Making PPP Work for Indonesia: Report on Public-Private Partnership in Indonesias Infrastructure

Indonesia is entering a period of great opportunity, with renewed rapid economic growth at a pace unseen since the Asian financial crisis of 1997-98. Senior economic policy-makers are projecting sustained growth of at least 7 percent in the years ahead.
       
Infrastructure is one of the crucial ingredients in achieving such high levels of growth, together with the reductions in poverty that it will bring. As Indonesia launches its next five-year development plan, the time is now critical for Indonesia to address and overcome the problems its faces in developing its infrastructure and attaining its full potential. In particular, the Government of Indonesia is renewing its focus on attracting private-sector investment.
       
This report provides an assessment of the current Indonesian context and provides some suggested  reforms, based on the experiences of other countries that have succesfully leveraged private investment for infrastucture. It is address to identify constraints that have limited private investment in infrastructure and thereby to exploit fully Indonesia’s growth opportunities and achieve its development goals.

Table of Contents:

Foreword
Table of Contens

Chapter 1. Introduction
1.1    Macroeconomic Context
1.2    Challenges  Infrastructure Sector
1.3    The Magnitude of Investment
1.4    The Second Five-Year Development Plan

Chapter 2. Indonesia’s PPP Framework: Recent Developments
2.1 Introduction
2.2 Sector Legal Reforms Concerning Infrastructure
2.3 Cross-Sector Legal & Regulatory Reforms
2.4 Other Developments Related to PPP

Chapter 3. Benchmarking and Lessons Learned
3.1 Institutional Coordination
3.2 Fiscal Support
3.3 Regulatory Framework: Implementing Rules and Procedures
3.4 Project Readiness
3.5 Political Leadership
3.6 Lead PPP Agency
3.7 Clarity of Regulations
3.8 Value-for-Money Mindset
3.9 Structure for Project Development and Implementation

Chapter 4. The Way Foreward: Unfinished Business
4.1 Background
4.2 Capacity Building
4.3 Domestic Capital Markets
4.4 Outsourcing
4.5 Land Acquisition
4.6 Local Governments and PPP
4.7 Further Steps to Strength the PPP Framework
4.8 The Championing Institution
4.9 Transaction Support Unit
4.10 Government Support Provision
4.11 Other Policy Initiatives