Pilot project(s) for accelerationIndonesia Business Working Group Jakarta, Indonesia 9 March 2017

System Initiative on Shaping the Future of Long-Term Investing, Infrastructure and Development

April 2017

Business Working Group (BWG) Progress to Date

Since its launch in April 2016, the World Economic Forum Business Working Group (BWG) has served as a platform to foster an enabling environment for private-sector participation in the financing of major infrastructure projects in Indonesia. With the focus primarily on identifying solutions rather than describing challenges, BWG members aim to enhance understanding and achieve consensus on a set of issues that need attention in the short to medium term, as well as gain explicit public and private commitment for their resolution.

Having passed the stage of understanding the country public-private partnership (PPP) landscape and catalysing improvements at a systemic level, the working group is now entering its second phase towards becoming an action-oriented vehicle for project-delivery acceleration.

Consequently, during the upcoming months, the BWG will be focusing exclusively on a pilot project for acceleration. This in-depth project assessment will aim to illustrate the specific issues that are slowing down project delivery in Indonesia, demonstrate the validity of the BWG recommendations formulated over the past year and design a model for replication. It will also serve as an excellent capacity-building exercise by providing much-needed project-specific experience to all parties involved.

To increase the impact and efficiency of this exercise, the group has selected pilot projects that are smaller-scale, require reasonable financing and are expected to deliver significant impact to society.

Pilot Projects for Acceleration

With the objective of facilitating the project implementation process by leveraging skills and expertise represented by the BWG business community, the Ministry of National Development Planning (Bappenas) has nominated four PPP projects for acceleration. These are:

1. Education Infrastructure: Teaching Hospital

2. Integrated Urban Transportation, City of Medan (Rail and Bus)

3. Correctional Facility: Development of Nusakambangan’s Industrial Correctional Institutions

4. Sport Infrastructure: Towards the National Sport Week in Papua 2020

The objective of this BWG gathering was to review the nominated projects, gather the BWG members’ comments and ideas, and select a pilot project for an exhaustive project assessment and acceleration.

Project Review and Selection

As part of the pilot project selection process, the group has further developed the selection criteria as follows:

– Project size/complexity: the BWG community must have the capacity to accelerate the selected project (not too complex, not too easy).

– Project design: the selected project must manifest some issues in its structure or design.

– Role model: the pilot project must have the potential to serve as a role model that can be replicated.

– Impact: the pilot project must have the potential to deliver high impact in the short term. The impact is measured by the project’s “market-making” capacity, its expected social impact as well as its potential to spread knowledge and best practice discipline in structuring and preparing projects.

1. Education Infrastructure: Teaching Hospital Even though some questions were raised regarding the provided financial analysis, the overall project complexity was described as manageable, with the potential to deliver high impact. In addition, the project review will certainly require less government and political interventions and, therefore, represents a higher probability for success.

Selected as a pilot project: YES

2. Integrated Urban Transportation, City of Medan (Rail and Bus) It was generally admitted that even though public transport projects are usually key to governments (in terms of social benefits, development of ancillary businesses and economic corridors, etc.), the sector is rarely profitable for private investors. Additionally, challenges such as politically sensitive pricing and disparities in technology that make it difficult to build-up a local expertise, are necessarily increasing project complexity. That said, the group has acknowledged that public transport companies worldwide are usually not covering their operating costs, which seems to be normal. There is generally a significant need for subventions (some form of capital grant or available payment; rail usually needs 20%-30% of contributions) to make those projects viable and attractive for private investors. Therefore, provided that an appropriate financial support is allocated by the government, the proposed project has been considered as suitable for acceleration.

Selected as a pilot project: YES

3. Correctional Facility: Development of Nusakambangan’s Industrial Correctional InstitutionsThe group has recognized that the project introduces an innovative funding model, which suggests “bundling” the correctional institution with another project to compensate the site investment by revenues from the associated farm. However, several factors were mentioned as impediments for investments. Among those, the objectives of the project have been described as unclear (correctional facility or a farm?) and consequently, questions were raised regarding the stakeholders involved (who is the actual user, developer, ultimate payer…?). This information was considered key as investors will consider differently an investment opportunity in a prison PPP vs in a farming facility. The project has been evaluated as economically unsustainable in its current state; therefore, there is a need for change in the project scope to make it a good pilot project.

Selected as pilot project: NO Recommendation: Restructure and re-scope.

4. Sport Infrastructure: Towards PON XX (National Sport Week) in Papua 2020 Acknowledging that the facility is situated in an attractive location and that the land is granted for free, other elements were highlighted as less positive. The government’s right to use the hotel for at least four months a year (matching with the sports calendar) at a preferential rate (80% of a normal rate) was considered unattractive, bringing an additional risk to the model (loss of opportunity). Additionally, the scope of the project has been described as misleading, based on the fact that the project only requires building a hotel facility. Therefore, the group considered the project not suitable for a PPP scheme.

Selected as pilot project: NO Recommendation: Not suitable for a PPP scheme; use a different delivery method

Conclusion and Next Steps

Based on the above listed criteria, the BWG has selected the following two projects as pilot projects for acceleration:

– Education Infrastructure: Teaching Hospital

– Integrated Urban Transportation, City of Medan (Rail and Bus)

As a next step, the World Economic Forum and the Government of Indonesia will aim to formalize a Memorandum of Understanding, including a formal mandate for pilot projects acceleration. The government would be expected to provide both executive and management leadership throughout the process. Concretely, this would take the form of an assigned project manager who would work as counterpart of the Forum project manager and an executive sponsor at the minister level.

The BWG will then be invited to initiate an in-depth projects assessment, guide the projects’ redesign and scope adjustments with the objective of unlocking their delivery.

BWG Community

Aziz Haydarov, Infrastructure Economist, Asian Development Bank

Rabin Hattari, Public Sector Economist, Asian Development Bank

Vera Kobalia, International Doing Business Adviser, Australia Indonesia Partnership for Economic Governance (AIPEG)

John Heong Holdaway, Infrastructure Adviser, AIPEG

Michaela Grimm, Senior Economist, Allianz SE

Jess Sidhu, Office Leader, Arup Group Ltd

Praneet Garg, Managing Director, Asia Alternatives

Rainier Haryanto, Program Director, Committee for Acceleration of Priority Infrastructure Delivery - KPPIP

Johan De Saeger, Chief Representative, ENGIE

Andi Insandi, Head of Regulatory and Institution Affairs, ENGIE

Donald P. Kanak, Chairman, Eastspring Investments Limited

Alan Darmawan, CEO, Eastspring Investments Indonesia

Nicholas Nash, Group President, Garena Interactive Holding Ltd

Philip Chua, Lead, Government Relations, Garena Interactive Holding Ltd

Chin Hau Boon, Senior Vice President, Infrastructure, GIC Private Limited

David Allen, Senior Manager, Global Infrastructure Hub

Erwandi Hendarta, Senior Partner, Head of Finance & Projects Practice Group, Hadiputranto, Hadinoto & Partners (Baker & McKenzie)

James Cameron, Managing Director, Co-Head of Infrastructure and Real Estate Group, HSBC

Gregoire Bouzereau, Director, Infrastructure and Real Estate Group, HSBC

Adhi Dipo, Infrastructure Specialist, Islamic Development Bank

Indra Nasution, Principal of Islamic Corporation for the Development of the Private Sector, ICD

Ari Soerono, Chief Financial Officer, Indonesia Infrastructure Finance (IIF)

Hilda Savitri, Director & Chief Investment, Indonesia Infrastructure Finance (IIF)

Sinthya Roesly, President Director, Indonesia Infrastructure Guarantee Fund (IIGF)

David Ray, Facility Director, Indonesia Infrastructure Initiative - IndII

Lamtuirida Hutabarat, Senior Investment Officer, International Finance Corporation - IFC

Mesra Eza, Senior Vice President; Head, Infrastructure Global Project Finance, Mizuho Financial Group

Imansyah Imansyah, Deputy Commissioner Strategic Management, Financial Services Authority of Indonesia (OJK)

Jordon Sims, Director, Project Management Institute

Alex Cramb, Lead, Australia, Project Management Institute

John Oehmke, Finance Director, PT Prudential Life Assurance

Sigit Wiryadi, President Director, PT Aberdeen Asset Management

Edy Tuhirman, Chief Executive Officer, PT Asuransi Jiwa Generali

Albertus Alex Hermanto, Director, Group Corporate Finance, PT Gunung Sewu Kencana

Lutfey Siddiqi, Adjunct Professor, Risk Management Institute, National University of Singapore

Josef Winter, Chief Executive Officer and President Director Indonesia, Siemens

Edwin Utama, Partner and Managing Director, The Boston Consulting Group

Steve Dean, Head, Account Management, Regionals, Thomson Reuters Singapore

Raj Kannan, Managing Director, Tusk Advisory

Shuhaela (Ela) Zen, Director, Tusk Advisory

Rezananta F. Pietruschka, Vice-President, Finance and Accounting, Investment, WanaArtha Life

Evelina Fadil Pietruschka, Chairperson, WanaArtha Life

Yanes Matulatuwa, President Director, WanaArtha Life, Indonesia

Simon McCrum, President Director, Willis Towers Watson

Marie Lam-Frendo, Associate Director, Advisory Services, WS Atkins Plc

Dominic Harvey, Chief Executive Officer, Atkins Infrastructure Advisory, WS Atkins Plc

Special Guest

Wismana Adi Suryabrata Deputy Minister for Infrastructure Bappenas - Ministry of Development Planning of Indonesia

Contact details

Andre BelelieuHead of Infrastructure Investors InitiativeWorld Economic Forumandre.belelieu@weforum.org

Katerina LabrousseProject ManagerWorld Economic Forumkaterina.labrousse@weforum.org

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00,0

00 1

,000

,000

1,2

00,0

00

JUM

LAH

PEN

UM

PAN

G B

RT

100%

85%

70%

Mos

t of t

he la

nd h

as b

een

acqu

ired

by g

over

nmen

t, in

clud

ing

the

depo

t lo

catio

n 8.

Env

iron

men

t Stu

dy

AMDA

L st

udy

will

be

com

plet

ed in

201

7

10. F

inan

cial

Rev

iew

12. G

over

nmen

t Gua

rant

ee

11. G

over

nmen

t Sup

port

13. S

ched

ule

of A

ctiv

ities

2016

20

17

2018

20

19

2020

LRT

Desi

gn

Tend

er

Cons

truc

tion

Ope

ratio

n

BRT

Desi

gn

Tend

er

Cons

truc

tion

Ope

ratio

n

The

risks

that

wou

ld b

e gu

aran

teed

are

: •

Polit

ical

and

reg

ulat

ion

risks

. Uns

tabl

e po

litic

al c

ondi

tions

may

cha

nge

regu

latio

ns

whi

ch m

ight

caus

e do

wns

ide

risks

for t

he p

roje

ct.

•Ta

riffs

risk

and

adj

ustm

ents

. The

risk

in d

elay

ing

or n

ot a

pply

ing

tarif

f’s a

djus

tmen

t in

acc

orda

nce

with

the

infla

tion

rate

adj

ustm

ent i

n ev

ery

2 ye

ars.

•

TOD

Risk

: TO

D la

nd o

wne

rshi

p ris

k an

d de

layi

ng ri

ght o

f use

of T

OD

land

risk

.

Gove

rnm

ent s

uppo

rt is

pro

vide

d in

the

form

of l

and

for T

OD

in th

e ce

nter

of t

he c

ity

and

a fe

w o

ther

are

as th

at ca

n be

bui

lt an

d m

anag

ed b

y Bu

sines

s Ent

ities

.

Coop

erat

ion

of s

chem

e al

tern

ativ

e is

BOT

to s

uppo

rt t

he a

vaila

bilit

y of

lan

d fo

r de

velo

pmen

t TO

D fr

om th

e go

vern

men

t for

35

year

s.

9. P

roje

ct S

chem

e

ASSI

STAN

CE IN

PRE

PRAR

ING

PU

BLIC

PRI

VATE

PAR

TNER

SHIP

(PPP

) PRO

JECT

YE

AR 2

016

Info

rmat

ion

Mem

oran

dum

Co

rrec

tiona

l Fac

ilitie

s De

velo

pmen

t of N

usakam

bang

an’s

Indu

stria

l Cor

rect

iona

l Ins

titut

ions

1. Ba

ckgr

ound

Proj

ect N

ame

: N

usak

amba

ngan

’s In

dust

rial

Corr

ectio

nal

Inst

itutio

ns

Gove

rnm

ent C

ontr

actin

g Ag

ency

:

Min

istr

y of

Law

and

Hum

an R

ight

s

Prep

arin

g Ag

ency

:

Min

istr

y of

N

atio

nal

Deve

lopm

ent

Plan

ning

(Bap

pena

s)

Tota

l Pro

ject

Cos

t :

695.

09 ID

R Bi

llion

Conc

essi

on P

erio

d :

25 Y

ears

Loca

tion

: N

usak

amba

ngan

, Ci

laca

p, C

entr

al Ja

va

Pict

ure

1 Lo

catio

n Pr

ojec

t

Nus

akam

bang

an I

sland

man

agem

ent

is un

der

Dire

ctor

ate

Gene

ral

of C

orre

ctio

nal

auth

ority

. Th

ey p

lan

deve

lopm

ent

of t

he i

sland

thr

ough

N

usak

amba

ngan

Isla

nd d

evel

opm

ent

plan

as

Corr

ectio

nal S

peci

al Z

one.

Gov

ernm

ent

plan

to

deve

lop

indu

stria

l co

rrec

tiona

l in

stitu

tions

in

orde

r to

opt

imize

the

ass

et o

f N

usak

amba

ngan

Co

rrec

tiona

l fa

cilit

y, co

nsid

erin

g N

usak

amba

ngan

Isla

nd h

as g

reat

pot

entia

l in

na

tura

l re

sour

ces

whi

ch

can

be

man

aged

pr

oduc

tivel

y to

re

duce

co

rrec

tiona

l fa

cilit

ies

oper

atio

n co

st.

Furt

herm

ore,

dev

elop

men

t of

in

dust

rial c

orre

ctio

nal

inst

itutio

ns w

ill b

e us

ed

as

form

s of

co

achi

ng

inm

ates

in

or

der

to

prep

are

priso

ner r

etur

ned

back

to th

e so

ciet

y.

2. P

roje

ct D

escr

iptio

n

The

indu

stria

l co

rrec

tiona

l in

stitu

tion

will

be

cons

truc

ted

as m

inim

um s

ecur

ity c

orre

ctio

nal

faci

lity

with

max

imum

cap

acity

of

1.20

0 re

siden

ts. T

he in

dust

ry t

hat

will

be

deve

lope

d is

beef

ca

ttle

ind

ustr

y. An

imal

hus

band

ry i

ndus

try

is se

lect

ed a

s th

e ob

ject

ive

of i

ncre

asin

g fo

od

prod

uctio

n be

side

prep

arin

g sk

ills

for p

rison

er b

efor

e re

turn

ed to

soci

ety.

3. P

roje

ct O

bjec

tives

Th

e de

velo

pmen

t of

Th

e in

dust

rial

corr

ectio

nal

inst

itutio

n is

expe

cted

to

in

crea

se th

e ca

paci

ty o

f cor

rect

iona

l fac

ilitie

s an

d to

pr

ovid

e fa

cilit

ies

in

incr

easin

g pr

isone

r’s s

kills

and

fur

ther

mor

e to

sup

port

na

tiona

l foo

d se

curit

y.

Pict

ures

2 C

orre

ctio

n In

dust

ry a

nd C

attle

Bre

edin

g

4. B

usin

ess

Opp

ortu

nity

In

vest

men

t pro

ject

will

be

supp

orte

d by

M

inist

ry o

f Law

and

Hum

an R

ight

s thr

ough

Di

rect

orat

e Ge

nera

l of C

orre

ctio

nal F

acili

ty

thro

ugh

sche

me:

a.

Desig

n, B

uild

, and

Mai

nten

ance

for

dev

elop

men

t of c

orre

ctio

n; a

nd

b.

Desig

n, B

uild

, Ope

ratio

n an

d M

aint

ain

for

deve

lopm

ent o

f ani

mal

hus

band

ry.

Pict

ures

4 A

nim

al H

usba

ndry

Pict

ures

3 L

ivin

g Ro

om fo

r Pris

oner

s

CORR

ECTI

ON

AL

INST

ITU

TIO

N

LIVE

STO

CK

INDU

STRY

5. T

echn

ical

Spe

sific

atio

ns

6. S

ched

ule

of A

ctiv

ities

Pict

ures

5. S

ite P

lan

of P

rison

Activ

ities

20

16

2017

20

18

2019

De

s Q

1 Q

2 Q

3 Q

4 Pr

e M

arke

t Sou

ndin

g M

-2

Tran

sact

ion

Proc

ess/

FBC

Inve

stor

Sel

ectio

n Pr

oces

s

Cont

ract

Sig

ning

Fina

ncia

l Clo

sing

Cons

truc

tion

CO

D

Build

ing

of p

rison

indu

stry

: A.

OFF

ICE

AND

VISI

T RO

OM

B.

BLO

CK O

F IN

MAT

ES

C.BL

OCK

OF

INM

ATES

D.

KITC

HEN

E.

HALL

& G

YM

F.SP

ORT

S FA

CILI

TIES

G.

MO

SQU

E H.

HEAL

TH FA

CILI

TY

Pict

ures

6. S

ite P

lan

of A

nim

al

Husb

andr

y

Build

ing

of a

nim

al h

usba

ndry

in

dust

ry:

A.EM

PLOY

EE’S

DO

RMIT

ORY

B.

MAN

AGEM

ENT

OFF

ICE

C.U

TILI

TY R

OO

M

D.W

ASTE

TRE

ATM

ENT

E.DO

CKIN

G F.

FEED

WAR

EHO

USE

G.

ANIM

AL C

ARE

H.DI

PPIN

G SP

RAY

I.N

URS

ERIE

S CR

ATE

J.IS

OLA

TIO

N C

RATE

K.

COLD

STO

RAGE

L.

SLAU

GHTE

R HO

USE

7. P

PP S

tage

Cu

rren

tly in

the

proc

ess o

f pr

epar

atio

n ph

ase

8. A

MD

AL

9. F

inan

cial

Ana

lysi

s

•Th

e co

rrec

tiona

l ca

paci

ty :

1.20

0 pe

ople

•

Tota

l cow

s: 7

.000

per

cyc

les (

21.0

00 p

er

year

) •

The

lend

ing

rate

s is 1

2% p

er y

ear a

nd th

e w

orki

ng c

apita

l is 1

3 %

per

yea

r;

Requ

ire th

e pr

epar

atio

n of

env

ironm

enta

l im

pact

ana

lysis

stud

y (A

MDA

L)

HASIL

25 TH

KEPU

TUSA

NPro

ject IR

R13,

31%≥

10,35%

Diterim

aEqu

ity IRR

14,41%

≥13,

50%Dite

rima

Projec

t NPV (i

n billio

n)339

Rp

≥-

Rp

Dite

rima

Equity N

PV (in

billion

)470

Rp

≥-

Rp

Dite

rima

Averag

e DSC

R (x)

1,61

≥

1,4

Diterim

aMin

imum D

SCR (

x)1,3

2

≥1,0

Diterim

aPay

back P

eriod (y

ears)

13,30

KE

PUTU

SAN

DITER

IMA

KEPU

TUSA

N KEU

ANGA

N PA

RAME

TER

Sen

siti

vita

s20

Th25

ThSP

C IR

R12

,11%

13,3

1%SP

C N

PV

176,

1

33

9,1

Equ

ity

IRR

12,4

2%14

,41%

Equ

ity

NP

V29

1,1

470,

4

K

ep

utu

san

Dit

ola

kD

ite

rim

a

No

INVE

STM

ENT

COM

POSI

TIO

N

AM

OU

NT

(in m

illio

n)

1 In

vest

men

t of R

PH, c

old

stor

age,

hea

lth fa

cilty

and

secu

rity

syst

em

Rp

42,

037

2

Corr

ectio

n bu

ildin

g R

p

237

,898

3

The

ranc

h bu

ildin

g, o

ffice

bui

ldin

g &

util

ities

R

p

326

,335

4

Proc

essin

g of

Ani

mal

Fee

d R

p

2

40

TO

TAL

Rp

6

06,5

10

5

Fina

ncia

l Cos

ts

Rp

6

06,5

10

In

tere

st D

urin

g Co

nstr

uctio

n R

p

8

1,48

8

Fi

nanc

ial F

ee

Rp

7,

096

Inve

stm

ent T

otal

R

p

695

,094

ST

ART

LOAN

S ID

C T-

1 ID

C T-

2 Fi

nc. F

ee

PIN

J+ID

C+P

EQU

ITY

TOTA

L (in

m

il)

INVE

STM

ENT

LOAN

S

42

4,55

7

16,9

82

42,4

56

4,67

0

48

8,66

5

181,

953

67

0,61

9

CAPE

X LO

ANS

220,

500

22,0

50

2,42

6

24

4,97

6

94

,500

33

9,47

6

TOTA

L

64

5,05

7

16,9

82

64,5

06

7,09

6

73

3,64

1

276,

453

1,01

0,09

4

•Th

e lo

an te

rms f

or c

orre

ctio

n is

10 y

ears

and

th

e lo

an te

rms f

or in

vest

men

t is 1

5 ye

ars

•In

vest

men

t gra

ce p

erio

d co

rrec

tion

is 2

year

s an

d in

vest

men

t gra

ce p

erio

d fo

r ani

mal

hu

sban

dry

is 3

year

s;

•30

% P

rivat

e Eq

uity

; •

70%

Loa

n;

ASSI

STAN

CE IN

PRE

PRAR

ING

PU

BLIC

PRI

VATE

PAR

TNER

SHIP

(PPP

) PRO

JECT

YE

AR 2

016

Info

rmat

ion

Mem

oran

dum

Sp

ort I

nfra

stru

ctur

e To

war

ds o

f PO

N (N

atio

nal S

port

Wee

k) X

X in

Pap

ua 2

020

1. Ba

ckgr

ound

Proj

ect N

ame

: Pa

pua

Spor

ts F

acili

ty –

Man

dala

Sta

dium

Gove

rnm

ent C

ontr

actin

g Ag

ency

:

Gove

rnor

of P

apua

Pro

vinc

e

Impl

emen

tatio

n U

nit

: Ag

ency

of Y

outh

and

Spo

rts o

f Pap

ua P

rovi

nce

Prep

arat

ion

Agen

cy

: M

inist

ry

of

Nat

iona

l De

velo

pmen

t Pl

anni

ng

(Bap

pena

s)

Proj

ect C

ost

: U

S$ 6

0.00

mill

ion

(Spo

rts

Hall

and

Four

-Sta

rs

Hote

l) Co

nces

sion

Per

iod

: 25

Yea

rs

Loca

tion

: Ja

yapu

ra, P

apua

Pict

ure

1 Pr

ojec

t Loc

atio

n

In a

ccor

danc

e w

ith M

inist

ry o

f You

th a

nd

Spor

ts D

ecre

e N

umbe

r 110

Yea

r 201

4, P

apua

pr

ovin

ce w

as se

lect

ed to

hos

t the

Nat

iona

l Sp

orts

Wee

k (P

ON

) XX

in 2

020.

In o

rder

to b

e su

cces

sful

for t

his e

vent

, the

Pap

ua P

rovi

nce

will

pre

pare

spor

ts fa

cilit

ies a

nd it

s su

ppor

ting

infr

astr

uctu

re w

ithin

thre

e ye

ars

(201

6-20

19).

The

prep

arat

ion

of P

ON

XX

will

be

the

star

ting

poin

t for

the

deve

lopm

ent o

f sp

ort i

n Pa

pua

Prov

ince

in a

pro

fess

iona

l m

anne

r. In

fact

, mos

t of t

he e

xist

ing

infr

astr

uctu

re in

Pap

ua a

re st

ill n

eed

to b

e im

prov

ed. I

n ad

ditio

n, th

e sp

orts

faci

litie

s m

ust s

atisf

y na

tiona

l and

inte

rnat

iona

l st

anda

rds.

2. P

roje

ct D

escr

iptio

n

Agen

cy o

f You

th a

nd S

port

s of P

apua

Pr

ovin

ce a

gree

d to

des

igna

te S

port

s St

adiu

m M

anda

la lo

cate

d in

Soa

Siu

as a

ta

rget

of P

ublic

Priv

ate

Part

ners

hip

(PPP

/KPB

U) P

roje

ct. T

he st

adiu

m is

loca

ted

thre

e m

eter

s fro

m th

e go

vern

or's

offic

e an

d ha

s a p

anor

amic

bea

ch o

n th

e no

rth

side.

Fu

rthe

rmor

e, th

e ar

ea n

earb

y M

anda

la

Stad

ium

is p

lann

ed to

be

a co

mm

erci

al

area

, hos

pita

lity

and

culin

ary

area

. Thi

s will

su

ppor

t the

dev

elop

men

t of s

uppo

rtin

g in

fras

truc

ture

such

as h

otel

s.

Man

dala

Sta

dium

doe

s not

curr

ently

fulfi

ll FI

FA st

anda

rds a

nd n

eed

to b

e up

date

d to

fu

lfill

the

inte

rnat

iona

l crit

eria

, thu

s the

st

adiu

m ca

n be

use

d to

car

ry o

ut th

e ga

me

on a

n in

tern

atio

nal s

cale

in th

e fu

ture

.

3. P

roje

ct O

bjec

tives

The

proj

ect i

s exp

ecte

d to

acc

eler

ate

the

deve

lopm

ent o

f spo

rts i

nfra

stru

ctur

e w

ith

natio

nal a

nd in

tern

atio

nal s

tand

ards

in th

e pr

ovin

ce o

f Pap

ua. I

n ad

ditio

n, th

is m

omen

tum

is a

lso u

sed

to e

ncou

rage

the

deve

lopm

ent o

f oth

er su

ppor

ting

infr

astr

uctu

re, s

uch

as ro

ads,

airp

orts

, and

so

on. Pi

ctur

e 2

Man

dala

Sta

dion

Loca

tion

4. B

usin

ess

O

ppor

tuni

ty

The

inve

stm

ent

proj

ects

will

be

supp

orte

d by

the

Papu

a Pr

ovin

ce a

nd

busin

ess e

ntiti

es

thro

ugh

sche

mes

of

Desig

n, B

uild

, O

pera

tion

and

Mai

nten

ance

. Bu

sines

s Ent

ities

also

ha

ve th

e op

port

unity

to

bui

ld a

nd o

pera

te

the

hote

l. Pi

ctur

e 3

Econ

omic

Zon

e in

Jaya

pura

5. T

echn

ical

Spe

cific

atio

ns

The

tech

nica

l spe

cific

atio

ns o

f the

pro

ject

ar

e:

• S

port

s Bui

ldin

g M

anda

la w

ith fo

ur m

ain

z

ones

: Pub

lic Z

one,

Spe

cial

Zon

e, S

ervi

ce

Z

one,

and

Sup

port

; •

Four

-sta

rs H

otel

The

infla

tion

rate

: 7.9

8% (2

014)

Nu

Part

AR

EA (m

2 )

4 st

ars

1 Ba

sem

ent (

park

ing

area

) 15

,000

2

Tran

sit A

rea

(gro

und

floor

) 10

,000

3

Shop

ping

Mal

l (1s

t-3r

d flo

or)

19,5

00

4 Fo

ur S

tars

Hot

el

16,9

40

5 Pe

dest

rian

& R

esta

uran

t Are

a 2,

237

6 Pe

dest

rian

& S

hip/

Dock

Yard

3,

280

7 Se

afro

nt D

evel

opm

ent

49,5

80

8 Re

deve

lopm

ent,

Upg

radi

ng &

Rev

italiz

atio

n sit

e ar

ea

600,

000

9 Ho

tel L

obby

1,

000

10

Spor

ts H

all &

Mul

tipur

pose

Roo

m o

r Bui

ldin

g (2

nd fl

oor)

7,

039

2016

20

17

2018

20

19

2020

Activ

ity

Des

Q1

Q2

Q3

Q4

Pre

Mar

ket S

ound

ing

M-2

Tran

sact

ion

Proc

ess/

FBC

Inve

stor

Sel

ectio

n Pr

oces

s

Cont

ract

Sig

ning

Fina

ncin

g Cl

osin

g

Cons

truc

tion

Star

ting

Ope

ratio

n

6. S

ched

ule

Act

ivity

7. S

tage

s of

KPB

U

9. E

cono

mic

Ana

lysi

s

Biay

aM

anfa

atEI

RREN

PV(m

ilyar

rupi

ah)

BCR

24%

2,77

52.

0-1

0%19

%1,

930

1.6

-20%

16%

1,36

81.

4-3

0%12

%80

71.

3-1

0%16

%1,

646

1.5

-20%

13%

1,08

41.

3-3

0%10

%52

31.

2-1

0%14

%1,

362

1.4

-20%

11%

801

1.2

-30%

8%23

91.

1+3

0%

Para

met

erH

asil

Eval

uasi

Base

cas

e

+10%

+20%

The

bene

fits a

re q

uant

ified

: •

Util

izatio

n of

the

stad

ium

to a

nd

afte

r the

impl

emen

tatio

n of

PO

N

•Em

ploy

men

t •

Savi

ng in

Reg

iona

l Bud

get

(APB

D) fo

r O &

M

•Ec

onom

ic im

prov

emen

t of

tour

ist v

isits

•

Stat

e bu

dget

(APB

N) r

even

ues i

n

th

e fo

rm o

f tax

Curr

ently

in p

repa

ratio

n pr

oces

s.

8. A

MD

AL

AMDA

L do

cum

ent o

f Man

dala

Sta

dium

Re

gion

was

com

plet

ed in

Dec

embe

r 201

6

10. F

inan

cial

Ana

lysi

s

•Ho

tel w

ith a

cap

acity

of 2

37

room

s;

•30

% o

f hot

el ro

oms o

ccup

y fo

r ath

lete

s eve

ry y

ear,

at th

e ra

te o

f 80%

; •

Leve

l gue

sts f

rom

gen

eral

cu

stom

ers (

occu

panc

y ra

te)

an a

vera

ge o

f 80%

; •

The

lend

ing

rate

of 1

2% p

er

year

; •

The

loan

per

iod

of 1

5 ye

ars

with

a g

race

per

iod

of 3

ye

ars;

•

The

infla

tion

rate

of 5

% p

er

year

; •

Priv

ate

equi

ty 3

0%;

•Lo

ans 7

0%;

•Th

e in

crea

se in

hot

el ra

tes

7% p

er y

ear

•Th

e in

crea

se in

oth

er

serv

ices

3%

per

yea

r

Fina

ncial

Pro

jectio

n Ana

lysis

Conc

essio

n Pe

riod

25 ye

ars

Para

met

er

Decis

ion

Proje

ct IR

R 11

,70%

≥ 10

,48%

Appr

oved

Eq

uity I

RR

14,7

9%≥

13,9

3%Ap

prov

ed

Proje

ct N

PV (i

n bil

lion

IDR)

Rp

11

2 ≥

Rp

-Ap

prov

ed

Equit

y NPV

(in

billio

n ID

R)

Rp 1

51

≥ Rp

-

Appr

oved

Av

erag

e DS

CR (x

) 1,

80

≥ 1,

4 Ap

prov

ed

Mini

mum

DSC

R (x

) 1,

22

≥ 1,

0Ap

prov

ed

Payb

ack P

eriod

(Yea

rs)

9,84

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