PUPR continues to explore infrastructure financing
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - PUPR terus eksplorasi pembiayaan infrastruktur
2 March 2023
Jakarta - The Public Works and Housing (PUPR) Ministry is continuously exploring various infrastructure construction financing innovations to cope with the limited state budget (APBN) for infrastructure construction financing. The implementation of the innovative financing scheme in the PUPR Ministry has helped the completion of many major infrastructure construction projects that would not have been completed with the state budget alone.
“Innovative financing is not only public-private partnership (PPP), but also includes the land procurement funding scheme from the State Asset Management Agency (LMAN) and the land bridging fund to overcome the limited budget from the government to procure lands. Through innovative financing for land procurement and the land bridging fund, Trans-Java toll road could be completed in 2019,” PUPR Minister Basuki Hadimuljono said during a panel discussion with Finance Minister Sri Mulyani at the 13th anniversary of PT Penjaminan Infrastruktur Indonesia (PII) titled Innovation Financing in Unity in Jakarta on Wednesday (1/3/2023).
According to Minister Basuki, an innovative financing that has been implemented is the cross-subsidy tender. To accelerate the construction of Trans-Sumatra toll road, the PUPR Ministry is implementing the innovation of a tender where the winner is whoever can construct Trans-Sumatra toll road the longest.
“The PUPR Ministry has implemented this innovation on the tenders of five toll segments of Trans-Java, which include Semarang-Batang and Serang-Panimbang. We received 83 km that are used to construct Trans-Sumatra,” Minister Basuki said.
Besides that, Minister Basuki said that there is the PPP scheme that uses availability payment. That scheme is not only for construction, but also road maintenance.
“The PUPR Ministry has implemented it for Riau Eastern Highway, South Sumatra Eastern Highway, and CH Bridge Duplication on Java Island,” Minister Basuki said.
In the drinking water sector, through the innovative financing scheme, the PUPR Ministry is providing a solution for clean drinking water in Jakarta with two PPP regional drinking water supply system (SPAM) projects, namely Jatiluhur I Regional SPAM with a capacity of 4,000 litres per second and Karian-Serpong Regional SPAM with a capacity of 3,200 litres per second. Besides that, Djuanda Regional SPAM is currently being prepared to have an output of 2,054 litres per second.
Minister Basuki revealed that, until now, PT PII’s guarantees for PPP projects in the public works and housing sector has reached 20 projects worth Rp205.43 trillion. The projects consist of 15 toll road projects, namely Balikpapan-Samarinda toll road, Manado-Bitung toll road, South Jakarta-Cikampek toll road, Yogyakarta-Bawen toll road, Solo-Yogyakarta-Kulonprogo toll road, Probolinggi-Banyuwangi toll road, Gilimanuk-Mengwi toll road, Pandaan-Malang toll road, Batang-Semarang toll road, Semarang-Demak toll road, Krian-Bunder toll road, Patimban Access toll road, Serang-Panimbang toll road, Cisumdawi toll road, and Jakarta-Cikampek II Elevated toll road.
There are two road preservation projects, namely Riau Eastern Highway and South Sumatra Eastern Highway. There is one bridge project, which is CH Bridge Duplication on Java Island. There are two regional SPAM projects, namely Jatiluhur I Regional SPAM and Karian-Serpong Regional SPAM.
“Out of the 20 projects, 10 toll road segments are operational, partially and fully. Ten other projects are in construction, land procurement, and financial close,” Minister Basuki said.
