PUPR Ministry offers 34 PPP projects
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 - Kementerian PUPR tawaran 34 proyek KPBU
6 September 2024
By Heru Febrianto
Jakarta, ID – The Public Works and Housing (PUPR) Ministry is continuously expanding its cooperation in financing infrastructure development through the public-private partnership (PPP) scheme.
Infrastructure Financing Director General of the PUPR Ministry, Triono Junoasmono, stated that for Fiscal Year (FY) 2025, the PUPR Ministry, through the Infrastructure Financing Directorate General, is targeting to implement 34 projects in the public works and housing sector through the PPP scheme.
“These include 14 PPP projects in the water resources sector, 10 projects in the roads and bridges sector, seven in the settlement sector, and three in the housing sector,” Triono said in his press statement on Thursday (5/9/2024).
He mentioned that in the water resources sector, there are three projects currently in the preparation stage with an estimated investment value of Rp10.78 trillion. These projects include Jambo Aye Irrigation Area in North Aceh and East Aceh in Aceh Province, Lambakan Dam in Paser Regency in East Kalimantan Province, and Cidanau Dam in Serang Regency in Banten Province.
“Meanwhile, projects in the water resources sector that are in the transaction stage reach 12, with an investment value of Rp32.11 trillion. These projects include Bodri Dam in Kendal in Central Java Province, Merangin Dam in Merangin in Jambi Province, and Lhok Guci Irrigation Area in West Aceh in Aceh Province,” he stated.
According to him, in the water resources sector, there are currently two projects in the process of completing a power purchase agreement (PPA) with PT PLN. These projects are the dam maintenance and infrastructure provision at Bintang Bano Micro-Hydro Power Plant in West Sumbawa in West Nusa Tenggara (NTB) Province and the hydropower plant infrastructure provision at Tiga Dihaji Dam in South OKU Regency in South Sumatra Province.
In the roads and bridges sector, there are seven toll road projects currently in the preparation stage, spanning 384.1 kilometers (km) and worth Rp124.02 trillion. These include Ciranjang-Padalarang Toll Road in West Java Province, Bandung Intra Urban Toll Road in West Java Province, and Pejagan-Cilacap Toll Road in Central Java Province.
In addition to these, there are Malang-Kepanjen Toll Road in East Java Province, Demak-Tuban Toll Road spanning Central Java and East Java Provinces, Pluit-Airport Toll Road that is part of Tomang-Pluit-Airport (Elevated)-Jakarta Toll Road, and Cilegon-Anyer Toll Road in Banten Province.
“In 2025, there will be three toll road projects spanning 265.5 km and worth Rp91.99 trillion in the transaction stage within the roads and bridges sector. These projects are Gedebage-Tasikmalaya-Ciamis Toll Road in West Java Province, Gilimanuk-Mengwi Toll Road in Bali Province, and South Sentul-West Karawang Toll Road in West Java Province,” Triono said.
Meanwhile, in the settlement sector, there are four projects in the preparation stage. These include Pemali Juana Drinking Water Provision System (SPAM) Idle Capacity Project in Semarang City in Central Java Province, East Kalimantan Regional SPAM in East Kalimantan Province, KIKN SPAM and Wastewater Management System (SPAL) in East Kalimantan Province, and the Sei Gong Reservoir Management project in Batam City and Rempang in Riau Islands Province.
“There are three projects in the settlement sector that will reach the transaction stage in 2025. These projects are Bitung City SPAM in North Sulawesi Province, Lombok Regional SPAM in NTB Province, and Sindangheula Regional SPAM in West Karian in Banten Province.,” Triono explained.
Last but not least, in the housing sector, there are two projects worth Rp1.64 trillion in the transaction stage. These projects are the Pasar Jumat Flat Revitalisation in Lebak Bulus TOD in Jakarta and the Tambak Wedi Flat in Surabaya City in East Java Province.
“Meanwhile, there is another project in the preparation stage, which is the Surabaya City Flat in East Java Province,” he added.
New financing scheme
The government’s budget allocation through the State Budget (APBN) for infrastructure development is limited, but the need for infrastructure financing continues to increase. In the 2015-2019 National Medium-term Development Plan (RPJMN), infrastructure financing reached Rp4,796 trillion, and this amount increased to Rp6,445 trillion in the 2020-2024 RPJMN.
Coordinating Ministry for Economic Affairs Secretary Susiwijono Moegiarso stated that a new scheme is needed to reduce the infrastructure financing burden on the APBN. He noted that infrastructure financing will continue to experience significant increases.
Therefore, the government will launch two new creative financing schemes to develop infrastructure. These schemes are Limited Concession Scheme (LCS) and Land Value Capture (LVC).
The legal basis for LCS has been outlined in Presidential Regulation Number 32 of 2020 on Infrastructure Financing through Limited Management Right, while LVC has been outlined in Presidential Regulation Number 79 of 2024 on the Funding of Infrastructure Provision through Land Value Capture.
“We were asked to be creative in infrastructure financing, so one of the aspects we are boosting is the optimisation of financing through the PPP system, which we are all familiar with. Today, these two creative financing initiatives already have a legal basis in Presidential Regulation 66 and Presidential Regulation 79,” Susi said recently.
Furthermore, he explained that in the 2025-2029 RPJMN, infrastructure investment will be directed towards three main sectors, namely water resources, transportation, and electricity.
Among these three sectors, the transportation sector will receive the largest portion of the financing. Therefore, in light of the substantial infrastructure financing required, the government is continuously encouraging the involvement of the private sector through various mixed financing schemes.
To date, infrastructure financing in the 2020-2025 RPJMN from the private sector has been continuously increasing. Private sector financing is projected to reach Rp2,707 trillion.
“Increasing from Rp1,700 trillion. What does this mean? We want the private sector to contribute more to infrastructure development,” he stated.
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