Download Bambang Susantono Coordinating Ministry for Economic Affairs The Republic of Indonesia

Bambang Susantono
Deputy Minister for Infrastructure and Regional Development
Coordinating Ministry for Economic Affairs
The Republic of Indonesia
Seoul, September, 2007
Investment Needs for Infrastructure in Indonesia
Infrastructure Annual Investment Needs 2005-2010
7–8%
of
4–5%
Of
GDP
Annual Funding
Gap (US$ 17.8
billion and will
be filled by
Private Sector)
GDP
3%
Of GDP
Average Annual
Investment Needs
(US$ 22 billion)
Average Central
and Local
Government
Budget
Allocation (US$
4.2 billion)
Government’s ability
has been limited by
budgetary
constraints.
Current economic
circumstances
dictate the need to
resort to private
sector participation
Indonesia : Macroeconomic Outlook
Economic Growth
% Change in GDP
6.8%
6.3 %
5.48 %
4-5 %
3- 4 %
2000-2003 2004-2005
2006
2007
-
*) based on RAPBN-P 2007
2008
**) based on RAPBN 2008
Public Debt Ratio
75%
% of GDP
Domestic
External
60%
45%
30%
15%
0%
2003
2004
2005
2006
2007
Policy Packages 2006
Investment
Climate
Improvement
Infrastructure
Financial
1
Investment Law & Procedure
2
Tax & Custom Reform
3
Labor & Immigration
4
Trade Licenses
5
Cross Sector Strategic Policy Reform
6
Sector Restructuring, Corporatisation and Policy Reform
7
Regulation on natural monopoly & investment protection
8
Clear separation on the role of policy maker, regulator,
contracting agency, and operator
9
Coordination Monetary & Fiscal Authority
10
Financial Institution (Banking & Non Banking)
11
Capital Market and SOE Privatization
4
Presidential Instruction (Inpres) 6/2007
•
As a continuation or carry over from the
policy package 2006 on various areas
such as:
•
•
•
•
•
Investment Climate Policy Package;
Infrastructure Policy Package;
Finance Policy Package
Additional focus in 2007 is a SmallMedium Scale Enterprises Policy Package
Consist of various mid and long term
programs and policies that should be
completed by end of 2007
KKPPI -
National Committee on Accelerating Infrastructure Provision
Presidential Regulation No. 42/2005
Chairman
Coordinating Minister for Economic Affairs
Executive Chairman
State Minister of National Planning –
Head of Bappenas
Board of Member
Minister
of
Finance
Secretary
of Cabinet
Minister of
SOE
Minister of
Public Works, Minister of
Transportation, Minister of MEMR,
Minister of Communication
Minister of
Home
Affairs
Secretariat
Risk
Management
Unit
CIIF
Communication
R&D
1st Secretary
Deputy for Infrastructure &
Regional Devt, CMEA
2nd Secretary
Deputy for Infrastructure,
Bappenas
PPP Center
P3 Nodes
Tasks
1.To formulate strategies
on the coordination for
acceleration of
infrastructure provision
2.To coordinate and
monitor the
implementation of
policies for Infrastructure
provision in the various
ministries and local
government
3.To formulate policies on
the implementation of
Public Service
Obligation on the
infrastructure provision
4.To determine efforts
required to solve various
issues relating to
infrastructure
development
6
PPP Framework - Presidential Regulation No. 67/2005
Modes
ƒ
Public – Private Partnership
of Cooperation
ƒ
Businesses License
ƒ
Competitive basis
ƒ
Unsolicited project
Procurement
Proper
ƒ
ƒ
Consistency with medium term national plan
Consistency with spatial plan
Due Diligence
ƒ
Assessment with regional infrastructure
development plan
Project Setting
Tariff & Subsidy
Government
Support
ƒ
Preparation Document
ƒ
Project Prioritization
ƒ
ƒ
Setting & Adjustment tariff
Compensation level for
economic & social project
ƒ
ƒ
Risk Allocation Framework
Admission of Fiscal Support
Operation
Guideline
&
Manual
(OGM)
Perpres 67/2005,
issued on 9
November, 2005,
defines the crosssector regulatory
framework for the
private provision of
infrastructure
ƒ Provides a clear and
sound framework for
the preparation and
contracting of PPP
projects;
ƒ As a replacement of
previous Presidential
Decree No. 7 / 1998;
ƒ Basic principles of
competition,
transparency,
accountability and
fairness
7
Risk Management Framework
Minister of Finance Regulation No. PMK 38/2006
‰
Government is willing to bear or share, namely certain types of political, project performance,
and demand risks;
‰
Government could consider some types of contingent support, and provide criteria to be used
in deciding the form and amount of Government support;
‰
Government has provide the procedures to be followed in evaluating and responding to
requests for Government support, including making the needed budgetary provision;
‰
Requirements for monitoring and reporting on the evolution of project risks.
Propose for
Govt Support
Eligibility & Priority
Ministries /
Non Ministerial
Agencies
KKPPI
Contracting
Agencies
KKPPI
Secretariat
SOE
P3
Center
*)
*) CMEA Regulation No. 4/2006
Risk Allocation
&
Fiscal Risk
Risk
Management
Unit
Decision
On
Govt Support
Minister
Of
Finance
ƒ
Fiscal support is
admissible:
ƒ
Fiscal support
must be
affordable;
ƒ
Annual quota for
fiscal support will
be variable,
depending on the
country’s fiscal
position
MoF Regulation No. PMK 38/2006
8
Infrastructure Sector Policy Highlight
Road & Toll Road
Water & Sanitation
Telecommunication
New Road Law
Law No.
38/2004
Law on Water
Resources
Law
No.7/2004
Interconnection
regulation
MCI regulation
No. 8/2006
GR on toll road
GR
No.15/2005
GR on Supply
GR
No.16/2005
Regulation on
Retain Revenue
GR No.
28/2005
Energy & Power
Transportation
GR on electricity
procurement &
utilization
GR No.
3/2005
New Rail
Transport Law
Law no
23/2007
Establishment New
Electricity Law
Submitted to
parliament
Draft new laws on
sea, air, and land
transport
Submitted to
parliament
New Energy Law
Law no
30/2007
Land &
Government Investment
New Land
Acquisition Law
Presidential
Regulation
No.36/2005 &
No.65/2006,
Per Ka BPN
3/2007
New Government
Investment
Regulation
Government
Regulation
No. 8/2007
9
Infrastructure Fund, Land Acquisition Fund, and Guarantee Fund
Land Acquisition
Fund
‰
‰
Guarantee Fund
Badan Layanan Umum, Public Service Agency as a unit
within Toll Road Regulatory Body (BPJT) will run the
service
‰
To reduce the cost of finance to infrastructure projects in
Indonesia
‰
A commercially-managed fund to be able more flexible
and responsive, while following best commercial practice
‰
Infrastructure Fund
Provision government seeds of capital in the form of
revolving fund to finance land acquisition
The RMU is in charge in designing the concept, including
setting up the legal vehicle, identification of assets,
obtaining technical assistance, and procuring management
fund.
‰
As an alternative sources of fund for infrastructure
financing
‰
To attract different sources of capital :
Bilateral/multilateral, domestic capital market, private
equity fund,etc
‰
Establishment a financial institution within MOF – work is
on going
‰
Seed capital from state budget has been set aside and will
be enhanced gradually over time
Project
Preparation
Project
Biddings
Construction
Operation
Key
elements to
attract
private
participation
(provisional
until
Indonesia
becomes
investment
grade)
Important
as a
complement
to mobilize
additional
capital
(will expand
after
investment
grade)
10
Creation of PPP Network
KKPPI
PPP Center under KKPPI
Permenko 01/M.EKON/05/2006
Secretariat
MoF
Risk
Management
Unit
Secretariat
‰ Centralized capacity to coordinate,
consolidate, and enhance public-private
transactions;
‰ Provide a strategic infrastructure
development plan and a road map for
investment;
‰ Provide Best Practice Guidelines for PPP
transactions;
‰ Create and manage a Project Development
Facility;
Line Ministry
PPP Center
PPP Nodes
‰ Networking and coordinating with the
Ministerial PPP Nodes;
‰ Study Independent Regulatory Body to
dismantle dual function of SOEs.
PPP Nodes
Risk Management Unit
MoF Regulation No.PMK 38/2006
11
Public-Private Partnership Network (P3 Network)
Future
Now
P3 Unit
CMEA
P3 Centre
(CMEA,BAPPENAS,
MOF)
P3 Unit
BAPPENAS
P3 Unit
MOF
P3 Unit
MPW
P3 Unit
MPW
P3 Unit
Min
Com &
INfo
P3 Unit
MOC
P3 Unit
MEMR
P3 Unit
MEMR
P3 Unit
MOC
LOC GOVT
SOE
12
BKPM
Infrastructure : Project Development Facilities (PDF)
Project Development Facilities aims to improve the quality of project preparation which will be executed using
the Private Public Partnership (PPP)
Project Proposal
From Local
Government
Approved by
Technical
Ministries
PDF Support for PPP Project
Preparation
KKPPI
List of priority
project
Bappenas
Approval for
PDF allocation
FS
Tender
Project
prep
Tender
Negotiation
Implementation
Decreasing PDF Support:
FS: 75% ; Tender prep: 50%; Negotiation: 25%
Increasing Local Government Contribution:
FS: 25% ; Tender prep: 50%; Negotiation: 75%
13
Status of 91 Projects offered in Indonesia
Infrastructure Summit 2005
Request for PQ,
PQ & Request for
Proposal
Award &
Concession
Agreement
Construction
Operation
TOTAL
Sector
Planning
Preparation to
Prequalification
Electricity / Power
Plant
1
5
4
2
-
-
12
Gas Pipeline
-
3
-
3
-
-
6
Transportation
5
3
-
-
2
-
10
Drinking Water
17
2
1
1
2
1
24
Toll Road
7
4
3
20
4
-
38
Telecommunication
1
-
-
-
-
-
1
31
17
8
26
8
1
91
TOTAL
14
10 Model Projects
Sector
Project
Margagiri Ketapang Ferry
Terminal
Transportation
Specification
Investment
Cost (USD
Miilion)
1.2 mil
pax/year
95.0
Recruitment of consultant for
preparing tender document
350 m berth
179.0
Feasibilty and Legal studies are still
ongoing
177.12 km
870.0
Negotiation with the preferred
qualified winner
Medan - Kualanamu
16 km
167.0
Preparation for market sounding
Tangerang Water
Supply
900 l/s
33.7
Selection process
Bandung Water
Supply
450 l/s
30.7
Tender document & concession
preparation
Dumai Water
Supply
500 l/s
44.0
Tender document & concession
agreement preparation.
Pasuruan
500 MW
275
Gas supply study is still on going
Central Java Coal
Fired
600 MW
1200
Finalization agreement with IFC
30,000 km fibre
optic network
1,500
Finalization of business model
Lamong Bay
Container Port (Ext
of Tanjung Perak)
Solo – Kertosono
Toll Road
Water Supply
Power
Telecommunication
Status
Palapa Ring
15
Infrastructure Priority Action Plan 2007
Regulatory
Framework
1. Acceleration of amendment of Transport Laws (MoT):
Sea, Air, and Land Transport
2. Acceleration of amendment of Electricity Law (MEMR)
Project Preparation
1. 10 Model Project Execution
2. Operationalization of Project Development Facility
(Bappenas)
Government
Support
1. Implementation of Infrastructure Fund (MoF)
2. Implementation of Guarantee Fund (MoF)
3. Implementation of Land Acquisition Fund (BLU MPW)
Institutional
1. Regular Communication with stakeholders: chief editors
meeting, KADIN, foreign chamber of commerce, investment
climate working groups and other stakeholders
2. Strengthening of KKPPI Secretariat, P3 Center and P3 Nodes
3. Capacity Building of Executing Agencies (line ministries
and agencies)
Coordinating Ministry For Economic Affairs - 2007
16
Coordinating Ministry for Economic Affairs
Republic of Indonesia
Korea, October 2007
Coordinating Ministry For Economic Affairs - 2007
17