WATER WORLD
Indonesia's geography presents significant opportunities and key challenges in the transport sector, as public and private companies seek to improve infrastructure across the archipelago.
New road infrastructure and runway expansions to Jakarta's Soekarno–Hatta International Airport (SHIA) will drive transportation sector activity in 2018. Looking further ahead, the government has pressed for a decision on how to tackle the widespread sinking of the nation's capital. On average, Jakarta is dropping by 10cm-15cm every year, but some areas of the city have seen as much as a 25cm drop, often far below sea level.
RIGHT FLIGHT
Advancements in the air transportation segment have made Indonesia attractive for investment and increased passenger numbers. Air transportation continues to be the primary choice for domestic travel between districts, cities, and islands. As well, a new visa-on-arrival policy has boosted the number of travelers arriving by air, and accordingly has spurred airport expansions at a faster pace.
PT Angkasa Pura II (Persero) is at the forefront of a third runway initiative at SHIA, and is currently in the land acquisition stage of the project. In order to build the landing strip, which will boast dimensions of 3,000x60sqm, Persero is looking to secure 216ha of land. As of end 2017, the company had acquired approximately 20% of the required land. The project is targeted to be completed by the middle of 2018, enabling the country's largest airport to serve 114 flights per hour. However, the new runway is not the only addition to the airport's capacity. “We are currently preparing supporting infrastructure to improve the capacity of runways 1 and 2 so that we are able to serve more flights—from 72 flights per hour to 86 flights per hour. This development includes 12 projects on our side with an investment worth IDR625 billion,” Muhammad Awaluddin, President Director of Persero, told TBY.
Airports in Indonesia are benefitting from the new Limited Concession Scheme (LCS), whereby the private sector is offered concessions to further develop and operate existing airports for 15-20 years. In an interview, Raj Kannan, Founder & CEO of Tusk Advisory, explained to TBY, “For this privilege, the private sector will pay the government upfront concession fees that can be used to build other infrastructure and also compensate the existing state-owned enterprise that is managing the current airport.” Kannan believes that the government could receive over USD3 billion for SHIA, which would be managed through a special infrastructure fund.
ROAD WORKS
The Ministry of National Development Planning (BAPPENAS) and the Indonesia Toll Road Authority (BPJT) are acting as key motivators for private-sector involvement. While in 2014 Indonesia boasted approximately 1,500km of toll roads, BPJT has collaborated with private companies such as Kopel Infrastructure to develop nearly 2,500km of toll roads through 2019, a figure that nearly doubles the total amount of toll road construction and implementation in the 30 years prior.
SINK STOPPER
To enhance flood prevention and urban development, Jakarta is developing the National Capital Integrated Coastal Development (NCICD), or Giant Sea Wall. The proposed wall would provide relief for the next 10-15 years. Criticism for the short-term nature of the project has led to alternative proposals and fostered discussion among government and private entities.
Victor Coenen, Director of PT Witteveen+Bos Indonesia, told TBY, “There are now two more options on the table: a medium-sized sea wall that will protect the city for 30-40 years if the sinking is not stopped, or a large sea wall that can protect it for 100 years with or without stopping the sinking.” The medium-sized wall would cost an estimated USD6 billion, while the large one would need an investment of USD10 billion. However, the densely built capital city lacks space for drainage canals and storage basins.
WATER WORLD
TABLE OF CONTENTS
Interview
Dr. Bambang Brodjonegoro, Minister , National Development Planning (Bappenas)
TBY talks to Dr. Bambang Brodjonegoro, Minister of National Development Planning (Bappenas), on acquiring financing for infrastructure projects and boosting private sector involvement in the country.
read articleInterview
Thomas Trikasih Lembong, Chairman, Investment Coordinating Board (BKPM)
Thomas Trikasih Lembong is the Chairman of BKPM. He was a former Minister of Trade of Indonesia from 2015-2016. Prior his appointment in the cabinet, he had a long professional career. He was a Co-Founder, Chief Executive Officer, Managing Partner, and Partner at Quvat Management Pte Ltd and also served as President Commissioner at PT Graha Layar Prima Tbk (BlitzMegaplex) since 2012. He was previously employed with Principia Management Group and the Equity Division of Morgan Stanley (Singapore) Pte. Ltd, among others. He received a bachelor's degree in architecture and urban design from Harvard. He also was elected Young Global Leader by the World Economic Forum in 2008.
read articleGuest Speaker
Tevita Lavemaau, Former Minister of Finance and National Planning , Tonga
TBY talks to Tevita Lavemaau, Former Minister of Finance and National Planning of Tonga, on the effect of climate change on the country, its work to combat inequality, and further areas of cooperation with Indonesia.
read articleInterview
Dr. Tito Sulistio, President Director, Indonesia Stock Exchange (IDX)
TBY talks to Dr. Tito Sulistio, President Director of Indonesia Stock Exchange (IDX), on the strong performance of the capital markets, its goals to increase the number of listed companies, and the growing importance of digital innovation.
read articleInterview
Amien Sunaryadi, Chairman, Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas)
TBY talks to Amien Sunaryadi, Chairman of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), on preparing new block offerings, attracting greater investment into the sector, and pushing for exploration.
read articleInterview
Ronald Walla, President Director, PT Wismilak Inti Makmur
TBY talks to Ronald Walla, President Director of PT Wismilak Inti Makmur, on offering the public a more relevant value proposition, strengthening the ideology of Indonesia's founding fathers, and forging bigger profit margins.
read articleInterview
Teddy Tjokrosaputro, President Director, PT Rimo International Lestari (RIMO)
TBY talks to Teddy Tjokrosaputro, President Director of PT Rimo International Lestari (RIMO), on stepping back forcefully from the brink, using affordable housing as a springboard, and laying the groundwork for the country's future.
read articleReview
In the House
As strong economic growth, an optimistic political outlook, and a partially successful tax amnesty to repatriate offshore wealth continue to drive up housing prices in Indonesia's major urban centers, demand for new housing and shares in developers plummeted in 2017.
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