Background for PPP Project of Cipularang Tollway in Indonesia – Specialized Solutions for Public-Private Partnerships from CWIIL Group of Companies

The Jakarta–Bandung corridor had been recognized to have a high traffic volume for many years. Although there are several alternative routes connecting these two cities, they were unable to cope with the increasing traffic volume. One alternative route in particular, which goes through the city of Purwakarta, experienced an average traffic volume increase of 7-9% per year in 3 years leading to 2002 (PT. Jasa Marga, 2002). Such condition occurred mostly due to the vast development of the industrial sector just outside the East Jakarta region,
such as Bekasi, Cikarang, Karawang, Tasikmalaya and Garut, as well as the economic development in Purwakarta, Subang, Plered and Cikalong Wetan.

Due to these conditions, the Indonesian government realized the urgency to develop a high standard primary road in order to increase transportation efficiency, so that it may decrease the required traveling time. Moreover, it was also intended to accommodate the growing traffic volume between Jakarta and Bandung.

As mentioned previously, the project was proposed as a solution to solve the traffic problems along the Puncak route and Purwakarta area, which were the main alternative routes between Jakarta and Bandung. Its development was also expected to stimulate the economic development in the West Java area as well as encouraging the development of Jakarta and Bandung in becoming mega-cities.

As a follow up to this national plan, the Indonesian government initially appointed PT. Citra Ganesha Marga Nusantara (CGMN) in 1994, a local private company, as the main investor and contractor for this 2nd Stage Cipularang Tollway project. A concession was then created between CGMN and Trafalgar House Construction, a British investor, along with PT. Jasa Marga as well as several other small local investors. CGMN was the consortium leader and had received licensed agreement from PT. Jasa Marga to finance, construct and operate this tollway project. As for Trafalgar, it provides additional financial support and construction technology.

However, due to the financial crisis in 1997, the project along with several other infrastructure projects was reevaluated based on the Presidential Decree No.39/1997. Since there was no significant progress made by the joint venture, the project was then suspended and resulted in the termination of the joint venture, including the withdrawal of CGMN as the investor. In 2000, a Presidential Decree No.64/2000 was issued by the Indonesian government to confirm the continuation of this project and appointing PT. Jasa Marga as the main developer.

The 2nd Stage Cipularang Tollway has a total length of 41 km that connects the north side of Purwakarta (Sadang) with Cikamuning, which is located at the west side of Padalarang (Figure 1). It connects the Padalarang-Bypass Tollway with the Jakarta-Cikampek Tollway, thus making it the longest tollway network in Indonesia (Hasanudin, 2005).

Initially, the project was divided into 4 work packages with an average length of 8.5-12 km for each package. However, since Indonesia would be hosting the 50th Asia-Africa Conference in Bandung in 2005, Megawati Soekarnoputri, who was the Indonesian President at the time, had requested PT. Jasa Marga through the Ministry of Public Works to accelerate the construction time of the project so that it may be completed just before the conference. To comply with this demand, the project was then divided into 9 packages or sections as follows to accelerate the construction process :

1. North Purwakarta-South Purwakarta (Section 1)
2. South Purwakarta (Section 2)
3. Plered-Darangdan + Ciujung Bridge (Section 3.1)
4. Darangdan-Cikalong Wetan (Section 3.2)
5. Cisomang Bridge (Section 3.3)
6. Cikalong Wetan-Cikubang (Section 4.1)
7. Cikubang Bridge (Section 4.2)
8. Cikubang-Cipada + Cipada Bridge (Section 4.3)
9. Cipada-Cikamuning (Section 4.4)

Nine local contractors were selected through a tendering process and nine project managers from PT. Jasa Marga were selected to supervise each of these sections, coordinated by a project director. Several consultants were also appointed to provide professional assistance to each of those project managers. Additionally, a group of experts from various academic institutions was also hired to provide PT. Jasa Marga professional advice on problems encountered during the design and construction stage of the project.

In terms of project financing, the Indonesian government, who was represented by PT. Jasa Marga in this project, was faced by limited capital due to high constraint of the construction time and limited liquidity. In order to anticipate the consequences that may arise due to this situation, PT. Jasa Marga developed a new financial strategy that would ensure financial security for the project as well as maintaining a healthy condition on the company’s cash flow. Thus, the Contractor’s Pre-Finance (CPF) system was developed.

In this system, several local banks (government and private) agreed to make a commitment with PT. Jasa Marga to finance the project by providing loan for all of the nine appointed contractors. In addition to that, these banks also agreed to apply a fixed interest rate for the whole loan and payback period. They were willing to provide such demanding commitment because of the guarantee from PT. Jasa Marga that the project will be completed and will not be suspended at any time during the construction phase. In other words, the banks were guaranteed to get their money back no matter what happens with the project. The agreement was then formulated in the form of Letter of Comfort which is then used by the contractors to request for a loan from these banks.

The difference between the CPF system with the other financial strategies, such as the conventional project financing or BOT, is that in the CPF system the project does not need to look for an investor to finance the project and they are not in debt to the banks who provided the loans during the construction phase because the contractors borrowed the money directly from the bank and these debts will only be acknowledged by the project owner after the project is completed and handed over to the owner. As long as it is still in the construction phase, the contractor is fully responsible for the loan debt to the bank. After the project is completed, the project owner has the responsibility to repay the loans made by the contractors to the bank within a certain period that has been agreed previously by the owner and the banks. On the other hand, conventional project financing requires the owner to ask for loan directly to the bank, appoint contractors to carry out the construction work and finance the project with the loan; while the BOT system requires the owner to look for an investor through a tendering process to help finance the project and form a concession with the investor.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all matters relating to Public-Private Partnerships, (PPP), ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable business advise can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
Strategic Business & Intelligence Division,
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923
Connect : LinkedIn – Twitter – Facebook – Quora

For Queries Specific to South East Asia :
Email : south.east.asia@cwiilgroup.com , hq@cwiilgroup.asia
Web : www.cwiilgroup.com , www.cwiilgroup.asia

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu
Connect : LinkedIn – Twitter – Facebook – Quora

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Teams would require minimum 2 weeks for Reviewing & Responding to Queries, which please note.

Related articles

• Infrastructure Development in Indonesia – Specialized Solutions From CWIIL Group PPP Units (cwiilgroupseasia.wordpress.com)
• Toll-Road Development in Indonesia – Specialized Services & Solutions From CWIIL Group (cwiilgroupseasia.wordpress.com)
• What Are the Advantages of Forming Public Private Partnerships? Specialized Consultancy & Advice From CWIIL Group PPP Units (cwiilgroupafrica.wordpress.com)

 

BOT Projects in Vietnam – Specialized Solutions for Public-Private Partnership Projects from CWIIL Group of Companies

As a form of Public-Private Partnership (PPP), the Build-Operate-Transfer (BOT) scheme is considered as an attractive means by the Vietnamese government to develop new infrastructure projects. This is due to the fact that the Vietnamese government has very limited budget to fund these kinds of projects and they are also aware that the country’s economic growth could be deterred if its infrastructure development falls behind. In such scheme, the partnership between the government and the private sector is more in the form of an indirect partnership, where the government agrees to delegate the rights to build and operate infrastructure facilities to private investors. Therefore, the government would have access to the private sector’s capital as well as expertise, and use them as the main resources for the infrastructure development.

In the case of Vietnam, the country had announced its desire for foreign private investment since the early 1990s, especially for its power sector development. The government’s factual determination was shown through the passing of the BOT law during this period. However, there have been quite a few problems in the development of infrastructure projects with private participation in Vietnam. Most of these problems occurred due to the difficulty in the negotiation process with the government agencies and also due to the reluctance of the majority of government officials to provide the necessary guarantee and appropriate assurance towards the private sector regarding the long-term security of the project’s revenue stream. In addition to that, the private sector’s constant skepticism towards the government had also played a major part in some of the delays that had occurred in the development of infrastructure projects in Vietnam.

BOT Legislation in Vietnam was passed by the government as the legal framework for all infrastructure projects that are developed under these types of procurement system. Under this legislation, BOT companies can secure foreign loans by using their assets that are financed by loan as a guarantee or other forms of security as long as it is in accordance with Vietnamese laws and regulations. However, the company may not grant a mortgage of land-use rights to any foreign investors / lenders. Instead, it may provide guarantees (through State approval) such as the following :

• Buildings, equipments and other assets constructed or purchased with the invested capital of the BOT company (invested capital includes the loan capital)
• Other assets owned by the BOT company
• The value of the land-use rights
• The property rights of the BOT company

Nevertheless, the legislation may agree on the application of a foreign law, provided that it is not contrary to the Vietnamese law and that it is approved
by the Ministry of Justice.

In the past 15 years, Vietnam has had more than 100 infrastructure projects developed under the BOT scheme. However, some of these projects could not be completed on time and some had experienced budget overrun.

These problems occurred mostly because there is a lack of knowledge in terms of project procurement system / procedure and the risks that have the possibility to occur in the project were not assessed properly during the project development stage. Moreover, disputes between the project stakeholders often occurred due to their misunderstanding and different perceptions on construction, financial and legal issues of projects that were developed under a BOT scheme. If negotiations and reconciliations fails, disputes may be resolved either by a Vietnamese arbitration organization, an arbitration established by agreement of the stakeholders or an arbitration established and operating in a third and neutral country.

As an encouragement for private sectors that are involved in any BOT company, the government of Vietnam provides various advantageous tax schemes and other incentives such as :

• BOT companies are entitled to a payment of business income tax (BIT) at the rate of 10% for the whole concession period, after the exemption and reduction that are referred in the following articles.
• BOT companies are exempted from payment of BIT for the first 4 years (8 years if the project is in an area where investment is encouraged by the government) from the company’s first profit-making year, followed by a 50% reduction in BIT for the next four years.
• BOT companies are entitled for an import duty exemption on equipment, machinery and specialized vehicles (including spare parts and accessories) that are utilized for creating assets of the project, as well as fuel, raw materials and other kind of supplies used for the BOT project
• Protected industrial property rights, technical know-how, technological process and technical services required to implement a BOT project are exempted from payment of taxes relating to the technology transfer

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all matters relating to Public-Private Partnerships, (PPP), ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable business advise can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
Strategic Business & Intelligence Division,
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923
Connect : LinkedIn – Twitter – Facebook – Quora

For Queries Specific to South East Asia :
Email : south.east.asia@cwiilgroup.com , hq@cwiilgroup.asia
Web : www.cwiilgroup.com , www.cwiilgroup.asia

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu
Connect : LinkedIn – Twitter – Facebook – Quora

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Teams would require minimum 2 weeks for Reviewing & Responding to Queries, which please note.

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• Infrastructure Development in Vietnam – Specialized Solutions For Public-Private Partnerships By CWIIL Group PPP Units (cwiilgroupseasia.wordpress.com)
• What Are the Advantages of Forming Public Private Partnerships? Specialized Consultancy & Advice From CWIIL Group PPP Units (cwiilgroupafrica.wordpress.com)
• Kinds of PPP and Contract Models in International Practice – Specialized Advice From CWIIL Group PPP Units (cwiilgroupafrica.wordpress.com)
• What Is Risk Allocation In Public-Private Partnerships? – Unbiased Legal Counsel, Services & Solutions From Legal Eagles Global Corporation – [ a CWIIL Group Company ] (legaleaglesglobalcorp.wordpress.com)
• Infrastructure Development in Indonesia – Specialized Solutions From CWIIL Group PPP Units (cwiilgroupseasia.wordpress.com)
• Toll-Road Development in Indonesia – Specialized Services & Solutions From CWIIL Group (cwiilgroupseasia.wordpress.com)
• What Is Risk Mitigation In Public Private Partnership Projects? – Unbiased Legal Counsel, Services & Solutions From Legal Eagles Global Corporation – [ a CWIIL Group Company ] (legaleaglesglobalcorp.wordpress.com)
• What Framework Is Required For Enabling PPP? – Unbiased Legal Counsel, Services & Solutions From Legal Eagles Global Group Of Multispeciality Law Firms – [ a CWIIL Group Company ] (legaleaglesglobalcorp.wordpress.com)

 

Infrastructure Development in Vietnam – Specialized Solutions For Public-Private Partnerships By CWIIL Group PPP Units

Investments made for infrastructure development in Vietnam was a major contributing factor for its impressive GDP growth in the past decade. Based on the World Bank report, Vietnam Infrastructure Strategy – Cross-sectoral issues, (2006), approximately 9-10% accounted in Vietnam’s GDP was from the total spending for infrastructure development and results from its studies also shows that there is a strong link between infrastructure investment and Vietnam’s economic growth. With regards to the transportation sector, Vietnam had experienced quite significant improvements and it is shown by the total length of road network which had doubled since 1990 as well as its
substantial quality improvement.

World Bank report had also confirmed that Vietnam will require an approximate
sum of 11.4% of its GDP to support its infrastructure development until 2010, in which the transportation sector requires 4.1% of the GDP per year. Moreover, the proposal for capital spending on transportation sector development was estimated to be US$ 4.3 billion from 2006-2008. Most of the funds for previous infrastructure developments had originated from the State budget (11%) and 37% were from the official development assistance (ODA). However, Vietnam could experience major difficulties in the future if it only relies on these sources. This is due to the fact that Vietnam had experienced a significant economic growth, especially in the past decade, and its GDP per capita had exceeded the permissible threshold of the donor community which makes Vietnam no longer entitled to preferential loans from donors. Therefore, private sector participation is expected to play a more major role in providing the necessary capital for infrastructure development in Vietnam.

So far, the public sector has frequently played the major role in financing, constructing and operating transportation infrastructure development and private investment in this sector has been very low with accounting for just 2% of its total capital expenditure in the last decade. While the implementation
of Vietnam’s transportation construction projects is managed by the Project Management Units (PMUs), the construction itself is usually carried out by some State-Owned Enterprises (SOEs) who are mostly attached to the Ministry of Transportation (MoT) as well as the provincial government, along with several private companies. Currently, there are approximately 200 SOEs under the MoT of Vietnam and most of them are grouped into 12 corporations, such as the 5 Civil Engineering Construction Corporations (CIENCOs). Although these SOEs are principally independent, they are practically under the instruction of the MoT.

The government of Vietnam has a very strong commitment to modernize the country’s transport system because they believe that such development would support the country’s overall economic growth. This commitment is shown through the real expenditures that the government made for the development of the transportation sector which experienced an increase of 21% annually between 1994 and 2002. Furthermore, the government had also introduced the Law of Foreign Investment in Vietnam as a mean to expand its foreign economic cooperation due to their awareness of Vietnam for being a highly attractive investment environment for foreign investors as a result of its
strategic location, which is in the center of a dynamic economic growth region.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all matters relating to Public-Private Partnerships, (PPP), ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable business advise can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
Strategic Business & Intelligence Division,
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923
Connect : LinkedIn – Twitter – Facebook – Quora

For Queries Specific to South East Asia :
Email : south.east.asia@cwiilgroup.com , hq@cwiilgroup.asia
Web : www.cwiilgroup.com , www.cwiilgroup.asia

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu
Connect : LinkedIn – Twitter – Facebook – Quora

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Teams would require minimum 2 weeks for Reviewing & Responding to Queries, which please note.

 

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• Infrastructure Development in Indonesia – Specialized Solutions From CWIIL Group PPP Units (cwiilgroupseasia.wordpress.com)
• Kinds of PPP and Contract Models in International Practice – Specialized Advice From CWIIL Group PPP Units (cwiilgroupafrica.wordpress.com)
• What Are the Advantages of Forming Public Private Partnerships? Specialized Consultancy & Advice From CWIIL Group PPP Units (cwiilgroupafrica.wordpress.com)

 

Toll-Road Development in Indonesia – Specialized Services & Solutions From CWIIL Group

Road transportation has always been the dominant mode of transportation in Indonesia. Furthermore, strong economic growth prior to the financial crisis in
addition to the inadequate condition of its public transportation causes an increasing demand for the use of private vehicles. As a result, most of the roads,
especially in urban areas, are easily congested, thus forcing the government to
provide a more adequate road network to reduce traveling time, reduce pollution
and increase efficiency.

Due to such demand, the government planned the construction of 688 km of
toll-roads by 1999 and 1935 km by 2020. Although several international organizations, such as the Asian Development Bank and World Bank, provided financial assistance for infrastructure developments in Indonesia, the Indonesian government played a major role in financing toll-road projects that were developed between 1978 and 1990. Based on the World Bank report (2002), the 46 km Jagorawi toll-road was the first toll-road built in Indonesia and Jasa Marga, which is a state-owned road agency, was given the responsibility of collecting and maintaining it.

In addition to that, Jasa Marga also operates the other toll-roads in Indonesia and became responsible for financing and constructing toll-roads in the later years. Their role in toll-road developments in Indonesia is further strengthened by being granted a license by the government to develop, construct
and operate toll-roads together with the private sector. Through the Presidential
Decree No.25/1987, the Indonesian government required Jasa Marga to be involved in all toll-road constructions and that private entities must set up joint
ventures with Jasa Marga if they are to be involved in those constructions. Most
of these collaborations were either in the form of BOT or Modified Turnkey.

Just before the 1997 financial crisis, the total operating toll-roads had reached
472 km, of which approximately 148 km was built and operated by private
concessionaires. The 15.5 km Cawang-Tanjung Priok elevated highway was
one of the first toll-roads to include private participation. The project was developed by a joint venture company formed between Jasa Marga and PT. Citra
Marga Nusaphala Persada (CMNP), a local private company, and they were
granted the project in 1993 with a 30 years concession period.

Moreover, the Jakarta Outer Ring Road project was the first international joint venture toll-road project in Indonesia. The consortium included Brey Contractors, Jasa Marga and two other private Indonesian companies. Another toll-road project which involves foreign investors was the 59 km Cikampek-Padalarang tollroad. Trafalgar House (UK) formed a consortium with Jasa Marga to finance this project and it took approximately 6 years of negotiation before the concession agreement was finally signed in 1995. Unfortunately, full financing for this project was not secured before the financial crisis and since Indonesia suffered heavily from it the government was forced to review the project along with the other ongoing projects. During that period, approximately 237 km of toll-road were still under construction and were planned to be completed by 2000.

In order to reinstate the private sector’s confidence to invest and be actively involved again in infrastructure development after the financial crisis, the Indonesian government must be able to formulate unbiased and non-discriminative regulatory policies, as a form of guarantee for the private sector, which hopefully may sustain their long-term partnership. This can be achieved as long as both the government and private sector have a common understanding regarding the risks that may occur in the project. Therefore, it is necessary to discover and understand the perception of risks from both parties.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all matters relating to Public-Private Partnerships, (PPP), ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable business advise can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
Strategic Business & Intelligence Division,
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923
Connect : LinkedIn – Twitter – Facebook – Quora

For Queries Specific to South East Asia :
Email : south.east.asia@cwiilgroup.com , hq@cwiilgroup.asia
Web : www.cwiilgroup.com , www.cwiilgroup.asia

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu
Connect : LinkedIn – Twitter – Facebook – Quora

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Teams would require minimum 2 weeks for Reviewing & Responding to Queries, which please note.

Related articles

• Infrastructure Development in Indonesia – Specialized Solutions From CWIIL Group PPP Units (cwiilgroupseasia.wordpress.com)
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• Minister Admits Indonesia to Fall Short on Infrastructure Goals (thejakartaglobe.com)

 

Infrastructure Development in Indonesia – Specialized Solutions From CWIIL Group PPP Units

Just like in any other developing countries, the Government of Indonesia acknowledges the importance of investing in infrastructure development such as roads, water supplies, energy, telecommunications and other basic infrastructure services to sustain the country’s economic growth. As a matter of fact, private sector participation has been encouraged by the Indonesian government by allowing the private sectors to invest in power generation activities as well as toll-road BOTs since the early 1990s. From 1994-1999, the total private investment in Indonesian infrastructure was more than US$20 billion, with US$7.3 billion and US$3.6 billion investment in 1996 and 1997 respectively. In terms of the number of projects, the transport sector led with 20 projects with private participation while sub-sectors of the energy and telecom sectors led with 14 projects each.

Greenwood, Jr. (2006) informed in his report that the Asian Development Bank had provided more than US$20 billion in cumulative development assistance to Indonesia since 1969, with the infrastructure sector consuming a significant share. The study also revealed that Indonesia would require an estimate of US$150 billion in the next 10 years for its infrastructure development. Therefore, private sector participation is needed more than ever to provide the capital investments required for infrastructure development so that it may instigate better economic growth.

Before the financial crisis period, Indonesia had actually made great investments
in infrastructure development which accounted for approximately 6% of its GDP. However, there was a significant drop in infrastructure spending right after the crisis. Currently Indonesia is still recovering from the crisis since it infrastructure
investment only accounts for around 2% of its GDP and that private investors are yet to make an active comeback, causing it to be left behind by neighboring countries that were once out-performed in terms of infrastructure development.

Nevertheless, the Indonesian government has attempted to increase private sector participation (PSP) and stimulate private investment through Public-Private Partnerships (PPP) by establishing a sound regulatory framework that follows international practices as well as amending and modifying laws and regulations related to private investment in Indonesia. Such efforts display the awareness of the Indonesian government in recognizing the need to attract private investment for its infrastructure development and to provide reassurance for the private sector to invest by providing them guarantee through the establishment of appropriate regulatory policies.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all matters relating to Public-Private Partnerships, (PPP), ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable business advise can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
Strategic Business & Intelligence Division,
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923
Connect : LinkedIn – Twitter – Facebook – Quora

For Queries Specific to South East Asia :
Email : south.east.asia@cwiilgroup.com , hq@cwiilgroup.asia
Web : www.cwiilgroup.com , www.cwiilgroup.asia

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu
Connect : LinkedIn – Twitter – Facebook – Quora

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Teams would require minimum 2 weeks for Reviewing & Responding to Queries, which please note.

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