Risk Mitigation Strategy for Public Private Partnership (PPP) of Airport Infrastructure Development in Indonesia

Abstract

The capacity of Indonesian Government to grow the country to become developed country in 2025 as mentioned in The Master Plan for Acceleration and Expansion of Indonesia’s Economic Development (abbreviated MP3EI) faces many challenges, one of them is financial capacity. Huge archipelago like Indonesia needs to be connected by good infrastructure, especially an airport, and it is needed enough funding for the government to make an equitable development. The government realizes the limitation or gap in funding the infrastructure needs. The government comes with the concept to form the cooperation with private sectors as known as a Public Private Partnership (PPP). The PPP schemes are expected to fulfill the financial problems in infrastructure service providing. Therefore, the aim of the study is to develop risk mitigation strategy for airport infrastructure and expected to solve the lack of succession of PPP. The research study was conducted by collecting data from Indonesian airports. The data used were primary and secondary data with validity test and reliability also descriptive analysis method. The primary based on field survey, while secondary according to the study on various literatures of the success with the implementation of PPP in Indonesia and abroad. The findings and recommendations are risk response and risk strategy in order to solve of each risk that already identified. Risk response can be: Retention, Avoidance, Reduction, or Transfer.