8

20

1,4

96

,04

11

,59

3,5

13

1,6

97

,60

91

,80

8,7

94

1,9

27

,56

12

,05

4,4

42

2,1

90

,00

52

,33

4,8

58

2,4

89

,65

42

,65

5,0

90

2,8

31

,91

43

,02

0,9

28

3,2

22

,99

03

,43

9,0

19

Co

nces

sio

n4

,81

9,0

97

27

,74

1,8

31

94

5,6

93

1,0

14

,21

11

,08

7,6

92

1,1

66

,49

81

,25

1,0

13

1,3

41

,65

21

,43

8,8

57

1,5

43

,10

51

,65

4,9

06

1,7

74

,80

81

,90

3,3

96

2,0

41

,30

12

,18

9,1

98

2,3

47

,81

0

Lea

se1

,12

0,9

89

5,5

69

,99

92

18

,09

92

26

,82

32

35

,89

62

45

,33

22

55

,14

52

65

,35

12

75

,96

52

87

,00

42

98

,48

43

10

,42

33

22

,84

03

35

,75

43

49

,18

43

63

,15

1

Par

kin

g1

,12

7,9

20

6,3

23

,17

22

13

,85

52

29

,34

92

45

,96

62

63

,78

72

82

,89

93

03

,39

53

25

,37

73

48

,95

13

74

,23

44

01

,34

84

30

,42

64

61

,61

14

95

,05

65

30

,92

4

Ad

ver

tise

men

t2

51

,46

11

,24

9,2

44

48

,90

85

0,8

65

52

,89

95

5,0

15

57

,21

65

9,5

05

61

,88

56

4,3

60

66

,93

56

9,6

12

72

,39

67

5,2

92

78

,30

48

1,4

36

Tel

eph

on

e/W

ater

/Ele

ctr

icity

34

5,0

85

1,7

57

,57

46

9,4

85

72

,26

57

5,1

55

78

,16

28

1,2

88

84

,54

08

7,9

21

91

,43

89

5,0

95

98

,89

91

02

,85

51

06

,96

91

11

,24

81

15

,69

8

Oth

ers

0

Op

erat

ing

In

co

me

15

,36

8,1

23

79

,79

8,8

58

2,8

08

,41

92

,96

5,7

30

3,1

33

,94

03

,60

6,4

74

3,7

75

,87

23

,95

5,6

44

4,1

46

,48

74

,34

9,1

45

4,5

64

,41

54

,78

5,4

91

5,0

20

,12

75

,26

9,2

26

5,5

33

,75

65

,81

4,7

53

Op

erat

ing

Ex

pen

se9

,37

7,8

24

44

,27

2,5

71

1,7

51

,18

51

,80

1,6

67

1,8

55

,82

01

,91

3,8

68

1,9

76

,04

32

,04

2,5

97

2,1

13

,79

52

,12

8,6

18

2,2

09

,97

12

,29

9,3

66

2,4

07

,25

92

,52

1,4

04

2,6

42

,18

92

,77

0,0

26

Per

son

nel

1,4

42

,79

26

,95

7,9

46

26

9,2

16

27

9,9

85

29

1,1

84

30

2,8

31

31

4,9

45

32

7,5

42

34

0,6

44

35

4,2

70

36

8,4

41

38

3,1

78

39

8,5

05

41

4,4

45

43

1,0

23

44

8,2

64

Mai

nte

nan

ce/

Eq

uip

men

t5

06

,04

32

,44

0,4

19

94

,42

49

8,2

01

10

2,1

29

10

6,2

15

11

0,4

63

11

4,8

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Unit

: ID

R i

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ons



5-9

3) Results of Preliminary Economic Analysis

In addition to financial benefits derived from aero and non-aero revenues related to this project, the following

economic benefits are considered:

a) Indirect Impact from the Airport Expansion Construction

In this project, the total project cost is estimated at JPY 71.4 billion, and direct economic impact on the

construction industry in Indonesia and Japan are expected. Around 24% of Japanese products are expected to

be imported for this project. In addition to these direct economic impacts, there are indirect economic

impacts on suppliers that provide sub-components of construction materials and small and medium

enterprises that supply equipment and parts. Furthermore, through the establishment of BB/RH Network, the

demand for regional jets is expected to increase, which leads to a spillover effect on the Japanese domestic

economy.

According to the analysis made by Oxford Economics on the economic impact of airport projects on gross

domestic product (GDP), economic impact derived from airport projects include direct impact, indirect

impact, and induced impact (economic impact from spending of those directly or indirectly employed in the

airport such as food, goods, and a range of services). In Indonesia, the proportion of indirect impact to direct

impact is estimated at 55%. In this economic analysis, indirect economic impact of airport expansion

construction on GDP will be calculated, using the data calculated by the analysis made by Oxford

Economics.

Table 5-7 Economic Impact of Airport Projects on GDP (USD in millions)

Source: Aviation Benefits Beyond Borders, ATAG (Air Transport Action Group), 2014

b) Indirect Impact from Increasing Commercial Revenue at the Terminals

In addition to revenue from commercial facilities at the terminal, it is considered that there are indirect

economic impact on related suppliers that provide goods and services to commercial facilities at the airport.

For instance, a manufacturing company that supplies water to airport shops would be benefited by the

increased sale caused by the airport expansion. This indirect impact from commercial revenue can be

calculated using the data on indirect impact shown in Table 5-8.

Direct Impact Indirect Impact Induced Impact Tourism

Indonesia 1,544 855 723 11,575

Proportion to Direct Impact (%) 100% 55% 47% 750%

Japan 19,464 13,265 10,126 21,780

Proportion to Direct Impact (%) 100% 68% 52% 112%



5-10

c) Regional Economic Impact in the Eastern Region of Indonesia

This project of expanding Makassar Airport to a regional-hub airport is expected to contribute to the

economic development of the eastern region by enhancing the connectivity of regional network in eastern

Indonesia. The increase of flights to the eastern region is expected to bring economic benefits to

airport-related industries such as the tourism industry. According to Table 5-8, economic impact of airport

projects on the tourism sector in Indonesia is far larger compared to that of Japan (around 7.5 times more

than direct impact), and not only Makassar Airport but also the surrounding islands are expected to benefit

from the tourism industry. Moreover, the eastern region is rich in energy resources, and through the

establishment of BB/RH Network, it is expected to promote the development of mineral resources by

improving access to the eastern region.

Among the above economic benefits, a) indirect impact from the airport expansion construction and b)

indirect impact from increase of commercial revenue at the terminals, are quantitatively calculated, and

therefore, will be included in the economic analysis. As for the economic benefit of (b), concession revenue

of the airport operators will be included in the calculation of indirect impact.

Based on the above assumptions, the EIRR of this project was found to be at 28.0%, which was considered to

be high.



5-11

Table5-8 Results of the Economic Analysis (1) 2016-2030


NP

VT

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23

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10

11

12

13

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2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

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2030

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men

t506,0

43

2,4

40,4

19

22,0

60

22,9

51

25,2

46

26,5

09

27,8

34

29,2

26

30,6

87

32,2

21

71,7

55

74,6

25

77,6

10

80,7

14

83,9

43

87,3

01

90,7

93

Tel

ephone/

Wat

er/E

lectr

icity

1,4

16,8

03

7,2

16,0

01

35,5

17

39,0

68

49,1

80

51,6

39

54,2

21

56,9

33

59,7

79

62,7

68

216,7

92

225,4

63

234,4

82

243,8

61

253,6

16

263,7

60

274,3

11

Pas

senger

Ser

vic

e C

ost

2,0

50,0

54

11,5

15,6

16

49,6

12

54,5

73

68,6

99

75,5

69

83,1

26

91,4

38

100,5

82

110,6

41

246,3

88

263,6

36

282,0

90

301,8

36

322,9

65

345,5

72

369,7

63

Gen

eral

Expen

se352,0

82

1,6

97,9

36

12,6

34

13,9

54

17,5

65

18,4

44

19,3

66

20,3

34

21,3

51

22,4

18

49,9

24

51,9

21

53,9

98

56,1

57

58,4

04

60,7

40

63,1

70

Oth

ers

(Ren

tal, e

tc.)

213,3

59

982,4

53

8,6

02

9,8

18

11,2

06

12,7

90

14,9

73

16,4

70

18,1

17

19,9

29

21,9

22

29,4

93

30,6

73

31,9

00

33,1

76

34,5

03

35,8

83

Dep

recia

tion (

Exis

ting F

acili

ties

)451,5

39

1,1

64,7

44

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

61,3

02

Dep

recia

tion (

New

Fac

ilities

)2,1

53,9

16

5,9

81,5

16

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

284,8

34

Inte

rest

Expen

se1,0

76,5

22

2,7

91,3

61

00

08,7

88

34,7

85

86,8

52

170,8

90

247,5

65

288,3

38

283,8

46

256,7

79

229,7

11

202,6

44

175,5

77

148,5

10

Pro

fit

(Econom

ic P

rice)

5,8

72,2

34

35,0

77,6

22

177,5

70

208,9

08

339,6

09

379,5

12

397,4

19

389,5

73

354,2

51

330,0

67

341,8

30

400,8

01

493,4

40

592,1

36

697,6

03

810,6

50

947,0

14

Indir

ect

Impac

t (C

onst

ruction)

33,6

05

50,2

90

00

02,5

14

7,5

43

12,5

72

12,5

72

12,5

72

2,5

14

Indir

ect

Impac

t (C

onces

sion)

2,1

13,5

36

12,1

66,8

77

33,7

09

40,4

51

48,5

41

58,2

50

69,8

99

83,8

79

100,6

55

120,7

86

254,1

84

272,6

01

292,3

51

313,5

33

336,2

49

360,6

11

386,7

38

EIR

R28.0

%211,2

79

249,3

59

388,1

50

39,5

66

-661,4

13

-1,4

03,0

65

-1,4

70,9

85

-1,4

94,9

16

170,4

38

673,4

02

785,7

91

905,6

69

1,0

33,8

52

1,1

71,2

60

1,3

33,7

51

Unit

: ID

R i

n m

illi

ons

)



5-12

Table5-10 Results of the Economic Analysis (2) 2031-2044


NP

VT

ota

l16

17

18

19

20

21

22

23

24

25

26

27

28

29

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

Aer

o R

even

ue

7,7

03,5

71

37

,15

7,0

37

1,3

12,3

78

1,3

72,2

18

1,4

36,3

31

1,7

97,6

80

1,8

48,3

11

1,9

01,2

02

1,9

56,4

82

2,0

14,2

86

2,0

74,7

61

2,1

30,4

02

2,1

88,2

13

2,2

48,2

98

2,3

10,7

67

2,3

75,7

34

Pas

sen

ger

Ser

vic

es (

Inte

rnat

ion

al)

1,3

42,3

79

8,7

31,8

60

26

3,6

98

29

2,1

24

32

3,6

15

43

0,2

00

45

7,5

45

48

6,6

29

51

7,5

62

55

0,4

60

58

5,4

50

61

6,6

52

64

9,5

17

68

4,1

34

72

0,5

95

75

9,0

00

Pas

sen

ger

Ser

vic

es (

Do

mes

tic)

5,1

00,5

21

22

,69

9,9

09

81

6,3

32

83

8,1

15

86

0,4

79

1,1

04,3

00

1,1

20,3

31

1,1

36,5

96

1,1

53,0

96

1,1

69,8

36

1,1

86,8

19

1,2

03,5

53

1,2

20,5

23

1,2

37,7

32

1,2

55,1

83

1,2

72,8

81

Lan

din

g,

Po

sitio

nin

g,

and

Sta

tio

nin

g (

Inte

rnat

ion

al)

14

3,6

40

89

8,1

14

32

,41

33

5,7

80

39

,49

74

3,6

00

46

,19

34

8,9

40

51

,85

05

4,9

33

58

,20

06

1,1

30

64

,20

76

7,4

39

70

,83

47

4,4

00

Lan

din

g,

Po

sitio

nin

g,

and

Sta

tio

nin

g (

Do

mes

tic)

36

1,9

67

1,4

79,8

69

60

,53

56

2,0

58

63

,61

96

5,2

20

66

,54

56

7,8

97

69

,27

67

0,6

84

72

,12

07

3,3

77

74

,65

77

5,9

58

77

,28

37

8,6

30

Av

iob

rid

ge

21

6,3

34

93

7,7

61

38

,14

83

9,3

31

40

,56

74

1,8

60

42

,86

04

3,8

89

44

,94

84

6,0

39

47

,16

34

8,1

52

49

,16

85

0,2

10

51

,28

05

2,3

78

Co

unte

r5

38,7

29

2,4

09,5

24

10

1,2

51

10

4,8

09

10

8,5

53

11

2,5

00

11

4,8

37

11

7,2

52

11

9,7

49

12

2,3

34

12

5,0

10

12

7,5

38

13

0,1

41

13

2,8

25

13

5,5

92

13

8,4

45

No

n-A

ero

Rev

enu

e7

,66

4,5

52

42

,64

1,8

20

1,4

96,0

41

1,5

93,5

13

1,6

97,6

09

1,8

08,7

94

1,9

27,5

61

2,0

54,4

42

2,1

90,0

05

2,3

34,8

58

2,4

89,6

54

2,6

55,0

90

2,8

31,9

14

3,0

20,9

28

3,2

22,9

90

3,4

39,0

19

Co

nces

sio

n4

,81

9,0

97

27

,74

1,8

31

94

5,6

93

1,0

14,2

11

1,0

87,6

92

1,1

66,4

98

1,2

51,0

13

1,3

41,6

52

1,4

38,8

57

1,5

43,1

05

1,6

54,9

06

1,7

74,8

08

1,9

03,3

96

2,0

41,3

01

2,1

89,1

98

2,3

47,8

10

Lea

se1

,12

0,9

89

5,5

69,9

99

21

8,0

99

22

6,8

23

23

5,8

96

24

5,3

32

25

5,1

45

26

5,3

51

27

5,9

65

28

7,0

04

29

8,4

84

31

0,4

23

32

2,8

40

33

5,7

54

34

9,1

84

36

3,1

51

Par

kin

g1

,12

7,9

20

6,3

23,1

72

21

3,8

55

22

9,3

49

24

5,9

66

26

3,7

87

28

2,8

99

30

3,3

95

32

5,3

77

34

8,9

51

37

4,2

34

40

1,3

48

43

0,4

26

46

1,6

11

49

5,0

56

53

0,9

24

Ad

ver

tise

men

t2

51,4

61

1,2

49,2

44

48

,90

85

0,8

65

52

,89

95

5,0

15

57

,21

65

9,5

05

61

,88

56

4,3

60

66

,93

56

9,6

12

72

,39

67

5,2

92

78

,30

48

1,4

36

Tel

eph

on

e/W

ater

/Ele

ctr

icity

34

5,0

85

1,7

57,5

74

69

,48

57

2,2

65

75

,15

57

8,1

62

81

,28

88

4,5

40

87

,92

19

1,4

38

95

,09

59

8,8

99

10

2,8

55

10

6,9

69

11

1,2

48

11

5,6

98

Oth

ers

0

Op

erat

ing

In

co

me

15

,36

8,1

23

79

,79

8,8

58

2,8

08,4

19

2,9

65,7

30

3,1

33,9

40

3,6

06,4

74

3,7

75,8

72

3,9

55,6

44

4,1

46,4

87

4,3

49,1

45

4,5

64,4

15

4,7

85,4

91

5,0

20,1

27

5,2

69,2

26

5,5

33,7

56

5,8

14,7

53

Op

erat

ing

Ex

pen

se9

,37

7,8

24

44

,27

2,5

71

1,7

51,1

85

1,8

01,6

67

1,8

55,8

20

1,9

13,8

68

1,9

76,0

43

2,0

42,5

97

2,1

13,7

95

2,1

28,6

18

2,2

09,9

71

2,2

99,3

66

2,4

07,2

59

2,5

21,4

04

2,6

42,1

89

2,7

70,0

26

Per

son

nel

1,4

42,7

92

6,9

57,9

46

26

9,2

16

27

9,9

85

29

1,1

84

30

2,8

31

31

4,9

45

32

7,5

42

34

0,6

44

35

4,2

70

36

8,4

41

38

3,1

78

39

8,5

05

41

4,4

45

43

1,0

23

44

8,2

64

Mai

nte

nan

ce/

Eq

uip

men

t5

06,0

43

2,4

40,4

19

94

,42

49

8,2

01

10

2,1

29

10

6,2

15

11

0,4

63

11

4,8

82

11

9,4

77

12

4,2

56

12

9,2

26

13

4,3

95

13

9,7

71

14

5,3

62

15

1,1

76

15

7,2

23

Tel

eph

on

e/W

ater

/Ele

ctr

icity

1,4

16,8

03

7,2

16,0

01

28

5,2

83

29

6,6

95

30

8,5

62

32

0,9

05

33

3,7

41

34

7,0

91

36

0,9

74

37

5,4

13

39

0,4

30

40

6,0

47

42

2,2

89

43

9,1

80

45

6,7

48

47

5,0

17

Pas

sen

ger

Ser

vic

e C

ost

2,0

50,0

54

11

,51

5,6

16

39

5,6

46

42

3,3

41

45

2,9

75

48

4,6

83

51

8,6

11

55

4,9

14

59

3,7

58

63

5,3

21

67

9,7

93

72

7,3

79

77

8,2

95

83

2,7

76

89

1,0

70

95

3,4

45

Gen

eral

Ex

pen

se3

52,0

82

1,6

97,9

36

65

,69

66

8,3

24

71

,05

77

3,8

99

76

,85

57

9,9

30

83

,12

78

6,4

52

89

,91

09

3,5

06

97

,24

71

01,1

36

10

5,1

82

10

9,3

89

Oth

ers

(Ren

tal, e

tc.)

21

3,3

59

98

2,4

53

37

,31

83

8,8

11

40

,36

44

1,9

78

43

,65

74

5,4

03

47

,22

04

9,1

08

51

,07

35

3,1

16

55

,24

05

7,4

50

59

,74

86

2,1

38

Dep

recia

tio

n (

Ex

istin

g F

acili

ties

)4

51,5

39

1,1

64,7

44

61

,30

26

1,3

02

61

,30

26

1,3

02

61

,30

26

1,3

02

61

,30

2

Dep

recia

tio

n (

New

Fac

ilities

)2

,15

3,9

16

5,9

81,5

16

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

28

4,8

34

Inte

rest

Ex

pen

se1

,07

6,5

22

2,7

91,3

61

13

3,4

10

11

8,3

09

10

3,2

09

88

,10

97

3,0

08

57

,90

84

2,8

08

27

,70

71

2,6

07

00

00

0

Pro

fit

(Eco

nom

ic P

rice)

5,8

72,2

34

35

,07

7,6

22

1,0

55,1

69

1,1

61,2

74

1,2

74,5

74

1,6

61,7

62

1,7

69,5

85

1,8

83,4

64

2,0

03,8

32

2,1

85,0

99

2,3

19,8

70

2,4

52,6

70

2,5

80,6

14

2,7

16,8

53

2,8

61,9

69

3,0

16,5

88

Ind

irec

t Im

pac

t (C

on

stru

ctio

n)

33

,60

55

0,2

90

Ind

irec

t Im

pac

t (C

on

ces

sio

n)

2,1

13,5

36

12

,16

6,8

77

41

4,7

58

44

4,8

08

47

7,0

35

51

1,5

97

54

8,6

63

58

8,4

15

63

1,0

47

67

6,7

68

72

5,8

01

77

8,3

87

83

4,7

82

89

5,2

64

96

0,1

28

1,0

29,6

91

EIR

R2

8.0

%1

,46

9,9

27

1,6

06,0

82

1,7

51,6

08

2,1

73,3

59

2,3

18,2

48

2,4

71,8

79

2,6

34,8

79

2,8

61,8

67

3,0

45,6

71

3,2

31,0

57

3,4

15,3

96

3,6

12,1

17

3,8

22,0

97

4,0

46,2

79

Unit

: ID

R i

n m

illi

ons


through the Indonesian Aviation Network Reconfiguration Planned Project Schedule

6-1

Chapter 6 Planned Project Schedule

(1) Planned Project Schedule

This upgrade plan for the airport includes the development of multiple terminals and annexed facilities, as

well as an apron and taxiway. In addition, the construction of these new facilities must proceed in parallel

with the operation of existing terminals. This chapter sets forth the implementation schedule up to Phase 1

(2024 start of operations) as shown in Table 6-1.



6-2

Table 6-1 Planned Project Schedule


1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Airline network verification

Study of regulations

Overall plan F/S

Selection of consultant

Basic plan

Bidding for concession

Detailed design


Civil engineering work

Business operation

Detailed design


Construction work /

System installation / Test run

Business operation

Detailed design



Transfer / Training

Business operation

Detailed design



Transfer / Training

Business operation

Detailed design



Transfer / Training

Business operation

Legend : BB/RH Network plan

: Makassar Airport overall upgrade plan

:

:

: Implementation in terms of software such as test run, transfer, training, etc.

: Business operation

： Workflow

Apron /

Taxiway

Adjustment period within development in terms of hardware such as

construction work, equipment installation, etc.

Development in terms of hardware such as construction work and equipment

installation

Cargo terminal /

Utility facilities

Terminal connecting

underpass /

APM

Main terminal

(Expansion)

Satellite terminal

(New construction)

BB/RH Network plan

Makassar Airport upgrade plan

2020 2021 2022 2023 2024

Quarter

Year 2015 2016 2017 2018 2019



6-3

(2) Tasks related to the Planned Project Schedule

It should be noted that the planned schedule is subject to change with regards to any of the facilities based on

the intentions of AP-I and DGCA, as well as due to variations in the air traffic demand forecast.

This project is planning and proposing to upgrade the airport on land which has already been acquired, but

according to the master plan of AP-I, there is some land that still needs to be acquired by the time of starting

Phase 1. In the future, we will make confirmation with AP-I regarding the details of the site situation, while

we continue to move forward with the plan of integrating this project with the master plan. However, there is

a possibility that the plan and schedule will change depending on the progress of land acquisition.

Furthermore, there is also the possibility that a verification phase will be implemented to confirm the

feasibility of the BB/RH Network at a stage before the operation start in 2024, as well as adjust the schedule

as required based on discussions made with the local stakeholders.

(3) Setting a Schedule related to Environmental Impact Issues

This project is an upgrade project to be done on land which has already been acquired, for which there are no

notable environmental considerations to mention. No countermeasures period has been established for the

project, but reference should be made to Chapter 4 regarding the general environmental impact that will

accompany the civil engineering and building construction work.



6-4


through the Indonesian Aviation Network Reconfiguration Implementing Organization

7-1

Chapter7 Implementing Organization

(1) AP-I

AP-I is 100% state-owned enterprise established in 1964. It owns and operates 13 significant airports in

Eastern Indonesia including Makassar Airport. The company’s vision is “to be one of Asia’s ten best airport

management companies”. The company’s missions are as follows:

1. To increase the stakeholders’ value;

2. To become a government partner and boost economic growth;

3. To provide airport business through excellent service meeting the standards of security, safety, and

comfort;

4. To improve company’s competitiveness through creativity and innovation; and

5. To give a positive contribution to the environment.

The organization of AP-I is shown in Figure 7-1. Five directors (Finance and Information Technology

Director, Marketing and Business Development Director, Operation Director, Human Capital and General

Affair Director, and Technical Director) are under the control of the President Director and are responsible

for each section.

Fig 7-1 Organizational Chart of AP-I


Marketing and

Business

Development

Director

President Director

General Affair

Group Head

Office

Administration

Department

Head

Asset

Management

Department

Head

Office

Facilities,

Operation &

Maintenance

Department

Head

Organization

Dev. &

Change

Management

Department

Head

Human

Capital Group

Head

Compensatio

n & Industrial

Relation

Department

Head

Career &

Talent

Management

Department

Head

Training &

Development

Group Head

Training

Module

Development

Department

Head

Tax

Management

Department

Head

Training

Management

Department

Head

Training

Facilities

Department

Head

Treasury

Department

Head

Finance

Group Head

Account

Receivable

Management

Department

Head

Fund

Management

Department

Head

F & B

Marketing

Department

Head

Network &

Infrastructure

Department

Head

IT Operation

Department

Head

Software

Development

Department

Head

IT Planning &

ERP

Department

Head

Information

Technology

Group Head

Property &

Advertising

Department

Head

Accounting

Group Head

Cost

Accounting

Department

Head

Finance

Accounting

Department

Head

Business

Development

Group Head

Business

Planning &

Development

Department

Head

Subsidiary &

Partnership

Department

Head

Customer

Service

Department

Head

Budget

Management

Department

Head

Aviation

Marketing

Group Head

Airline

Marketing

Department

Head

Cargo

Marketing

Department

Head

Non Aviation

Marketing

Group Head

Retail

Marketing

Department

Head

Non Terminal

Security

Department

Head

Electricity

Department

Head

Electronic

Department

Head

Project

Management

Office Group

Head

Project

Program

Department

Head

Project

Portofolio

Department

Head

Head of Internal Audit

Head of Procurement

Head of Corporate Social

Responsibility

Passenger,

Airline &

Cargo

Services

Department

Head

Airport

Services

Group Head

Fire Fighting &

Rescue

Department

Head

Airport

Compliance,

Performance

& Quality

Assurance

Department

Head

Airport

Security

Group Head

Screening

Check Point

Department

Head

Terminal

Security

Department

Head

Operational Audit Department Head

Engineering Audit Department Head

Marketing and Business Development

Audit Department Head

Finance Audit Department Head

Human Capital & General Affair Audit

Department Head

Material Procurement Department

Head

Corporate Secretary

Head of Corporate

Planning & Performance

Head of Risk Management

and Compliance

Corporate Administration Department

Head

Corporate Communication

Department Head

Legal Department Head

Corporate Planning Department Head

Corporate Performance Monitoring &

Evaluation Department Head

Quality Management Department

Head

Risk Management Department Head

Safety, Health

&

Environment

Department

Head

Safety, Health

&

Environment

Group Head

Airport

Facilities

Readiness

Group Head

Civil Airside

Department

Head

Civil Landside

Department

Head

Airport

Equipment

Readiness

Group Head

Mechanical,

HB & Water

Technique

Department

Head

Human Capital

and General Affair

Director

Finance and IT

DirectorTechnical DirectorOperation Director

Compliance Department Head

Safety

Management

System

Department

Head

Service Procurement Department

Head

Procurement Planning and

Administration Department Head

Corporate Social Responsibility

Cooperation Department Head

Corporate Social Environment

Department Head


through the Indonesian Aviation Network Reconfiguration Implementing Organization

7-2

AP-I is the enterprise where it follows a financially independent accounting system. Since Makassar Airport

handles many passengers, Makassar Airport manages to make a profit in recent years.

AP-I has financial accounting guideline in accordance with the Financial Accounting Standards (GAAP)

applicable in Indonesia.The guideline was approved by Decree of the Board Number: KEP.131/OM.02.07/202

dated 31 October 2012.

AP-I carrys out the passenger terminal building development of their operating airport. The second terminal

of Surabaya Airport started to operate in February 2014 while the new terminal of Balikpapan Airport started

operations in March 2014.

The organization of Makassar Airport has the following directors which respectively managed their own

section and are all under the control of the airport general manager.

・Airport Operation and Readiness Director

・Airport Security Director

・SMS, QM and Costumer Service Director

・Sales Director

・Finance and IT Director

・Shared and Service Director


through the Indonesian Aviation Network Reconfiguration Technical Advantages of Japanese Companies

8-1

Chapter 8 Technical Advantages of Japanese Companies

(1) Expected Roles of Participating Japanese Companies (financing,

supply of machinery and equipment, facility management, etc.)

1) Basic Business Scheme for the Entire Project

The business scheme for setting standards for the entire upgrade project of the airport is as shown in Figure

8-1. This project assumes a business model for receiving usage payments as a service consideration from

AP-I, the operator of the airport, based on the establishment of SPC, founded on financing from Japanese and

Indonesian investors, to provide services for managing the ownership and maintenance required of the

increased facility assets accompanying the upgrade of the airport.

In addition, the details of financial analysis and funding for the project are studied in Chapter 5 and 9.

Figure 8-1 Basic Business Scheme for the Project


Mitsubishi Heavy Industries, Ltd., Trading companies, etc.

Angkasa Pura 1

Investment

Overseas investment

Export

Usage payments

Service provision

Investment

<Japan> <Indonesia>

Investment companies, InvestorsInvestment

Airport management company, Airport design consultants

Technical assistance

for operation

and maintenance

Investment

JICA

Airport-related facilities, Equipment manufacturers

Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development

(Government infrastructure fund)

PPP Study Team

Commercial banks

Financing

AP-I(Makassar Airport operating company)

Special Purpose Company (SPC)(Increase of facilities, ownership,

operation, and maintenance management

of terminals)



8-2

2) Necessity of Creating Project Packages

For the reasons mentioned below, it is necessary to study the business scheme for dividing the project into

multiple packages.

a) Features of a BB/RH Network Deployed Airport

This project is not simply a project for upgrading the airport to accommodate increases in airline

passenger demand, but is also based on the aim of introducing the BB/RH Network. Stakeholders,

investors and promoters of the plan, differ between the facilities which should clearly reflect the goals

of the BB/RH Network and the general upgrade facilities for meeting the increase in airline passenger

demand. Therefore, it is thought that dividing and organizing these facilities into packages will most

effectively work to promote the goals of the entire project.

b) Scale of the Business Project

The airport upgrade is a large-scale, long-term investment for AP-I, and it is assumed that the project

will be difficult to manage as a single collective project.

c) Autonomy of AP-I

AP-I and AP-II are state-owned airport management companies that are expected to basically carry out

business operations as financially independent entities, and the subsidiary airport upgrade is regarded

as an independent project, not a public undertaking. AP-I has also been working to prepare its own

master plan for meeting the increase in airline passenger demand and has created a proactive

long-term vision for the year 2044, with a mid-term project targeting 2024.

The investment and procurement plans of AP-I with regard to the implementation of the master plan

have not been disclosed, but as mentioned in Chapter 7, AP-I has generated steady profits through the

development of the airport and growth of non-aero revenue in recent years. AP-I is using its own

capital as funding to attract investment and financing from companies in Indonesian and abroad, and it

is expected that it will proceed with its intentions on upgrading the airport on its own. We learned

through meetings and interviews that AP-I aims at increasing its non-aero revenue, and this intention

needs to be considered and reflected into the project.

d) Considerations of the Business Operation Content Entrusted to SPC

AP-I, which is currently operating Makassar Airport autonomously, has accumulated the operation

know-how needed to provide passenger services and airline services such as the parking of aircraft.

The airport management companies in Japan possess a high-degree of business know-how as typified

by punctual operations and non-aero revenue, and although it will be difficult to entrust all of the

airport business operation duties to SPC in consideration of the uniqueness of passengers and airlines

in Indonesia, it will still be desirable if a portion of the operation duties were entrusted based on the

consultation of both parties. It is recommended that facilities and equipment that can be effectively

managed using the know-how of Japanese companies, especially duties related to facility management

and maintenance, be entrusted to SPC.

Business promotion will be able to proceed more efficiently by examining packages that conform the

entrusting of these business operations to the facility development.



8-3

3) Study of Project Packages

In consideration of the above, a study was undertaken regarding the project packages as shown in Table 8-1.

Among the specified packages, it is expected that SPC, with the participation of Japanese companies, will

proactively carry out Package (2). It is presumed that AP-I will take the initiative in carry out Package (1),

but since it is deeply connected to Package (2), there will need to be close cooperation such as that related to

the common designs between each of the implementing parties. Furthermore, Package (3) deals mostly with

civil engineering construction, so it should be able to be implemented as an AP-I project or as a public

undertaking.

Table 8-1 Business Package List


(2) The Superiority of Japanese Companies when Implementing this

Project (from a Technical and Economic Viewpoint)

1) Technical Aspects

a) BB/RH Network Configuration Technology and Management

The goal of this project is to achieve the upgrade of the airport based on the proposal that positions the

BB/RH Network, as a new aviation network, in an ideal state. As described in Chapter 3, the study

team has created the airport concept under careful coordination with local stakeholders. When creating

the concept, the study team performed a cross-study pertaining to the aviation network reconfiguration

and airport plan based on their long cultivated history of managing airports and rich experience of

operating numerous aircraft in Japan. In this manner, adjustment and arrangement can be made

between all of the stakeholders, which include aviation authorities, airlines, and airport management

Package (1) (Upper objects 1) Package (2) (Upper objects 2) Package (3) (Lower objects)

Passenger terminal main building and annex

facilities

Cargo terminal

Utility facilities

Passenger terminal satellite and annex facilities

Connecting system between terminals

(Underground connection APM / Bus,

Underground baggage handling system, etc.)

Utility facilities

Expand apron

Expand taxiway

and annex equipments (guiding lights, etc.)

Fuel hydrant facilities

Underpass connecting terminals

Roads and parking lots

AP-I project PPP-BOT AP-I project or public undertaking

AP-I SPC AP-I

AP-I SPC AP-I

1,660 billion IDR (16.6 billion yen) 2,710 billion IDR (27.1 billion yen) 2,120 billion IDR (21.2 billion yen)


- Does not include aircraft maintenance hanger

to be developed by the airlines


- Connecting transportation method (including

alternatives) to be decided in the plan of SPC

- Underground baggage handling system

included in Package (2)

- Fuel hydrant facilities are to be managed by a

local fueling company

Remarks

Common remarks- GSE / ramp bus to be considered separately

- Does not include reserve fund or design costs

*As of January 5, 2015, 1 JPY = 100 IDR

Classification

Applicable assets

Project type

Ownership

Implementing entity

Project costs *

(excluding reserve fund and design costs)



8-4

companies in both Japan and Indonesia. Doing this will help make evident the unique integration

technology that the newly conceived BB/RH Network achieves, as well as the superiority of Japan for

taking a leading role in this project.

b) Airport related Special Facilities

Japanese companies are good at providing high-quality airport related special facilities and technology.

In particular, the technology of Japanese companies can contribute to the project with respect to the

nature of configurating the BB/RH Network, as well as with regards to the highly effective

deployment of facilities for increasing the convenience of transfer passengers.

c) APM

APM is recommended for this project as a means of connecting satellite terminals with existing

terminals. From the perspective of the nature of this project, this is a top priority of the plan to ensure

punctuality and safety.

Punctuality in transportation is regarded as extremely important to the transportation related facilities,

including airports, in Japan and other developed nations. Japanese companies have introduced many

systems to the United States and countries in Asia and the Middle East. These systems for

transportation facilities have been highly evaluated for their stability, high-density operation, and

safety. Furthermore, Japanese companies not only deliver the transportation and operation systems, but

also provide long-term operation and maintenance through periodical renewing contracts.

Photo 8-1 Washington Dulles Airport APM

Source: Mitsubishi Heavy Industries, Ltd.



8-5

Photo 8-2 Atlanta Airport APM


d) Environmental Technology

The facilities to be developed in this project include the many facilities inside the airport as well as the

terminal and apron. Many of these facilities must be designed in consideration of reducing burdens on

the environment. Japan, as an environmentally advanced country, has introduced its

environmental-friendly facilities, construction technology, and maintenance know-how to many

airports and similar types of social infrastructure, so we are confident in Japanese companies ability to

demonstrate their superiority. Specifically, the following systems and measures are considered.

High Efficiency Equipments and Systems

The high efficiency equipments and systems listed below contribute not only to the environment,

but also to reducing life cycle costs, and are recommended for the long-term and stable use

required in operating airports.

- Power generators

- Cogeneration systems

Photo 8-3 Gas Engine Cogeneration System




8-6

- High efficiency heat source equipment

Photo 8-4 Centrifugal Chillers


- Air-conditioning systems for large scale facilities and tropical areas

- Energy-saving lighting devices

- Energy management systems

Photo 8-5 Integrated Control and Monitoring Systems


Utilization and control of natural energies

- Solar power generation systems

- Natural lighting usage and sunlight shading

Effective use of resources

- High-performance water treatment and recycling systems

- Resource recycling

- Waste treatment and power generation systems

Construction technology

- Selection of environmentally friendly materials

- Effective use of construction materials

- Advanced quality control

- Surrounding environment countermeasures



8-7

e) Construction management

This is a project to upgrade the existing airport, so construction works need to be carried out while

maintaining current airport functions. Developments are planned for each project package, but every

package contains complex construction plans that must be carried out so as not to obstruct airlines

operation and passengers using the airport.

In addition, the tunnel construction proposed by this project requires excavation underneath an

existing runway, and this requires the use of advanced technology and know-how when implementing

the building technology and construction plans. Furthermore, there also exists the issue regarding the

airport's desire to have a hydrant system installed at an early stage, and this work needs to be

implemented in parallel to the construction work to be done under the apron and runway.

Japan is a country advanced in using its land and Japanese companies have lots of experience

implementing and managing complex construction work such as the construction of tunnels

underneath active runways, building underground multi-level structures for subway systems, and so on.

In addition to being able to adopt the appropriate construction methods and techniques for a project

such as this one, Japanese companies are able to contribute highly to providing the rigorous

construction planning and enhanced on-site implementation management required in this project.

f) Airport Operations

The airport will take on the function of a regional-hub airport, and therefore, it must carry out airport

operations such as handling the high density flights and complicated ground support, ensuring security

checks, and supporting smooth passenger transfer, embarking, and disembarking. Japanese airports,

which place a high emphasis on punctuality, are able to achieve these advanced operation support

duties while also maintaining safety. In this project, we intend to make use of our industry proven

know-how at Japanese airports to support the high density duties on the airside of the airport,

especially in consideration of the plan to make frequent use of twin aisle aircraft.

Furthermore, we should make note of the operations at LCC dedicated terminals at airports in Japan.

Their inexpensive, simple, but superior in function, and accommodating terminal design makes it

possible to achieve business operations with a high cost performance, and since the airport in this

project is also expecting the need to have a future LCC dedicated terminal according to phased

planning, which includes phase for verification, we believe that our know-how in this field is worth

referencing.



8-8

Photo 8-6 Terminal 2 Building at the New Kansai International Airport (LCC Dedicated Facilities)

Source: New Kansai International Airport Co., Ltd.

At the same time, AP-I, the operator of the airport, has shown its intention of wanting to maintain its

financial independence in business operations by increasing non-aero revenue in addition to the

existing functions of the airport. In recent years, there have been many cases of airports in Japan

developing unique shopping malls for creating a concentration of stores such as shops and restaurants

in both the airside and landside of airports. These types of merchandising and management methods

also contribute to improving the attractiveness of the airport and the profitability of businesses.

2) Economic Aspects

After making coordination with Indonesia regarding construction work and facility procurement, a proper

plan should be made with regards to the participation of local companies.

As a funding source, Japan's overseas investment and loans are advantageous and we expect that they will be

actively utilized.



8-9

(3) Further Collaboration to apply Japanese Technologies

1) Continuous Coordination with AP-I and DGCA

AP-I has been planning its own master plan for Makassar Airport to accompany the expected large increase in

airline passenger demand in the future, and we have had interviews with AP-I regarding its master plan, while

simultaneously having discussion on a draft for integrating the BB/RH Network advocated in this project for

the regional-hub airport concept with the master plan of AP-I. Also, we had repeated talks with DGCA

regarding this project since the approval of the them is needed with regard to airport plans including the

master plan and changes to taxes and other public dues such as landing fees. In the executive debriefing of

local stakeholders in December 2014, we received approval for the integration plan and from 2015 we need to

make continuous adjustments based on coordination with AP-I and DGCA. As indicated in this chapter, we

still need to carry out a detailed study with AP-I regarding the business project package. In order to make use

of Japanese companies technology and know-how, as well as maximize the cost-effectiveness of this project,

a thorough examination needs to be undertaken by companies in both Indonesian and Japan regarding the

selection of suitable technologies to introduce into the project, and the appropriate project package and

business scheme to adopt.

2) Consultation with Other Indonesian Stakeholders (Promotion of the BB/RH Network)

This project aims at introducing the BB/RH Network to aviation networks in Indonesia with the goal of

reducing air traffic and airport congestion in Jakarta, and in order to accomplish this, we have been having

relevant discussions with local stakeholders other than AP-I and DGCA, and have been studying the potential

for accomplishing the tasks that need to be promoted, as well as accompanying projects. It is essential that a

leadership role be taken for the entire project with regard to issues that relate to the companies of each of

these stakeholders such as implementation of task extraction and problem-solving, continuation work, holding

of meetings, facilitation, and proposal of solutions.

It is expected that the detailed needs of each of the stakeholders as well as the required domestic policies for

Indonesia will be clarified during the implementation study for the BB/RH Network, and thereafter, we

believe it is important to reflect these needs and determined policies into appropriate airport plans and project

content.

3) Financing and Investment from Japan

With the establishment of SPC, it is expected that, in addition to the contributions of participating Japanese

companies, financing can be procured from the "Japan Overseas Infrastructure Investment Corporation for

Transport & Urban Development (JOIN)". Furthermore, it is expected that JICA overseas investment will be

utilized as a source of funding. The development of the infrastructure section of the project allows for the

opportunity to study whether the project is applicable for an international yen loan in the future.

In addition, JICA's Preparation Study for Development Cooperation is anticipated to be used during future

detailed studies, and we will be asking for the support of these Japanese government agencies in the near

future.



8-10

4) Invitation of Indonesian Stakeholders

The BB/RH Network is a new global initiative, and although this project would be its first implementation,

there are some case studies that should be referenced with respect to airport networks and airport management

operations. It is recommended that AP-I, AP-II (the operator of Soekarno-Hatta Airport), and DGCA be

invited to Japan so that they can see firsthand the know-how possessed by Japanese airports and participate in

a technology tour. It is expected that the Japanese government would help support this type of invitation and

training tour.

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