Development of Indonesian Infrastructure Projects with PPP Scheme

Public-Private Partnership (PPP) as an alternative infrastructure financing scheme for the public in Indonesia has improved services in several sectors. Collaboration between the government and business entities that has been going on for a long time is able to reach an agreement point that is considered in accordance with the needs of both parties so that the project can proceed to the physical construction phase until operation.

As for the current practice in Indonesia, PPP refers to Presidential Regulation No. 38 of 2015 concerning Public Private Partnership and Minister of National Development Planning / Bappenas Regulation No. 7 of 2023 concerning Procedures for PPP Implementing in Infrastructure Provision. Projects planned under the PPP scheme are listed in the PPP Plan List or PPP Book published by the Ministry of National Development Planning/Bappenas every year. Based on the PPP Book 2024, there are a total of around 100 projects listed in the PPP Book, consisting of PPP projects that are still under preparation, PPP projects that are ready to offer, PPP projects that will be signed by the Cooperation agreement (Agreement Signing), and PPP projects that have entered the construction phase until they are successfully operated (Success Story).

PPP Project That Are Ready to Offered

Launching from the results of the analysis of the 2024 edition of the PPP Book, it is noted that per August 2024, PPP Book data shows the total investment value of PPP projects in the “Ready To Offer” category amounting to 8,257.96 Million USD or 131.07 Trillion IDR with a total number of 13 projects. 

PPP Projects that Have Obtained Investment Certainty

Along with the fulfillment of the government's work plan target in Indonesia, the realization of infrastructure provision projects that have been launched has also progressed in terms of investment certainty. The achievement of investment certainty is considered in line with the number of PPP projects with the “Cooperation/Agreement Signing” and “Success Story” categories. 

It is known that as of August 2024, PPP Book data shows the total investment value of PPP projects in the Agreement Signing category is 5,166.66 Million USD or 82.53 Trillion IDR with a total of 8 infrastructure projects.

Meanwhile, PPP projects that include success stories or PPP projects that have successfully entered the Management stage (Construction to Operation phase) amounted to 20,081.41 Million USD or Rp318.78 Trillion with a total of 35 Infrastructure Projects.

Although the concept of Public Private Partnership (PPP) has been introduced in Indonesia since several decades ago, its success rate is still relatively low compared to the duration of its implementation. This shows that there are various challenges in the implementation of PPP, such as the complexity of project design, risk allocation, and limited capacity in attracting private investors.

Therefore, the factors supporting the success of PPP must be the main concern in terms of preparation and implementation, such as Optimizing the Capacity of the Government Party as PJPK; Streamlining Supporting Regulations & Policies; and Deepening the Planning Study Documents such as Preliminary Doc., Pre-Feasibility Study (PreFS) doc., and Feasibility Study (FS) document. By continuing to optimize these elements, the potential of PPP to support infrastructure development and encourage community welfare can be realized more optimally.