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PRESENTATION OUTLINE Explains today’s Indonesia economic condition in which many international observers called Indonesia is one of the promising global.

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Presentation on theme: "PRESENTATION OUTLINE Explains today’s Indonesia economic condition in which many international observers called Indonesia is one of the promising global."— Presentation transcript:

1 PRESENTATION OUTLINE Explains today’s Indonesia economic condition in which many international observers called Indonesia is one of the promising global investment country. Informs some facts and current status of infrastructure services, that corresponds mainly to the tasks of the Ministry of Public Works. Describes some discussions on reforms in infrastructure policies as ways to attract private investors Discussing and identifying the profile of 2011 – 2014 potential infrastructure projects to be financed by the next preferential buyer’s export credit from the China Government or Public – Private Partnership (PPP) Projects financed by Chinese investors. 0

2 INDONESIA’S PROMISING ECONOMIC GROWTH AFTER GLOBAL FINANCIAL CRISIS Source : Bappenas 4,5% Indonesia has the best economic growth (around 4.5%) in the world after China and India on the global financial crisis. 1

3 HIGH CONTROLLED INFLATION RATE AND HIGH ECONOMIC GROWTH  The inflation rate in the same year can be controlled at the level of 2.78% which is the lowest inflation rate in the last ten years. With this low level of inflation, the purchasing power of the people of Indonesia can be maintained  Economic growth is projected to grow in a sustainable manner at the rate of 7% in 2014 Sumber: Badan Pusat Statistik (BPS) 2,78% Inflation Rate (IHK) 2

4 THE IMPORTANCE OF CHINA’S BUSINESS INVESTMENT ROLE The capacity of government financing can only meet 17% of the total estimated investment requirement of U.S. $ 200 billion per year Actual investment from China to Indonesia is very significant: rank-13 Hope for the value of Chinese investment in Indonesia will continue to increase in the future NOCOUNTRYPROJECT VALUE (US $) % 1Singapore1894, ,1 2Netherlands321, ,1 3Japan ,3 4South Korea ,8 5United Kingdom ,4 6Seychelles ,0 7US of America ,6 8Mauritius ,5 9Switzerland ,2 10Malaysia ,2 11Germany ,0 12Australia ,7 13 People's Republic of China ,6 14Thailand451.40,5 15Italy ,4 16Taiwan ,3 17France ,3 18India ,2 19Hong Kong ,2 20Arab Emirat315.50,1 Sumber : Badan Koordinasi Penanaman Modal (BKPM) Ranking of Foreign Direct Investment Realization by Country, 1 JANUARY - 31 DECEMBER

5 4 NEGARA PERINGKAT GCI Switzerland11 Swedia24 Singapura33 Amerika Serikat42 Jerman57 Malaysia2624 Brunei Darussalam2832 Thailand3836 Indonesia4454 Vietnam5975 Filipina8587 Kamboja INDONESIA’S RANK IN THE GLOBAL COMPETITIVENESS INDEX 2009 – 2010 AND 2010 – 2011 Sumber : World Economic Forum, 2010

6 Although in the last five years, infrastructure condition in Indonesia has improved, but there are still a lot of infrastructure projects need to be accomplished along with the rapid population growth and economic development activities. Road infrastructure : national road network has increased from 34,629 km in 2004, became 38,570 km in Toll road development increasing: −In 1978 – 2010 = 741 km −Target in year = 700 km National drinking water coverage increasing: −In 2005 = 42,5% −In 2009 = 47,71% −Target in year = 68,87% Developing waste management LATEST DEVELOPMENTS IN INDONESIA’S INFRASTRUCTURE (1) 5

7 To meet these targets, Indonesia Government invite the private sector, both domestic investors and overseas to participate in building infrastructure, especially in areas that have been developed such as metropolitan cities, major cities and other areas. LANDFILL CONDITION IN INDONESIA TOTAL : 378 LANDFILLS AREA : 1.886,99 Ha 6 LATEST DEVELOPMENTS IN INDONESIA’S INFRASTRUCTURE (2)

8 OPPORTUNITY INVESTMENT ON TOLL ROAD DEVELOPMENT, WATER RESOURCES MANAGEMENT AND SANITATION WATER SUPPLY WASTE MANAGEMENT TOLL ROAD 7

9 GOVERNMENT SUPPORT TO ENCOURAGE INVESTMENTS (1) Water Supply Development  Institutional reforms with the establishment of the Subsidiary Agency of Water Supply System Development (BPP-SPAM)  PDAM recovery reforms in Indonesia  Water supply regulations improvement Toll Road Development Acceleration  Institutional and legislation reforms and establishment of Indonesian Toll Road Authority (BPJT)  Completion of the relevant regulations of land acquisition  Establishment of Public Service Agency (BLU) toll road  Land Capping policy implementation 8

10  To create a conducive investment climate, the government has issued Perpres No. 13/2010, as revised from Perpres No. 67/2005, concerning cooperation between the government and business entities in providing infrastructure. Through this revision the government provides convenience and greater access to business entities to participate in infrastructure development.  Related with the risks guarantee associated a better financing, the government establishing two state-owned enterprises, namely PT. Indonesia Infrastructure Facility and the PT. Penjaminan Infrastruktur which responsible for facilitating funding or financing to ensure financial compliance or financial disclosure before the construction starts. 9 GOVERNMENT SUPPORT TO ENCOURAGE INVESTMENTS (2)

11  Linked to land acquisition, the GOI commits to support private investors by creating some new methods. These methods are: 1.Land freezing when no land transaction is allowed after toll road corridor been decided by the government; 2.Land price is determined by independent appraisal instead of using tax value of land; 3.Land capping in which government will bear the land cost 110% above proposed by investor in concession agreement; 4.Revolving fund which is provided to ease investors risks in case of delay in land acquisition.  Ministry of Public Works launched the e-procurement system in 1999 that allows public to participate transparently in the process of procurement 10 GOVERNMENT SUPPORT TO ENCOURAGE INVESTMENTS (3)

12 INFRASTRUCTURE DEVELOPMENT PROJECTS TO BE OFFERED TO THE CHINA GOVERNMENT (1) Priority projects in the area of roads and bridges are: 1.Toll road development of Solo - Kertosono 2.Toll road development of Bawen – Solo 3.Toll road development of Cisumdawu (Cileunyi – Sumedang – Dawuhan) Potential projects in the area of roads and bridges are: 1.Construction Project of Musi III Bridge 2.Construction Project of Pasir Panajam Bridge 3.Construction of Arterial Road to Support Belang-Belang International Port 4.Manado – Bitung Toll Road Development Project 5.Pekanbaru – Kandis – Dumai Toll Road Development Project 11

13 1. SOLO – KERTOSONO TOLL ROAD  Part of the Trans Java Toll Road network.  Length ± 179 km connecting Central Java and East Java Provinces.  One of the Government Priorities to be operated simultaneously with the other Trans Java Toll Road segments.  Preparations such as FS (2005), PPP studies (2007) with 6 schemes, Amdal/Environmental Impact Assessment (2008), DED (2008) had been done.  Economically Feasible (EIRR ±22%), but Financially Marginal (FIRR ±14%).  Government gives the support through the constructions of Colomadu – Karanganyar (± 21 km) and Saradan – Kertosono (± 39 km) segments.  Government support is included within the Blue Book worth of US$ 500 million, but isn’t yet commited.  Road construction with a length of ± 600 m was done in the year 2009 using the National Budget with an amount of Rp 15 billion.  An amount of ± Rp 53 billion was allocated in the year 2010 for the purpose of constructing the bridges bottom structure and the approach in the west side of the bridge (± 150 m).  An amount of Rp 150 billion is allocated in 2011 to finish the bridge work.  Another funding is still needed to finish the government support. 12 PRIORITY PROJECTS IN THE AREA OF ROADS AND BRIDGES (1)

14 2. SEMARANG SOLO TOLL ROAD SECTION : BAWEN - SOLO  Semarang Solo Toll Road (72.64 km) is a part of the Trans Java Toll Road  It has been bound with Badan Usaha Jalan Tol (BUJT) which is PT Trans Marga Jateng.  Evaluation of Penerusan Pengusahaan Jalan Tol based on the regulation within Permen PU No. 06/PRT/M/2010 about Pedoman Evaluasi Penerusan Pengusahaan Jalan Tol has been done.  Based on results of the evaluation, for the project to be financially feasible, the Government will have to give construction support worth Rp billion or construction as long as 32.1 km (Sta to Sta ) in the Bawen-Solo section.  Plan of the operation :- Semarang-Bawen (2012) - Bawen-Solo (2014) Details2010 Evaluation Land CostRp 927 Billion Construction Cost (minus Government Support)Rp Billion Investation CostRp Billion Initial Rate Class IRp 500/km (2011) Government SupportRp Billion 13 PRIORITY PROJECTS IN THE AREA OF ROADS AND BRIDGES (2)

15 3. CILEUNYI – SUMEDANG – DAWUAN TOLL ROAD Phase 2  The Bandung City, Capital of West Java is one of the biggest emerging metropolitan city attract and generate socio-economic activities.  The Government intends to build a new international airport in Majalengka and new port in Cirebon as main inlet/outlet for West Java and Secondari inlet/outlet of Jakarta which need high standard road access.  Accordingly GOI will develop the Cileunyi-Sumedang-Dawuan toll road along ± 58.5 km connecting Trans Java Toll Road, new airport and other cities as Bandung and Cirebon.  Project Objective: (a) Improve accessibility and capacity of road networks connecting Bandung and Cirebon and the proposed new airport and seaport; (b) Promote national and regional development in corridor-impacted areas and cities along the road in the eastern part of West Java; and (c) Increase productivity of the area and improve access to regional and international market.  Cost estimate: US$ 205 Million PRIORITY PROJECTS IN THE AREA OF ROADS AND BRIDGES (3) 14

16 OTHER POTENTIAL PROJECTS IN THE AREA OF ROADS AND BRIDGES No.ProjectCost (US$)Remarks 1Construction Project of Musi III Bridge 55 MillionTo provide an efficient road network in Sumatra Island as well as Palembang Metropolitan City and to promote its rapid socio economic and industrial area development. 2Construction Project of Pasir Panajam Bridge 350 MillionTo improve accessibility from Panajam to Balikpapan it requires bridge construction to shorten travel time and to anticipate traffic congestion. 3Construction of Arterial Road to Support Belang- Belang International Port 60 MillionTo build the national road network into an acceptable standard of services and provide accessibility to support regional and local economic development. 4Manado – Bitung Toll Road Development Project 562 MillionThe construction of Manado – Bitung toll road length ± 35 km is designated to connect Sam Ratulangi International Airport with the planned Bitung International Port. 5Pekanbaru – Kandis – Dumai Toll Road Development Project 845 MillionFacilitate through traffic to the Dumai Port which will soon become Sumatra Island’s primary shipping gateway. Ease traffic congestion as well as to increase efficiency and shorten travel time. 15

17 Priority projects in the areas of water resources management sector are: 1.Construction of Jambo Aye Dam 2.Construction of Pandan Duri Dam 3.Construction of Dams in East Nusa Tenggara (NTT), includes: Raknamo, Kolhua, and Mbay Dams 4.Construction of Lau Simeme Multipurpose Dam 5.Additional funds for Jati Gede multipurpose dam 16 INFRASTRUCTURE DEVELOPMENT PROJECTS TO BE OFFERED TO THE CHINA GOVERNMENT (2)

18 PRIORITY PROJECTS IN THE AREA OF WATER RESOURCES MANAGEMENT (1) 17

19 PRIORITY PROJECTS IN THE AREA OF WATER RESOURCES MANAGEMENT (2) 18

20 INFRASTRUCTURE DEVELOPMENT PROJECTS OF PUBLIC WORKS TO BE OFFERED TO THE PRIVATE SECTORS OF CHINA (1) Road Infrastructure Development which includes the construction of toll roads with a total funding requirement of U.S. $ 15 billion to support the construction of toll roads in Jakarta and surrounding areas (Greater Jakarta) Banten, West Java, Central Java, Yogyakarta, East Java, North Sumatra, Riau, Kepulauan Riau, West Sumatra, South Sumatra, Lampung and North Sulawesi (detailed information enclosed). 19

21 Development of Water Supply Network Infrastructure and Sanitation and also waste management that includes the development of water supply system in 4 (four) locations with a total fundings requirements of U.S. $ 1.2 billion; and waste processing facilities in 11 (eleven) locations with with a total fundings requirements U.S. $ million. (detailed information enclosed) 20 INFRASTRUCTURE DEVELOPMENT PROJECTS OF PUBLIC WORKS TO BE OFFERED TO THE PRIVATE SECTORS OF CHINA (2)

22  Appresiation to China International Contractors Association (CHINCA), China Ministry of Commerce and China EXIM Bank and their staffs who have provided support and assistance in the implementation of this Forum.  Expectation that forum this is the first step in a productive and mutually beneficial relationship between the Indonesian Government, the Government of People’s Republic of China, and Chinese investors in infrastructure development in Indonesia, and can be run successfully. CLOSING REMARKS 21


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