INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT

ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN ROADMAP AND PROGRESS IN

INDONESIAINDONESIAINDONESIAINDONESIAINDONESIAINDONESIAINDONESIAINDONESIA

““““““““EU EU EU EU EU EU EU EU –––––––– Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)Indonesia Business Dialogue (EIBD)””””””””

Dedy Supriadi Priatna, Ph.DDeputy Minister of Infrastructure Affairs

Ministry of National Development Planning / Bappena s

Infrastructure Conference

Jakarta, 30 November 2010

1. Infrastructure Challenges

2. Mid Term National Development Plan 2010-2014

3. Central Government Financing

a. Rupiah

b. External Loan/ Grant

c. Government Guarantee

4. Public Private Partnership

5. Summary

2

4

Signal from Asian Economic Growth and Signal from Asian Economic Growth and Signal from Asian Economic Growth and Signal from Asian Economic Growth and Emerging Market becoming Emerging Market becoming Emerging Market becoming Emerging Market becoming

at at at at Q3Q3Q3Q3 …………

Economic Growth

4

Infrastructure Financing of other countries (%from GDP)

THE PERCENTAGE OF INFRASTRUCTURE FINANCING AND GROSS THE PERCENTAGE OF INFRASTRUCTURE FINANCING AND GROSS THE PERCENTAGE OF INFRASTRUCTURE FINANCING AND GROSS THE PERCENTAGE OF INFRASTRUCTURE FINANCING AND GROSS

DOMESTIC PRODUCTDOMESTIC PRODUCTDOMESTIC PRODUCTDOMESTIC PRODUCT

0.0

2.0

4.0

6.0

8.0

Indonesia Albania Russia Cambodia Kazakhstan

Private

Govt

Source: World Bank

5

•• AAAAAAAActual investments actual investments actual investments actual investments actual investments actual investments actual investments actual investments are less than half of re less than half of re less than half of re less than half of re less than half of re less than half of re less than half of re less than half of the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve the annual requirements to achieve target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction;target growth and poverty reduction; So, aSo, aSo, aSo, aSo, aSo, aSo, aSo, a continued push for the development continued push for the development continued push for the development continued push for the development of infrastructure is of infrastructure is of infrastructure is of infrastructure is expected expected expected expected for rapid growth and poverty reduction; for rapid growth and poverty reduction; for rapid growth and poverty reduction; for rapid growth and poverty reduction;

•• Budget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requiremenBudget for infrastructure only 1 % of GDP , meanwhile requirement about 5 %. t about 5 %. t about 5 %. t about 5 %. t about 5 %. t about 5 %. t about 5 %. t about 5 %.

•• Insufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels oInsufficient budget allocation in infrastructure at all levels of governmentf governmentf governmentf governmentf governmentf governmentf governmentf government. F. F. F. F. F. F. F. Fiscal iscal iscal iscal iscal iscal iscal iscal space does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by thspace does not allow all infrastructure needs to be funded by the public sector; e public sector; e public sector; e public sector; e public sector; e public sector; e public sector; e public sector; From total national budget, From total national budget, From total national budget, From total national budget, From total national budget, From total national budget, From total national budget, From total national budget, 20 % 20 % 20 % 20 % 20 % 20 % 20 % 20 % for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan for education sector, repayment of foreign loan 9,8 %, subsid9,8 %, subsid9,8 %, subsid9,8 %, subsid9,8 %, subsid9,8 %, subsid9,8 %, subsid9,8 %, subsidy y y y y y y y 16 %, transfer 16 %, transfer 16 %, transfer 16 %, transfer 16 %, transfer 16 %, transfer 16 %, transfer 16 %, transfer to local goverment to local goverment to local goverment to local goverment to local goverment to local goverment to local goverment to local goverment 30 %. 30 %. 30 %. 30 %. 30 %. 30 %. 30 %. 30 %. Thus, the potencial for Thus, the potencial for Thus, the potencial for Thus, the potencial for Thus, the potencial for Thus, the potencial for Thus, the potencial for Thus, the potencial for infrastructure not more than infrastructure not more than infrastructure not more than infrastructure not more than infrastructure not more than infrastructure not more than infrastructure not more than infrastructure not more than 25 % 25 % 25 % 25 % 25 % 25 % 25 % 25 % from national budget or from national budget or from national budget or from national budget or from national budget or from national budget or from national budget or from national budget or 5% 5% 5% 5% 5% 5% 5% 5% from GDPfrom GDPfrom GDPfrom GDPfrom GDPfrom GDPfrom GDPfrom GDP........

• Deteriorating quality and shortages of infrastructure are major Deteriorating quality and shortages of infrastructure are major Deteriorating quality and shortages of infrastructure are major Deteriorating quality and shortages of infrastructure are major impediments to impediments to impediments to impediments to growth and recovery;growth and recovery;growth and recovery;growth and recovery;

• QQQQuality infrastructure services are necessary to sustain growth uality infrastructure services are necessary to sustain growth uality infrastructure services are necessary to sustain growth uality infrastructure services are necessary to sustain growth and maintain or and maintain or and maintain or and maintain or improve competitiveness. And inadequate infrastructure services improve competitiveness. And inadequate infrastructure services improve competitiveness. And inadequate infrastructure services improve competitiveness. And inadequate infrastructure services mean a lower mean a lower mean a lower mean a lower quality of life; quality of life; quality of life; quality of life;

• However, the huge investment needs in infrastructure during the However, the huge investment needs in infrastructure during the However, the huge investment needs in infrastructure during the However, the huge investment needs in infrastructure during the next five years next five years next five years next five years and beyond, clearly confront us with enormous challenges.and beyond, clearly confront us with enormous challenges.and beyond, clearly confront us with enormous challenges.and beyond, clearly confront us with enormous challenges.

6

Note: Infrastructure: Transport, Power / Energy, Housing, Telecommunication, Water Resources.

Growth Competitiveness Index/GCI Ranking (2003 - 2008)

Argentina Indonesia Philipines Brazil Korea China Japan Thailand Malaysia

2003 78 72 66 54 18 44 11 32 29

2004 74 69 76 57 29 46 9 34 31

2005 72 74 77 65 17 49 12 36 24

2007 85 54 71 72 11 34 8 28 21

2008 88 55 71 64 13 30 9 34 21

� Difficult challenges to promote foreign and domesti c investment� National competitiveness is low� Based on World Economic Forum (WEF), Indonesia rank ed 55th out of 134 countries. Meanwhile,

Malaysia and Thailand ranked 21st and 34th, respec tively.

Note: In 2003 cover 101 countries, 2004 cover 104 co untries, & 2005 cover 117 countries, 2007 cover 131 countries, 2008 cover 134 countriesSource: World Economic Forum

7

8

ArgentinaIndonesia

Philippines Brazil Korea China Vietnam Thailand Malaysia2008 2009

Infrastructure 94 96 84 98 81 20 66 111 41 27

Roads 84 105 94 104 106 14 50 102 35 24

Railroad 78 58 60 92 86 8 27 58 52 19

Port 85 104 95 112 127 36 61 99 47 19

Air Transport 113 75 68 100 89 21 80 84 26 27

Electricity 97 82 96 87 55 21 61 103 41 39

Telephone 52 100 79 102 61 23 49 36 84 72

Sumber: World Competitiveness Report, 2009 – 2010

In 1996, Competitiveness Rating of Indonesia better than China, Thailand, Taiwan, dan Srilanka. This fact indicate that Indonesia Infrastructure development is slowing down

Growth Competitiveness Index/GCI Ranked 2009, (out of 134 countries)

9

10

Housing Problems: Housing Problems: Housing Problems: Housing Problems:

� Limited access to land acquisition and

legality for low income community

� Limited public access to housing

financing

� Low efficiency level in housing dev’t.

� Non-optimal utilization of housing and settlement resources

Strategy:Strategy:Strategy:Strategy:

Subsidy for Housing Credit for ‘Rumah Sederhana Sehat‘ (RSS) is 685,000

units until 2014.The accumulated backlog is expected to continue to

occur due to growth of 710,000 new households per

year

11

Housing Backlog (in thousand units)

Outstanding Ratio for housing credit to GDP

• USA (47%)

• Malaysia (27 %)

• Indonesia (1,8%) Indonesia (1,8%) Indonesia (1,8%) Indonesia (1,8%)

Outstanding Ratio for housing credit to GDP

• USA (47%)

• Malaysia (27 %)

• Indonesia (1,8%) Indonesia (1,8%) Indonesia (1,8%) Indonesia (1,8%)

� Slow growth of improved

drinking water coverage,

especially piped drinking

water � from 18.91% to

47.63% (1994-2009)

� Supply capacity growth can not keep up with

population growth

Susenas, BPS, various years

12

Government investment is IDR 200/capita/year. If the investment for

sanitation infrastructure is around IDR 47,000/capita/year �

� Increase in community productive time : 34%-79%

� Decrease in health cost : 6%-19%

� Decrease in medical cost : 2%-5%

13

Impact of Poor Sanitation:

� 75 % river polluted

� 70 % ground water polluted

� 150 thousand peoples died

annually by diarrhea

� For every increment of 1 mg/liter

of BOD in river � 25% of increase

in PDAM cost production from

national average tariff

� Economic loss related to poor

sanitation estimated about US$

6,3 billion annually (2.3% of GDP)

� Only 20.63% solid waste collected, the remainder is burnt, burried, disposed to rivers, and anywhere

� Only 2% of existing Final Disposal Site using sanitary landfill method

� Improper solid waste management contributes to global warming � climate change

� Other impacts : flood, environmental pollution, public health

Persentage of Collected Solid WastePersentage of Collected Solid WastePersentage of Collected Solid WastePersentage of Collected Solid Waste

Cities in Indonesia produce solid waste 10 million ton/year 10 million ton of solid waste produce 404 million m3 of metan annually 14

15

National Target 75/100 : Year 2020 (75 years after indipendent day) electrification ratio will rise 100 %

1. Creating noble, moralized, ethical, cultured, and civilized society

2. Creating competitive nation

3. Creating democratic society based on the law

4. Creating the safe, peace, and united of Indonesia

5. Creating fair and equal development

6. Creating harmonized and eternal Indonesia

7. Creating Indonesia to be independent, advance, strong, and prioritizing national interest

8. Creating Indonesia to be participated in international community

2005-2024 MISSION

2005-2024 VISION

ADVANCE, INDEPENDENT, FAIR, WEALTHTY Sufficient and advanced Infrastructure Government focus to the infrastructure development policy formulation, and enhancing private participation (PPP)•Development of water resources infrastructure•Development of transportation infrastructure•Development of post and telecommunication infrastructure•Development of energy and electricity infrastructure•Development of drinking water provision and sanitation infrastructure

Sufficient and advanced Infrastructure Government focus to the infrastructure development policy formulation, and enhancing private participation (PPP)•Development of water resources infrastructure•Development of transportation infrastructure•Development of post and telecommunication infrastructure•Development of energy and electricity infrastructure•Development of drinking water provision and sanitation infrastructure

• System of food security is directed to sustain reliability and independency of national food by developing domestic product

• Fulfillment of housing infrastructure• Fulfillment of society basic needs in the form of drinking water and sanitation

• System of food security is directed to sustain reliability and independency of national food by developing domestic product

• Fulfillment of housing infrastructure• Fulfillment of society basic needs in the form of drinking water and sanitation

• To utilize the renewable natural resources• To manage the non-renewable natural resources• to sustain the energy provision• To sustain and conserve water resources• To mitigate natural disaster according to the Indonesia Geological Condition

• To utilize the renewable natural resources• To manage the non-renewable natural resources• to sustain the energy provision• To sustain and conserve water resources• To mitigate natural disaster according to the Indonesia Geological Condition

• To decrease the impact of coastal disaster and sea pollution• To decrease the impact of coastal disaster and sea pollution

DIRECTION OF LONG TERM DEVELOPMENT PLANNING (RPJP) 2005-2024 IN INFRASTRUCTURE DEVELOPMENT

17

18

(1) (2) (3) (4)

FOCUS AND PRIORITY

OF INFRASTRUCTURE DEVELOPMENT FOR 2010-2014

1. Enhancement of infrastructure services according to the Minimum Standard of Services (SPM)

o Rehabilityo Accessibilityo Safety

2. Infrastructure support to the enhancement of Real Sector Competitiveness

o New development

3. Enhancement of infrastructure investment through PPP

19

WATER RESOURCES MANAGEMENT DEV’T TARGET

Number of Dam Cons tructed

Number of Small Dam/Pond s Constru cted

Number of O & M Dams/Pond s

Performance 2005-2009

Length of Coastal Protection (km)

areas protected from flood hazards (thousand

ha)

Performance 2005-2009

Improvement of

irrigation system

(thousands ha)

Rehabilitation of

irrigation system

(thousands ha)

O & M irrigation

system

(thousands ha)

Improvement /

rehabilitation of

swamps

(thousands / ha)

O & M swamps

system

(thousands / ha)

� From 83 % in 2009, National Road targeted 90 % in “Good

Condition” and no damaged;

� Average vehicle velocity in increase from 44,4 km/hour to 60

km/hour in national road

� Share of cargo sea transport incease from : domestic 85, 7 % and

export import 9 % in 2009 ; increase 100 % and 12,5 % respectively

in 2014

� Market Share of Railway Transport : Freight : from 0,6 % in 2009 to

7 % in 2010 and passenger from 6 % in 2009 to 23% in 2014

� Keep growth of air transport passenger : domestic 9,78 % /year and

non domestic 12,3%/year;

21

� Access to drinking water to 70% of total population which is

divided into detailed target: 32% of piped system and 38% of

improved non-piping system

� The realization of Open Defecation Free condition (BABS), which

is marked by the available access to off-site wastewater

management system for 10% of the total population, either

through a off-site wastewater treatment system at city-scale (5%)

or communal scale (5%) and access provision and quality

improvement of adequate on-site wastewater management

systems for 90% of the total population

� Access to solid waste management system for 80% of urban

household

� The reduction of inundation area of 22.500 hectares in 100

strategic urban areas 22

� Energy Mix

�Oil Utilization : 38,33 %

�New & Renewable Energy Utilization: 16,1 %

� Energy Elasticity : 1,48

� Natural gas infrastructure development e.g. city gas

distribution, natural gas station for transportation (SPBG)

� Power plant additional capacity ± 30.500 MW

� Electrification Ratio : 80,0 %

� Rural Electrification Ratio : 98,9 %

23

24

GOVERNMENT PLANGOVERNMENT PLAN

Central Government

Financing (APBN)

Central Government

Financing (APBN)

Public Private Partnership

(PPP)

Government Plan:

• finance by private

• execute by private

Public Private Partnership

(PPP)

Government Plan:

• finance by private

• execute by private

External

Loans/Grants

(PHLN)

External

Loans/Grants

(PHLN)RUPIAHRUPIAH

Blue BookBlue Book PPP BookPPP Book

GOVERNMENT

GUARANTEE FOR

SOE’S PROJECT

GOVERNMENT

GUARANTEE FOR

SOE’S PROJECT

� RupiahRupiahRupiahRupiah

� External Loan/ GrantExternal Loan/ GrantExternal Loan/ GrantExternal Loan/ Grant

� Government GuaranteeGovernment GuaranteeGovernment GuaranteeGovernment Guarantee

2009200920092009 2010201020102010 2011201120112011 2012201220122012 2013201320132013 2014201420142014

Growth Growth Growth Growth (%)(%)(%)(%) 5,1 5,5 6,2 6,8 7,3 7,7

Nominal GDP Nominal GDP Nominal GDP Nominal GDP

(Rp (Rp (Rp (Rp Trillion)Trillion)Trillion)Trillion) 5.206,5 5.989,5 6.718,3 7.632,3 8.611,0 9.523,3

InfrastruInfrastruInfrastruInfrastruccccturturturture Needs e Needs e Needs e Needs 5%5%5%5%

GDP (Rp. Trillion) GDP (Rp. Trillion) GDP (Rp. Trillion) GDP (Rp. Trillion) 260,3 299,5 335,9 381,6 430,6 476,2

Total Total Total Total of of of of InfrastruInfrastruInfrastruInfrastruccccturturturture Needse Needse Needse Needs (2010 (2010 (2010 (2010 –––– 2014) Rp. 1.923,7 Tril2014) Rp. 1.923,7 Tril2014) Rp. 1.923,7 Tril2014) Rp. 1.923,7 Trillionlionlionlion

26

27

Source 2010 2011 2012 2013 2014 Total

APBN (Central gov.)* 74.518 93.744 110.488 132.979 147.809 559.538

APBD (Local gov) 50.778 57.622 69.031 82.065 95.578 355.074

SOE 47.851 56.950 68.400 77.400 90.250 340.851

Private 41.870 46.900 53.200 60.200 142.500 344.670

Total 215.016 255.216 301.119 352.644 476.137 1.600.132

GapGapGapGap 84.48484.48484.48484.484 80.68480.68480.68480.684 80.48180.48180.48180.481 77.95677.95677.95677.956 63636363 323.668

Source : Kemenko Perekonomian – Bappenas (2010)

* Including DAK

Rp Miliar

TOTAL Rp1.924

T

????????323 T

SOE340 T

APBD355 T

APBN560 T

• Need of Infrastructure investment, 5% GDP, 2010-2014 ���� Rp. 1,924 T, Central Government (APBN) Rp. 560 triliun (including DAK), and other potential budget (SOE, Private and APBD)����Rp. 1,041 triliun.

• To achieve economic growth 7% at the end 2014, ���� gap : Rp 323 triliun.

ESTIMATION OF INFRASTRUCTURE INVESTMENT NEEDS 2010-2014

ESTIMATION OF INFRASTRUCTURE INVESTMENT NEEDS 2010-2014

28

Gap

(*) Including Search and Rescue Agency

MINISTRY/AGENCY 2010 2011 2012 2013 2014 Total

MIN. OF PUBLIC WORKS 46.666,1 58.472,6 56.208,5 55.372,9 52.084,1 268.804,3

MIN. Of TRANSPORTATION(*) 16.008,9 21.735,3 23.259,6 27.775,1 30.984,8 117.763,7

MIN. Of ENERGY AND MINERAL RESOURCES 14.984,2 15.672,7 15.757,6 16.496,5 17.910,0 80.821,0

MIN. Of COMMUNICATION AND INFORMATICS 2.811,07 3.282,6 3.616,5 4.107,2 4.432,2 18.250,2

STATE MIN. Of HOUSING 2.395,7 2.759,5 4.199,4 2.065,1 2.274,8 13.694,5

BPLS 1.216,0 1.286,0 1.456,0 1.516,0 1.737,0 7.211,0

SEARCH AND RESCUE AGENCY 565,7 1.163,8 798,6 902,8 1.046,8 4.477,7

TOTAL 82.648,5 104.372,4 105.296,5 108.235,2 110.469,5 511.022,2

29

*)*)*)*) Exclude financing from local goverment, private, and SOEExclude financing from local goverment, private, and SOEExclude financing from local goverment, private, and SOEExclude financing from local goverment, private, and SOE**) **) **) **) Potential Potential Potential Potential PPP PPP PPP PPP Poject Poject Poject Poject Rp 340 Rp 340 Rp 340 Rp 340 billion billion billion billion for water supply under DG. Housing and Resetlement .for water supply under DG. Housing and Resetlement .for water supply under DG. Housing and Resetlement .for water supply under DG. Housing and Resetlement .

Currently, Currently, Currently, Currently, Water Conveyance Water Conveyance Water Conveyance Water Conveyance inininin Banten (Karian) Banten (Karian) Banten (Karian) Banten (Karian) and and and and LampungLampungLampungLampung are proceed as PPP project.are proceed as PPP project.are proceed as PPP project.are proceed as PPP project.

SESESESECCCCTORTORTORTORPUBLIC PUBLIC PUBLIC PUBLIC

PRIVATE PRIVATE PRIVATE PRIVATE TOTAL TOTAL TOTAL TOTAL RUPIAHRUPIAHRUPIAHRUPIAH PHLN PHLN PHLN PHLN TOTAL TOTAL TOTAL TOTAL

INFRASTRUCTUREINFRASTRUCTUREINFRASTRUCTUREINFRASTRUCTURE 426.513,5426.513,5426.513,5426.513,5 84.508,884.508,884.508,884.508,8 511.022,3 511.022,3 511.022,3 511.022,3 407.110,3 407.110,3 407.110,3 407.110,3 918.132,6918.132,6918.132,6918.132,6

Min. Of Public WorksMin. Of Public WorksMin. Of Public WorksMin. Of Public Works 205.626,2 63.178,1 268.804,3 209.173,0 477.977,3

DG. Water Resources 39.355,1 20.594,4 59.949,5 0,0**) 59.949,5

DG. Highway 120.334,9 28.084,0 148.418,9 201.438,0 349.856,9

DG. Cipta Karya (Housing and Resetlement ) 35.500,2 14.499,8 50.000,0 7.735,0 57.735,0

Others (supporting program) 10.435,9 0,0 10.435,9 0,0 10.435,9

State Min. of Housing 13.694,5 0,0 13.694,5 0,0 13.694,5

Ministry of Transportation 98.113,8 19.650,0 117.763,8 150.987,3 268.751,1

DG. Land Transportation 11.401,0 450,0 11.851,0 1.228,0 13.079,0

DG. Railway 19.992,5 13.800,0 33.792,5 133.935,0 167.727,5

DG. Sea Transportation 28.044,7 5.000,0 33.044,7 5.455,5 38.500,2

DG Air Transportation 19.135,6 400,0 19.535,6 10.368,8 29.904,4

Others (supporting suporting) 19.540,0 0,0 19.540,0 0,0 19.540,0

Ministry of Energy and Mineral Resources 80.821,0 0,0 80.821,0 46.950,0 127.771,0

Min istry of Communication and Informatics 17.420,0 830,2 18.250,2 0,0 18.250,2

Search and Rescue Agency 4.052,7 425,0 4.477,7 0,0 4.477,7

BPLS 7.210,8 0,0 7.210,8 0,0 7.210,8

30

31

Minister of FinanceMinister of NDP M/A/LG/SOE

Proposals

RKPLN (Borrowing Strategy)

Donor/Lender

LendingProgram

Evaluation

DRPHLN-JM (Blue Book)

Synchronization of projects

Preparation of Detailed Activity Plan

Indications of the LG/SOE’sfinancial capacity

Request for Indications of the LG/SOE’s

financial capacity

Enhancing Preparedness

Readiness

DRPPHLN (Green Book)

List of Projects

Funding Commitment

Indication

Fund Allocation

Loan/Grant Agreement

RPKPHLN (Brown Book)

Risk Management

Plan for Project Implementation

Projects of LG/SOE

Projects of M/A

31

32

� The Blue Book is in line with the period of medium-term development plan (5 years), issued after RPJM completed and could be up-dated if needed.

� Currently in transition period, thus the new Blue Book cover period of 2006-2009.

� Contains list of projects that are viable to be funded by external loans / grants and used as basis for preparing development cooperation with Donors/Lenders

� The projects should : � be in line with RPJM and Borrowing Strategy (RKPLN)

� be proposed and signed by Minister / Chairman of Agencies / Head of Local Governments / Director of State Own Enterprises ( One Gate Policy)

� have approval letter from local parliament for project proposed by LG, and from Ministry of SOE for project proposed by SOE

� Only projects listed in DRPHLN-JM will be proceed to financed by foreign assistance.

33

� Contains list of projects that already have indicative funding sources from lender/donor and will be negotiated within 1-2 year ahead.

� The project listed in DRPPHLN should meet certain readiness criteria and ready to be Appraised, and will be put in Daftar Kegiatan (Definite Projects List) after having commitment for funding by lender/donor and put in corresponding annual work plan.

Readiness Criteria:Readiness Criteria:Readiness Criteria:Readiness Criteria:

� detailed activity plan has already been compiled;

� performance indicators on implementation of projects for carrying out monitoring and evaluation have already been compiled;

� a statement is already available on the willingness of the Regional Government/BUMN to prepare funds for implementing projects that constitute the tasks of the relevant Regional Government/BUMN, including the availability of counterpart funds, in accordance with the schedule of implementation;

� counterpart fund for the first-year implementation of the project has already been prepared in the Work Plan of the State Ministry/Agency/Regional Government/BUMN;

� there is already the plan on procurement of land and/or on resettlement, including the availability of funds that are needed in the Work Plan of the State Ministry/Agency/Regional Government/BUMN;

� the draft on the formation of the Project Management Unit and the Project Implementation Unit has already been compiled;

� projects management plan has already been compiled

34

� Contains further information of signed and agreed project for

project implementation.

� Source of information for :

� Monitoring and evaluation during implementation period.

� Preparing DIPA (Government annual budget).

� Assist Executing Agencies to implement projects in timely

manner.

� Should be prepared 3 months after Loan Agreement was signed

(the latest).

35

SEKTOR

Blue Book 2006-2009, Revisision I and II Project Cost

Loan Grant Counterpart Fund Total

Ministry of Transportation 1.381.038 197.648 201.658 1.780.344

Ministry of Public Works 5.781.523 439.433 1.216.392 7.437.348

Ministry of Communication and Information

67.521 20.199 22.329 110.049

Ministry of Energy and Mineral Resources

5.000 76.860 840 82.700

State Ministry of Housing 150.000 21.000 32.550 203.550

PT Merpati 232.444 - - 232.444

PT. KAI 51.000 - 7.650 58.650

PT PLN 6.968.762 38.000 615.671 7.622.433

TOTAL 14.637.288 793.140 2.097.091 17.527.519

36

SECTORProject Cost

Loan Grant Counterpart Fund

Total

Ministry of Transportation

1.818,80 - 285,50 2.104,30

Ministry of Public Works 4.517,06 11,00 574,14 5.102,20

Ministry of Communication and Information

74,85 - 7,49 82,33

Ministry of Energy and Mineral Resources and PT PLN

5.206,80 10,50 700,00 5.917,30

State Ministry of Housing

300,00 - 6,00 306,00

TOTAL 11.917,51 21,50 1.573,13 13.512,13

AS OF 31st DESEMBER 2009

37

Note : Update 31 tt Desember 2009

AS OF 31ST DESEMBER 2009

38

AS OF 31ST DESEMBER 2009

39

40

41

GOVERNMENT

GUARANTEE

GOVERNMENT

GUARANTEE

PROJECTSPROJECTS

BANKBANKSOESOELoan

Example : 10.000 MW PLN Project Phase I

� Transportation infrastructure

� Road infrastructure

� Infrastructure for the distribution of water

� Infrastructure for drinking water

�Waste water infrastructure

� Telecommunication infrastructure

� Electrical power infrastructure

� Oil and natural gas infrastructure.

43

44

Selection and Priority

Complete Test

Tender Process

NegotiationContract Management

• Project Study:• Need Analysis• Multi Criteria

Analysis• Value for Money

Analysis• Public

Consul tation• Identify and set

priority project

• Feasibility study:• Project Technical

Evaluation• Social Cost Benefi t

Analysis• Social and

Env ironment Analysis

• Financial Analysis• Risk Analysis and

Study• Identify the need

of Government Support.

• Choose PPP Form

• Set Project to be tendered

• Build Transaction Team

• Prepare Offered Document

• Pre-Qualification Tender Participants

• Do the Tender• Evaluate Tender• Set Winner

Candidate

• Build Negotiation Team.

• Prepare Negotiation Strategy

• Prepare Risk Allocation Limit

• Negotiate Partnership Agreement Draft

• Set Winner

• Make Sure and Monitor Financial Closing, Construction, Commissioning, Operation, Monitoring, and diversion in the end of concession.

� Government realize the importance of PPP to cover

infrastructure financing gap;

� Measures have been taken on:

�Policy and regulatory framework

� Institutional and financial framework

�Project development facilities

� Government is now in the final stage of completing the

framework by establishing the PPP Central Unit (PPP-CU)

and launching of the PPP Book.

45

� PPP as part of Government policy package 2006

� Issuance of Presidential Regulation 67/2005 and adendum of Presidential Regulation 13/2010 that governing the process of developing PPP projects;

� Issuance of Presidential regulations 36/2005 and 65/2006 on Land Acquisition to outline the rules and procedures for infrastructure projects serving public purpose;

� Minister of Finance Decree No. 38/2006 on risks management of PPP projects

� Various ministerial decrees related to PPP implementation

46

� The Committee on the Policy for the Acceleration of Infrastructure Provision (KKPPI) established under PD42/2005;

� A Risk Management Unit on Fiscal Support already up and running since 2006 in the Ministry of Finance.

� PT. SMI/Indonesia Infrastructure Financing Faciliy (IIFF) established in February 2009

� PDF to fund PPP projects preparation

� PPP Nodes established in the (MEMR, MPW and MOT)

� PPP Units in various Local Governments

� PPP-CU in Bappenas issued PPP Book

� Infrastructure Guarantee Fund (under preparation)

47

InfrastructureSector

Ministries(MPW, MOT,

MEMR, MCI)

KKPPICMEA,

BappenasMOF

PPP Nodes (PPP Units)Project Ident ification, Preparation,

Monitoring & Qual ity Control:

-- Screening-- Due Diligence

-- Bid Documents

-- Trans action & Post-transact ion Proc ess

Secretar iat/P3CUPolicy Analysis ,

Development

and Planning & C oord.Monitoring & Quality Ctr l

Identify Projects

requiring Government Support

Resolv ing cross-sector

issues

Risk Mgt

UnitAssess

Government Support

Issue

Guarantee Fund

Project

Dev.Fac.

& PPP

Book

IIFF,

Land

Fund,

etc.

MOHA

MSOE

SOEsProject Dev’tProject Impl.

&

Monitoring

Local Gov’t &

ROEsProject Development

Project Impl. &

Monitor

� Direct Support (PD 36/2005 and PD 65/2006)

� Land

�Part of Construction Costs

� Government Guarantee (MoFD 38/2006)

�Political Risks

�Project Performance Risks

�Project Location Risks

�Project Operational Risks

�Demand Risks

48

� Based on Presidential Instruction (Inpres) No. 5/2008 on Economic Development Focus 2008-2009

� To confirm list of PPP Projects in the Government pipeline;

� To ensure that the PPP project planning is transparent and preparations are done properly;

� As an instrument to monitor the progress of PPP implementation;

� As a mean for cross-sector and inter-region synchronization and coordination for PPP project preparation

� As a mean for Public Consultation on PPP projects

49

50

POTENTIAL PR0JECTS

PRIORITY PROJECTS

PROJECTS READY FOR OFFER

1. Conformity with the National/Regional Medium Ter m Development Plan and the infrastructure sector’s st rategi plan;

2. Conformity of the project’s location with the spa tial plan;3. Linkage between the infrastructure sector and reg ional

area;4. Cost recovery potential

1.1.1.1. Included in the list of PPP Potential projects or proposed by tIncluded in the list of PPP Potential projects or proposed by tIncluded in the list of PPP Potential projects or proposed by tIncluded in the list of PPP Potential projects or proposed by the he he he contracting agency as unsolicited project;contracting agency as unsolicited project;contracting agency as unsolicited project;contracting agency as unsolicited project;

2.2.2.2. PrePrePrePre----FS shows that the project is feasible (legal, technical, FS shows that the project is feasible (legal, technical, FS shows that the project is feasible (legal, technical, FS shows that the project is feasible (legal, technical, economic and financial);economic and financial);economic and financial);economic and financial);

3.3.3.3. Project risks identified and allocated properly;Project risks identified and allocated properly;Project risks identified and allocated properly;Project risks identified and allocated properly;4.4.4.4. PPP Modality defined; PPP Modality defined; PPP Modality defined; PPP Modality defined;

5.5.5.5. Government support identified; Government support identified; Government support identified; Government support identified;

1.1.1.1. Bidding documents completed;Bidding documents completed;Bidding documents completed;Bidding documents completed;2.2.2.2. PPP Procurement Team formed and capable to transact project;PPP Procurement Team formed and capable to transact project;PPP Procurement Team formed and capable to transact project;PPP Procurement Team formed and capable to transact project;

3.3.3.3. Procurement schedule defined and agreed upon;Procurement schedule defined and agreed upon;Procurement schedule defined and agreed upon;Procurement schedule defined and agreed upon;4.4.4.4. Government support (if applicable) has been approved and Government support (if applicable) has been approved and Government support (if applicable) has been approved and Government support (if applicable) has been approved and

allocatedallocatedallocatedallocated

51

52

53

54

55

56565656

ProjectsProjectsProjectsProjectsProjectsProjectsProjectsProjectsEst. Project CostEst. Project CostEst. Project CostEst. Project CostEst. Project CostEst. Project CostEst. Project CostEst. Project Cost( US$ million )( US$ million )( US$ million )( US$ million )( US$ million )( US$ million )( US$ million )( US$ million )

StatusStatusStatusStatusStatusStatusStatusStatus

Central Java CoalCentral Java Coal--Fired Power PlantFired Power Plant 3,0003,000 RFP was issued in 2010RFP was issued in 2010

ManggaraiManggarai––Soekarno Hatta Airport Rail LinkSoekarno Hatta Airport Rail Link 700700 RFP will be issued in 2011RFP will be issued in 2011

Umbulan Water Supply Umbulan Water Supply 200200 EOI issued in 2010EOI issued in 2010

Jatiluhur Water Supply ProjectJatiluhur Water Supply Project 380380 Project preparationProject preparation

Bandung WasteBandung Waste--toto--EnergyEnergy 1,0001,000 EOI will be issued in 2010EOI will be issued in 2010

Tanah Ampo Cruise Ship TerminalTanah Ampo Cruise Ship Terminal 7575--100100 Project preparationProject preparation

Central Kalimantan Coal RailwayCentral Kalimantan Coal Railway 2,2002,200 RFP issued in November 2010RFP issued in November 2010

Kota Bandung Integrated Terminal Kota Bandung Integrated Terminal 2525 Project preparationProject preparation

Kertajati International AirportKertajati International Airport 1,4001,400 Project preparationProject preparation

Jakarta MonorailJakarta Monorail 475475 Project evaluation for retenderProject evaluation for retender

Cisumdawu Toll RoadCisumdawu Toll Road 590590 Land acquisition and govLand acquisition and gov’’t support t support

MedanMedan--KualanamuKualanamu--Tebing Tinggi Toll RoadTebing Tinggi Toll Road 476476 Land acquisition and govLand acquisition and gov’’t supportt support

Tanjung Priok Access Toll RoadTanjung Priok Access Toll Road 641641 ConstructionConstruction

Selat Sunda Bridge ( Linking Java Selat Sunda Bridge ( Linking Java –– Sumatra )Sumatra ) 15,00015,000 Project preparationProject preparation

57575757

58585858

� Opportunities are widely open for Opportunities are widely open for Opportunities are widely open for Opportunities are widely open for EUEUEUEU Business entity and Business entity and Business entity and Business entity and

Indonesian partner in Infrastructure Development in Indonesian partner in Infrastructure Development in Indonesian partner in Infrastructure Development in Indonesian partner in Infrastructure Development in

Indonesia, i.e consultancy, EPC (Engineering, Indonesia, i.e consultancy, EPC (Engineering, Indonesia, i.e consultancy, EPC (Engineering, Indonesia, i.e consultancy, EPC (Engineering,

Procurement, & Construction), Supplier, Investment, Procurement, & Construction), Supplier, Investment, Procurement, & Construction), Supplier, Investment, Procurement, & Construction), Supplier, Investment,

etc.etc.etc.etc.

� The involvement of The involvement of The involvement of The involvement of EUEUEUEUBusiness entity and Indonesian Business entity and Indonesian Business entity and Indonesian Business entity and Indonesian

partner could be in the area of:partner could be in the area of:partner could be in the area of:partner could be in the area of:� Projects financed by Projects financed by Projects financed by Projects financed by EU EU EU EU Loans and GrantsLoans and GrantsLoans and GrantsLoans and Grants

� Projects financed by multilateral donor such as World Bank, ADB,Projects financed by multilateral donor such as World Bank, ADB,Projects financed by multilateral donor such as World Bank, ADB,Projects financed by multilateral donor such as World Bank, ADB, EU, EU, EU, EU,

etcetcetcetc

� PPP Projects PPP Projects PPP Projects PPP Projects

60

THANK YOUTHANK YOU