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WORLD
BANK
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JAKARTA
Indonesia
Stock
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Printed
in
March
2011
Unlocking
the
Public-Private
Partnerships
Deadlock
in
Indonesia
is a
product
of
staff
of
the
World
Bank. The
findings, interpretation
and
conclusion
expressed
herein
do not
necessarily
reflect
the
views
of
the
Board
of
Executive
Directors
of
the
World
Bank
or
the
government
they
represent.
The
World
Bank
does
not
guarantee
the
accuracy
of
the
data
included
in
this
work.
The
boundaries,
colors,
denomination
and
other information
shown
on
any
map
in
this
work do
not imply
any
judgment
on
the
part
of
the
World
Bank
concerning
the
legal status
of
any
territory
or
the
endorsement
of
acceptance
of
such
boundaries.
Photo
cover
by
Hardini
Puspasari
Unlocking
the
Public-Private
Partnerships
Deadlock
in
Indonesia
AndiWbsn,Jf
emnadHnjoHh
Table
of Contents
Abstract
Acknowledgements
iv
About
the
Authors
v
Disclaimer
v
Chapter
1
Indonesia's
PPP
Program
1
1.1
Legal
and
Regulatory
Framework
1
1.2
PPP
Support
Facilities
4
1.3
Indonesia's
PPP
Program
-
Status
and
Summary
5
Chapter
2
Benchmarking
and
Lessons
Learned
7
2.1
Political
Leadership
7
2.2
Lead
PPP
Agency
7
2.3
Direct
Fiscal
Support
8
2.4
Regulation
8
2.5
Project
Selection
9
2.6
Structure
for
Project
Development
and
Implementation
11
Chapter
3
Indonesia's
PPP
-
The Way
Forward
13
Challenges
13
Recommendations
14
Table
1.1:
Revision
of
Infrastructure
Laws
2
Table
1.2:
Regulatory
Framework
that
Governs
PPP
3
Figure
1.1:
Current
Indonesian
PPP
Institutional
Framework
6
Figure
3.1:
Proposed
Project Selection
Process
16
Figure
3.2:
Proposed
Project Preparation
Process
18
Unlocking
the
Public-Private Partnerships
Deadlock
in
Indonesia
Abstract
The
challenges
faced
by
Indonesia
in
creating
a
robust
public-
private
partnership
(PPP)
program
are
similar
to
those
faced
by
many
other middle-income
countries.
This
paper
provides
a
gap
analysis
for
Indonesia's
PPP
framework
based
on
lessons
learned
and
good
practice from
countries
with
successful
PPP
programs.
It
identifies,
in
particular,
the
need
for
the
government to:
1.
Select
good
projects
for
PPP,
rather than
only
complex
ones
that
are
less
likely
to
attract
private
partners.
*
Establish
a
list
of
projects
by
a
limited
cabinet
meeting
and
stick
to it
-
issuing
different
lists
of
projects
and
holding
showcase
summits
with
open
agendas
tends
to
confuse
the
market.
*
Keep
those
projects
on
track
for
PPP
-
allowing
the
contracting
agencies
to
develop
prospective
projects
directly,
or
to
award
them
without
competition
leads
investors
to
question the
commitment
and
resolve
of
the
government
to
its
own
PPP
process.
2.
Prepare
projects well,
using
the
Ministry
of
Finance
to
provide
access
to:
* A
team
of
PPP
experts
to
help
contracting
agencies
develop
projects.
*
Project
preparation
funding
to
help
pay
the
high
costs
of
preparation.
*
Viability
gap
funding
to
make
projects
more
affordable
and
bankable
by
defraying
some
of
the
capital
costs.