infrastructure and tourism-infra development in...

Infrastructure and Tourism-Infra Development in Indonesia

Indonesia Australia Business Conference 2017

Rainier Haryanto, Program DirectorCommittee for Acceleration of Priority Infrastructure Delivery (KPPIP)

6 November 2017

Agenda

RPJMN, Strategic, and Priority Infrastructure ProjectsRPJMN, Strategic, and Priority Infrastructure Projects

Update on Strategic and Priority Project Status

Solving Infrastructure IssuesSolving Infrastructure Issues

2

Agenda




3

To achieve higher economic growth, Indonesia has determined its infrastructure targets for the period of 2016 – 2019 which were stipulated in the National Medium Term Plan (RPJMN)

4

Enggano

Kertajati

Singkawang

Muara Teweh

Miangas

Maratua

Tojo Una-Una

Pohuwato

Moa

Namniwel

Taria

Kenyam

Aboy

Sultan Hassanuddin

Banda Aceh

Belawan

Kuala Tanjung

DumaiBatam

PangkalPinang

Pontianak

Panjang

Padang

Tj. Priok

Cilacap

Tj. Perak

Lombok

Kupang

Palangkaraya Banjarmasin

Makassar

Maloy

Bitung

Halmahera

Sorong Jayapura

Merauke

Ambon

KorowayBatu

Sea toll concept as a means to support Indonesia in becoming the world maritime axis.

• develop 24 new seaports • increase number of substantial

vessels (pioneer cargo, transport vessels, pioneer crossing vessels)

• develop 60 crossing ports

Strengthen connectivity through air transport infrastructure development

• develop 15 new airports• develop air cargo facilities in 6

locations • increase number of pioneer

airplanes

Improve transport efficiency by road development and maintenance• develop 2,650 km of new roads • develop 1,000 km of new toll roads• rehabilitate 46,770 km of existing road

Reduce logistic cost by improving railway infrastructure develop new tracks in Java, Sumatra, Sulawesi, and Kalimantan:• 2,159 km inter-urban railways• 1,099 km urban railways

Develop urban transport

• develop Bus Rapid Transit (BRT) in 29 cities

• develop Mass Rapid Transit (MRT) in 6 metropolis and 17 large cities.

Achieve electrification ratio of 96.6% by 2019 through generating capacity improvement

• develop power plants with total capacity of 35,000 MW

Ensure efficiency of fuel production by optimizing domestic refineries

• build new oil refineries of 2x300,000 barrels

• Expand existing refineries in Cilacap and Balongan

Energy Related

Logistic Related

Location of 24 new seaports & 15 new airports

Source: Bappenas

Achieving food sovereignty through irrigation system improvement

• develop 33 new dams and 30 hydropower plants

• expand 1 million ha irrigation system • rehabilitate existing irrigation system

5

PSN includes 15 sectors at project level and 2 sectors at program level

7IRIGASI

Proj

ect

Prog

ram

Electricity 1 PROGRAMSmall-Medium Airplane 1 PROGRAM

74 12647549333081023

61 2427

13

15

ProjectsProyek93

101122

Projects

Programs

US$49.1 B US$43.3 BUS$11.9 B

US$34.2 B

US$101.5 B

US$0.8 B

US$81.9 B

Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects

ROAD RAILWAY SEAPORT AIRPORT INDUSTRI-AL ZONE

HOUSING HOUSINGWATER & SANITA-

TION

IRRIGA-TIONDAM TECH-

NOLOGYOIL

REFINERYSMELTER

National

Projects

Projects

Projects

Projects

Projects

1Project

FISHERY

1Project

SEA DIKE

Exchange rate: US$ 1 = IDR 13,000

Sumatra KalimantanSulawesi

Maluku & Papua

Java

Bali & Nusa Tenggara

Government of Indonesia introduced 245 projects and 2 programs as National Strategic Projects (PSN) with estimated total investment of US$322.8 Billion

From the 245+2 PSN, KPPIP has selected 37 Priority Projects out of the PSN stipulated in Coordinating Minister of Economic Affairs Regulation No. 5/2017

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4

4

4 4

3

78

17 13 32 20

1

25

152

9

4

27

4

1610

12

21

34

1818

18

1818

18

18

18

18

18

4

4

14

11

36

22

19

23

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13. Light Rail Transit (LRT) of DKI Jakarta14. Kuala Tanjung International Hub Seaport15. Bitung International Hub Seaport16. Patimban Port17. Inland Waterways/Cikarang – Bekasi – Laut

(CBL) 18. Palapa Ring Broadband19. Central Java Power Plant (CJPP)20. Central – West Java Transmission Line 500 kV21. Indramayu Coal-fired Power Plant22. Sumatera 500 kV Transmission (4 Provinces)23. Mulut Tambang Coal-fired Power Plant (6

Provinces)24. PLTGU (16 Provinces)25. Bontang Oil Refinery

26. Tuban Oil Refinery27. RDMP/Revitalization of Existing Oil Refineries(Balikpapan, Cilacap, Balongan, Dumai, Plaju)28. Abadi WK Masela Field29. Unitization Field Has Jambaran-Tiung Biru30. Indonesian Deepwater Development (IDD)31. Tangguh LNG Train 3 Development32. West Semarang Drinking Water Supply33. Jakarta Sewerage System34. National Capital Integrated Coastal Development (NCICD) Phase A35. Jatiluhur Drinking Water Supply36. Lampung Drinking Water Supply37. Waste to Energy Program in 8 Cities

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1. Balikpapan-Samarinda Toll Road2. Manado-Bitung Toll Road3. Panimbang-Serang Toll Road4. 15 Segments of Trans Sumatera Toll Road5. Probolinggo-Banyuwangi Toll Road6. Yogyakarta-Bawen Toll Road7. SHIA Express Railway8. MRT Jakarta North – South Line9. Makassar – Parepare Railway10.Light Rail Transit (LRT) of Jakarta, Bogor,

Depok and Bekasi11.Light Rail Transit (LRT) of South Sumatera12.East Kalimantan Railway

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27

2027

22

22

22

13

6 5

23

23

23

23

23

31

2829

30

3537

3737

37 37

3724

24

24

24

24

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24

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24

24

24

24

24

24

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4

4

4

#

#

New Priority Projects

Existing Priority Projects

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Included in the PSN are Industrial Estates (IE), Special Economic Zones (SEZ), and Priority Tourism Destination (PTD) projects

7

8

1

2

7

12

3

9

118

SEZ Projects in PSN

For the SEZ projects, among 12 projects in total, 4 projects are tourism focused

No Project Project Value (mioUS$) Status

1 Lhokseumawe SEZ 12.70 Preparation 2 Sei Mangkei SEZ 395.38 Operating3 Tanjung Api-Api SEZ 946.15 Preparation 4 Belitung SEZ 115.38 Construction 5 Tanjung Lesung SEZ 323.08 Operating6 Mandalika SEZ 169.23 Operating7 Maloy Batuta Trans Kalimantan SEZ 200.00 Construction 8 Palu SEZ 130.77 Operating9 Bitung SEZ 176.92 Construction 10 Morotai SEZ 523.08 Construction 11 Sorong SEZ 184.62 Construction 12 Merauke SEZ - Not Yet Determined

Preparation (US$958.85 mio)

Construction (US$ 1,018.46 mio)

Not yet determined as SEZ by National Council of SEZ

Operating* (US$1,200 mio)

(Exchange rate: US$ 1 = IDR 13,000)

*Projects in “Operating” phase may also still undergo construction

: SEZ with focus on tourism industry

4

56

10

18. Kereta Api Tebing Tinggi – Kuala

Tanjung

19. Kereta Api Tanjung Enim – Tanjung

Api-Api

13. Pelabuhan Hub Internasional

Kuala Tanjung

14. Pelabuhan Hub Internasional

Bitung

15. Pelabuhan KEK Maloy

16. Pelabuhan Palu (Pantoloan)

17. Pelabuhan Sorong Seget

9. Bitung

10. Morotai

11. Sorong

12. Merauke

1. Arun Lhokseumawe

2. Sei Mangkei

3. Tanjung Api-Api

4. Tanjung Kelayang (Belitung)

5. Tanjung Lesung

6. Mandalika

7. Maloy Batuta Trans Kalimantan

8. Palu

Government supportDevelopment of strategic transportation projects to support SEZs

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1

2

4

10

5

8 11

6

7

12

3

913

1415

1617

SPECIAL ECONOMIC ZONE INFRASTRUCTURE

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Government support for SEZs and Tourism Destination under PSNIssuance of regulation to accelerate the delivery of PSN Projects

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Government Reg. No. 13/2017 on National Spatial Plan (RTRWN)The issuance of RTRWN can encourage the settlement of obstacles that are caused by spatial mismatch in the implementation of infrastructure projects listed in the annex of Government Reg. No. 13/20.This regulation provides legal certainty for regional governments in following spatial planning recommendations for PSN issued by the Ministry of Agraria and Spatial Planning.

MoF Regulation No. 60/2017 on Procedures for the Provision of Central Government Guarantee for the Acceleration of the PSN ImplementationThis regulation enables further provision of Government Guarantee with regards to political risk for PSN projects, including SEZs. Usage of this political risk guarantee would provide greater certainty to investors in investing in PSN projects, which is expected to make investment in PSN projects more attractive.

Presidential Reg. No. 56/2017 Mitigation of Social Impact in the Land Acquisition for PSNThis Presidential Regulations is the Government’s effort to minimize the social impact of land acquisition for PSN delivery, especially in state-owned land that have been informally inhabited by public.This regulation enables acceleration of land acquisition by providing a strong legal basis in giving compensation for communities whose living spaces and economic opportunities are impacted by infrastructure development on state-owned land.

Government support for SEZsFiscal incentives in special economic zones

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INVESTOR (S)

Main ActivitiesINCOME TAX REDUCTION

20-100% for 5-25 years

Other ActivitiesINVESTMENT ALLOWANCE

up to 10 years

GOODS ENTERING SEZIMPORT:• Deferred import duties and other import

taxes;• Exempted excise tax

FROM CUSTOM AREAS:• Exempted Value Added Tax and Luxury

Sales Tax

GOODS EXITING FROM SEZEXPORT:• General rules

TO DOMESTIC MARKET:• Import duties follows FTA tariff rates

Import duty and other import tax exemption for capital goods (machinery, equipment, parts, etc)

Fit with primary activity?

YES NO

Agenda




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Private investors have opportunity to contribute more than half of the total PSN investment value

PSN Investment Value

IDR 4,197Trillion

StateBudget

SOEs/RSOEs

Private

Estimated required funding1 for PSN of 245 Projects + 2 Program:

PSN requires funding from various sources, including state budget, SOEs/R-SOEs, and private

IDR 525 TrillionTotal Investment Value

IDR 1,258 Trillion

IDR 2,414 Trillion

1Exclude 16 projects which investment value is still unknown

5 Sectors with Highest Investment Value:

Energy12 Projects

IDR 1,242 Trillion

Electricity1 Program

IDR 1,035 Trillion

Road74 Projects

IDR 684 Trillion

Train23 Projects

IDR 613 Trillion

SEZs and IEs30 Projects

IDR 290 Trilion

State Budget

13%

SOE/RSOE30%Private

57%

13

Progress status of 245 + 2 National Strategic Projects (PSN) + 35 GW Electricity Program

4 projects are completed

12 projects are in transaction100 projects are in preparation

131 projects are in construction1

1Including one electricity program under construction category (39% of electricity program has reached construction per April 2017)

948 MW are operating15,126 MW are in construction13,673 MW have signed PPA but have not reached financial close

2,328 MW are in planning3,763 MW are in procurement

Progress of 245 PSN + 2 Programs per September 2017

Progress of 35 GW Electricity Programper October 2017

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6%11%

38%

42%

3%

35GW

245 + 2PSN

40%

5%

53%

2%

Progress Status of 37 Priority Projects Funding Scheme of 37 Priority Projects

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Progress Status of 37 Priority Projects as per October 2017

Exchange rate: US$ 1 = IDR 13,500

30%

24%

46%

Preparation

Transaction stage

Construction stage

11 Projects in Preparation Stage

9 Projects in Transaction Stage

17 Projects in Construction Stage

9%

40%51%

APBN/D

BUMN/D

Swasta

US$16.4 billion State/Regional Budget (including G-to-G loan)US$74.5 billion SOE/Regional SOEUS$95.21 billion Private/PPP

From the monitoring effort conducted by KPPIP, here are some results of the achievement of the National Strategic and Priority Projects (PSN)

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PROJECT NAME PROJECT ACHIEVEMENTPatimban Port Environmental Permit has been issued on February 28, 2017. Thus, one of the

prerequisites for foreign loan applications through loans from the Japanese Government through JICA has been fulfilled.

Hub Internasional Port of Kuala Tanjung

The Pre-Feasibility Study/Outline Business Case integrated with the port development plan and regional infrastructure development has been completed and socialized to the stakeholders. OBC can be used as a reference for the most optimal funding scheme from the Government of Indonesia.

Central - West Java Transmission Line 500 kV

Contracts for three packages of Engineering Procurement Construction (EPC) (Tx-Batangsection, Batang-Mandirancan 1 section and Batang-Mandirancan 2 section) have been signed in March 2017, so the 928 km line construction can be started.

Coal Fired Power Plant Jawa-4 (Tanjung Jati-B)

The acceleration of Financial Close was reached on March 31st, 2017 from the initial target of June 7th, 2017 so the project can proceed to the construction phase.

Serang – Panimbang Toll Road The signing of the Toll Road Concession Agreement (PPJT) and the guarantee facility of PT Penjaminan Infrastruktur Indonesia (Persero) has been done in February 2017.

Agenda




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Issue 1: Easing infrastructure provision and investment Government has also created Economic Policy Packages 1-16 to ease infra provision

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PKE 1: National industrial competitiveness

PKE 2: Investment permit, tax holiday

PKE 3: Electricity tariff

PKE 4: Worker welfare

PKE 5: Revaluation of assets, double taxation and Sharia Banking

PKE 6: Special Economic Zones

PKE 7: Labor-intensive industries

PKE 8: One Map, Oil Refinery, Aircraft parts inventory

PKE 9: Electricity infrastructure, stabilization of meat price

PKE 10: Micro Small Medium Enterprises

PKE 11: Business credit, pharmaceutical

PKE 12: Ease of doing business in Indonesia

PKE 13: Housing for low-income society

Economic Policy Package (PKE)

PKE 14: E-commerce

Policy package that is directly related to the provision of SEZ projects

PKE 15: Logistics

PKE 16: Integrated permit system

Issue 1: Easing infrastructure provision and investmentThree Economic Policy Packages are directly related to acceleration of SEZ projects

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Economic Policy Package 6: Special Economic ZonesIncentivize business in SEZs through:• Reduction of Corporate Tax, and Entertainment Tax, as well as implementation of Accelerated Depreciation.• Abolishment of additional fees.• Foreign citizens may own property.• SEZ Administrators may issue Land Permits and Business Permits.

Economic Policy Package 12: Ease of Doing BusinessAims to improve Ease of Doing Business in Indonesia through:• Issuance of 16 regulations to improve Ease of Doing Business.• Reduction of various business permits from 12 procedures requiring 47 days to 7 procedures requiring 10 days.• Reduction of construction-related permits from 17 procedures requiring 210 days to 14 procedures requiring 52 days.

Economic Policy Package 16: Integrated Permit System• Implementation of permit checklists for SEZ, IZ and Free-Trade Zones (FTZ) that must be completed by the business

owner within a specified time. The One-Stop Integrated Services (PTSP) provides necessary documents to the business owner, and the business owner would receive a checklist to complete. This is expected to accelerate the provision of facilities in taxation, customs, and ease in labor, immigration and land acquisition.

• A Single Submission system is planned to be fully effective by March 2018.

Issue 2: Indonesia workforce to support infrastructure developmentIndonesia current workforce structure has potential to support infrastructure development

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Increasing number of workforce in Indonesia is followed by challenge to increase workforce competitiveness

Population

255.46 mn

Work Force

127.67 mn

Non Work Force127.79 mn

Population120.65 mn

Unemployed7.02 mn (5.5%)

INCREASE

INCREASE

DECREASE

Source: Central Bureau of Statistics, Feb ‘16

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Issue 2: Indonesia workforce to support infrastructure development However Current state of employment shows a gap

• Almost half (42.5%) of Indonesia workforce is elementary school graduate

• It’s difficult to obtain workers with sufficient skill and expertise

• Highest level of unemployment is on vocational school graduate (9.84%)

• A breakthrough is needed in preparing next generation of national workforce

1. Returning the state to its task of protecting all citizens and providing a safe environment;

2. Developing clean, effective, trusted and democratic governance;

3. Developing Indonesia’s rural areas;4. Reforming law enforcement agencies;5. Improve quality of life;6. Increasing productivity and competitiveness;7. Promoting economic independence by developing

domestic strategic sectors;8. Overhauling the character of the nation;9. Strengthening the spirit of “unity in diversity” and social

reform.

in mn

in mn

Employed

Unemployed

million

million

Workforce

mn

2016 Unemployment

2015-2019 Mid Term Development Plan Unemployment Target

Indicator Number

(7.05 mn people)

Source: Central Bureau of Statistics, Feb ‘16

Issue 2: Indonesia workforce to support infrastructure development Vocational education revitalization needed to support infrastructure and tourism industry

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Vocational School

Polytechnic

CommunityAcademy

IND

ON

ESIA PRO

FESSION

AL W

OR

KFO

RC

E

Non Professional

Labor

Presidential Decree to revitalize vocational school

Revitalization of Polytechnic and Academy:

• Teacher and lecturer preparation• Increase in total student capacity• Quality of supporting physical

infrastructure• Cooperation with industry• Curriculum revamp• Certification and accreditation• Improvement of management capacity• Development of new study program of

polytechnic

• Revitalization of Work Training Centre

• Certified internship

MEA

1. Health2. Tourism3. Logistic service4. Online service5. Air cargo service6. Agro-product7. Electronics8. Fishery9. Rubber-based product10.Textile and clothing11.Automotive12.Wood-based product

Profession:1. Engineer2. Nurse3. Architect4. Surveyor5. Doctor6. Dentist7. Accountant8. Hospitality

KPPIPMenara Merdeka, 8th floor

Jl Budi Kemuliaan I No 2, Jakarta 10110E-mail : [email protected]

Landline : +62 21 2957 3771

TERIMA KASIH

ANNEXES

Example of National Strategic Tourism Infrastructure Project:1. Mandalika Special Economic Zone/Priority Tourism Destination

• Special Economic Zone focusing on agro-industry and eco-tourism industry, with total area of 1,250 ha

• Will be developed for meetings, incentives, conferencing, exhibitions purpose, leisure spot, luxury lodging, and commercial center for products from Central Lombok

Location Mandalika, West Nusa Tenggara

Investment Value IDR 177 billion

Funding Scheme SOE

Project Owner PT Indonesia Tourism Development Corporation (ITDC)

Construction 2016

Operation Target 2017

• SEZ Mandalika is ready to operate – Chairman of National Board of SEZ and Governor of NTB has requested the President to inaugurate SEZ Mandalika in September 2017

• Development and improvement Mandalika Kuta Beach (total area of about 5 ha) has reached 90%

• Administrator's Office has been established and is ready to serve accelerated investment permit (3 minutes)

• There are four 4-star and 5-star hotels have started land-clearing process, and initial construction, including Pullman Hotel and Clubmed Hotel

• Government will support the extension of Lombok International Airport runway, port revitalization, and clean water network

• Construction for roads within 11km of the area is currently at procurement process

Latest Status

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Description

Example of National Strategic Tourism Infrastructure Project: 2. Morotai Special Economic Zone/Priority Tourism Destination

• Special Economic Zone focusing on fish processing industry, manufacture, logistics, and tourism

• Government has committed to provide supporting infrastructures including the provision of national roads, airports, ports and electricity supply

Location Morotai Island Regency,North Maluku

Investment Value USD 520 billion

Funding Scheme Private

Project Owner PT Jababeka Morotai

Construction 2016


• The SEZ regional councils, regional secretariat councils, and administrators have been established in 2014

• Is currently under construction – 200 hectares of land has been cleared and land is being prepared for construction, while 3km of entrance road has been built

• SEZ Morotai will be supported by several strategic infrastructure, includindMorotai outer ring-road and Pitu Airport – most sections of the Morotai ring-road has been built, remaining sections connecting Hapo Village to BereVillage is yet to be built

• Stage 1 development for container field, storage warehouse, speed boat jetty and management office renovation has been started

Latest Status

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Description

Progress Status of Selected Tourism Supporting Infrastructure Project3. Yogyakarta – Bawen Toll Road

• The Yogyakarta - Bawen Toll Road is expected to support tourism around Yogyakarta, Semarang, and Solo, especially The Borobudur Temple. This toll road will connect the existing toll road, Semarang – Solo Toll Road with the Special Region of Yogyakarta.

• Based on the study, the toll road will be 71,56 km with the expected average daily traffic amounted to 16,322 car/day.

Location Yogyakarta – Central Java

Investment Value Estimated USD 911.4 Million

Funding Scheme Potential for PPP

Project Owner Indonesia Toll Road Authority

Construction 2018


• The feasibility study of Yogyakarta – Bawen Toll Road has been completed in 2008. But, it needs to be redeveloped to accommodate the updated information. Thus, KPPIP is currently preparing the Outline Business Case (OBC) which will be completed in December 2017.

• The funding scheme for the construction of Yogyakarta – Bawen is potential for PPP. However, the funding scheme determination will be based on the OBC result.

Latest Status

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Description

Progress Status of Selected Tourism Supporting Infrastructure Project4. Serang-Panimbang Toll Road

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Location Banten Province

Investment Value USD 410 Million

Funding Scheme PPP

Project Owner Indonesia Toll Road Authority

Construction 2017


• In February 2017, the concession of Serang-Panimbang Toll Road has been awarded to PT Wijaya Karya

• GoI will implement Availability Payment scheme in Cilleles-Panimbang section (33 km), which is currently in Prequalification process of construction business entity procurement

• Currently, Serang-Panimbang Toll Road is in the land acquisition process, specifically in identification and mapping the land ownership

Latest StatusDescription

• The development of this 83.6-km toll road aims to provide access to Tanjung Lesung Special Economic Zone (SEZ) and Ujung Kulon National Park.

• In addition to promoting tourism development in Tanjung Lesungand Ujung Kulon National Park, this toll road is expected to reduce logistic costs from the industrial zone in Pandegelang to ports in Jakarta.

• The development of an international hub seaport as the gateway to Western Indonesia. The port is expected to serve transshipment cargo by 2.3 million TEUs in 2030.

• The International Hub Port is expected to accommodate captive and transshipment cargos from international and domestic, especially from and to Sei Mangkei SEZ and Kuala TanjungIndustrial Zone.

Location North Sumatra

Investment Value Estimated US$ 2.25 billion (Phase I)

Funding Scheme Potentially PPP (to be determined)

Project Owner Ministry of Transportation

Target Construction Estimated in mid 2019

Target Operation Estimated in 2021

Description

• The Outline Business Case (OBC) has been completed and distributed to stakeholders. The OBC’s objective is to ensure the planning and preparation of the project meets the criteria and depth of study that is accepted by the market, and also provide recommendation on port area and regional infrastructure development.

• Private sector can participate as developer and operator of the port, terminal and industrial zone. The land including industrial zone will be acquired by the Indonesian Government if PPP scheme is selected.

Latest Status

Progress Status of Selected Non-Tourism Infrastructure Project5. Kuala Tanjung International Hub Port

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• The development of an International Hub Seaport in Bitung, North Sulawesi, to support the development of Bitung SEZ. The International Hub Seaport will also support the industrial activities in East Indonesia, including Ambon and Ternate (Agriculture, Manufacturing, and Mining), and Samarinda, Balikpapan, Tarakan, and Nunukan (Coal, Oil, and Plywood).

• In 2034, the capacity is planned to be up to 2.25 Million TEUs.

Location North Sulawesi

Investment Value Estimated US$ 2.55 billion

Funding Scheme Potentially PPP (to be determined)

Project Owner Ministry of Transportation

Target Construction Estimated in 2020

Target Operation Estimated in 2022

Description• Currently in the development of OBC, which is facilitated by

KPPIP. The OBC will analyze the integration of the existing port, Bitung SEZ, and Lembeh Island.

• Land acquisition will be started after the completion of the OBC.

• Private sector has the potential to participate as developer and operator of the port and terminal. The private role will be defined based on the OBC.

• PT Pelindo IV is currently developing the existing port in Bitung.

Latest Status

Progress Status of Selected Non-Tourism Infrastructure Project6. Bitung International Hub Port

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31

List of National Strategic Projects with the potential for private sector involvements (1/2)

No Project Name Sector ProvinceInvestment Value

(US$ Million)Transportation and Road sectors

1 Kertajati Airport Airports West Java 378.22 Kuala Tanjung International Hub Port Ports North Sumatera 2,307,73 Bitung International Hub Port Ports North Sulawesi 2,615.44 Trans Sumatera (Padang – Pekanbaru) Roads Sumatera 2,814.9

5 Yogyakarta – Bawen Toll Road Roads D.I. Yogyakarta –Central Java 933.8

Other sectors6 Cilacap refinery Energy Central Java 5,252.17 Balikpapan Refinery Energy East Kalimantan 5,252.18 Balongan Refinery Energy West Java 1,200.49 Bontang Refinery Energy East Kalimantan 14,555.8

10 Waste to Energy (Semarang, Makassar, Tangerang) Energy Central Java, South

Sulawesi, Banten 322.1

11 Jakarta Sewerage System Water & Sanitation DKI Jakarta 5,384.612 Kuala Tanjung Industrial Zone Industrial Zone North Sumatera 346,213 Tanjung Lesung Special Economic Zone Industrial Zone Banten 323.114 Landak Industrial Zone Industrial Zone West Kalimantan 93.915 Tanggamus Industrial Zone Industrial Zone Lampung 1,346.2

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List of National Strategic Projects with the potential for private sector involvements (2/2)

No Project Name Sector ProvinceInvestment Value

(US$ Million)16 Jorong Industrial Zone Industrial Zone South Kalimantan 1,000.0

17 Maloy Batuta Trans Kalimantan Special Economic Zone Industrial Zone East Kalimantan 195

18 Bantaeng Industrial Zone Industrial Zone South Sulawesi 1,830.719 Bitung Special Economic Zone Industrial Zone North Sulawesi 172.520 Morowali Industrial Zone Industrial Zone Central Sulawesi 3,728.921 Konawe Industrial Zone Industrial Zone Southeast Sulawesi 2,153.322 Mandalika Special Economic Zone Industrial Zone West Nusa Tenggara 16523 Buli Industrial Zone Industrial Zone North Maluku 330.124 Morotai Special Economic Zone Industrial Zone North Maluku 510.225 Teluk Bintuni Industrial Zone Industrial Zone West Papua 2,355.926 Batulicin Industrial Zone Industrial Zone South Kalimantan 15927 Java Integrated Industrial Port Estate Industrial Zone East Java 1,96928 Dumai Industrial Zone Industrial Zone Riau 1,34429 Tanjung Buton Industrial Zone Industrial Zone Riau 52730 Multi Purpose Satellite Technology National 31031 Sumatera 500kV Transmission Electricity Sumatera 1,830.7

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List of Fiscal Incentives for SEZs (1/4)

NO. SUBJECT INCENTIVES/FACILITIES

1. CORPORATE INCOME TAX (PPh)

1. Primary Industry (Tax Holiday):• Reduction by 20-100% for 10-25 years for investment more than

Rp. 1 trillion (USD 77 million) *USD 1 = IDR 13,000• Reduction by 20-100% for 5-15 years for investment between Rp. 500

billion-1 trillion (USD 38.5 - 72 million) *USD 1 = IDR 13,000• Reduction by 20-100% for 5-15 years for investment between for

investment less than Rp. 500 billion (USD 38.5 - 72 million) *USD 1 =IDR 13,000 in particular area

2. Other than Primary Industry (Tax Allowance):• Net income reduction by 30% of the amount invested, spread in 6 years

(5% per year);• Accelerated depreciation and amortization;• Reduction of the withholding tax rate on dividends paid to non residents

to 10% (or lower if treaty is available);• Loss carried forward facility for period up to 10 years.

2.

VALUE ADDED TAX (PPN)AND SALES TAX ONLUXURY GOODS(PPnBM)

• Imported goods: exempted• Goods delivered among companies in SEZ: exempted• Goods delivered among companies in other SEZ: exempted

34

List of Fiscal Incentives for SEZs(2/4)


3. IMPORT DUTIES AND EXCISE

• Deferred import duties for imported goods• Exempted excise for imported goods• For goods delivered to custom areas (domestic), import duties follows FTA

tariff rates

4 NEGATIVE LIST

Negative list not applied in SEZ, except for:• Prohibited activities• Business reserved for SME

5.RESTRICTION AND LIMITATION TO EXPORT AND IMPORT

• Restriction and export limitation is apply in SEZ• Import limitation is not applied until the goods enter the custom areas

(domestic area)

6. BUSINESS LICENSES

• Start up business license will be proceeded by SEZ administrator within 3 hours.

• All procedures related to export, import, immigration, working permit, etc., willbe handled by SEZ Administrator.

35

List of Fiscal Incentives for SEZs(3/4)


7.FOREIGN PROPERTY OWNERSHIP IN TOURISM SEZ

• Exempted from Luxury and Very Luxury Sales Tax• Foreign individual and foreign corporate can own properties in SEZ, including

landed house• The status of the properties are Right to Use (Hak Pakai) for 30 years and could

be renewed up to 80 years• Stay Visa will be given to property owner in SEZ

8. LOCAL TAXES IN TOURISM SEZ

• Reduction of local taxes• Reduction of local retribution

9. LABOUR ANDEMPLOYMENT

• Special Wage Council and Special Tripartite Consultation will be established in SEZ

• Limitation of Labor Union Forum• Agreement and extension of Expatriate Employment Plan by SEZ Administrator

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List of Fiscal Incentives for SEZs (4/4)


10. IMMIGRATION

Immigration facilities for Individual working in SEZ, including his/her family:• VOA for 30 days and could be extended 5 times• Multiple entry Visa for expatriate and his/her family• Stay Visa for foreign individual who owned property in Tourism SEZ• Retirement Visa for individual who intended to stay in Tourism SEZ

11. LAND TITLING

Land Titling in SEZ:• Right to Build (HGB) will be given for Indonesian citizen or corporate bodies

established in Indonesia, for 30 years, could be extended for 20 years danrenewed for 30 years (total 80 years)

• Right to Use will be given for foreign individual and foreign corporate, for 30 years, could be extended for 20 years and renewed for 30 years (total 80 years)

• Extension and renewal of Right to Build could be applied after the business entering commercially operated period

• Extension and renewal of Right to Use could be applied after the propertie(s) is fully owned

infrastructure and tourism-infra development in...

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