KPPIP Achievements

In 2015 KPPIP made provisions for and conducted monitoring and debottlenecking of 22 priority projects with a a total investment value of Rp 851 trillion, which was determined at the committee level and reported to the President by a letter dated March 18, 2015. At the end of 2015 the number of projects increased to 30 priority projects as stipulated in Regulation of the Coordinating Minister for Economic Affairs Regulation No. 12 of 2015 on the List of Priority Infrastructures1.

Throughout the year 2015, KPPIP provided project preparation facilities for the preparation of Bontang Re nery, funded a strategic study on Jakarta-Bandung High Speed Railway as well as VfM and AMDAL studies on Panimbang-Serang Toll Road. Besides that, in order to ensure that the projects are implemented on schedule, KPPIP also facilitated coordination meetings to resolve issues and discuss funding schemes for the priority projects.

In accordance with Presidential Regulation No. 75 of 2014, KPPIP has 6 major mandates with achievements as summarized below:

achievements_kppip

A. Achievement of KPPIP’s Mandates

1. Determination of Priority Projects for for the Year 2016

Pursuant to Presidential Regulation No. 75 of 2014, in December 2015, KPPIP issued a list of priority projects in the form of Coordinating Minister for Economic Affairs Regulation No. 12 of 2015 on the List of Priority Infrastructures for the period of 2015-2019.

The projects were selected from potential National Strategic Projects duly stipulated in Presidential Regulation No. 3 of 2016 where further selection was made by KPPIP. In the process of preparing the National Strategic Projects, KPPIP referred to the basic criterion, that is synchronization between RPJMN, Renstra and RTRW, so that Green Open Spaces will not be tampered with. Other than the aforementioned basic criterion, the PSN (National Strategic Projects) were selected based on additional criteria covering:

A. Strategic Criteria:

  1. Strategic roles for the economy, social welfare, defense and national sovereignty (creating positive impacts on GDP, employment rate, socio-economic conditions, and the environment);
  2. Conformity between infrastructures (supportive and complementary to each other);
  3. Conformity between infrastructures (supportive and complementary to each other);
    3.Distribution of projects among regions.

 

B. Operational Criteria:

  1. The proposed project must have a high quality feasibility study.
  2. The Project shall either have an investment value of more than Rp 100 billion or play strategic roles
    in improving the region’s economy;
  3. Construction must commence by 2018. Based on
    such basic and additional criteria, 225 PSNs and one electricity infrastructure development program have been selected.

The priority projects were then selected from the list of National Strategic Project by taking the following matters into account:

  1. There must be an undisputed rmly-committed champion to realize the project, particularly to prepare for an action plan and project implementation schedule;
  2. The value of the project must be over Rp 500 billion; however, KPPIP will demonstrate exibility regarding the minimum project value;
  3. KPPIP not only considers projects with high investment value, but also takes account of projects with high economic value;
  4. KPPIP focuses on new infrastructure projects, rather than on maintenance projects or projects for procurement of facilities.

From such a priority-based process, 30 priority projects have been selected for 2015-2019, and these projects have been stipulated in Regulation of the Coordinating Minister for Economic Affairs No. 12 of 2015. Therefore, KPPIP can focus on these 30 projects without neglecting its mandates, but continue to monitor and support the debottlenecking process required for the PSN.

2. Improvement in Quality of Project Preparation

Panimbang-Serang Toll Road

In preparing the toll road project which was potentially implemented under the PPP scheme, KPPIP facilitated the provision of consulting services in the amount of Rp 2.6 Billion for conducting quantitative evaluation and establishing guidelines for the preparation of VfM study for the toll road sector. PT Marga Graha Penta was awarded the Project and has coordinated with Indonesia Toll Road Authority (BPJT), Directorate General of Highways (Ditjen Bina Marga) and Banten Provincial Government for the preparation of the study and the study was completed at the end of December 2015. The VfM study becomes the basis for determining the funding scheme for the project proposed under the PPP scheme.

In addition, in order to ensure that the preparation for the Project could be done without delay, KPPIP provided Rp 990 Million for consulting services for the purpose of preparing an AMDAL Report. PT Karsa Buana Lestari has carried out the study, given a detailed account of and preliminary dissemination of information with regional governments and the local community along the areas traversed by the toll road. In the process of preparation for the report, the consultant coordinated with Ditjen Bina Marga, Banten Provincial Government and Regional Environmental Protection Agency (BLHD) of Banten. By providing the fund, the land procurement process is expected to be realized on schedule in 2016 .

 

Jakarta-Bandung High Speed Railway

KPPIP provided Rp 3.1 Billion for consultation with a rst-class internationaly-known consultant as stipulated in Presidential Regulation No. 93 of 2015 on the Evaluation Team for Jakarta-Bandung High-Speed Railway Project and appointed PT Boston Consulting Group – Parsons Brinckerhoff consortium through a series of selection process to review the proposal for Jakarta-Bandung High Speed Railway submitted by the Government of Japan and Government of PRC. The Evaluation Team consisted of the Coordinating Minister for Economic Affairs, Coordinating Minister for Maritime Affairs, Minister of Finance, Minister of Transportation, Minister of SOE and Minister of National Development Planning/Bappenas.

The components under evaluation encompassed aspects of commitment, government risks, technology, and user’s experience, socio-economic impact and project planning. The nal report on the work results, which constituted part of the consideration for the Evaluation Team in the decision-making process for the selection of the proposed projects, was nalized at the end of September 2015. The decision on the determination of the project funding scheme was made by the Government of Indonesia at the beginning of October 2015 and the preparation for the project could be continued.

 

Bontang Oil Refinery

KPPIP allocated a budget of Rp 12.2 Billion in 2015 for the procurement of a consultant, PT Pricewaterhouse Coopers (PwC) Advisory, which was appointed as the consultant charged with conducting the prefeasibility study/OBC for Bontang Re nery. The OBC, which was completed in December 2015, became the basis for determining the funding scheme and served as grounds for Government support to improve the feasibility of the project.

In drawing up the OBC, the winning consultant worked collaboratively with a rst-class internationally-known technical consultant such as Jacobs Engineering, which is highly experienced in conducting technical studies on oil and gas projects around the world as part of the team. Such technical study gave some insight for the decision makers into determining the applicable con guration to Bontang Re nery that is in line with the policy of the Government of Indonesia with respect to the strategy to achieve energy security.

 

Synchronization between PPP Unit, Ministry of Finance, and Ministry of PPN (National Development Planning) / Bappenas

To avoid obstacles posed by different standards or overlaps in the process during the preparation for the project, KPPIP has coordinated with the PPP unit at the Ministry of Finance on projects potentially implemented under the PPP scheme. The synchronization was made by harmonizing feasibility study standards which also involved the Ministry of PPN/Bappenas and cutting down stages and simplifying documents required to apply for the scal support (VGF) and government guarantee.

Having clear standards in preliminary feasibility study is very important to ensure that the project is well-prepared, so that obstacles in the future can be minimized. Effective coordination between KPPIP, Ministry of PPN/Bappenas and PPP Unit involved in establishing such standards is expected to prevent confusion on the side of Implementing Agency as the party preparing the preliminary feasibility study.

3. Acceleration in Determining Project Funding Scheme

South Sumatera LRT
Through a series of coordination meetings and active monitoring by KPPIP, the Palembang LRT funding scheme has been decided to use SOE assignment under Presidential Regulation No. 116 of 2015 on the Acceleration in Light Rail Transit Operation in South Sumatra Province in October 2015. It is stipulated that PT Waskita Karya is assigned to build the infrastructure while PT Kereta Api Indonesia is to operate the railway facilities. By the issuance of the Presidential Regulation, all stakeholders are expected to perform their duties and obligations to ensure that partial target operation is achieved in August 2018.

 

Jakarta, Bogor, Depok and Bekasi LRT
In line with the process undergone for determining the Palembang LRT funding scheme, KPPIP conducts active monitoring related to the preparation of the required regulations until the issuance of Presidential Regulation No. 98 of 2015 on the Acceleration in the Operation of Integrated Light Rail Transit in Jakarta, Bogor, Depok and Bekasi Areas in September 2015.The development of the infrastructure with six-track services is assigned to PT Adhi Karya and procurement of the railway facilities will be carried out by the Ministry of Transportation. Under this SOE assignment scheme, it is expected that the target for the whole operation of LRT tracks services will be achieved in 2018.

 


Soekarno-Hatta International Airport (SHIA) Express Railway

For the purpose of obtaining clarity on the continuation of the preparation for SHIA Express Railway project, KPPIP facilitated coordination meetings to discuss the updated status of the project, including the funding scheme for the project. In the meeting, Directorate General of Railway of the Ministry of Transportation announced the cancellation of the application of PPP scheme in this project. In response to this decision, the facilities for preparation of the project under PPP scheme by PT SMI was decided to be discontinued and returned to the Ministry of Transportation.

4. Monitoring and Debottlenecking

High Voltage Direct Current (HVDC)
KPPIP has supported the process of transfer of land required to be used as the location of the converter station from PT Perkebunan Nasional (PTPN) 7 to PT PLN. In November 2015, the appraisal process was completed and both parties negotiated the price. Therefore, the transaction process could take place in December 2015 so the transfer of rights over the land could be expedited and PLN could start the construction.

Additionally, KPPIP also encouraged the issuance of the Location Determination for Lahat – Gumawang transmission line required for the purpose of backfeeding for PLTU Sumsel 8 Mine Mouth Power Plant (PLTU Mulut Tambang Sumsel 8). If this backfeeding process is delayed, the schedule for the HVDC project is predicted to fall behind schedule.

 

Manado-Bitung Toll Road
In the coordination meeting held by Presidential Staff Of ce (KSP) in July 2015 and attended by stakeholders, among others, the Ministry of Public Works and Public Housing (MoPWPH) and the Provincial Government of North Sulawesi, KPPIP reported the progress of the preparation for Manado-Bitung Toll Road. Considering the issuance  of the Location Determination for the project and referring to Article 36 of Presidential Regulation No. 38 of 2015, procurement for the PPP Executing Business Entity was put out to tender. The Indonesia Toll Road Authority (BPJT) carried out pre-quali cation stage from July to August 2015 and announced the result of the pre-quali cation stage on September 29, 2015 by producing a shortlist of four business entities, namely (1) Consortium of PT Jasa Marga – PT Wijaya Karya – PT Pembangunan Perumahan, (2) PT Bangun Tjipta Sarana, (3) Consortium of HCM – Dewanto, dan (4) PT Waskita Toll Road.

 

Balikpapan-Samarinda Toll Road
In the coordination meeting held by KSP in July 2015, KPPIP reported the progress of the priority projects in the toll road sector, including Balikpapan-Samarinda toll road. Considering the issuance of the Location Determination for the project and the progress of land procurement that had achieved more than 75%, and referring to Article 36 of Presidential Regulation No. 38 of 2015, the tender for procurement of PPP Executing Business Entity was held. Through the coordination following the tender, BPJT carried out a pre-quali cation between July and August 2015 and selected four business entities, namely (1) Consortium of Naza Engineering and Construction Sdn Bhd – PT Daya Mulia Turangga, (2) PT Waskita Toll Road, (3) Consortium of PT Citra Marga Persada – PT Kaltim Binasarana Konstruksi – PT Brantas Abipraya – PT Istaka Karya dan (4) Consortium of PT Jasa Marga – PT Wijaya Karya – PT Pembangunan Perumahan with the noti cation of award sent on November 27, 2015.

 

North-South Corridor of MRT Jakarta
KPPIP facilitated the support for acceleration in the signing of the exchange note required to secure the execution of the loan agreement. A close coordination between the Ministry of Finance, Ministry of National Development Planning/ Bappenas, and Ministry of Foreign Affairs was needed during the steps to conclude agreements on the substance of and mechanism for loan disbursement. As a result, the exchange note was signed on November 27, 2015, and the loan agreement was targeted to be executed in December 2015.

 

Trans Sumatera Toll Road

KPPIP facilitated the initiative to coordinate integrated infrastructure development in Sumatra by using Trans Sumatra toll road as the backbone of the cross-sectoral infrastructure development. The coordination is aimed at optimizing the utilization of the toll road track and involving a number of stakeholders, among others, the Ministry of Public Works and Public Housing (BPPASPAM, Cipta Karya and Directorate General of Water Resources, Ministry of Energy and Mineral Resources (Directorate General of Oil and Gas and Directorate General of Electricicy), Ministry of Transportation (Directorate General of Railway), Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (MoAASP/NLA) Ministry of Environment and Forestry, Ministry of Communication and Information, PT Hutama Karya, PT PGN and PT PLN.

KPPIP facilitated a series of coordination meetings and collected data and information related infrastructure development plan from each institution. Considering that the integration plan will use the toll road track, further coordination will be made by the Regional Infrastructure Development Agency (BPIW) and MoPWPH with the support of ad hoc coordination by KPPIP.

In addition, KPPIP also monitored the revision process of Presidential Regulation No. 100 of 2014 on the Acceleration of Toll Road Development in Sumatra until the issuance of Presidential Regulation No. 117 of 2015 in October 2015 to include the assignment of 24 road sections to PT Hutama Karya. Out of the 24 sections, 8 priority sections are targeted to be in operation by 2018-2019.

5. Improvement to Regulations

Presidential Regulation on National Strategic Projects

The Presidential Regulation on National Strategic Projects (PSN) aims to provide special facilities for the projects serving national strategic interests so that the provision of the infrastructure can be made easier and faster. The facilities provided under the Perpres (Presidential Regulation) cover permits-and-licenses and non-permits- and-licenses facilities, government procurement, land procurement, local content, debottlenecking support and government guarantee.

KPPIP was appointed as the party in charge of selection of the PSN. Since September 2015 KPPIP has been preparing for the establishment of a criteria for selection and has selected the projects based on information and con rmation from the Project Implementing Agencies. After undergoing such a process, KPPIP selected 225 projects and 1 electricity program as described in the PSN Regulation Attachment.

Presidential Regulation No. 3 of 2016 on the Acceleration in the Implementation of National Strategic Projects and Presidential Instruction No. 1 of 2016 on the Acceleration in the Implementation of National Strategic Projects were issued in January 2016.

 

Decision of the Coordinating Minister for Economic Affairs on the Working Team for the Acceleration of Land Acquisition

The process of land procurement for infrastructure projects often poses as a major hurdle. A large number of inter- ministerial or inter-institutional stakeholders are involved a large variety of land procurement obstacles starting from the planning stage to the delivery of the result requires intensive and comprehensive coordination. In response to this matter, KPPIP nds it necessary to establish a Working Team for the Acceleration of Land Acquisition that consists of Coordinating Ministry for Economic Affairs, Coordinating Ministry for Maritime Affairs, Ministry of Finance, Ministry of the Environment and Forestry, Ministry of Foreign Affairs, Ministry of State-Owned Enterprises, Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (MoAASP), Ministry of Religious Affairs, Attorney General’s Of ce and the National Police of the Republic of Indonesia. In order to support the working team in their job, a Technical Team will be established, with details of membership and duties of which shall be determined by the MoAASP based on the requirement for settlement of land procurement issues.

The letter of decision on the Working Team for the Acceleration of Land Acquisition was targeted to be issued in January 2016.

6. Facilitation for Capacity Building of Apparatus and Institutions Related to Priority Infrastructure Provision

In 2015, KPPIP’s capacity building activities were still focused on building KPPIP’s internal capacity in performing the mandates it had received. KPPIP organized workshops on November 30 and December 1 to improve its capacity to apply the Outline Business Case (OBC) Guideline, determine the funding scheme, and monitor the projects and resolve issues.

B. Operationalization of KPPIP’s PMO and Development of Working System

Operationalization of KPPIP’s PMO (Project Management Of ce)

The Project Management Of ce (PMO) was established at the beginning of 2015. The KPPIP’s PMO consists of professional experts led by the Program Director for the purpose of supporting the operation of the KPPIP. The PMO has the duties to provide full support and conduct analysis required during the preparation for and implementation of priority projects.

In August 2015, the Program Director, Director of Finance, Director of Energy and Electricity, and Accountant were appointed and started performing their duties. Meanwhile, KPPIP has planned and conducted preparation for the tender for other expert positions for the year 2016.

 

Integrated Information Technology (IT) System

In order to provide an integrated IT system as the information and data base for the development of the projects being monitored, KPPIP appointed PT Accenture Indonesia to build the IT system which was targeted to be completed by the end of December 2015.

Its initial implementation will be by KPPIP, the system was expected to be used by all Implementing Agencies in Ministries/Institutions and SOEs to report the progress and issues during preparation and implementing stages of the projects. This IT system is expected to improve the level of accuracy in the data as they will be updated on a real time basis by the parties performing preparation and implementation activities for the projects. To support the project management functions and activities at each stage of the project cycle, the IT system will provide data and information that encompass:

  1. Project Status Overview Dashboard: displays the project performance as a whole from the point of view of development and achievement of actual project phases as well as the latest issues about the project;
  2. Milestone Analytical Dashboard: displays information concerning potential delay in the project based on the plan and actual conditions of the project;
  3. Project Performance: displays information concerning details of a project from various perspectives such as general information about the project, progress of preparation, as well as the risks to and issues about the project;
  4. Data webservice and Batch Uploader: are features in an application to make the data maintenance process easier using program uploading or interface with the application currently available at the Ministries/ Institutions;
  5. Project Risk and Issue Dashboard: displays the status of risk mitigation and settlement of issues in all projects available on the KPPIP’s dashboard.

All data and information in the system will be used by KPPIP to monitor and evaluate preparation for and implementation of the project as well as becoming the basis for decision-making related to the projects.

C. KPPIP Budget Realization

Budget realization was accelerated after the establishment of the PMO at the second semester of 2015. Throughout the year 2015, KPPIP absorbed 61.76% of the total budget where 62.62% of it was spent on consulting services (Strategic Studies on Jakarta-Bandung HSR, Pre-Feasibility Study for Bontang Re nery, Value for Money and AM- DAL Studies for Panimbang-Serang Toll Road and KPPIP IT System mockup). On top of that, 16.96% and the total budget absorbed was spent on daily operation expenses; 8.14% on the fees of services rendered by individual consultants, 4.75% on overseas business travel, 3.49% on out-of-town businesss travel, 2.62% on within-the-city business travel, and 1.41% on other operational expenses.

In 2015, KPPIP succeeded in funding 4 studies on project preparation which were completed in December 2015. The results of the studies play important roles in the decision making and progress of priority projects.

 

Realization of 2015 Budget by KPPIP – 61.76%

 

achievements_kppip_budget_realization

WhatsApp chat