Government Encourages PPP Scheme in Accelerating Infrastructure Development in Indonesia
Jakarta - The government through the Ministry of Public Works and Public Housing (PUPR) continues to develop infrastructure in order to improve the nation's competitiveness. However, not all infrastructure is built using funding from the State / Regional Budget (APBN / APBD). The involvement of the private sector continues to be encouraged through various models of Government and Business Entity Cooperation (PPP) / Public Private Partnership (PPP).
The ability of the 2020-2024 state budget is projected to only be able to meet 30 percent or around Rp. 623 trillion of the total budget requirement for infrastructure provision of Rp. 2,058 trillion. The budget needs include the Water Resources sector of Rp 577 trillion, the Road and Bridge sector of Rp 573 trillion, the housing sector of Rp 128 trillion, and the housing sector of Rp 780 trillion.
Head of the Toll Road Regulatory Agency (BPJT) Danang Parikesit said, in addition to providing support in financing innovation, the private sector is also expected to provide other innovations in the field of technology so as to increase efficiency in infrastructure development.
"The involvement of the private sector has the effect of leverage / leverage from the results of its investment, so that profits can be used for other infrastructure development," said Danang representing PUPR Minister Basuki Hadimuljono in the High Level Dialogue on Indo Pacific Cooperation forum on Wednesday afternoon (03/20/2019).
Danang said that the private sector is still more interested in toll road concessions in toll roads with high daily traffic volumes in urban areas.
"This should be a challenge for the private sector to join in the construction of toll roads in sections with low financial feasibility. One way is to innovate the development of the area around the toll road being built, so that not only expect revenues from toll road tariffs, "he said.
So far, the government has also provided viability gap fund (VGF) support in the form of guarantees and funding support from the State Budget for the construction of part of the toll road construction, thereby increasing the financial feasibility of a toll road segment.
With the development of the area around the toll road, it will provide added value for regional development. "The private sector as investors benefited from the increase in the volume of traffic on the toll roads that were built. While the growing industries and settlements will contribute to employment, "he said.
Danang said, the government is ready to facilitate innovative ideas on regional development along the toll road being built.
In this forum various state representatives present shared experiences in infrastructure development. "This becomes important so that there is no repetition of the same mistakes in development," he said.
