PPP Scheme Research Articles

Initial study of the Palu-Parigi By-pass road policy in Central Sulawesi Province, Indonesia

This research aims to do the assessing the feasibility of the Public-Private Partnership project in investing in the construction of the Palu-Parigi By-pass road through a PPP financing scheme, thereby providing opportunities for the private sector to participate in the provision of special road infrastructure. In this context, experimental criteria for determining Value for Money (VFM) are applied using the PPP model, to evaluate projects. The main objective also emphasizes the provision of greater VFM Goods through private financing, through conventional methods that are economical, efficient and effective. Furthermore, financial performance measurement reports apply several methods, including Payback Period (PP), Net Present Value (NPV), and Internal Rate of Return (IRR) which determine the feasibility and time required for returns on invested capital. The previous Economic Feasibility Study of the Palu-Parigi By-pass Road Construction project also showed an EIRR value of 20.1% in 2014, illustrating the economic development of this work. In connection with the limitations currently faced by the Regional Budget Agency of Central Sulawesi Province, the next PPP scheme is recommended for road construction by prioritizing infrastructure completion after the 28 September 2018 earthquake and the COVID-19 pandemic. The DBFMT (Design–Build–Finance–Maintenance–Transfer) model was also applied to the project, with GCA responsible for design, construction, financing, periodic maintenance and transfer at the end of the collaboration agreement.

Regional Government Cooperation with Business Entities for Efficiency in the Public Street Lighting Sector for the Potential to Increase Purwakarta Regency's Original Regional Income

This research aims to analyze the implementation of Regional Government Cooperation with Business Entities (KPBU) in the Public Street Lighting (PJU) sector in Purwakarta district. The method used in this research is a qualitative method with a descriptive approach with secondary data from books and other sources that support the discussion of this research, as well as media and internet documents, included in the data category. This research shows that if government collaboration with PPP is successful, several things must be considered. Relationships, resources, networks, organizations. In other words, this collaboration is strategically important for both parties. parties and must complement each other, information from both parties must be considered and maintained. Mutual trust is important, especially the efficiency of PJU costs/budgets in the APBD. The implementation of the PPP policy is included in the category of complex cooperation because the mechanism for payment of services is based on payment from savings, the Government does not bear the initial costs (no investment) and does not bear the risk of state losses (zero risk). PPP scheme PJU business entities with unsolicited projects have so far not found any potential complaints or indications of state financial losses because so far they have still complied with the precautionary principle.

Analysis of Risk Factors and Gaps in Government Risk Allocation with Private Investor Risk Perceptions in the Toll Road Sector Using the PPP Scheme in Indonesia

Infrastructure development has an important role in a country's economic growth. Based on the 2020-2024 APBN plan, the total budget requirement for providing infrastructure is IDR. 2,058tn, where the government budget is 30% of the portion of budgeted funding needs. Due to the need for infrastructure development, the government initiated Government Cooperation with Business Entities (KPBU) in various infrastructure sector to accelerate infrastructure development in Indonesia, including toll road. This research was conducted to investigate identified risks along with risk mapping analysis to find out whether there is a gap in risk allocation between the government and private investors in implementing toll road PPPs in Indonesia. The method of this research is a qualitative study with data collection methods through interviews and questionnaires. From the research conducted, it is known that there are 7 (Seven) risk categories with 17 (Seventeen) risk events that are considered important by private investors. From the research conducted, it is known that there are 11 risk allocations that are appropriate and 6 allocations that are not in accordance with the risk perception of private investors in the toll road sector with the PPP scheme in Indonesia, namely the risk of differences in interest on land bailout loans, increases in construction costs, the risk of inflation rates and interest rates, the risk of rate adjustments being lower than projected, the risk of general regulatory (and tax) changes and the risk of political force majeure.

INVESTMENT ANALYSIS OF KARANGAGUNG TUBAN FISHING PORT DEVELOPMENT WITH PPP AVAILABILITY PAYMENT FINANCING

As the largest maritime country, Indonesia holds tremendous potential in fisheries and marine resources, serving as a primary driver for national economic growth. Despite the substantial potential for fishery activities in the Karangagung region, limited infrastructure and government budget constraints hinder the optimization of these activities. This research aims to conduct an investment analysis for the development of a fishery port in Karangagung, utilizing the Government and Business Entity Cooperation (PPP) scheme with Availability Payment financing. The investment analysis methods employed encompass the calculation of Net Present Value (NPV), Internal Rate of Return (IRR), and Benefit Cost Ratio (BCR), considering Availability Payment financing. Additionally, the study will analyze the Life Cycle Cost (LCC) in the development of the Karangagung Fishery Port. Therefore, this research aims to provide a comprehensive overview of both financial and non-financial potential benefits derived from the development of the Karangagung fishery port. Under the Availability Payment scheme, the Project Responsible Party will compensate the Business Entity reasonably for investments, operational costs, and fair profits. They will also be granted permission to provide these services for a specific duration. Upon the conclusion of this period, all assets will become government property. The analysis results indicate that the PPP Availability Payment financing scheme yields a positive NPV, an IRR value of 7.26% with returns in the 24th year, and a BCR value exceeding 1. Hence, this PPP scheme can be deemed feasible for implementation in the Karangagung Fishery Port development project.

The Challenges and Opportunities of Small-Scale Public-Private Partnership Scheme to Finance Indonesia Local Street Lighting Equipment Projects : The Case of the Madiun Regency

The Public-Private Partnerships Scheme (PPP) has become an important option in overcoming the gap in infrastructure financing needs. From the total number of PPP projects implemented in several countries, it was found that the number of small-scale PPP projects was relatively greater than mega PPP projects. In line with this, in the Indonesian context, regional governments are expected to be able to innovate infrastructure financing, including by using the PPP scheme. The Madiun Regency Street Lighting Equipment (APJ) PPP project is the first small-scale PPP that has completed the auction process and signed the Cooperation Agreement in Indonesia. Using the qualitative method through the relevant case study approach, this research succeeded in identifying several challenges as well as opportunities for more massive implementation potentials of small-scale PPP in APJ in the future as follows: (1) optimal risk allocations; (2) the strong commitment of the regional government as the party responsible for the cooperation project; (3) financial aspects/parameters accepted by the market; and (4) doable projects.

Critical Success Factors in the Implementation of the PPP Scheme in the Wosusokas SPAM Project (Wonogiri, Surakarta, Sukoharjo, and Karanganyar)

Infrastructure development is one of the Indonesian government's programs in the RPJMN stage 4 for 2019–2024. The need for significant infrastructure development cannot be met with the state budget alone. Fiscal limitations narrow the space for the government to carry out infrastructure development. Therefore, to overcome these problems, one of the efforts made by the Indonesian government is to implement a PPP scheme. The Wosusokas SPAM project is a drinking water supply infrastructure project in the Wonogiri, Surakarta, Sukoharjo, and Karanganyar areas that uses a PPP scheme. This study uses the scoping review method to collect and analyze critical success factors that play a role in implementing PPP projects. Based on previous studies, implementing the Wosusokas SPAM project can pay attention to five critical success factors: the commitment of partners, the strength of consortiums, asset quality, the political environment, and the national PPP unit. By implementing the five critical success factors from the planning stage to contract execution, the Wosusokas SPAM project is hoped to be implemented more effectively and efficiently.

Meeting investors’ demands in PPP project to improve enthusiasm for participating in green and low-carbon

The use of PPP scheme to guide private investors to actively participate in green and low-carbon development is conducive to filling the funding gap of domestic green and low-carbon transformation. It is important to meet the demands of investors to ensure that investors can permanently participate in PPP low-carbon projects. Due to the high financing leverage, wide coverage, and government's right to initiate in PPP project, the investors' demands also include the enhancement of social reputation, and the acquisition of future project market resources besides investment income. To fully understand the purpose of the investors' participation in PPP projects and provide guidance for further analysis of behavioural influence path, the study systematically analyzes the demands of investors and develops a demand measurement scale. Firstly, based on the characteristics of PPP scheme, six investor's demands were identified. Secondly, through theoretical analysis, the measurement items of investors' demand were constructed, and 269 valid data were collected through questionnaire. Finally, carrying out factor analysis, reliability and validity test, the items were revised to get the formal investor demand scale. The research provides guidance for improving the demand satisfaction of investors, which is conducive to attracting private capital to participate in the green low-carbon development strategy of PPP projects, and provides financial guarantee for achieving the ‘double carbon’ goal.

The Influence of Capital and Transportation in the Implementation of the Public Private Partnership Scheme

Indonesia as a country that is currently carrying out developments requires a lot of funds to carry out infrastructure development. The methods used carrying out infrastructure development is by implementing a Public Private Partnership or PPP scheme. Several experts have put forward the definition of PPP, which is contained in No. 38 of 2015 Presidential Regulation concerning Government Cooperation with Business Entities in the Provision of Infrastructure. In reality the implementation of the PPP scheme is said to be able to influence several things including the use of capital and transportation.

Evaluation Criteria of Facilities Management Through Public-Private Partnership (PPP) Scheme

The delivery of facilities management (FM) services through the Public-Private Partnership scheme has been increasing in recent years. The long-term success of this partnership depends mainly on the choice of the best-suited private partner. However, an issue regarding the unavailability of evaluation criteria was discovered when selecting the best FM service providers within this scheme. Preliminary research shows that evaluation criteria are the fundamental elements of the FM procurement process, yet little attention is given to this subject. The evaluation criteria are fundamental in choosing the most qualified FM service providers, especially ina complex project like PPP. Thus, this research aims to identify the evaluation criteria for FM through the PPP scheme. An in-depth literature review was conducted in this paper. The focus of the review was associated with the evaluation criteria of FM service providers in the PPP scheme. This paper identified four criteria that should be considered, namely clients’ requirements, external environment/factors, project characteristics, and financial advantages. The outcome of this paper can be used as a theoretical basis for the development of the FM procurement framework for the PPP scheme.

FINANCING MANAGEMENT ANALYSIS OF PASIR KOPO DAM CONSTRUCTION PROJECT IN BANTEN PROVINCE

The strategic program of <span lang="EN-US">the</span> Republic of Indonesia<span lang="EN-US">’s Government</span> is <span lang="EN-US">stated</span> in the National Medium-Term Development Plan (RPJMN) for 2020 – 2024<span lang="EN-US">.</span><span lang="EN-US">One of its target</span><span lang="EN-US">is</span><span lang="EN-US">construction of</span> eighteen (18) multipurpose dams. Pasir Kopo Dam is included in the RPJMN target and its expected to provide raw water<span lang="EN-US"> supply</span>, irrigation water<span lang="EN-US">,</span> and increase the potential for electrical energy through <span lang="EN-US">Micro-Hydro Power Plant (</span>PLTMH<span lang="EN-US">)</span>. <span lang="EN-US">However</span>, the dam construction requires a <span lang="EN-US">huge</span> project costs<span lang="EN-US"> which can’t be handled solely by State Budget (APBN)</span>.<span lang="EN-US"> There is funding gap in State Budget for financing the dam construction, so another financing alternative is needed.</span> Public Private Partnership (PPP<span lang="EN-US">)</span><span lang="EN-US">is </span>an alternative financing scheme for dam construction<span lang="EN-US">. PPP is influenced by economic feasibility analysis and identification of influential project risks. The selection of an investment-worthy PPP Scheme in the Pasir Kopo Dam Development Project is expected to be mutually beneficial for all parties involved in the cooperation.</span>

Critical Success Factor for Labuhan Bajo Airport Public-Private Partnership Investment Pilot Project

The government often faces budget constraints and financial gaps between necessity and real allocation funds. It makes them must be more selective when prioritizing infrastructure development. Moreover, providing adequate transport infrastructure and sustainability is crucial for the government. Government must innovate by creating a conducive investment climate to encourage the participation of private and state-owned enterprises in infrastructure financing. Innovation financing through Private Funding and PPP schemes is directed to infrastructure with high economic and financial feasibility. PPP schemes in the air transportation sector particularly in Indonesia have not been successfully implemented until 2018. Therefore, the government has initiated several PPP projects as pilot projects to encourage PPP implementation in the Transportation Sector. One of them is Labuan Bajo International Airport. Labuan Bajo Airport is in West Manggarai Regency as a gateway to enter the Komodo Island area. Labuan Bajo airport is one key infrastructure that supports The Big 5 Super Priority Destinations of Indonesia by the Indonesia Ministry of Tourism and Creative Economy. This paper aims to examine critical success factors and interfere factors of the PPP pilot project for Labuan Bajo Airport. This paper uses an exploratory descriptive method to examine every factor that supports the success of the PPP implementation process in the air transportation sector based on qualitative data. The study will also explore the planning process through analysis of PPP Book documents from 2010-2020 (content analysis) to historically examine the process of proposing PPP project activities and examine the factors that support the success or delay the PPP pilot project within the Ministry of Transportation based on stakeholder approach. The planning and preparation stage plays a critical role in efforts to prepare comprehensive, reliable, and feasible projects. The feasible project can minimize project uncertainty and gain attract private sector investment.

Application of The PPP Scheme on The Tourism-Transportation, Case Study : The Concept Of Palopo City Tourism

The stipulation of the Palopo City Regional Tourism Development Master Plan 2021 – 2025 makes the Palopo City tourism sector quite optimistic after the beginning of the pandemic. Until 2030, Palopo City targets 250,000 domestic tourists and 1800 foreign tourists. The tourism potential of Palopo City, especially in urban areas is quite promising with the construction of a culinary center and souvenirs, public space activities, and the development of culinary businesses. These potentials must be supported by adequate facilities and infrastructure, including accessibility. Meanwhile, public transportation in Palopo City is considered inadequate and not integrated with each other. The concept of Palopo City Tourism offers the integration of tourism activities in the urban areas of the city of Palopo by providing integrated tourism transportation modes, equipped with supporting infrastructure such as bus stops. However, the implementation of the concept will be constrained by funding problems given the limited regional finances and the demand to prioritize sectors that are more strategic than tourism. This paper will see how the implementation of the PPP scheme in the tourism sector, especially in the transportation aspect, namely in the concept of Palopo City Tourism, both in development, operation and potential benefits. From the results of the analysis of movement patterns and the location of tourist objects, 3 optimal routes were chosen that could accommodate the movement of tourists, namely the southern route, western route and northern route. From the results of the analysis of infrastructure needs, it is necessary to develop infrastructure in the form of shelters and pedestrian paths and their accessories at tourist attraction points and several commercial areas. In addition, several PPP financing schemes are also proposed which are considered suitable for the City Tour Palopo concept, including Concessions and Affermage/Lease schemes, such as Service Contracts and Management Contracts, Design-Build-Finance-Operate/Maintain (DBFO, DBFM or DBFO). /M), Build-Own-Lease-Transfer (BOLT).

A socio-economic study for establishing an environment-friendly metro in Kuwait

Purpose This paper aimed to study the optimal way to implement and subsequently manage the new metropolitan lines in the Kuwait city as well as to justify them from a social and economic-financial viability standpoint and the most important aspects of transport infrastructure projects viability. The implementation of new modes of transport in an urban environment requires the study of several factors that allow their incorporation on the transport system in the most efficient method. These factors include reviewing the organization of the transport system. The concept of transport system organization, financing models and common trends was defined. Finally, the Public Transport Authority was created to define global objectives and establish specific policies to achieve them was suggested.Design/methodology/approach After the analysis of the “status quo” of transport systems organization, the financing and management schemes, both infrastructure projects and the provision of rail service were analysed. The characteristics of the PPP scheme (Public–Private Participation) contract, advantages and disadvantages, its structure, and the definition and share of risk (matrix of risk, rights and obligations of the parties) as a key element of the PPP contracts were defined. From this point onwards, the legal framework in force in Kuwait was analysed, particularly the administrative and commercial regulations applying to this project and the authors verified that the economic-financial viability analysis suggested before can be established under this framework.Findings For the viability of these alternatives, the authors developed a simulation economic-financial model that reflects Financial Statements for the “Society Vehicle Project” and are considered some minimum thresholds of profitability, both from the viewpoint of the partners sponsoring the project as from the standpoint of lenders, which make attractive participation of private initiative. Finally, there was a short socio-economic analysis to justify the project implementation from a social standpoint. It analyses and quantifies the reduction of operating expenses of other modes of transport, travelling times, accident rates, environmental pollution etc. All these factors affect the quality of life of the population of Kuwait and are the main reason to carry out this project. Several recommendations were raised that aimed at preparing the projects, bidding and selection of private partner and the articulation and implementation of projects.Originality/value This research contributes to the existing body of knowledge through setting the framework for metro projects in arid regions with the hottest temperature on Earth such as Kuwait where such projects are missing completely. This work will be very helpful to governments and municipalities in taking investment decisions. It sets the strategy for utilizing the best of decision-making theory, identifying the reliability advantages and finding the larger economic effects. This work identified, through the analysis of alternative management options generally used in underground and rail projects in different parts of the world, the most convenient alternative in developing countries. It also clearly showed, through the analysis carried out on governmental contributions, how to obtain economic viability for such types of projects. Finally, it helped drawing a roadmap for preparing the projects, bidding and selection of private partner and the articulation and implementation of projects in Kuwait and Gulf Cooperation Countries (GCC).

Analisis Dampak Ekonomi dan Sosial Pembangunan Infrastruktur di Indonesia

Infrastructure projects are expected to deliver positive economic and social impact to the community. However, the model to analyze the economic and social impact is still limited. Therefore, this study aims to develop an economic and social impact model to be used for study the impact of infrastructure projects. The research focuses on several case studies of infrastructure projects which guaranteed by Indonesia Infrastructure Guarantee Fund (IIGF) both PPP (Public-Private-Partnership) Scheme and non-PPP Scheme on telco, water, tourism Sector. These sectors are believed to represented the major infrastructure development that cover both local, national, and international perspectives. The analytical method used to measure economic impacts from infrastructure development is a quantitative approach by using following attributes: Sectoral Economic Analysis, Potential Economic Analysis, Growth Accounting, Input-Output Table Analysis, and Statistical Forecasting. While, to analyse the social impact of infrastructure development, quantitative and qualitative approaches are used by In-depth Interview through questionnaire filling technique and Social Impact Assessment (SIA) method. In addition, this study also used legal approach method. The results show various economic impacts of project investment development, both in terms of potential and realization. Meanwhile, in terms of social impacts, there are various community responses to the realization of project development.

Government’s responsibility towards investor’s loss in toll development on PPP agreements due to delay in land acquisitions

Until now, the slow process of land acquisition in toll road infrastructure development projects is still one of the obstacles to the completion of a infrastructure development project. The delay in the land acquisition process is detrimental to parties involved in PPP, especially investors. This study uses a normative juridical approach with analytical descriptive research specifications. Data collection techniques are carried out by means of literature study to obtain secondary data and interviews to obtain primary data, then the data obtained is analyzed using qualitative juridical methods, namely by taking inventory, systematically arranging, connecting with each other related to the problems studied with the enactment of the provisions of the regulations. one does not conflict with other regulations. The result of this research is a form of responsibility from the Government due to delays in land acquisition, namely compensation in the form of extension of the concession period on a toll road project with a PPP scheme, and consideration of additional initial tariffs on toll roads based on inflation, capital, construction time and increase. the concession period and also the imposition of fines in a business contract, and the last resort for resolving disputes over the PPP agreement through non-litigation or arbitration institutions based on Presidential Regulation Number 38 of 2015. How to cite item: Aulia, D. Z., Chandrawulan, AA., Trisnamansyah P. (2021). Government’s responsibility towards investor’s loss in toll development on PPP agreements due to delay in landa cquisitions. Jurnal Cakrawala Hukum , 12(1), 21-31.doi:10.26905/idjch.v12i1. 4337.

Mapping of the governance problem in the implementation of an unsolicited public-private partnership project (the case of Jatiluhur regional water supply phase I)

Governance instruments and their links to network relations are seen as principal elements of the success of PPP. The PPP implementation also deals with multi-level regulation. Jatiluhur Regional water supply is considered to have a governance complexity and potential to face various obstacles that will affect the smoothness of project implementation compared to others. Jatiluhur Regional water supply was initiated by a business entity (unsolicited), faced a setback in realization and was halted in the preparation of the procurement process so that the project had not yet reached financial close after two years. The research aims at identifying the governance problem of the Jatiluhur Regional water supply project implementation causing the delays. This is qualitative research using content analysis and Social Network Analysis (SNA). The gap on PPP regulations, some risks that have not been well mitigated, slow decision making, weaknesses of local governments and off-takers roles in the network, the problem of determining the Government as the Contracting Agency (GCA), mapping of ownership conflicts and actor distrust of GCA competency are the problems of governance found in the case of Jatiluhur regional water supply implementation. In order to accelerate the project implementation, this study suggests the optimization of multi-level governance by, first, revising the PPP Regulations in terms of further explaining the unsolicited project of PPP and the criteria in the determination of GCA. Further, the optimization requires determination of the new GCA in strengthening the role of actors in coordination and decision making, as well as in risk mitigation and latent conflict management. Jatiluhur regional water supply project is also known as the first regional water supply using the PPP scheme in Indonesia. Therefore, the multi-level governance perspective of the PPP implementation can be seen as a precedent for the next project of water supply infrastructure in Indonesia which uses PPP scheme.

Dealing with Private and Public Space Interface Problem in TOD Area. Case study of Batuceper Station, Tangerang

The Indonesian government has implemented the new strategy of Transit-Oriented Development (TOD) in dealing with urban issues, especially to overcome some of the urbanization effects such as housing deficiency, traffic jams, and private car usage. Under the PPP scheme, national private companies have initiated developing apartments in TOD of Batuceper station, located at the most populated district in the city of Tangerang. The mixture of residences with other public activities at TOD creates problems of privacy as the concern of accessibility and connectivity in the development principles. An in-depth study to examine this problem is required. Thus, this paper reviews various research related to the private and public spatial interface in the mix facilities area. This paper analyses the possible private and private space interface strategy between an apartment and other functions or activities at TOD Batuceper station development. The findings of this paper suggested that apartment design at the TOD area is a complex problem, and the proper strategy to solve such spatial interface problems depends on its linking hierarchy with other activities in the development area.

The applicability of public-private partnership contracts for infrastructure projects as a function of their specificity

The Crimean bridge, as Russia’s largest infrastructure project, can be considered a marginal case of the relative effectiveness of public financing without the involvement of private partners. According to the formalization employed, the implementation of this project through market coordination leads to additional costs due to the rising level of specificity. The increase in these costs is not linear and is more intensive than growth in the level of specificity. Introduction of an NPV-efficiency assessment tool into the analysis allows us to prove a limiting reduction of this interval for considering the risk profile of the project under сonsideration. Reserves required due to the risk of rising budget expenditures due to the project’s scale actually does not exist according to these reasons: increases in the discount rate is more intensive than the rise of negative expectations; the rise of additional equity premiums is more intensive than the rise of the risk-free rate itself. Thus, the Crimean bridge project should be considered a marginal case of the relative effectiveness of direct state funding comparing PPP scheme.

Collaborative Governance: Managing Residential Areas In Malang Based on Public Private Partnership

Slum areas are one of in Malang problems as the second largest city in East Java, especially along the Brantas River in the area of Jodipan village. According to Malang Local Government, Brantas River area is an area designated as a Green Space. Rearrangement of this area has not been done by the Local Government, and the area has turned into a densely populated area and Tourism Village. Guys Pro student group cooperates with PT. Indana Paint and supported by Malang Mural community are trying to promote the area. Although this violates existing regulations, the government still legalizes colorful villages as tourism areas. This is because the government has not been able to provide enough space to relocate citizen. Collaboration needs to be done by the Government with private sector to relocate citizen and rearrange tourism areas on the banks of Brantas River. PPP scheme will help government in handling costs and resources by the private sector. This research was conducted with descriptive qualitative and literature review methods. This research seeks to examine the innovations that the government can do in improving the governance of that area through citizen relocation and structuring of the Brantas river bank through PPP collaboration.

Comparative Study on Financial Calculation Indicators of PPP Project

Financial calculation is an important part in the PPP project investment decision. In PPP practice, the selection of financial calculation indicators is quite arbitrary, which is prone to fairness imbalance between PPP projects to a certain extent and even affects project decision-making. Financial calculation indicators usually used in the PPP scheme design include financial internal rate of return, return on investment, reasonable profit rate, annual interest rate, etc. Based on the economic meanings of the four types of indicators and combined with specific cases, the study analyzes the quantitative relation and applicability between different indicators. When the PPP project involves as long a period as 20 to 30 years, it is recommended to use dynamic indicators (financial internal rate of return) rather than static indicators (return on investment, reasonable profit rate, annual interest rate) in the project investment decision. When dynamic indicators are selected, it is more suitable for the public sector to adopt the internal rate of return on investment without considering the financing cost and debt repayment. For private sector, the internal rate of return of the project capital reflects the profit after the financial leverage using equity fund, with more realistic reference significance.