PRESENTATION OUTLINE
• Explains today’s Indonesia economic condition in which many international
observers called Indonesia is one of the promising global investment country.
• Informs some facts and current status of infrastructure services, that
corresponds mainly to the tasks of the Ministry of Public Works.
• Describes some discussions on reforms in infrastructure policies as ways to
attract private investors
• Discussing and identifying the profile of 2011 – 2014 potential infrastructure
projects to be financed by the next preferential buyer’s export credit from the
China Government or Public – Private Partnership (PPP) Projects financed by
Chinese investors.
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INDONESIA’S PROMISING ECONOMIC GROWTH
AFTER GLOBAL FINANCIAL CRISIS
4,5%
Source : Bappenas
Indonesia has the best economic growth (around 4.5%) in the world after China and
India on the global financial crisis.
1
HIGH CONTROLLED INFLATION RATE
AND HIGH ECONOMIC GROWTH
Inflation Rate (IHK)
2,78%
Sumber: Badan Pusat Statistik (BPS)
 The inflation rate in the same year can be controlled at the level of 2.78%
which is the lowest inflation rate in the last ten years. With this low level of
inflation, the purchasing power of the people of Indonesia can be maintained
 Economic growth is projected to grow in a sustainable manner at the rate of
7% in 2014
2
THE IMPORTANCE OF CHINA’S BUSINESS
INVESTMENT ROLE
Ranking of Foreign Direct Investment Realization by Country,
1 JANUARY - 31 DECEMBER 2009
• The capacity of government
financing can only meet 17%
of the total estimated
investment requirement of
U.S. $ 200 billion per year
• Actual investment from China
to
Indonesia
is
very
significant: rank-13
• Hope for the value of Chinese
investment in Indonesia will
continue to increase in the
future
NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
COUNTRY
Singapore
Netherlands
Japan
South Korea
United Kingdom
Seychelles
US of America
Mauritius
Switzerland
Malaysia
Germany
Australia
People's Republic of
China
Thailand
Italy
Taiwan
France
India
Hong Kong
Arab Emirat
189
32
124
186
61
4
27
6
11
75
18
26
VALUE
(US $)
4,341.0
1,198.7
678.9
624.6
567.7
322.2
171.5
159.5
132.1
129.3
103.9
79.7
40,1
11,1
6,3
5,8
5,4
3,0
1,6
1,5
1,2
1,2
1,0
0,7
37
66.5
0,6
4
11
36
12
31
18
3
51.4
41.1
31.7
29.0
26.2
21.0
15.5
0,5
0,4
0,3
0,3
0,2
0,2
0,1
PROJECT
Sumber : Badan Koordinasi Penanaman Modal (BKPM)
%
3
INDONESIA’S RANK IN THE GLOBAL COMPETITIVENESS INDEX
2009 – 2010 AND 2010 – 2011
NEGARA
PERINGKAT GCI
2010-2011
2009-2010
Switzerland
1
1
Swedia
2
4
Singapura
3
3
Amerika Serikat
4
2
Jerman
5
7
Malaysia
26
24
Brunei Darussalam
28
32
Thailand
38
36
Indonesia
44
54
Vietnam
59
75
Filipina
85
87
Kamboja
109
110
Sumber : World Economic Forum, 2010
4
LATEST DEVELOPMENTS
IN INDONESIA’S INFRASTRUCTURE (1)
Although in the last five years, infrastructure condition in Indonesia has improved, but
there are still a lot of infrastructure projects need to be accomplished along with the rapid
population growth and economic development activities.
• Road infrastructure : national road network has increased from 34,629 km in 2004,
became 38,570 km in 2009.
• Toll road development increasing:
− In 1978 – 2010 = 741 km
− Target in year 2010-2014 = 700 km
• National drinking water coverage increasing:
− In 2005 = 42,5%
− In 2009 = 47,71%
− Target in year 2010-2015 = 68,87%
• Developing waste management
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LATEST DEVELOPMENTS
IN INDONESIA’S INFRASTRUCTURE (2)
LANDFILL CONDITION IN INDONESIA
Controlled
landfill. 15,5%
Sanitary
landfill, 2,8%
Open dumping
80,6%
TOTAL : 378 LANDFILLS
AREA : 1.886,99 Ha
To meet these targets, Indonesia Government invite the
private sector, both domestic investors and overseas to
participate in building infrastructure, especially in areas
that have been developed such as metropolitan cities,
major cities and other areas.
6
OPPORTUNITY INVESTMENT ON TOLL ROAD DEVELOPMENT,
WATER RESOURCES MANAGEMENT
AND SANITATION
WATER SUPPLY
WASTE
MANAGEMENT
TOLL ROAD
TOLL ROAD
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GOVERNMENT SUPPORT
TO ENCOURAGE INVESTMENTS (1)
Toll Road Development Acceleration
 Institutional and legislation reforms and
establishment of Indonesian Toll Road
Authority (BPJT)
 Completion of the relevant regulations
of land acquisition
 Establishment of Public Service Agency
(BLU) toll road
 Land Capping policy implementation
Water Supply Development
 Institutional
reforms
with
the
establishment of the Subsidiary Agency
of Water Supply System Development
(BPP-SPAM)
 PDAM recovery reforms in Indonesia
 Water supply regulations improvement
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GOVERNMENT SUPPORT
TO ENCOURAGE INVESTMENTS (2)
 To create a conducive investment climate, the government has
issued Perpres No. 13/2010, as revised from Perpres No. 67/2005,
concerning cooperation between the government and business
entities in providing infrastructure. Through this revision the
government provides convenience and greater access to business
entities to participate in infrastructure development.
 Related with the risks guarantee associated a better financing, the
government establishing two state-owned enterprises, namely PT.
Indonesia Infrastructure Facility and the PT. Penjaminan
Infrastruktur which responsible for facilitating funding or financing
to ensure financial compliance or financial disclosure before the
construction starts.
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GOVERNMENT SUPPORT
TO ENCOURAGE INVESTMENTS (3)
 Linked to land acquisition, the GOI commits to support private
investors by creating some new methods. These methods are:
1.
2.
3.
4.
Land freezing when no land transaction is allowed after toll road corridor
been decided by the government;
Land price is determined by independent appraisal instead of using tax
value of land;
Land capping in which government will bear the land cost 110% above
proposed by investor in concession agreement;
Revolving fund which is provided to ease investors risks in case of delay in
land acquisition.
 Ministry of Public Works launched the e-procurement system in
1999 that allows public to participate transparently in the process
of procurement
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INFRASTRUCTURE DEVELOPMENT PROJECTS
TO BE OFFERED TO THE CHINA GOVERNMENT (1)
Priority projects in the area of roads and bridges are:
1. Toll road development of Solo - Kertosono
2. Toll road development of Bawen – Solo
3. Toll road development of Cisumdawu (Cileunyi – Sumedang – Dawuhan)
Potential projects in the area of roads and bridges are:
1. Construction Project of Musi III Bridge
2. Construction Project of Pasir Panajam Bridge
3. Construction of Arterial Road to Support Belang-Belang International Port
4. Manado – Bitung Toll Road Development Project
5. Pekanbaru – Kandis – Dumai Toll Road Development Project
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PRIORITY PROJECTS
IN THE AREA OF ROADS AND BRIDGES (1)
1. SOLO – KERTOSONO TOLL ROAD











Part of the Trans Java Toll Road network.
Length ± 179 km connecting Central Java and East Java Provinces.
One of the Government Priorities to be operated simultaneously with the other Trans
Java Toll Road segments.
Preparations such as FS (2005), PPP studies (2007) with 6 schemes,
Amdal/Environmental Impact Assessment (2008), DED (2008) had been done.
Economically Feasible (EIRR ±22%), but Financially Marginal (FIRR ±14%).
Government gives the support through the constructions of Colomadu – Karanganyar (±
21 km) and Saradan – Kertosono (± 39 km) segments.
Government support is included within the Blue Book worth of US$ 500 million, but
isn’t yet commited.
Road construction with a length of ± 600 m was done in the year 2009 using the
National Budget with an amount of Rp 15 billion.
An amount of ± Rp 53 billion was allocated in the year 2010 for the purpose of
constructing the bridges bottom structure and the approach in the west side of the
bridge (± 150 m).
An amount of Rp 150 billion is allocated in 2011 to finish the bridge work.
Another funding is still needed to finish the government support.
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PRIORITY PROJECTS
IN THE AREA OF ROADS AND BRIDGES (2)
2. SEMARANG SOLO TOLL ROAD SECTION : BAWEN - SOLO





Semarang Solo Toll Road (72.64 km) is a part of the Trans Java Toll Road
It has been bound with Badan Usaha Jalan Tol (BUJT) which is PT Trans Marga Jateng.
Evaluation of Penerusan Pengusahaan Jalan Tol based on the regulation within Permen PU
No. 06/PRT/M/2010 about Pedoman Evaluasi Penerusan Pengusahaan Jalan Tol has been
done.
Based on results of the evaluation, for the project to be financially feasible, the
Government will have to give construction support worth Rp 1.914 billion or construction
as long as 32.1 km (Sta 40+541 to Sta 72+611) in the Bawen-Solo section.
Plan of the operation : - Semarang-Bawen (2012)
- Bawen-Solo (2014)
Details
2010 Evaluation
Land Cost
Rp 927 Billion
Construction Cost (minus Government Support)
Rp 3.112 Billion
Investation Cost
Rp 6.212 Billion
Initial Rate Class I
Rp 500/km (2011)
Government Support
Rp 1.914 Billion
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PRIORITY PROJECTS
IN THE AREA OF ROADS AND BRIDGES (3)
3. CILEUNYI – SUMEDANG – DAWUAN TOLL ROAD Phase 2





The Bandung City, Capital of West Java is one of the biggest emerging
metropolitan city attract and generate socio-economic activities.
The Government intends to build a new international airport in Majalengka and
new port in Cirebon as main inlet/outlet for West Java and Secondari inlet/outlet
of Jakarta which need high standard road access.
Accordingly GOI will develop the Cileunyi-Sumedang-Dawuan toll road along ±
58.5 km connecting Trans Java Toll Road, new airport and other cities as
Bandung and Cirebon.
Project Objective: (a) Improve accessibility and capacity of road networks
connecting Bandung and Cirebon and the proposed new airport and seaport; (b)
Promote national and regional development in corridor-impacted areas and
cities along the road in the eastern part of West Java; and (c) Increase
productivity of the area and improve access to regional and international
market.
Cost estimate: US$ 205 Million
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OTHER POTENTIAL PROJECTS
IN THE AREA OF ROADS AND BRIDGES
No.
Project
Cost (US$)
Remarks
1
Construction Project of Musi
III Bridge
55 Million
To provide an efficient road network in Sumatra
Island as well as Palembang Metropolitan City and
to promote its rapid socio economic and industrial
area development.
2
Construction Project of Pasir
Panajam Bridge
350 Million
To improve accessibility from Panajam to Balikpapan
it requires bridge construction to shorten travel
time and to anticipate traffic congestion.
3
Construction of Arterial
Road to Support BelangBelang International Port
60 Million
To build the national road network into an
acceptable standard of services and provide
accessibility to support regional and local economic
development.
4
Manado – Bitung Toll Road
Development Project
562 Million
The construction of Manado – Bitung toll road
length ± 35 km is designated to connect Sam
Ratulangi International Airport with the planned
Bitung International Port.
5
Pekanbaru – Kandis – Dumai
Toll Road Development
Project
845 Million
Facilitate through traffic to the Dumai Port which
will soon become Sumatra Island’s primary shipping
gateway. Ease traffic congestion as well as to
increase efficiency and shorten travel time.
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INFRASTRUCTURE DEVELOPMENT PROJECTS
TO BE OFFERED TO THE CHINA GOVERNMENT (2)
Priority projects in the areas of water
resources management sector are:
1. Construction of Jambo Aye Dam
2. Construction of Pandan Duri Dam
3. Construction of Dams in East Nusa
Tenggara (NTT), includes: Raknamo,
Kolhua, and Mbay Dams
4. Construction
of
Lau
Simeme
Multipurpose Dam
5. Additional funds for Jati Gede
multipurpose dam
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PRIORITY PROJECTS
IN THE AREA OF WATER RESOURCES MANAGEMENT (1)
17
PRIORITY PROJECTS
IN THE AREA OF WATER RESOURCES MANAGEMENT (2)
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INFRASTRUCTURE DEVELOPMENT PROJECTS OF PUBLIC WORKS
TO BE OFFERED TO THE PRIVATE SECTORS OF CHINA (1)
Road Infrastructure Development which
includes the construction of toll roads with a
total funding requirement of U.S. $ 15 billion
to support the construction of toll roads in
Jakarta and surrounding areas
(Greater
Jakarta) Banten, West Java, Central Java,
Yogyakarta, East Java, North Sumatra, Riau,
Kepulauan Riau, West Sumatra, South
Sumatra, Lampung and North Sulawesi
(detailed information enclosed).
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INFRASTRUCTURE DEVELOPMENT PROJECTS OF PUBLIC WORKS
TO BE OFFERED TO THE PRIVATE SECTORS OF CHINA (2)
Development of Water Supply Network
Infrastructure and Sanitation and also waste
management that includes the development
of water supply system in 4 (four) locations
with a total fundings requirements of U.S. $
1.2 billion; and waste processing facilities in
11 (eleven) locations with with a total
fundings requirements U.S. $ 41.62 million.
(detailed information enclosed)
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CLOSING REMARKS
 Appresiation to China International Contractors
Association (CHINCA), China Ministry of Commerce
and China EXIM Bank and their staffs who have
provided support and assistance in the
implementation of this Forum.
 Expectation that forum this is the first step in a
productive and mutually beneficial relationship
between the Indonesian Government, the
Government of People’s Republic of China, and
Chinese investors in infrastructure development in
Indonesia, and can be run successfully.
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