Structure of Infrastructure Project Selection Criteria in Indonesia: A Systematic Approach

Seng Hansen,Tiendung Le,Eric Too

doi:10.13189/cea.2021.090611

Abstract

Infrastructure project selection is a challenging decision-making problem. While previous literature has pointed out relevant criteria for infrastructure project selection, these criteria need to be contextualized for the effective selection of appropriate projects. This paper aims to identify these criteria in an Indonesian context. A systematic literature review was adopted to identify infrastructure project selection criteria from both local and international practices. It was coupled with twenty semi-structured interviews to draw knowledge and experiences from the Indonesian experts. Finally, a questionnaire survey was distributed and the data was analyzed using factor analysis to obtain the underlying structure of infrastructure project selection criteria. The review of literature outlined 23 selection criteria, out of which 19 criteria were considered important in the Indonesian context. Factor analysis further produced a structure of selection criteria that comprises of five major components: technical criteria, administrative criteria, strategic fit criteria, risks & politics criteria, and innovation. This study contributes by structuring infrastructure project selection criteria that also marks the transitional change from a conventional to a modern decision-making technique as adopted in Indonesia. Thus, it provides a useful reference for decision makers in making a context-based infrastructure project selection.

Highlights

As the largest economy in Southeast Asia, the Indonesian government is fully aware of the reciprocal relationship between infrastructure development and economic growth
Using a systematic research approach, this study has successfully established 19 key criteria for infrastructure project selection in Indonesian context which are further grouped into five components: technical criteria, administrative criteria, strategic fit criteria, risks & politics criteria, and innovation
These final criteria were established from a bigger set of criteria which have been refined using factor analysis

Summary

Introduction

As the largest economy in Southeast Asia, the Indonesian government is fully aware of the reciprocal relationship between infrastructure development and economic growth. There has been an infrastructure deficit as well as challenges such as limited investment resources and poor budget allocation. To address these issues, it is imperative that government agencies in Indonesia continually explore new breakthroughs. One possible breakthrough is the need to explore innovative project selection in infrastructure decision-making process for infrastructure project selection. The selection of infrastructure projects in Indonesia is not yet managed optimally with many internal and external challenges including poor identification of strategic needs, coordination problems, politicized decision-making, and the absence of infrastructure project selection framework[1]. Better approaches to decision-making practices for infrastructure project selection are, indispensable for achieving strategic objectives of infrastructure development. The development of many modern decision-making techniques may provide an opportunity for developing a Decision-Making Framework (DMF) for infrastructure project selection

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Methods

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Discussion

Conclusion