Key Improvements in Infrastructure Delivery in Indonesia Joseph - PowerPoint PPT Presentation

Key Improvements in Infrastructure Delivery in Indonesia Joseph Tobing, Director of Finance Committee for Acceleration of Priority Infrastructure Delivery August 2017

Agenda KPPIP, National Strategic Projects (PSN) and Priority Projects Issues and Challenges Latest Policy Development 2

Agenda KPPIP, National Strategic Projects (PSN) and Priority Projects Issues and Challenges Latest Policy Development 3

KPPIP is formed as a center of excellence for priority projects acceleration and preparation to achieve infrastructure development target KPPIP is mandated by Presidential Regulation No. 75/2014 j.o. Presidential Regulation No. 122/2016 in decision-making, project involvement from planning and capacity building for human resource . Through PR No. 122/2016, there are 2 new additional ministry as the member of KPPIP KPPIP MEMBERS SOME FUNCTIONS OF KPPIP Coordinating Minister of Economic Affairs Established standard quality of Pre-Feasibility 1 Providing OBC 1 facility for top-down projects o Study/Outline Business Case (OBC) Monitoring and debottlenecking of projects on economic o Provided facilities for review and revision/re-do issues 2 and/or other project preparation (e.g: Coordinating Minister of Maritime Affairs – New Member Environmental Impact Assessment (EIA)) Overseeing and performs debottlenecking effort o Preparing action plans, carry out monitoring 3 especially for issues in energy and transportation activities as well as conduc debottlenecking projects strategies for priority projects Minister of Finance Reviewing and approving Government support and Determine strategies and policies in the 4 o guarantee infrastructure sector Providing PDF 2 facility for PPP projects o Minister of National Development Planning/Bappenas NEW MANDATES and FACILITES Assessing and providing OBC facility for bottom-up o projects Infrastructure sectors which can be listed in the 1 Developing Pre-Feasibility standard and quality guidelines Priority Projects, for example: oil and gas, o education, industrial zone, tourism and health Minister of Agrarian and Spatial Planning (BPN) Special Procurement Facility within KPPIP, such 2 o Debottlenecking on issues related to land acquisition as Direct Appointment (up to IDR 500 million) and supporting acceleration efforts and Direct Appointment of Multilateral Agency for project preparation facility purpose. Minister of Environment & Forestry – New Member Supporting environmental permitting process o 3 Consulting Panel System to allow 5-7 acceleration, IPPKH, and land clearing inside forest companies/ institutions to sit in the panel. area 1 OBC: Outline Business Case; 2 PDF: Project Development Facility 4

As stipulated by Pres. Reg. No. 75/2014, KPPIP was mandated to execute six main tasks KPPIP’s six main tasks as stipulated in Pres. Reg. No. 75/2014 1. Development of pre-feasibility study (OBC*) quality standard and General Funding Scheme Options revise/re-do when necessary (3-6 months) 1. State Budget Coordinate between the project owner** 2. Determination of Priority Projects and Bappenas related to secure funding • Top down projects (from President/Vice President) (State Budget, Regional Budget, ODA) • Bottom Up Project (Proposed by Line Ministries and Regional Govt) 2. SOE appointment 3. Determination of funding scheme & source for priority projects SOE appointment aims to accelerate implementation and leverage SOE financial capacity. 4. Monitoring & Debottlenecking KPPIP assists development of Action Plans and monitor debottlenecking efforts 3. PPP/ Strategic Funding PPP Unit at MoF to coordinate FBC* development and do transaction 5. Determine Strategy and Policy for Infrastructure Delivery Acceleration advisory to implement PPP projects (involving internationally reputable consultant ) . 6. Facilitate capacity and institutional building related to Priority Infrastructure delivery PSN Monitoring & Evaluation including debottlenecking high level issues (additional) * OBC (Outline Business Case) is the output of pre-feasibility study. FBC (Final Business Case) is the output of feasibility study. ** Project owner is the ministry, agency head, regional heads, SOE/ROE heads established as the responsible party in priority infrastructure delivery. 5

Government has set project pipelines for infrastructure provision in 2015-2019 Definition These are projects that are listed in RPJMN and most of the projects are included in RENSTRA (Strategic Plans) of each related technical Ministry/Institution Represent 245 PSN and 2 Programs which have strategic criteria across nation as stipulated under Presidential Regulation No. 3/2016 j.o No. 58/2017 Represent 37 Priority Projects which Priority Projects have a high economic impact and are stipulated through Coordinating Minister of Economic Affairs Regulation and will be monitored and supported by Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 6

National Medium Term Plan (RPJMN) 2015-2019 Logistic Related Banda Aceh Sea toll concept as a means to support Indonesia in becoming the Miangas Belawan world maritime axis. Kuala Tanjung Maratua •develop 24 new seaports Pontianak Bitung Dumai •increase number of substantial Singkawang Batam Pohuwato vessels (pioneer cargo, transport Maloy Halmahera vessels, pioneer crossing vessels) Padang Muara Jayapura Sorong Teweh Tojo Una- •develop 60 crossing ports Pangkal Una Pinang Taria Enggano Palangkaraya Banjarmasin Sultan Strengthen connectivity through air Ambon Kenyam Hassanuddin Namniwel transport infrastructure Aboy Makassar development Panjang Tj. Priok Tj. Perak Kertajati • develop 15 new airports Koroway Merauke Cilacap Batu Moa • develop air cargo facilities in 6 Lombok locations Location of 24 new seaports & 15 new airports Kupang • increase number of pioneer Source: Bappenas airplanes Develop urban transport Reduce logistic cost by improving railway Improve transport efficiency by road infrastructure development and maintenance • develop Bus Rapid Transit develop new tracks in Java, Sumatra, •develop 2,650 km of new roads (BRT) in 29 cities Sulawesi, and Kalimantan: •develop 1,000 km of new toll roads • develop Mass Rapid Transit  •rehabilitate 46,770 km of existing road 2,159 km inter-urban railways (MRT) in 6 metropolis and 17  1,099 km urban railways large cities. Energy Related Achieve electrification ratio of 96.6% by Achieving food sovereignty through Ensure efficiency of fuel production 2019 through generating capacity irrigation system improvement by optimizing improvement domestic refineries • develop 33 new dams and 30 •develop power plants with total capacity •build new oil refineries of hydropower plants of 35,000 MW 2x300,000 barrels • expand 1 million ha irrigation system •Expand existing refineries in • rehabilitate existing irrigation system Cilacap and Balongan 7

Due to the State Budget limitation, there is an opportunity for private investors to contribute the 36.52% of the required investment National Gov’t ~ USD 110.3 bill National and Budgets ~ 29.88% 2) Regional Budgets Total Need of ~ USD 42 bill Regional Gov’t Strategic Budgets ~ 11.37% Infrastructure Investment 1) etc ~ 36.52%) } ~ USD 82 bill SOEs ~ 22.23% (USD 368.9 Alternative bill) 3) Financing Private Investment Financing Gap (PPPs, Off Balance Schemes ~ USD 134.9 bill Sheet, Loan, Obligations, NOTES: 1)Hypothetical number, not for quotation. Official number of needs only include budget ceiling for National and Regional Budgets as approved by Ministry of Finance in January 2015. 2)Portion of National Budgets based on agreed budget ceiling by the Ministry of Finance as proposed by the National Development Planning Ministry. 3)All estimates only based on the large investment and rehabilitation projects, e.g., not calculating the operational costs in detail. Based on conversion rate of IDR 13,000 per USD 8

Under Presidential Reg. No. 58/2017, KPPIP selected 245 projects and 2 programs to be listed as National Strategic Projects (PSN) - estimated total investment of US$322.8 billion 27 61 Projects 24 13 Projects Projects Projects US$13.0 Bn US$43.4 Bn US$49.0 Bn US$34.2 Bn 93 1 2 Programs Projects National Proyek Projects 10 12 Projects US$100 Bn 15 US$81.9 Bn Projects US$0.8 Bn PSN includes 15 sectors at project level and 2 sectors at program level Project WATER & TECH- INDUSTRI- IRRIGA- OIL FISHERY ROAD SEAPORT AIRPORT HOUSING HOUSING IRIGASI SMELTER SEA DIKE RAILWAY DAM SANITA- AL ZONE TION NOLOGY REFINERY TION 74 30 54 7 4 12 1 23 10 8 3 3 7 6 1 9 Projects Projects Projects Projects Projects Projects Project Projects Projects Projects Projects Projects Projects Projects Project Program Electricity 1 Small- Airplane 1 PROGRAM Medium PROGRAM Exchange rate: US$ 1 = IDR 13,000 9