chapter 5. demand creation and introduction of …287 chapter 5. demand creation and introduction of...
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287
Chapter 5. Demand Creation and Introduction of Company to
Indonesia
To look for potential tenants into NARC, Indonesian and Japanese companies have been
examined.
With cooperation of IPB, ITB and BTTP in Indonesia, potential tenants list were made and JICA
team visited the companies with above organizations researchers. In addition, JICA Study Team
visited Japanese companies which had business relation with member companies of the team and
which were shown in web. The team has looked for companies which have possibility of the
entering into Indonesia bio cluster (NARC).
5.1 Examination of the Field of Tenant Target
The bio-industry is the industry that a big market is predicted worldwide. Not only developed
countries but also developing countries have put emphasis on bio-industry because it will be
trigger for economic growth. When assorting bio-industry according to the product wise or
utilization wise, classification is as follows:
-Pharmaceutical products, new medical care development
-Energy
-Environmental conservation
-Chemicals manufacturing(Chemical Refinery)
-Food, food production
-Basic separation technology (elemental technology development)
According to the examination in Indonesia, although the production and sale of the herbal
medicine (Jamu in Indonesia word) is accomplished, chemical synthesis medicines are not made
in Indonesia where chemical industry is not developed enough. Therefore the country has
imported raw pharmaceutical materials from India and China, and Japan, the country has
produced presently generic medicines. Some visited companies have intensions in future to
produce chemical synthesis pharmaceuticals in Indonesia. These companies want to produce new
chemical medicines with help from foreign countries in the facility of NARC.
According to the AIST, there are many countries which produce generic drugs. But there are only
10 countries in the world that can produce new medicines and Japan is only one country
producing new drugs in Asia. It is considerably challenging that Indonesia goes into this world
and this does not realize without providing Japanese support. Although AIST does not involve
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agriculture field, it is related with food and energy fields. Although it has conducted bio-energy
research field and generally it is competitiveness with food problems, only Brazilian sugar cane
has competitiveness. Micro-alga (Micro-Algae) energy density is small and there is a little yield.
Theses research and development shall be carried out considering the present conditions and
future energy price. In addition, Jetropha tree that is considered suitable for Indonesia where there
are many islands. This plant does not become edible, and there are not competing with food. It is
a point whether self production and self consumption can be performed as stand-alone in terms of
cultivation, refinement, storage. Therefore, if transportation cost is generated, it does not become
economical. This field is relatively new field and there is few private enterprise.
This study do not include raw materials of bio fuels(bio-ethanol, bio-diesel) such as cassava,
sugar cane, etc. which have been competitive with foods.
5.2 Major Research Theme Using Bio Diversity
Research theme connected to business establishment and model building were examined from bio
cluster literatures in Japan, USA and Europe and interviews of researchers. Research theme in
BPPT, IPB and ITB utilizing Indonesian abundant biological resources and Indonesian marketing
characteristics, were searched as much as possible.
In the Indonesian bio cluster plan, its business plan shall be, of course, targeted to international
direction, and also its direction of theme must include regional oriented theme. These research
theme are important information to introduce enterprises into NARC facility.
Table 5.2.1 Study Theme (using bio diversity) of BPPT
Table 5.2.2 Study Theme (using bio diversity) of IPB
Table 5.2.3 Study Theme (using bio diversity) of ITB
5.2.1 Study Theme (Using Bio Diversity) of BPPT
Table 5.2.1 shows research theme which BPPT has implemented. Major research target are
Medicinal Plants, Pharmaceutical grade starch for Excipient, Vaccine and Diagnostics,
Microbes-based products, Assay System, Fishery (Thilapia), Cacao, Rubber Tree, Feedstock for
bio-energy, Oil palm, Land Bioremediation, Bio refinery. As BPPT is governmental organ, the
width of research theme is very wide and those research were considered requested theme from
Indonesian various organizations. In the Pharmaceutical field, these theme are new medicines
development using Herbal plant like Chinese medicines, development for remedy medicine and
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vaccine for malaria and dengue fever, the medicine development using microbe. Food
development is theme using cacao, palm oil and emergency food.
Table 5.2.1 Theme of Bio Resource-Based Research and Innovation in BPPT
Field Theme Medicinal Plants Bioprospecting of medicinal plants for degenerated diseases (anti diabetic,
anti cholesterol, anti ageing, and anti uricemia). Bioprospecting of medicinal plants for infectious diseases (malaria; dengue
hemorrhagic factor- DHF; HIV) Bioprospecting of medicinal plants for cosmetics (whitening, wound
healing, anti acne)
Application of nano technology on herbal medicine to improve efficacy and reduce dosage.
Improvement of medicinal plant seedling through breeding, biology molecular and tissue culture
Pharmaceutical grade starch for Excipient
Development of technology for production of pharmaceutical grade starch from cassava.
Vaccine and Diagnostics
Development of vaccine and diagnostic test for infectious diseases (dengue, malaria, HIV)
Seed development for HbSAg protein-based vaccine production isolated from local strain using Saccharomyces cerevisiae expression system
Development of Technology for the production of Nano adjuvant for H5N1(avian influenza) vaccine from Curcuma xanthorrhiza
Development of Tools for Vaccine Production (Expression vector, host cell) from Indonesian indigenous strain)
Microbes-based products
Bioprospecting of Indonesian microbes for medicine (antibiotics, anticancer and anti malaria) and agriculture (enzymes, anti phytopathogen, bactericides, herbicides, fungicides, probiotics, waste decomposer, animal feed, root growing and promoter)
Biotech-based Process production of pharmaceutical and industrial products (Penicillin G, Erythromycin, Tetracycline, Cephalosporin, Cyclosphorin, Vitamin B12)
Exploration, collection, preservation of Indonesian Microbial Resources from Soil, insect, plant, and marine organisms.
Assay System Development of assay system by Screening of useful compounds for treating of infectious diseases (anti-microbe, anti-malaria, anti-dengue, anti-virus, etc.) and degenerative diseases (anti-diabetic, anti- aging, anti-cancer, etc)
Emergency Food Formulation of Emergency food containing high carbohydrate, protein, mineral, fiber and immunomodulatory compounds for first aid in the catastrophic area.
Fishery (Thilapia) Development of Technology for the production of Superior, fast growing and disease resistant Thilapia.
Development of technology for the production of Thilapia vaccine against streptococcus.
Recombinant protein for growth hormone in Thilapia Cacao Micro grafting of cocoa (Theobroma cacao) for seedling improvement Biopesticide for integrated pest and disease management of cocoa. Rubber Tree Development of technology to increase quality and productivity of natural
rubber (latex) using genetic engineering.
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Field Theme Feedstock for bioenergy
Searching for 2nd
generation feedstock (straw, stalk of sweet sorghum, empty fruit bunch (EFB) of oil palm fruits, woody residual, etc) for bioethanol production
Oil palm Development of Technology for the production of Palm Oil derivatives Development of Technology to process palm oil byproduct into animal
feed
Development of Technology to process palm oil fruit bunch into bioethanol Development of Technology for the production of oleo chemicals from
palm oil Development of Technology for the production of oleo food from palm oil Development of Technology for the production of less saturated fatty acid
of palm oil. Chloroplast transformation of oil palm to enhance the quality and yield of
oil palm tree. Early Detection of Ganoderma for Eco-Friendly Basal Stem Rot Disease
Control in Oil Palm
Techno economic study on palm oil derivative products Development of information and communication system of palm oil Land Bioremediation
Utilization of microbe consortium for land bioremediation
Improvement of Eco physiology of microbes for land bioremediation Bio refinery Bio refinery process for the production of functional foods, biocatalyst and
agrichemicals Development of plant micropropagation techniques of potential plants
(Rubber tree, orchids, teak wood, oil palm, banana, Jatropha, sago palm, red wood, and medicinal plants)
Source: BPPT
5.2.2 Study Theme (Using Bio Diversity) of IPB
Table 5.2.2 shows collaborating research theme with enterprises, universities in and out of
Indonesia. As chemical synthesis medicines are generally expensive in Indonesia, many
Indonesian people like to take ―Jamu‖ like Chinese medicine. IPB has Biofarmaca center (Herbal
Medicine) of which theme is mainly herbal medicines research and development. In Table
5.2.2(1)-(3) there are many research theme related with effective herbal medicines research. In the
Biofarmaca center, they sell these medicines as outcome of research.
Table 5.2.2(1) IPB Study Theme in the Biopharmaca Collaborated with Companies,
Governmental Institutes and Universities
Name of Counterparts Activities Industries 1. PT Bintang Toedjoe (National
Pharmaceutical Industry) 2006 until now
Research collaboration from 2006, grant were received from PT Bintang Toejoe and government.
Collaboration to develop product of herbal medicine from standardized extract –
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Name of Counterparts Activities phytopharmaceutical product (cholesterol reducer, anti rheumatic, anti inflammation, immunostimulan)
Production of herbal medicine as result of research collaboration and Biopharmaca Research Center (BRC) research results. To be commercialized by PT Bintang Toedjoe.
2. PT SOHO Industri Farmasi (Pharmaceutical Industry) 2009 until now
Collaboration for developing the Biopharmaca plantation region in the Sukabumi district since 2009, Especially for Curcuma xanthoriza and Curcuma domestica.
Mapping of region for plantation and station (Master plan formulation).
Cultivation and production of curcuma xanthoriza under supervision of BRC researcher.
Research on the standardization of Curcuma xanthoriza and Curcuma domestica through metabolic and genomic approach
Research on the formulation of nanocurcuminoid for increasing bioavailability as an antioxidant and antiinflamation.
3. PT Primax Asia Link Since 2010
Research collaboration on domestication and cultivation of trenggiling (Manis javanica).
Research efficacy of M. javanica.
4. PT Erjan Biocell Pharmaceutical Since 2010
Collaboration on commercialization of research product, and herbal product of academic venture of BRC.
Research on the scientific background for selected products.
5 The Indonesian Herbs & Traditional Medicine Association (GP Jamu) 2008 until now
Collaboration of dissemination of research output to the industries under GP Jamu coordination, through seminar, discussion and business meting.
Collaboration to perform National and International seminar on Indonesian herbal medicine.
To perform the globalization of Jamu on May 2011.
6. PT Indofarma 1999-2004
Research collaboration on cholesterol reducer, immunostimulan and hepatoprotector herbal medicine.
Performed the National Seminar (1999, 2003)
7. PT. Biolife 2000-2002
Research collaboration on hepatoprotector. Performed the research product
dissemination 8. PT Agrofarmaka Nusantara
2003-2005 Product development and sharing laboratory
facilities 9. PT Tulada Research collaboration on potency of marine
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Name of Counterparts Activities 2003-2006 biota especially sponges as anti cancer
10. PT Zahda Ashira Mulia 2006
Research collaboration on feasibility study of medicinal plant plantation
11. PT Vitaher 2005-2008
Supervision for curcuma xanthoriza export
12. PT Ultra Trend 2006-2008
Research collaboration on screening for ant diabetic formula
13. PT Charoen Phokphand 2008-2010
Research collaboration on antioxidant for chicken feed
14. PT Bukit Asam Product development from cajuput Government Institutions 15. Coordinating Ministry of Economic
Affairs Republic of Indonesia 2007 until now
To create Jamu as brand of Indonesia since 2007, through seminar, exhibition and policy paper.
To synergizes all of the stakeholders to develop the herbal in the formal health care system in Indonesia.
To create Internationalization of Jamu. Designed roadmap of jamu in Indonesia
collaborated with many ministries in Indonesia.
To perform the globalization of jamu on May 2011.
16. Ministry of Agricultural Republic of Indonesia 2003 until now
Research collaboration on cultivation of potential medicinal plants and medicinal plants farmer supervision since 2003.
Supervised groups of farmer to export curcuma xanthoriza to Korea.
Research on developing and using the bio regionalization concepts in cultivated the medicinal plants.
Designed roadmap of jamu in Indonesia collaborated with many ministries in Indonesia.
To perform the globalization of jamu on May 2011.
17. Ministry of Health Republic of Indonesia 2009 until now
To create and established the jamu sanctification program.
Designed roadmap of jamu in Indonesia collaborated with many ministries in Indonesia.
To perform the globalization of jamu on May 2011.
18. The National Agency of Drug & Food Control Republic of Indonesia 2004 until now
Collaboration on research and policy since 2004.
Research Collaboration on selected national priority of medicinal plants in cultivation and efficacy 2005-2008.
Mapping Indonesian Medicinal plants at 2004-2007.
Designed roadmap of jamu in Indonesia collaborated with many ministries in Indonesia.
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Name of Counterparts Activities To perform the globalization of jamu on May
2011. 19. Association of Indonesian Herbal
Medical Doctors 2008 until now
To improve the nationalization of jamu in Indonesia by jamu sanctification program (policy seminars, exhibition).
20 Indonesian Medicinal and Aromatic Crops Research Institute, Estate Crops Research and Development Institute (BALITTRO) 2002 until now
Collaboration on research and policy since 2002.
Research collaboration for developing cultivation and production of medicinal plants, through the funding of Agriculture Minister since 2004.
Designed roadmap of jamu in Indonesia collaborated with many ministries in Indonesia.
To perform the globalization of jamu on May 2011.
21. Bogor City Government 2008 until now
Supporting national and international seminar on Indonesian herbal medicine and other activities of BRC.
22. Sukabumi City Government 2009 until now
Collaboration in developing Biophramaca region with PT SOHO since 2009.
Supporting and supervising the farmer which involve in the cultivation of C. xanthoriza.
Research on cultivation of some medicinal plants which it use in the program of jamu scientification.
Sukabumi City Government provided agricultural land to cultivate the potential medicinal plants for research and production.
23. Ministry of Research and Technology of Indonesia 1999 until now
Providing competitive research funding
24. Ministry of Education 1999 until now
Providing competitive research funding
Indonesian Universities 25. Lambung Mangkurat University,
Kalimantan Selatan (South Kalimantan) 2005 until now
Internship and supervising on research in medicinal plants.
Research collaboration on Tabat Barito for product development.
26. Palangkaraya University, Kalimantan Tengah (Center Kalimantan) 2007 until now
Research collaboration on cultivation of croton tiglium as biological larvacide for preventing dengue haemorraghic fever.
27. Airlangga University, Surabaya, Jawa Timur (East Java) 2008 until now
Research collaboration on clinical assay of cholesterol reducer herbal medicine.
Collaboration for program of jamu scientification.
28. Mulawarman University (East Kalimantan) 2003 until now
Collaboration in empowerment community of the ITTO (International Tropical Timber Organization) project since 2003.
Research collaboration on the potency of wood for antibacterial and GTS.
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Name of Counterparts Activities Initiating research collaboration on
Goniothalamus macrophylus for TNF- activity.
Overseas Universities 29. Australian National University
2005 Research collaboration on jamu for women
30. University of Seoul, South Korea 2003-2005
Research collaboration on screening of anticancer potency
31. Yonsei University, South Korea 2000-2008
Research collaboration on curcuma xanthoriza
Researcher exchange Performed First International symposium on
curcuma xanthoriza
32. Beijing University of Traditional Chinese Medicine, China 2008-2009
Researcher exchange Performed First International symposium on
curcuma xanthoriza
33. Chengdu University of Traditional Chinese Medicine, China 2004 until now
Research collaboration on dementia herbal medicine
Researcher exchange International symposium on Traditional
Chinese Medicine To perform the second international
symposium on curcuma xanthoriza (Jamu Globalization)
Overseas Companies 33. Oxford Natural Product Company
2002-2003 Research collaboration on survey and
database preparation of jamu ingredients from Jawa and Bali
Source: IPB
Table 5.2.2(2) IPB Study Theme in the Biopharmaca Collaborated with Japanese
Universities/Research Institutes/Companies in 21st Century
Name of Japanese
Universities,
Research Institutes,
Companies
Details of Collaboration Activities
Gifu University
Research collaboration on:
(1) Ant acne potency of Indonesian medicinal plants,
(2) Potency of Indonesian medicinal plants as whitening agents and
(3) Slimming agents based on aromatherapy.
Provided graduate student (Ph.D) grant for BRC IPB researcher or
IPB lecturer.
Many publications resulted from this collaboration (attached)
Ehime University Sending 3 staffs of Department of Chemistry IPB to conduct
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research as both long-term postdoctoral program as well as
short-term research fellow at the laboratory.
Research collaboration on:
Long-term postdoctoral program has generated 6 abstracts
presented at international conference, 4 published
international journal and 3 papers submitted to international
journal.
Nanomaterial, soil & environment and its innovation on
nanomaterial synthesis and composite based on material from
inorganic waste.
Nanomaterial as anti microbial and antioxidant herbal
medicine.
Research collaboration with Dept. of Pharmacology, Ehime
University School of Medicine, Japan for preclinical assay
of Indonesian herbal medicine.
Sending 1 Master student of IPB for doing experiment for his
thesis.
Ehime University
Research Collaboration on the cellular mechanism of jati belanda and
salam leaves extracts in the therapy of cardiovascular disease
Kyoto University Research Collaboration on biosensor and International Seminar on
Sensor and Biosensor (Prof Tokuji Ikeda/ previous professor) in 2005
Shinshu University Research Collaboration on biosensor and Visiting professor from
Kyoto University to give lecture focusing on Biosensor
NAIST (Nara
Institute of Science
and Technology
Research Collaboration on jamu database
Obihiro University Research Collaboration on functional food
Source: IPB
5.2.3 Study Theme (Using Bio-Diversity) of ITB
The main study themes of ITB are classified in Energy, Health, Environment, Manufacture and
Information and Communication Technology. The sub-theme of each field are listed in Table
5.2.3(1). The ITB Bio-Energy theme is shown in Table 5.2.3(2). These themes are the most
advanced research theme in the world.
Bio-refining theme which ITB is carrying out is shown in Table 5.2.3(3). This field is a relatively
new field and even in Japan this is new field, and it shows the height of the level of the university
that already started the study. The background of this study which attracts attention is to create the
petrochemical products from bio raw materials instead of hydrocarbons such as oil, coal, gas
which are believed to generate Global Warming. This study is a big plan for human being.
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Table 5.2.3(1)-(3) are retrieved from ITB Research Theme of which data source are from
Proposal of New Academic Research Cluster prepared by ITB.
Table 5.2.3(1) Cluster and Research Topics
No. Cluster Research Topic
1 Energy Biorefining Research and Innovation Center
Smart Grid for Sustainable Electricity
2 Health
Green Pharmacy for Smart Community
Center For Bioindustrial-Based Research
Biomedical and Sport Research Center
(BSRC)
3 Environment
Laboratory of Environmental Analysis
Environmental and Health Risk Assessment
for Industry Research Center:
Research Center for Waste and air
Management Technology
Research Center for Bio-eco engineering
in reducing pollution from industrial waste
4 Manufacture
Biobased-industry Equipment
Manufacturing and Product Development
Center
5 Information and
Communication Technology
Advanced Research on Information and
Communication Technology
6 Incubation Center
Source: ITB NARC Proposal
Table 5.2.3 (2) ITB Bio Energy Related Research Category
ITB Research Category
1 Biodiversity of micro and macro alga
2 Bioethanol from Lignocellulosic Biomass
3 Xylitol Production from Lignocellulosic Biomass
4 Green Diesel
5 Bio-BTL (biohydrocarbon)
Source: ITB NARC Proposal
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Table 5.2.3(3) ITB Existing Research Theme on Biorefining
Energy Cluster
Research Themes
Parameters
Facilities Key Services Service Contents Human
Resources
Current System
Biodiversity of micro
and macro alga
- Culture collection of macro
and microalga
- Mini fotobioreactor for
microalga cultivation
- Medium scale fotobioreactor
- Alga
development
- Lab scale culturing and
development of various
strain of alga
- Professor 2
- Senior
Researcher 2
- Junior
Researcher 5
- Patent on fotobioreactor
Bioethanol from
Lignocellulosic
Biomass
- Pretreatment (lab scale, low
temperature)
- Bioreactor (lab scale)
- Analytical instrumentation
(HPLC)
Process and
biocatalyst
development
Preliminary studies on
pretreatment,
Lab-scale production of
bioethanol,
Biocatalyst examination
for xylitol production
Existing
Professors are
available (2)
Senior
researchers
(PhD = 5)
Requested a proposal to
build pilot plant (10 L) from
industrial partner and
strategic industrial
collaboration for process
development is developed
Xylitol Production
from Lignocellulosic
Biomass
Funded by RUNAS
(Excellent National
Research)
Green Diesel a) Catalyst Characterization
b) Catalyst Testing
Process
simulation and
development,
including
catalyst
preparation
(Limited) Catalyst
development and
characterization (BET,
XRD)
Catalyst Testing (batch
and continuous)
Professors: 1
Senior
researchers
(PhD): 2
Industrial collaboration for
process development is in
progress Bio-BTL
(biohydrocarbon)
a) Catalyst Development
b) Reactor setup
Source: ITB NARC Proposal
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5.3 Interviews to Enterprises and Search for Possible Tenants Candidates
As mentioned above, bio research and development includes pharmaceutical products, new
medical care development, energy, environmental conservation, chemicals manufacturing, food,
food production, basics separation technology (elemental technology development). Therefore
there are many bio industry related companies in, of course Japan, Taiwan, Korea, Singapore,
Indonesia, Europe like German and UK, and the US. In this project, JICA Study Team target and
squeeze Japanese companies and Indonesian companies that have relatively high potentiality
compared other countries, as potential tenants candidates. And the team lists potential tenants
candidates by the support from BPPT, IPB and ITB and then the team visits companies and
interviews them.
Furthermore, the team hires a local consultant to implement ―Local Market Survey‖.
Table 5.3.1 Contents of Market Survey
Investigation
Item
-Preparation for Potential Tenants List in Indonesia and Japan
-Through interview the companies, examine their intension and requests or
conditions to become tenants
Work in Japan
1st Phase
-Check Potential tenant from the homepage
-Picking up companies with the possibility from customers lists
Work in
Indonesia
-Preparation for Potential Tenants List in Indonesia and foreign countries
introduced by BPPT, IPB and ITB
-Squeezing companies in Indonesia to be visited, with consultation with
BPPT, ITB and IPB
-Visit and Interview with potential companies in Indonesia
-Consultation with Indonesian governments, JETRO and JJC (Jakarta Japan
Club)
-Consultation with JICA expert in BKPM
-Hiring a local consultant to implement local market survey
Work in Japan
2nd Phase
-To Interview to high potential tenants in candidates list
-To find out potential tenants in " BIO JAPAN 2013‖
Source: JICA Study Team
5.3.1 Preparation and Result Evaluation of Potential Tenants List
The team made the List of the possible tenants candidate in the Indonesian companies based on
the information that the Team obtained from BPPT, IPB and BPPT. In addition, the team made
potential tenants list from the customer list of Chiyoda and Mitsubishi Corporation. In Jakarta, the
team visited Jakarta Japan Club (JJC) and obtained relative information. And the team visited the
Japan office of Indonesia Investment Coordinating Board (BKPM) to collect Japanese companies
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that want to invest in Indonesia. In addition, in the ―Bio Japan‖ performed in October 9 to 11 2013,
the team sent invitation letters to around 300 customers enclosing the outline of NARC and
questionnaires. The team installed a booth in the Bio Japan venue of Yokohama Pacifico and
conducted Publicity work to catch possible tenants candidates using the business matching
system with the customers
A local consultant of Jakarta was employed to conduct the local market survey from the data of
associations of Food, Energy and Pharmaceuticals and the consultant interviewed companies
instead of the team.
Table 5.3.2 and table 5.3.3 show a list of Japanese potential tenants and Indonesian tenants to
NARC respectively. Table 5.3.2 includes the results of the Matching meeting in BIO JAPAN 2013.
The team found several potential tenants by the meetings.
And interviews to local potential tenants are still continuing and until the final report, more
possible tenants are able to be found.
Table 5.3.2 Potential Tenants List and Interview Results in Japanese Customers
(Including the results of Bio Japan 2013)
Company
Name
Future Research
Theme
Request to
NARC
Potential-
ity of
tenants
Interview Other
1
A- Comp.
(Tire
Producer)
Improvement
byprovement e from
Effluent
High Finished Collaboration
with BPPT
2
B- Comp.
(Pharmaceuti
cal Producer)
Vaccine
development for
Malaria and Dengue
fever
-Subsidiary of
research fundri
-Technology
transfer to
Indonesians
High Finished Presentation
to BPPT
3
C- Comp.
(Bio
Cultivation)
Production of
cultured raw
medical materials
High Meeting
in Bio
Japan
Collaboration
with BPPT
4
D- Comp.
(Health
Drink)
Utilization of
Fertilizer from
seasoning effluent
High Meeting
in Bio
Japan
Collaboration
with BPPT
5
E- Comp.
(Supplement
& Cosmetic)
Healthy drink
development
High Met in
Indonesia
6
F- Comp.
(Pharmaceuti
cal Producer)
Functional beverage
and Cosmetics
development
Necessary for
Governmental
Approval
High Meeting
in Bio
Japan
300
Company
Name
Future Research
Theme
Request to
NARC
Potential-
ity of
tenants
Interview Other
system
7
G- Comp.
(Pharmaceuti
cal Producer)
Sales and
Development of
diagnosis medicines
High Meeting
in Bio
Japan
8
H- Comp.
(Pharmaceuti
cal Producer)
Natural
fermentation met
with Asia
High Meeting
in Bio
Japan
Searching for
the place
of Asian
research
center
9
I- Comp.
(Pharmaceuti
cal Producer)
New medicines
from bio plants
Medium Meeting
in Bio
Japan
Searching
Asian Center
1
0
J- Comp.
(Bio library)
Offshore library
Data base
Necessity of
Incentive
High Meeting
in Bio
Japan
Target From
Okinawa to
Indonesia
Source: JICA Study Team
Table 5.3.3 Potential Tenants List and Interview Results in Indonesian Customers
(Including the results of local market survey)
Company
Name
Future Research
Theme Requests for NARC
Potentiality
for Tenants Others
1
I-1 Company
(Pharmaceutical
Manufacturer)
Development for
Active Ingredient
(Low Vol. / High
Value)
-Subsidiary for Research
by the government Fund
High Collaboration
with BPPT in
future
2
I-2 Company
(Pharmaceutical
Manufacturer)
Vaccine & Blood
Products
-Animal Experiment
Labo. & QC Center,
-Patent Support by
Support Center
High Collaboration
with BPPT in
future
3
I-3 Company
(Pharmaceutical
Manufacturer)
-Clinic Trial Labo
-BABE facility
-Substitution of
Importing
Ingredient
-Necessity for Human
Resources Development
High Collaboration
with BPPT in
future
4
I-4 Company
(Pharmaceutical
Herbal Industry)
-Nano Medicines
-New Chemical
Entity from Herbal
-DDS & Biosimilar
-Training & its Facility
・-Stable Power Supply
High
(As a tenant)
Cooperation
with
Singapore
Labo.
301
Company
Name
Future Research
Theme Requests for NARC
Potentiality
for Tenants Others
-
5
I-5 Company
(Pharmaceutical
Herbal Industry)
-New materials and
new plants for
innovative product
-Technology for
scale up
-Collaboration with
overseas institutes by
governmental support
-Scale up technology
-Researchers
Position(Certification &
international acceptance)
-Workshop
High (As a
tenant)
6
I-6 Company
( Cosmetic &
Herbal)
-Cosmetics from
Natural Herbal
-Possibility
collaboration&
technology transfer from
overseas manufacturers
Medium
7
I-7 Company
(Bio Energy)
-Supporting Mini
scale technology &
Industrialized
technology
-Possibility collaboration
in developing mini scale
project until industrial
scale
Medium
8
I-8 Company
( Poultry
Industry)
-Feed technology
& Production
technology
-Certainty of land
use
-No need Governmental
research fund
-Tax reduction due to
research investment
High
9
I-9 Company
（Stem Cell
Bank)
-Research on storing Stem Cell
in low temp
-Dormitory
Clean Room
-Recruiting of
Professional Engineers
-Interest as a
tenant
-0.5M$*
Note-1
-Location at
Serpong
10
I-10 Company
( Petroleum &
Petrochemicals)
-Japanese trend of
bio fuel
technology
-To be discussed with
Head Office in future
-Securing Breeding Land
for Bio-mass
-Cooperation
with
governmental
policies
-Interest in
a tenant for
bio energy
-20Bil.Rp*
Work with
many
universities
11 I-11 Company
（Bio Energy）
-New Bio fuel not
using palm oil
-Securing Plantation area As a tenant
12
I-12
Company
(Food &
Agriculture)
-Development of
new pesticide
-More information
-Location at Serpong
-Tax Reduction
As a tenant
2-3Bil. Rp*
13
I-13 Company
(Bio Energy)
Renewable energy
(biofuel) using
Jetropha
-Specifications stipulated
by the government
-More participation by
many companies
-As a tenant
-Research
Fund
2 Bil.Rp*
14 I-14 Company
( Pharmaceuti
-Herbal Medicines
& Food
Supplements
-Incentives like
Singapore Biocluster
-Not enough government.
-Decision by
Kalbe
-500m2
Work with
IPB,ITB
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Company
Name
Future Research
Theme Requests for NARC
Potentiality
for Tenants Others
cal
Manufacturer)
-Nanotechnology
based products
budget for labo. test
-Bekasi
-Research
Fund* 10
Bil.Rp
15
I-15 Company
(Food)
Food (Production
of Cream in breads)
Many troubles experience
when establishment a new
factory in Indonesia
Low (To be
discussed
with
Japanese
head office)
16
I-16 Ministry
of SME
Encourage for
SMEs
-Provision for SMEs
encourage fund
To be
surveyed
17
I-17
GP Pharmacy Indonesia
Indonesian
Pharmaceutical
Manufacturers
Association
(Encourage
Pharmaceutical
Manufacturing
industry)
-Development anti-cancer
agent at reasonable
price
-Development of
bio-similar
-Tax reduction
To be
surveyed
18 I-18 Company
(Pharmacy)
Pharmacy Needs detail explaination
further about the scheme
before taking decision
Medium Reserach
based
company
19
I-19 Company
(Food)
Agriculture Research on increasing
palm oil productivity.
Medium Reserach
based
company
20
I-20 Company
(Aqua Feed )
Feed technology
and production
technology
Research collaboration on
aquaculture. It can be
investor if the scheme is
attractive
High It has research
center in East
Java with
around Rp 25
Bil.
21 I-21 Company
(Animal Feed)
Feed technology and vaccine
Research collaboration on
aquaculture.
High (need
to be
discussed
with
Netherland
Head
Office)
They do research in Taiwan and can move to Jakarta.
22 I-22 Company
( Aqua Feed)
Feed technology
and production
technology
Research collaboration on
aquaculture.
Medium Reserach
based
company
23 I-23 Company
( Animal Feed)
Feed technology
and production
technology
Research collaboration on
aquaculture.
Tax incentive
Medium Reserach
based
company
24 I-24 Company
(Animal Feed)
Feed technology
and production
technology
Needs detail explaination
further about the scheme
before taking decision
Low
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Company
Name
Future Research
Theme Requests for NARC
Potentiality
for Tenants Others
25 I-25 Company
( Animal Feed)
Feed technology
and production
technology
Research collaboration on
aquaculture.
Tax incentive
Medium Research center in East Java.
26 I-26 Company
(Cosmetics &
Health)
Research base clinic
Needs detail explaination
further about the scheme
before taking decision.
Medium Reserach
based
company
27
I-27 GPMT (Indonesia Feedmill Association)
Research collaboration,
tax incentive, workshop
To be
surveyed
Have 40 members of Feedmill company that lead Indonesia feedmill market
Note: Mark* shows research fund available for the company
Source: JICA Study Team
5.3.2 Companies Interview Results
The interviewed minutes of meeting of several major companies in Japan and Indonesia which
were visited, are shown below.
(1) Japanese Company Visit Results
1) A-company (Tire maker)
a) For the yield improvement of rubber tree, the company has collaborated with BPPT and
the company wants to serve the increasing and stable demand for natural rubber in the
future. The Indonesian government does not advise production increase in order to
avoid rubber price sudden fall.
b) A company has a research institute and a farm of the selective breeding of the rubber in
Medan of Indonesia.
Persuasion in the company is necessary whether A company prepare the research
institute in Jakarta. Preparations are necessary from now.
c) Selective breeding of the natural rubber
The improvement of rubber tree and understanding outcome of research take a time, of
course, including gene analysis.
A company purchases crude rubber of 300 billion yen a year and occupies world 10%.
The suppliers are from Southeast Asia in 90%. The most of plane tires (Boeing 777,787)
can be expected increase from now on.
d) Collaborative investigation with BPPT Indonesia
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BPPT has conducted patent sharing and cooperation with article making.
e) Incubation center: The research institute in Medan, has few measuring equipment
surely, and they seemed to have trouble. If the latest apparatus is introduced into this
incubation center and a result appears immediately, it will be attractive. But problems
are in the double investment.
f) This matter whether the company join the NARC, is not answered immediately, Yes or
Not, but this is reported to the upper management in the company. On the contrary, the
movement to investment is clear if a business scheme is formed.
2) B-Company (Pharmaceutical Producer)
There was the following suggestion from B Company;
The company visited BPPT LAPTIAB of Serpong and Bio Tech Center on September 20,
2013 and performed opinion exchange.
a) The company will build a generic medicine factory in Indonesia until 2016-2017. It has
been decided as a company, but the place is undecided and examines a site proposed for
3. A factory is in Bandung, but it became old and the company decided to make generic
drug products newly.
b) B-Company subsidizes Canadian pharmaceutical products company ―M‖ Inc. and runs
―M‖ Inc. in a joint venture with Philip Morris Investment B.V. of the cigarette company.
Using Virus like Particle (VLP) technology can make bird flu vaccine in ten weeks or
one month. On the other hand, the vaccine from chicken eggs takes a half year.
It is said that using tobacco leaves can produce 10 million tablets from approximately
1ha tobacco leaves farmland.
The land where there is not much rain is preferably, and the tobacco leaves like the
Indonesian highlands (tea, coffee production place).
c) B-Company wants to perform dengue fever and malaria vaccine development using
VLP technology in Indonesia. Although there are dengue fever and malaria vaccine
development, their prices are expensive and are not practical. And without large
quantities and cheaply, there is not a meaning of this vaccine. Because the developed
country does not have these diseases, as for the dengue fever and malaria, the European
and American medicine companies concentrate to copes with West Nile heat rather than
diseases. VLP technology can be applied theoretically in dengue fever and malaria
vaccine development, but whether the protein of tobacco leaves germinates in
generation mechanism of VLP should be tested in various ways. The company wants to
carry out development with financial support of JICA and/or the Indonesian
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government. Development costs around 50 million yen for one type of vaccine
development. Although the company wants to conduct technology transfer and the
researcher education, the company cannot serve it only in the company. However, it is
important that technology development is carried out for Southeast Asia and African
people saves. This project is hopefully conducted by the subsidiary of Japanese and
Indonesian governmental research fund.
(2) Interview Results with Indonesian Companies
1) I-1 Company and I-2 Company (Pharmaceutical producer)
a) Both companies present company profile in the form of short movie, and booklets
b) Both companies welcome and have interest in the concept of NARC
c) Related to the NARC concept on R&D facilities that private companies are expected to
invest on the erection of buildings and installment of equipment required, both
companies are not agree with the reason that it is not in accordance to the present
regulation that state own companies should not erect facilities in the land that not
belong to the company. Rather, they prefer all facilities and equipment are provided by
NARC, and they willing to rent the R&D facilities with competitive price.
d) I-1 proposed that R&D is totally supported by Government, conducted by Research
Institutes and Universities, I-1 willing to continue at production scale and marketing.
e) I-2 proposed that Incubation or Support Center will also handle the patent issues of all
products delivered by NARC, including filing and maintaining patent. These to avoid
all mistakes done by universities and research institute in Indonesia that experience
claiming right issues due to conducting research using materials (genes, genetics, etc)
that is still belong to other parties.
f) I-2 will much appreciate if NARC will provide facilities for research, scale up and down
stream processing for new and prospective products (vaccine and diagnostics), because
I2 Company Bandung does not have more space and facilities. All are already
occupied.
2) I-3 Company (Pharmaceutical producer)
a) Company Profile
-State Own Company: Government own 90%, Private 10%.
-Conducting up stream to downstream process.
-Have 5 production facilities: Iodine production in East Java; Cosmetic products in
Central Java and 3 other production factories for pharmaceuticals.
-Have 2 subsidiaries: 45 branches distributors; 500 Pharmacy retails.
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-Plan to build: as anticipation of Government new regulation on Social Health Security:
1000 health services (clinics), 250 diagnostics services.
-Future: Build many hospitals to conduct activities in lands own by company K F all
over Indonesia.
-Currently: 2 Stem Cell research and production: Surabaya
b) Comment and Proposal on NARC
(i) I3 Company highly appreciate and will support NARC project.
(ii) Propose on 4 subjects:
A. Clinical Trial Facility such as Research Hospitals
B. BABE (Bioavailability and Bioequivalence) facilities as pharmacological
evaluation on off-patent drugs, compared to original patent, conducted in
patients who should stay 7 days in the facility to be controlled on food consumed
and drug administration . The BABE is an obligation by Indonesian FDA to get
permission to release such products to market.
(iii) Research on delivering Bulk Pharmaceuticals as import substitution. Currently,
90% of bulk pharmaceuticals are imported from China and India. Japan will be
expected to provide technology transfer for bulk pharmaceuticals including fine
chemicals as drug raw materials.
(iv) Added value process on bio-diversity resources (bio prospecting). To deliver
products, especially those having high value and low volume characteristic
3) I-4 Company Factory (Health Drink)
a) The factory is producing 3million bottle of Y health drink per day and delivering all over
Indonesia by 20 refrigerated trucks per day. The production amount in this year
becomes double compared last year (1.5 Million bottles). About 5,000 Y health drink
ladies are working in Indonesia.
b) Y health drink t is willing to join into NARC facility becoming partner (preceded by
collaboration with BPPT or other members then doing together in the lab/incubation
center) not rent first and do research.
c) Y health drink had a collaboration with UGM (Gajahmada University) as well to check
the effect of Y health drink (clinical test for new Y health drink and decrease of
cholesterol).
d) The direction of Y health drink business : benefit of health effect of Y health drink
e) Yakult proposed if possible, NARC team can ask the government to amend the
regulation of exchange of biological materials (microbes) etc.
f) The Indonesian government prohibits exchanges of micro-bacteria with foreign
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countries and the merits of NARC will be generated. Collaborative research and theme
are decided by Yakult head office in Japan.
4) I-5 Company (Cosmetic)
The team introduced NARC at a place of the IPB attendance for K-company. The company
would collaborate on a certain research in future with IPB, and the IPB person in charge
talked about a prospect when the company would use the facilities of NARC in the future.
5) I-6 Company (Pharmaceutical producer)
The company is collaborating with BPPT on the research of Nano-medicines. As a new
research theme is expected ― New Medicines Entity from Herbal‖.
Requests items are as follows:
-Dormitory for researchers
-High quality Power supply
- Atomic absorbing light analyzer
-Training opportunity and facility
The company plans energy conservation such as electric generation from bio-mass.
And in future, they plan to install bio-effluent treatment system and the target is becoming
―Green Pharmaceutical Factory‖.
As conclusion, they intend to be a tenant NARC.
5.4 Marketing Activity through “BIO JAPAN 2013”
5.4.1 Outline of “BIO JAPAN 2013”
BIO JAPAN 2013 was held for three days over October 9 to 11 20013 in the venue of Yokohama
Pacifico. Also exhibits in companies booths and governmental organization booths were
conducted, this event was planned not only exhibitions, but business matching program also were
provided, aiming at business partnership and cooperation. Many overseas and domestic
companies of bio-industry tried to sell their own technology, and business talk were actively
made.
During a short period in Bio Japan 2013, JICA team could meet many possible tenants and it was
very efficient. In future, it is necessary to continue to participate in such events and to make an
effort to find out tenants as much as possible.
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5.4.2 Marketing Activities of JICA Study Team
(1) JICA team delivered about 300 invitation letters of BIO JAPAN 2013 enclosing the brochure
of NARC project outline. These addressees were extracted from the customer list of Chiyoda
Corporation and the participating company list of past bio-cluster events or trade fair in Japan.
(2) JICA team had business talking with about 27 companies individually using the Business
Matching system which was the special features of BIO JAPAN exhibition. As a result, the
intention to the NARC participation from several companies was shown in Table 5.4.1.
(3) The lecture meeting of Dr. Listiyani which is a vice-chairman of BPPT was held at the
Pacifico hall, and about 100 participants audited about the biodiversity and the NARC project
of Indonesia eagerly. After the lecture, there were appropriate questions regarding research
assistance like subsidy or incentive
(4) The smallish booth was installed next to the booth of Chiyoda Headquarter, and JICA Study
Team explained the NARC project to the visitors who is likely to be positively interested.
There were many opinions a) it was a big project, b) some people did not know Chiyoda was
doing such activity and c) some people introduced the NARC project to gathering of many
people who were interested in Indonesia. After 2~3 months of the Bio Japan, several
companies contacted JICA team to ask the introduction for Indonesian related companies for
collaboration and for new Indonesian market of their products for sale.
(5) JICA Study Team visited relating companies booths, explained the outline of NARC and
requested to pass the NARC brochure to responsible persons in the companies.
(6) JICA Study Team participated in the reception and partnering party which the sponsor held,
and the team exchanged name cards, and NARC project was explained.
Table 5.4.1 Results of Matching Meeting through Bio Japan (Oct. 9-11, 2013)
Company Name Note Possibility
M-1 Company
( Seasoning)
Collaborating with BPPT on Fertilizer for Rubber Tree
from Effluent
High
M-2 Company
(Event Comp.)
Possible to introduce NARC Project Low
M-3 Company
( Pharmaceutical)
Along with Singapore center, search for new research
center
Medium
M-4 Company
( Petrochemicals)
Development sales for Liquid Chromatography column Medium
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Company Name Note Possibility
M-5 Company
(Pharmaceutical).
Sales and Royalty from Knowhow on Vaccine development
and production
Medium
M-6 Company
(Cosmetic).
Development of Cosmetics met with Indonesian
ladies skin. Industrial purposes Enzyme is
planned to develop. Next meeting will be held.
High
M-7 Company
(Pharmaceutical)
Sales and development for mycoplasma diagnosis
medicine.
Low
M-8 Company
(Patent Comp) Patent service company
Low
M-9 Company
(University)
New tomato Development Low
M-10 Company
(Pharmaceutical)
Innovative vaccine production technology is targeted to
cancer and infections. Development for Indonesia is also
applicable.
Medium
M-11 Company
(Bio Fermentation)
Planning in Shimane for peptide, protein, nucleic acid by
Chiyoda. Interest in Indonesia but can decide soon.
Production of functional organic materials.
Low
M-12 Company
(Pharmaceutical)
"Closing Thai factory for the production of gastric ulcer
because of decreasing sales rate.
Interested in collaboration with Indonesian universities for
more information on
lowering blood glucose
Low
M-13 Company
(Health Drink)
Functional Beverage, Helthia, is planned to sell in
Indonesia. They want to obtain governmental authorization
for effects.
High
M-14 Company
(Pharmaceutical)
Sales and development for diagnosis medicines. They want
to obtain human body samples.
Low
M-15 Company
(Pharmaceutical)
Sales and development for mycoplasma diagnosis
medicine. Interest in NARC project. Waiting another
additional meeting Sales of Infection disease diagnosis kit.
High
M-16 Company
(Functional foods)
Sales of Functional foods developed by JBA. Low
M-17 Company
(Pharmaceutical)
Sales of diagnosis medicines. Company size is too small. Low
M-18 Company Moving Production and development base from Okinawa to High
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Company Name Note Possibility
(Bio library) Indonesia.
M-19 Company
(Pharmaceutical)
Microchip and Sell separator development and sales for cell
separation. They want to sell these products in Indonesia.
Medium
M-20Cmpamy
(Pharmaceutical)
Sales of all processes and equipment necessary for medicine
development and production.
Medium
Source: JICA Study Team
5.5 Qualitative Market Survey about “Private Sector’s Interest to be Involved in NARC”
This study was conducted by an Indonesian market consultant and the contents are based on the
intermediate results.
5.5.1 About Survey
Direct interview (meeting or by phone) is the primary survey tools. However, questionnaire
survey is still used to adjust with different culture in the organization. For example, Some listed
company are willing to answer the questionnaire in the written form. The workflow of this project
can be seen in the work flow chart below.
Source: JICA Study Team
Figure 5.5.1 Survey Work Flow
Based on the above workflow, preparation stage has the critical elements, especially related to
Work Flow
5
NARC
ADHIKARI
• Framework of interview question
• Image of NARC, overseas cases
•Provide list of potential respondents
TASKS & RESPONSIBILITIES
• Gather the contact list
• Find out and arrange a meeting with 20 interested respondent
• Develop final questions
• Develop interview guidelines
• Interview 20 interested respondents
Preparation Stage Survey Stage Reporting Stage
Confirmation to join the meeting
Agree on the candidate
ApprovalProposal
Survey result Analysis
Reporting
Provide Output Image of The
Analysis
311
validity of the contact list. If the validity of the contact list is low, it can effect to the survey
duration. It is because the respondent is very segmented and targeted which are only the interested
respondent. In this process we have contact more than 100 companies, but finding the right person
in the interested companies is not an easy task.
The duration for this study is planned for 2 months, from 8 September until January 2014.
The survey will be conducted in the Jabodetabek (Jakarata, Bogor, Depok, Tanggerang, and
Bekasi) region.
The respondent criteria are:
- Pharmacy, agriculture, food company, bio energy (optional), and bio science companies
- Manager level or decision makers
- Experience over one year in managerial level
5.5.2 Summary of Results and Fact Findings
The results from interviewed are described in Table 5.3.2.
Based on our interview, JICA Study Team got some interested insights:
(1) This biotechnology cluster has to clearly focus in specific research. For example, culture cell
is one of the highlight research that will have good prospect for the future.
(2) Investment scheme and research scheme have to be clear since the beginning. Clarification on
research right scheme will avoid dispute in the future.
(3) The operator should have transparent and accountable minimum service standard and
standard operating procedure for this biotechnology cluster.
(4) Legal and institutional aspect review and design is a vital step before launching the
bio-technology cluster.
(5) Private sector still cannot see the business plan for the biotechnology development in the
future. Early engagement of private sector in formulating the development plan is a must to
ensure the success of this biotechnology cluster.
(6) The government should consider the options for companies that has huge research activities
in bio-technology inside their factories (for example bio-energy company, and feedmills) but
312
they only have interactions with the integrated support center of bio-technology cluster.
These company should get attractive scheme because they have big contribution in
developing bio-technology reserach even they do not invest the research facilties in the
cluster.
(7) Specific Summary in Bio energy Sector
-Both of our respondents have a not impressive reserach collaboration with universities.
They underline that the lead of the research should be form private sector while the
universities research based on the requirement from private sector. They proposed the team
would be better if we can mixture senior level in business experience with some passionate
young researchers. University experience in developing pilot project or mini-scale industry
project is still far compare to private.
-Government subsidy for the bio-energy research is required to attract the research and the
business. Privates prefer to won their reseach facilities in their factories while the
government can provide the land as the laboratory for the plants.
-Our respondents don‘t mention exact number, but they said the research fund for the
bio-energy is available depend on the attractive climate for bio-energy business.
-Since the nature of plants for bio-energy are varries, it would be better if government can
provide the land in some location with different altitute. So, the private can choose based on
their plants habitat. As conclussion, the selection of ITB area in Bekasi is not a mandatory
place.
-In terms of joining the bio-technology cluster, our respondents will take a look the
government plan first before deciding.
-They prefered to use the reserach center facilties (land) rather than as tenants.
(8) Specific Summary in Pharmacy Sector
-Collaboration amongst research, industries, and BPPOM (NFA) as regulator is necessary to
speed up the process.
-University involvement has provide certainty in the human resources availability and
quality.
-Government subsidy for the pharmacy research is not a mandatory as long as the product
will be profitable in the future, for example like cancer related medicine. Reducing import
tax will be an attractive proposals.
-Research fund in the pharmacy company is around 0.5-3% of revenue per year. Phapros has
budget 0.5% per year or equal to Rp 1,5-2 Billion per year. Cell safe has budget
313
US$300,000-500,000 per year or equal to Rp 3,3-5,5 billion per year. Kalbe Farma has
budget 2-3% per year.
-Serpong as the location for pharmacy research is preferrable, especially for CellSafe. Blood
has limited time to get into storage, maximum 36-48 hours.
-Buying research patent and tenants as two preferred options for time being.
-Cold storage facilities for blood stem cells and cell culture research facilties are some
facilties that needed by private. Some support facilties such as dormitory or mess for
employees will be good.
-The pharmacy companies has great interest since they are willing to participate in the
bio-technology cluster since the operating year (2015).
(9) Specific Summary in Food and Agriculture Sector
-Regulation support is the key element for the success of this project. Strong regulation
support in bio-technology product will be .
-They have impressive experience with IPB or ITB in the joint research. But academic
institution should understand that private interest on research is end when the research result
can be produce and profitable. Private sector realize that university involvement has provide
certainty in the human resources availability and quality.
-Currently, many feedmill bio-technology product import from Europe or America. This can
be replace if government can integrally support this bio-technology cluster. -Coordination
accross line ministry to formnulate the scheme is one of the stepping stone.
-Government subsidy for bio-technology products is will be the attractive point. Malaysia
-Bio-technology area can be as one of the referrence.
-Research fund in the feedmills company are varies. For example in JAPFA Comfeed
Indonesia, they have established a research facilities for poultry around Rp 25 Billion in East
Java, and the same number for aquaculture will be build in the future. This number is outside
their reserach budget around Rp 7 Billion per year including facilties operation. Other, PT.
Charoen Phokpand Indonesia has develop huge factory and research facilities in Ancol,
North Jakarta area. With this huge investment, they also has allocate huge research fund.
-Considering this situation, their involvement in the bio-technology cluster is can be as
investor, integrated support center and or business incubation. For example, if JAPFA
interest to invest in this project, they will operate the research facilities by themselves.
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5.6 Bio Venture and Small and Middle Enterprises (SMEs) Status in Indonesia
5.6.1 Situations of Bio Ventures and SMEs in Indonesia
In Indonesia, there are not so many bio ventures compared with advanced countries like Japan,
the US and European countries. Even if they exist, some venture companies work under big
pharmaceutical companies as subcontractors for Jamu research and development. According to
interview done with the Ministry of Cooperative and SMEs, situations of bio ventures and SMEs
are summarized as follows:
- In Indonesia, ratio of SMEs among all industry is higher than Japan at 95 % and 67 % of
people are working in SMEs. However, many companies have problems on their
technological background such as education career, and as a result, there are few innovative
developments.
- In order to encourage SMEs, BPPT and Universities have collaborated with SMEs and tried
industrialization of seeds to products. However, they are still staying in laboratories. In
order to create entrepreneurs in Indonesia, the Ministry has programs for cooperation with
universities in each province.
- The Ministry has a grant program of Rp.50 million for each cooperative for purchasing
instruments. This amount is higher than LPDB (Revolving Fund Management Institutions)
established by MOF and the Ministry. In the past, this fund was applied to 10 mini-hydro
plants and 20 bio-gas plants.
- As for fostering and encouraging bio ventures, the Ministry has cooperated with institutions
on the project basis by utilizing policies issued by institutions.
- In conclusion, there is no incentive policy for promotion of bio ventures. Even in Japan, these
issues are still controversial. For example, provisions of venture capital system, angel
taxation and improvement of fund taxation system for American and European investors are
needed. In Indonesia, however, there are few entrepreneurs in life science industry.
5.6.2. Policy for Promotion of BioVentures
In Indonesia, policies for promotion of bio ventures are not enough, nor are SMEs promotion.
Although in Japan, recognition of bio venture promotion is not high, METI is playing the main
role for promoting creation of ventures and developing policy provisions. Major promotional
measures are as follows:
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- Fund for ventures by SME promotion agency
- Funding by Industrial innovation agency
- Angel taxation
- Fund taxation for overseas investors
- Supporting technology development and trial manufacturing by the New Energy and
Industrial Technology Development Organization (NEDO).
Local governments in Japan also provide various menus for supporting venture enterprises.
In the US, on the other hand, needs for venture companies are high as follows:
- Bio ventures in the US are in general small and can work speedily in terms of management.
- Needs from large companies and universities are high and their value are also high.
Development of bio ventures and bio clusters has close relationship. Kanagawa Prefecture
provides bio venture supporting system for promotion of ―Life Science Industry.‖ The system
includes support for the industrialization of outcome of university research, promotion of
entrepreneurs, business matching, fund procurement and support for human resource
development. Contents of such measures are summarized as follows:
(1) Measures for Human Resources Development
- Human resources development for new industries
- Bio venture management human resources development
- Utilization for Bio venture human resources
(2) Measures for New Business Support
- Industrialization of universities research outcomes
- Creation for Bio ventures
- Business development for new industries
(3) Measures for Business Partnering
- Work for business partnering
- Supporting Bio Japan exhibition
Although in Indonesia, policies for supporting bio ventures are not realized and not reached
the level of developed countries, these policies must be provided along with development of bio
clusters.
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5.7 Interview Results and Potential Tenant Candidates
5.7.1 Possible Tenants for NARC
According to the interview results of Japanese companies and Indonesian companies, the team
obtained positive reaction of about 10 possible tenants from Japan and about 30 companies from
Indonesia to NARC project respectively. The team contacted about 30 companies in Japan and
100 companies in Indonesia including telephone questionnaires. Therefore the JICA team have
positive reactions from the one-third of total contacts.
Especially, Japanese B Comp. disclosed their intension of collaborated research on Malaria and
Dengue fever vaccine development in their presentation in front of Indonesian counterparts. The
company would implement the technology transfer of new vaccine development technology and
the company expects official financial aid from Japan or Indonesia due to their lack of man-power
and research fund. Also Indonesian large enterprises expect incentives like subsidiary of research
fund. On the contrary, a certain conglomerate company intends to conduct their research by own
expenses without governmental bindings.
Through ―Bio Japan 2013‖, the team contacted many potential tenants candidates and explained
about NARC project to the persons who visited NARC booth. Some of companies showed strong
interests, but it was said that many SMEs or Ventures could not decide soon. The team explained
additionally visiting persons that the project took a time more than two years and in near future
due to the Nagoya protocol (Bio resources are not able to be moved easily), researches are
principally carried out in Indonesia.
Through the interviews in Bio Japan, many companies requested assistances for countermeasures
of marketing, laws and standards etc, in Indonesia when the companies found research base or
production base. Not only collection of tenants, but also kind services and communication is
required. These supports become important.
Many visited pharmaceutical and total energy companies in Indonesia were state enterprises and
therefore they are relatively cooperative regarding governmental policies. According to the Local
Market Survey, there are many tenants candidate. And valuable opinions on requests to NARC
project and to governmental policies are obtained.
As for interviews in Indonesia, many companies requested strongly fulfillment of incentives,
collaboration opportunities with Japanese companies and providing training opportunities.
5.7.2 Anchor Tenants
As for the incentives enrichment, when the SEZ law is applied, it is necessary to propose anchor
317
tenant company (or companies) in each area. Although the JICA Study Team do not obtain the
final confirmation from tenant candidates as anchor tenants yet, before the submission of SEZ
proposal to local authority, further discussion with and final acceptance from these candidates
are needed. Following candidates are recommended as anchor tenant(s).
(1) Puspiptek (Serpong) Area (BPPT)
Two to three major pharmaceutical state enterprises in Indonesia and one Japanese
pharmaceutical company. Those Indonesian and Japanese pharmaceutical companies have a
possibility of joint venture as an anchor tenant based on Japanese technology.
(2) Bogor Area (IPB)
Animal feed and poultry conglomerate which is the largest in ASEAN countries and 1 or 2 local
aqua feed companies.
(3) Deltamas Area (ITB)
One or two local bioenergy companies and one palm oil handling company which is aiming at
trying for cultivation of palm trees, fertilizer and utilization.
In interview for Japanese enterprises, there are special own circumstances around enterprise and
economic conditions. They pointed out these conditions and environments described below. In
order to collect tenants in future, these fact and conditions are improved for a long time span.
5.7.3 Demand Risks and Points to Reduce Risks
As mentioned above, the Study Team has conduceted series of interviews with potential tenants
and agknowledges their storong interests; there seems to concerns in Indonesian side whether
many Japanese tenants participate in NARC as a tenants or investor. In interviews done by JICA
Study Team (Indonesian possible tenants accompanied with Indonesian counterparts), both
possible tenants of Japanese and Indonesian companies could understand by the comprehensive
explanation on the outline of NARC project, the reason that there is a need for the project and
possible measures to reduce the demand risks are described as below. Furthermore, it is
necessary to confirm participating intension of possible tenants with reasonable incentives after
this. The necessity of action plan for more tenants gathering is needed to prepare and continuous
efforts must be made.
(1) Indonesian Bio Industry Potential
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1) Bio Diversity
Research theme done by Indonesian universities and institutes are described before, but bio
diversity is not utilized enough. In Nagoya protocol, bio resources are prohibited to move
in and out of the countries. In NARC project, utilization and offering of bio diversity is
expected to be approved. Many universities and companies outside Indonesia wish to
research, make products, and finally export these products to ASEAN markets.
2) Biggest Market of Islamic Region
Indonesia has more than 200 million populations and has the largest market in ASEAN
region. The market is also the largest among Islamic regions. In Indonesia, foods are
processed according to the rules for halal. Indonesia has more potentiality expand their
market of food and pharmaceuticals to Islamic regions.
3) Collaboration of Industries and Academic Fields in Research, Product Development and
Production
Major Indonesian pharmaceutical and food enterprises have already collaborated with
universities. They have much interests in collaboration for product development and
production. However, SMEs of pharmaceutical, food and energy companies except a part
of major companies, do not generally have recognition of importance for academic and
industrial collaboration. There is a possibility for expansion and utilization of collaboration
in future.
4) Competitive Position of Indonesian Biocluster
The competitive position of Indonesian Biocluster is described later and main points are as
follows:
- Indonesia is the largest exporter of palm oil in the world. In addition, from now on,
various kind of new product development and production activities of palm oil are
expected.
- Human resources from BPPT, IPB and ITB are provided to NARC project. Expansion
of research and development is expected through the above collaboration. Market
expansion to Islamic region is expected by utilizing Halal food know-hows.
- As Indonesia is the largest market in ASEAN countries, big profits are promised if one
can succeed in Indonesia.
- NARC becomes a bridge or networking between Japanese and Indonesian companies
and universities. They want to expand business development. Especially, Indonesian
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companies want to collaborate with Japanese companies to introduce Japanese
technologies and to expand their market.
(2) Possible Measures to Reduce Risks
1) Fulfillment of incentives
Incentives for tenants which are competitive compared with neighboring must be fulfilled
referring possible tenants requests countries clusters. For example, competitive price
setting and incentives for taxation in order to invite many enterprises shall be provided.
2) Countermeasures to be met with companies needs
Some Japanese possible tenants requested to providing experimental farm and a big pond
for cultivation of fish. To gather more tenants, not only providing incubation and research
center, but also corresponding to the individual requests from possible tenants is necessary.
These measures are necessary to secure and maintain enough tenants.
5.7.4 Current situation in Japanese Life science enterprises
In interview for Japanese enterprises, there are special own circumstances around enterprise and
economic conditions. They pointed out these conditions and environments described below. In
order to collect tenants in future, these fact and conditions are improved for a long time span.
Table 5.7.1 Enterprises Status in Interviewed Companies in Japan
Environment and Reasons
MC-1Company There are many production center outside Japan. In Indonesia, sugar cost is
cheap and specialized production using cheap sugar.
Research and development are done in Japan or other developing countries.
MC-2Company As the factory was just expanded, there is no room to invest into overseas.
Research on genetic modified biology required skill engineering and skill
operators who never leak those to outside. These management is good at doing
research in Japan from security purposes.
MC-3Company As Japanese factories could not run 100%, there is no room to deploy outside
Japan.
MC-4Company As Japanese factories could not run 100%, there is no room to deploy outside
Japan.
MC-5Company As patent on block-buster is terminated, there is necessity on strengthening
new medicines development. But there is preference to conduct research in
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US rather than Asia countries.
MC-6Company Production centers exist already. Indian Products of their factory were
forbidden to export to US and then the company is busy for countermeasures.
Therefore there is no good time for new business.
MC-7Company Targets of production market and R/D are US and European countries.
Source: JICA Study Team
In order to collect possible tenants as much as possible until NARC completion, action plan of
mile stone basis for searching tenants must be prepared.
-Press release, Holding Seminars (explanation)
-Participation to Bio Events in Indonesia and other countries
-Continuing explanation and request to join NARC company by companies basis in both
countries
-Establishment matching system for co-research and co development between Indonesian
and other countries for more effective binding (Companies in Indonesia and Japan want to
collaborate each other)
-To clarify governmental policy and incentives
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Chapter 6 Market Forecast
6.1 Investment Trend for Research and Development of Promising Sector
6.1.1 Life Science Market Trend in the World
Although life science business has performed the good market trend for years, currently it is
affected by the following and it seems to look for the future business model;
-The environmental changes surrounding medical cares,
-Patent Cliff (End of patent validity)
-Competition with generic medicines
-Price pressure (Lowering unit prices)
-Emerging developing countries
-Alliance or M&A
-Long economic slump, etc.
Pharmaceutical products in the world in 2011 and the sales of the biotechnology exceeded 1,100
billion dollars, and the average annual growth rate 2007 through 2011 was 6.7%. By segments,
sales of pharmaceutical products in 2011 were 798 billion dollars, and those of biotechnology
was 289 billion dollars The world's largest market was North and South America, and it occupied
46% of the total sales.
There are also long-term strong incentives surrounding life science business as follows:
- Increase in aged population
- Multiplication in chronic diseases
- Multiplication in the market opportunity in developing countries
- Reform of medical payment system
In spite of the preferable environment, a part of life science business is faced with slowdown of
sales amount and decrease in profit margins. In parallel to a tardy growth of sales amount, the
resources (time, cost, talented people) to a new medicine development by life science is also
decreasing. R&D expenses in pharmaceutical industry in 2010 was falling by about 3% to
approximately 68 billion dollars from 70 billion dollars in 2008 and 2009. In addition to decrease
in profit margins and price pressure of medicines, these were caused by increase in R&D costs
and costs by regulation correspondence.
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As a future trend, there are problems of patent cliff and developing countries market issues.
Generic medical companies will receive the privilege of this patent cliff. The developed countries
can control the medical payment, using generic medicines. In the United States, 44% of the
original medicines sales in 2011 changed to generic medicines. Since the value of generics is
cheaper than forerunner medicines by 30 to 80%, movement toward the decrease in medical
payment leads to the use of generic medicines in the world. In the generic market in the world,
10% of the annual average increase is expected. In Asia, as there are shortage of funds and an
expenditure damping, increase in generic use will be expected from now on.
Also in Japan, generic medicines use has been promoted as one of the measures to cut medical
payment by Government authorities. The government planned to increase the rate of generic
medicines to 30% by 2013 as a target. Use of the generics reached to 25% in 2012. This trend is
likely to continue from now on.
In order that life science companies in the United States or Europe secure their sales amount, they
are strengthening sales in developing countries such as China, India, Brazil, and so on.
The medical market occupies 20% of the market of pharmaceutical products in the world in 2011.
Increasing market in developing countries is led by increase in the aged population, in chronic
diseases, and in middle income class. Moreover, the political incentives are also growth factors in
developing market. For example, the Chinese policies have invited many companies (especially
foreign-affiliated companies) by the lower costs for R&D expenses. However, in developing
countries markets, there are various risk factors, such interruption of supply chain and low quality
medicines not reaching standards, and fake medicines. Life science companies have increasingly
imported the low costs of active ingredients (API) from the developing countries these days.
However, quality control of these APIs is difficult and they often become sources of troubles. As
potentiality of higher growth is more expected in developing countries than developed countries,
Billion $
Source: DTTL Global Life and Health Care Industry Group
Figure 6.1.1 Bio Technology Market Size (2007-2011)
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it is much more attractive and expansion of the market is expected in the future.
6.1.2 Outlook of Japanese Pharmaceutical Manufacturing Industry
Medical market in the world has grown by about 2.4 times in ten years from 2000 to 2010. On the
other hand, although Japanese market is maintaining the status of the 2nd place which ranks next
to the US market, the share in 2010 is 2/3of that in 2000. Market growth of medical supplies in
Japan has been more greatly affected by the repeated price down of medicines than other markets
of developed countries (See Table below).
Table 6.1.1 Change in Shares of Main Countries in the World Medical Market
Year USA Japan German France Italy UK Other
2000 43.0% 15.9% 4.8% 4.6% 3.0% 3.1% 25.6%
2010 38.6% 11.2% 4.7% 4.5% 3.1% 2.4% 35.6%
Source: IMS Health, ―IMS World Review Analyst‖
When seeing top 100 sales medicines by country developed, Japan developed 12 products and
ranked 3rd, whereas the United States developed 49 and the UK with 16 (See Figure below).
Source: IMS Health, ‖IMS World Review LifeCycle‖
Figure 6.1.2 World New Medicines Development Ranking
As shown in the Figure below, production amount of the medical supplies in Japan in 2010 was
6,779,100 million yen. Among these, the value of production of pharmaceutical for hospital use
UK 16
Second
Ranking
USA 49
Japan 12
Swiss 6
German 5
France 5
Sweden 2
Israel 2
Other 2
World Medicines Sales Amount Top 100
First
Second
Third
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was 6,148,900 million yen and accounted for about 90%. Moreover, the ratio of the value of
production for medical care and for general purposes accounted for about 602,200 million yen
and occupied about 10% of the total sales.
Source: Ministry of Health, Labor and Welfare, ―Statistics of Medical Production,‖ 2000
Figure 6.1.3 Manufacturing Amount of Medicines in Japan
In Japan, expenses for developing one new medicine cost from 50 to 100 billion yen. Although
the average research and development expenses of Japanese companies manufacturing medicines
whose sales are top 10 were 58,800 million yen in 2002, they increased to 126,200 million yen in
2010 (See Figure below). In order to strengthen competitiveness of new medicine development,
mergers and acquisitions of medicine manufacturing companies are currently on the progress.
Source: Medical Manufacturing Association, ―Data Book 2012‖
Figure 6.1.4 Average R&D Costs in Medical Manufacturing Companies
Average R&D Cost in Top 10 companies
¥100Mill. R&D Cost
R&D Ratio
Medical
Production
¥6.8Trillion Medical Drug
¥6.1Trillion
General Drug
¥0.6Trillion
Medical Drug Production, 2010 House keeping
¥28Billion
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The traits of development of pharmaceutical products are characterized with long years of
spending and low rates of successful development. Furthermore, in order to pursue validity and
safety, a large amount of research and development expenses is needed. The ratio of research and
development to the sales amount in manufacturing industry of pharmaceutical products is 12.02%,
which is a higher ratio compared to that of other manufacturing industries (See Figure below).
Source: Medical Manufacturing Association, ―Data Book 2012‖
Figure 6.1.5 Ratio of Research and Development Expenses to Sales Amount in Manufacturing
Industry of Pharmaceutical Products (2010)
Medical payment in Japan is expected to increase by 5.5% per annum till 2014. This is caused by
increase in the aging population and chronic diseases. By increase in the aged population, the
share of population of age over 65 is predicted to increase to 23% in 2011, 25% in 2013and 35%
in 2035. Since medical payment is also expanded rapidly in connection with this, the Government
authorities have put a lot of energy into promotion of use of generic medicines, preventive care,
promotion of self management for chronic diseases, and so forth. Japanese life science business is
already in a mature phase, and rapid transmutation cannot be expected. In order to cope with
many subjects, performing an investment with a long-term scope divides the victory or defeat in
future.
Pharmaceutical
Machines
Electrics
Electronics
Transportation
Machine &Tools
Rubbers
Manufacturing industry
Average
average
Industry average
Top ten companies average
All industry average
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6.1.3 Indonesian Health Care Market
(1) Pharmaceutical Products Market in Indonesia
The ethical pharmaceuticals of Indonesia are classified by three kinds, a non brand generic, a
brand generic, and a new medicine.
The non brand generic is very cheap generic medicines (late-coming medicines) which the
Government authorities (Ministry of Health Care) controlled medicine manufacturers. Most
medicines of this kind are accepted by the insurance for the poor people. Most of brand generic
medicines are generics which were produced by domestic medical manufacturers. Most new
medicines are imported and foreign companies are dealing with them. Since they are not accepted
by the public insurances, they are sold with market prices.
Retail prices of Indonesian drugs are relatively expensive compared with other countries. Main
reason is higher distribution costs. Especially, prices of new medicines are extremely expensive
and their prices reach 22 times higher than those of the international indicating prices (Market
prices of medicines in the international market).
Generally, retail prices of the ethical pharmaceuticals in Indonesia is the greatly higher compared
with foreign countries. It is a main reason that physical distribution cost is high. Especially, there
is data in which prices of new medicines are higher by 22 times or more than the international
indicator value (indicators for prices of pharmaceutical products in the international market).
Market researches shows the overall pharmaceutical market in Indonesia have reached US$ 5 to 6
billion in 2012 and the size of the market is expected to grow at rather healthy rates of 7.6% to
9.0% annually over the next 5 to 7 years. In 2012, each share of generic prescription drugs and
over-the-counter medicines was approximately 40% of the total pharmaceutical market.
The remaining 20% of the Indonesian pharmaceutical market in 2012 was comprised of patented
prescription drugs. There are concerns about intellectual property protection in Indonesia for
foreign developed drugs, which serve as a disincentive for many foreign companies to bring
patented prescription drugs to Indonesia.
While there is not significant activity in Indonesia in modern biotechnology approaches for the
discovery of novel drugs, there are still areas of research and development that can support the
pharmaceutical industry in Indonesia, which can meet local needs as well as start exports. Three
market niches for industrialization in pharmaceutical drugs include:
1) Herbal medicines
2) Biopharmaceuticals for diagnostics, vaccines and antibiotics
3) Pharmaceutical raw materials
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As most products manufactured by the industry are generic, competition is intense and profit
margins are narrow. It is therefore essential that companies should develop products with
differentiation in new fields or distinctive bulk pharmaceuticals with special usage.
Universities may play an important role in advancing competitive advantages for Indonesian
pharmaceutical raw material companies through development of novel active pharmaceutical
ingredients, innovative formulation technologies or advancing novel drug delivery methods, such
as through the use of nanotechnology.
(2) Foodstuff and Beverage Market in Indonesia
In the food and the beverage market of Indonesia, magnification continues by income increase
accompanying national economic growth. A processed food and soft drink market are especially
fast-growing. In the processed food and the soft drink market, although the major local food
companies are maintaining the first place, major foreign companies, such as Nestle which has
marched out for many years, have also secured the fixed position.
To develop functional foods and secure food safety, knowledge of food and nutritional sciences,
microbiology, biotechnology and analytical chemistry are required. Research is critical for
characterizing, separating, purifying, and processing bio-active chemicals in agricultural
Process Food Market Share
IndoFood
Nestle
Uni-Liver
Danon
100 Mil.$
Source: Euromonitor International
Figure 6.1.6 Process Food Market and Shares
Process Food Market
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commodities and byproducts and developing new technologies to create health-promoting foods,
as well as for identifying and mitigating food pathogens.
This often requires specialized laboratory equipment as well as scale-up processing technologies.
(3) Bio Diesel Market in Indonesia
Indonesia‘s biodiesel sector maintained a healthy growth in 2012. Biodiesel production increased
from 1.575 billion liters in 2011 to 2.2 billion liters in 2012. Exports of biodiesel registered a
strong export growth of 22 percent from 1.225 billion liters in 2011 to 1.5 billion liters in 2012 –
with nearly 90% being exported to Europe. World production of palm oil is expected to increase
by 32% to approximately 60 million tonnes by 202044
.
There is considerable room for further penetration of palm oil in biodiesel production (where it
has a low level of usage currently, despite high yield of oil).
Biodiesel consumption is predicted to increase significantly globally with various nations
implementing blend mandates. Blending targets for bio-diesel are ranging from 2 percent in the
Philippines to 10 percent in the European Union, by 2020. OECD estimates if such blending
mandates are enforced, an extra 4 million hectares of oil palms would be needed to meet
European Union requirements alone. Further, one million hectares may be needed to satisfy
China‘s requirements, making bio-fuel production even more attractive.
Although palm oil currently accounts for less than 5 percent of the world‘s bio-diesel production,
demand is likely to increase as economies adopt policies that encourage the use of bio-fuels.
Despite a relatively low market share, palm oil is often used as feedstock in bio-diesel production,
and as feedstock represents the major cost of production, a bio-diesel industry is a viable option
for Indonesia.
6.2 Analysis on Competitive Position of Indonesian Bio Cluster
6.2.1 Technological Accumulation in Herbal Medicines
Indonesia is an ideal market for production and use of herbal medicines.
There is a strong cultural acceptance of herbal medicines for treating diseases. Indeed, there is
even a specific Indonesian word for herbal medicine, Jamu.
On the production side, significant diversity of plants in Indonesia offers a wide range of
opportunities for herbal medicine development. This has lead to significant value in ethno
botanical study, since herbal medicines have a long tradition of use in Indonesia, and because of
the nation‘s extensive biodiversity, herbal medicines are richly available. Indonesian Ministry of
44 World Growth, ―The Economic Benefit of Palm Oil to Indonesia,‖ 2011
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Health reported in its report ―National Policy on Traditional Medicines‖ in 2007 that there were
approximately 40,000 species of plants in Indonesia and among them at least 9,600 species of
plants had been used as medicines. In addition, there are 400 ethnic groups in Indonesia that
possess traditional knowledge, accumulated over centuries, regarding the use of plants for
medicinal purposes.
It is reported that there are already over 1,200 producers of herbal medicines in Indonesia. This
is an area of particularly significant small and medium sized business development and an active
sector for development in rural areas of Indonesia.
Among the competitive challenges for Indonesia to grow its herbal medicine industry are:
-Reaching significant scale in the identification and assessment of different plants used
traditionally for herbal medicines.
-Improving the quality standards of herbal medicine producers, particularly in light of ongoing
Association of Southeast Asian Nation (ASEAN) harmonization efforts to standardize
technical requirements on safety, efficacy, stability, good manufacturing practices and labeling
related to herbal medicines. It is expected that these harmonization regulations will be put in
place in 2014 and fully implemented by 2015.
6.2.2 Superiority on Vaccination Production in Indonesia
The reason for putting priority focus on biopharmaceuticals in Indonesia is for vaccines to treat
communicable diseases. World Health Organization (WHO) reports that communicable diseases
continue to be the major causes of morbidity and mortality in Indonesia. In addition, possibility of
emerging diseases with epidemic or pandemic potential is a major concern in Indonesia.
Indonesia stands out in having a state-owned company, PT Bio Farma, serving as a producer of
vaccines, sera and diagnostic products. Bio Farma was the first ASEAN based vaccine
manufacturer to achieve WHO prequalification status, enabling participation in UNICEF tenders
for DTP, DTP-HepB, HepB, measles and oral polio vaccines. Bio Farma remains active in
vaccine development, with its recent development of a pandemic flu vaccine in collaboration with
the Research Institute for Microbial Diseases (RIMD), Osaka University, Japan (Biken Institute
of Japan) and pentavalent child vaccination with support from the GAVI Alliance, which contains
five antigens in one shot and protects against diphtheria-tetanus-pertussis (DTP), hepatitis B and
Haemophilius influenzae type b (Hib).
Bio Farma is also active in exporting, with a reported 60% of its products sold as exports. This
potential to serve the global market is significant.
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6.2.3 Huge Market in Indonesian Food Industry
The food industry in Indonesia is a significant economic driver. Food products comprise 7.3% of
gross domestic product, grew by 35% in real terms from 2004 to 2010 and involve over 5,000
business establishments.
Market researches note a trend towards healthier food consumption, especially amongst middle
and upper income Indonesians and urban residents, who are more exposed to health issues. Rising
health consciousness was partly driven by increasing coverage of health issues in newspapers,
magazines and on television. In addition, packaged food manufacturers continued to invest
heavily in launches of new health and wellness brands and promotional activities that emphasized
the health benefits of their products. In 2012, people continued to witness a number of products
launched with vitamin fortifications, healthy ingredients, suitability for weight watching, lower
sugar, lower cholesterol, and lower fat content characteristics in both retail packaged food and
foodservice outlets.
Multinationals have a strong foothold in the Indonesian food products industry. This includes
Heinz ABC Indonesia, Kraft Foods Indonesia and So Good Food. In 2012, these multinationals
continued to invest heavily in new launches and promotions. For example, Heinz ABC launched
ABC KecapPedas or spicy soy sauce and held road-shows in major cities as well as in-store
promotions in modern retail outlets. Besides launching Oreo in new orange ice cream flavor,
Kraft Foods actively promoted its packaged food products through social media such as Facebook
and Twitter. Meanwhile, So Good Food had just established its fourth processing factory, adding
larger production capacity to meet consumers‘ demand.
6.2.4 World Largest Palm Oil Producer
Indonesia is the top palm oil producer in the world producing 18 million tonnes (40%) of the
global production of 45 million tonnes.
More than 70% of Indonesia‘s palm oil is exported. The main destinations countries are India, the
Netherlands, Malaysia, Italy, Singapore, Germany and China.
While large scale private companies produce over 50% of Indonesian palm oil, a significant share
representing 35% of palm oil production is still with small land holders, but their yields are lower
than for corporate and government plantations.
There is considerable room to significantly enhance yields of palm oil in Indonesia. In Indonesia,
palm oil yields averaged 3-4 tonnes/ha, however, various estimates of potential yields are up to
8.6 tonnes/ha.
Currently most of the palm oil leaves Indonesia with no value-added beyond the milling stage
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(which produces crude palm oil and has to be done close to the plantations to avoid spoilage).
About 60% of production is shipped in crude form, with limited value-added by the country of
origin.
6.2.5 Summary of Indonesian Bio Cluster Superiority Analysis
It is observed that location of China and Korea‘s research and development base in 2010 had
decreased compared with 3 years ago (2007). However, the number of location of research and
development bases in other Asian countries had increased. As in the past, targeting China as a big
market, many companies put research and development bases into China, but currently many
companies are considered to put research and development bases into ASEAN countries which
are expected to increase in term of economic growth and consumption market. Especially, the size
of consumption market in Indonesia is larger than other countries, and along with GDP growth,
Indonesia is expected to be location site for research and development bases.
Competitive and superiority analysis for the Indonesian bio-cluster is carried out from following
points;
- Marketability: when the market of the bio-industry products is taken into consideration, the
Indonesian market with future economic growth or population of 200 million have a big
predominance in comparison with foreign countries, and its market is attractive, and a huge
profit will also be expected if they succeed in industrialization.
- Incentive: if the governmental powerful supports and incentives system are expected,
Indonesia enterprises and foreign enterprises can participate in which they feel as attractive
conditions.
- Human Resources: although in Indonesia, cheaper labor force is available, bio-industry is not
a labor intensive one and needs skilled labors, engineers, etc. In order to secure human
resources, the talented people from BPPT, IPB and ITB, and graduates from the universities
can be provided.
- Cluster location: BPPT Serpon is located in 1 hour distance by car from the center of Jakarta.
There is an industrial estate next to the cluster and companies can use it as production centers.
IPB has a cluster space within the Bogor university campus. When the expressway from
Jakarta will complete in 2017, it becomes better location.
Deltamas of ITB is located in about 1 hour and half distance from Jakarta by car although
traffic congestion is expected. Japanese affiliated companies, such as Honda, are located next
door in the industrial estate.
- It is taken into consideration whether core institutions, such as a big university hospital,
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factories or related facility of big companies of pharmaceutical producers, bio energy, food,
environment, biochemical, can be invited.
- User oriented cluster: cluster should have an expandable specifications in consideration of
future expansion. For this purpose, it is required to be able to secure ample surplus area, and
cluster should be expanded in the future in stepwise manner.
6.3 Setting-up of Project Scale
6.3.1 Installation Procedure of Project Scale
The following are standpoints examining the project scale:
-Though an incubation center and a research center are built at each site of the three planned
construction sites, an integrated support center is due to build only at the site of BPPT.
-The number of participating companies through the hearing is estimated as tenants. Although
this estimation is considered to be an appropriate procedure presuming the matter of service
and scale of a research center and an incubation center on demand basis, potential tenants
search is under implementation and it continue until completion of the cluster.
-As described in the Chapter 7, project size is estimated from the number of researchers and the
number of bio venture researchers per GDP. Furthermore, project scale is checked again as
compared with the bio clusters of neighboring countries.
-The rentable ratio which shows the ratio of the unit requirement per researcher and the usable
area of exclusive use, becomes important. Since especially a rentable ratio influences business
potential greatly by installation of the building, similar cases are examined sufficiently.
-It is examined whether the cluster size is appropriate in consideration of investment by both
Japanese and Indonesian sides.
6.3.2 Incubation Center Configuration
To embody Incubation Center, the sample layout is shown in Figure 6.3.1 and Figure 6.3.2 for
Nagoya life science incubator, and Figure 6.3.3 for Tokyo University Kasiwa Venture Plaza.
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Source: Small & Medium Enterprises and Regional Innovation HP
Figure 6.3.1 Sample Layout of Incubation Center in Japan (Nagoya Life Science Incubator)
Source: Small & Medium Enterprises and Regional Innovation HP
Figure 6.3.2 Sample Interior of Incubation Center in Japan (Nagoya Life Science Incubator)
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Source: Small & Medium Enterprises and Regional Innovation HP
Figure 6.3.3 Sample Layout of Incubation Center in Japan
(Tokyo University Kashiwa Venture Plaza)
6.3.3 Estimation of the Number of Researchers in Venture Companies
(1) Number of Employees in Venture Companies
According to ―Investigation of Japanese companies established from universities‖, there are
many companies with only one employee in the first year of establishment. After a few years from
establishment, the number of employees in many companies is own one to five.
Therefore, the JICA Study Team selected two types of laboratories, one is the laboratory for one
to five researchers, and the other is one for six to ten researchers for incubation companies.
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Source: Minister of Economy, Trade and Industry, ―The Investigation of Venture Companies
Established from Universities (2011)‖
Figure 6.3.4 Number of Employees in Venture Companies
(2) Standard Room Size
Concerning the room size, the standard required space for one to five researchers is about 50 sq. m
and 100 sq. m for six to ten researchers.
Source: Yamato Scientific Corporation Co., LTD, ―Design of Laboratory‖
Figure 6.3.5 Sample Layout Drawing for One to Five Researches
(3) Study of Incubation Center Size by Number of Researchers
1) Estimation of Number of Researchers
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The Working Group knows that numbers of researchers ratio is 0.09% of per 1,000
populations in 2009 in Indonesia. And the value in 2015 is targeted at 0.5 (Source: METI,
―Study on the Smart Community and Urban Development Project in Greater Jakarta, the
Republic of Indonesia‖ (2012)).
Table 6.3.1 GDP PPP per 1,000 and Estimated Number of Researchers per 1,000 Populations
GDP PPP per 1,000 people
(US$ at constant 2005 prices)
Researcher per 1,000
people
National
Population
Estimated
Researcher
Number 2007 2008 2009 2007 2008 2009
Indonesia 3,403,369 3,569,809 3,696,297
0.09
0.5
(2015)
237,414,495
253,000,000
(2015)
21,367
126,500
(2015)
Malaysia 12,553,958 12,941,784 12,526,284 (0.47) 27,051,142 12,714
Philippine 3,303,284 3,382,448 3,364,210 0.078 88,652,631 6,915
Singapore 49,942,413 48,159,690 46,270,870 5.834 4,839,400 28,233
Thailand 7,249,187 7,377,964 7,160,115 0.316 67,796,451 21,424
Vietnam 2,481,873 2,610,563 2,720,686 (0.11) 84,221,100 9,264
Japan 31,635,876 31,322,700 29,625,390 5.189 127,704,040 662,656
Korea 24,948,258 25,338,654 25,299,185 4.947 48,949,000 242,151
China 5,238,677 5,712,246 6,206,264 1.199 1,324,655,000 1,588,261
Source： ‖GDP PPP per 1000 people (2012)‖ by IMF
http://www.imf.org/external/pubs/ft/weo/2012/02/weodata
―Number of researchers per 1000 people‖ by World Bank
http://data.worldbank.org/indicator/SP.POP.TOTL
There is no data about the growing number of researchers in 2013, so we don`t judge if
estimation number will be 0.5 or not. Therefore, 35% availability is assumed as the
progress of 2015.
According to table 6.3.1 GDP PPP and Number of Researchers per per 1,000 people,
estimated number of researchers is aimed as 0.5 per 1,000 people in 2015. If 35% can be
assumed as percentage of achievement, Number of researchers will be 0.5x0.35=0.175 per
1,000 people in 2015. LIPI states that 200,000 researchers will be required in future. The
ratio of number of researchers to Indonesian people is 200,000/250,000,000=0.0008 in 2015.
This figure shows 0.8 to 1,000 people. If the number of researchers will be reached to the
200,000 in 10 years, the ratio of increase will be 0.8/10 years=0.08 by one year. Present ratio
of increase number of researchers per year is 0.1/1,000 people. Therefore the ratio of increase
in 2015 will be 0.1+0.08=0.18. 0.1 is the number of present increase in 2014. If 0.8 and 0.175
2009 Actual
2015 Target
2009 Actual
2015 Target
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are compared, both figures are almost same. Assumption of 35% achievement percentage is
almost correct.
2) Estimation of Number of Bio-Related Researchers
The data above contains not only researchers in agriculture, pharmacy, forestry, and bio
related field, but also engineering, science, economical and legal etc.
The percentage of bio-related researchers in countries of the U.S., EU and Japan is
obtained. However, the actual value data in Indonesia is unavailable. Therefore, Japanese
data is used to estimate.
Source: MEXT‖ Report on the Survey of Res. and Development‖
http://www.mext.go.jp/b_menu/hakusho/html/hpaa200601/002/002/0101.htm
Figure 6.3.6 Researcher Percentage in Research Centers in Japan
Nowadays, research centers in Japan are based on Company‘s research (45.6%) much
more than universities research (29.1%). But thirty years ago, the percentage of company
and university were almost the same.
If today‘s Indonesian researchers number is similar to Japanese`s 30 years ago, the ratio of
researchers in universities and public research centers is estimated as 60% of total (refer to
Figure 6.3.7). These data are percentage of number of type of researcher working in public
338
institutions and NPOs by industry. Figure 6.3.8 shows the natural science researcher data in
universities.
By these data, the percentage of bio-rerated researchers can be estimated as 60% in Japan.
Source: http://www.mext.go.jp/b_menu/hakusho/html/hpaa200601/002/002/0101.htm
Figure 6.3.7 Researcher Percentage in Public Institutions in Japan (2005)
Source: http://www.mext.go.jp/b_menu/hakusho/html/hpaa200601/002/002/0101.htm
Figure 6.3.8 Researcher Percentage in Universities in Japan (2005)
As mentioned above, the number of researchers of bio field is 60% of total researcher
number in university and public research center. Therefore estimated bio related researcher
ratio in universities and public research centers is estimated 36% of total researchers in
Indonesia.
LIPI data of ―Indonesia‘s Science Funding and Review of Quality of Science presented at
339
6th Asiahoecs, Beijing, 9-12 October 2012‖ show that number of bio related researchers
are 36.3% in Indonesian Government Facilities in 2009. Therefore above assumption
would be correct figure in present Indonesian situation.
3) Regional Concentration Near Jakarta Biocluster
The below is the list of famous and leading universities in Indonesia. However, there are
some universities without bio-related faculties and far away from NARC candidate
location. The number of universities and institutions near NARC is four among all the
Indonesian universities.
The University List Reason not for NARC
a) Institut Teknologi Bandung [Bandung]
b) Universitas Gadjah Mada [Yogjakarta] location
c)Universitas Indonesia [Depok]
d) Institut Teknologi Sepuluh Nopember [Surabaya] location
e) Universitas Pendidikan Indonesia [Bandung] only for teach-training
f) Institut Pertanian Bogor [Bogor]
g) Universitas Sebelas Maret [Solo] location
h) Universitas Gunadarma [Depok]
i) Universitas Sriwijaya [Inderalaya] location
j) Universitas Airlangga [Surabaya] location
On the other hand LIPI data45
of shows governmental researchers number in every
government ministry, for example :
- Ministry of Agriculture: there are 1,743 researchers in total
- Ministry of Marine Fisheries: l,486 researchers in total
- Ministry of Health: there are 422 researchers in total
- Ministry of Forest: there are 447 researchers in total
- BPPT: there are 252 researchers in total
In addition, these governmental researchers seem to be 10 percents and counted into above.
In conclusion, the regional ratio seems up to be 40%.
4) Assumption of Bio-Related Researchers Near NARC
45 http://pusbindiklat.lipi.go.id/pembinaan-peneliti/data-peneliti
340
After the consideration factor 1) to 3) above, the total bio-related researcher number near
NARC region is estimated to be 6,376.
The calculation is as the following:
253,000,000 x 0.5/1,000 =126,500
∟→2015 Estimated Population
∟→2015 Estimated Target of researchers per 1,000 population
126,500 x 0.35 x 0.6 x 0.6 x 0.4 =6,376
∟→2015 Estimated Progress Refer to 1）
∟→2015 Estimated Progress Refer to 1）
∟→ Researcher in University & Public Research Centers Refer to 2）
∟→Bio-related Researchers Refer to 2）
∟→Regional Factor near NARC etc. Refer to 3）
As the result, the bio researchers near Jakarta are estimated to be 0.050 people per 1,000
populations in 2015.
6,376/253,000,000*1,000＝0.025
∟→ Total bio-related researcher number near NARC region
∟→ Population in Indonesia
∟→ per 1,000 population
Since Japanese total area of laboratory for bio research centers is 84,784 sq. m and bio
researchers are 60% of 5.19 people per 1,000 populations, the required area of Indonesian
research laboratory is estimated to be:
84,784 sq. m.×0.025/5.19/0.6 = 681 sq. m.
If the population ratio of Japan and Indonesia is taken into consideration fromTable 6.3.1,
then,
253,000,000/127,704,040 ≒ 2
681 sq. m x 2 = 1,362 sq. m
(4) Study of Incubation Center Size by Collaborative Projects
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Japanese collaboration programs have been performed in national universities mainly. In
Indonesia case seems to be the same situation. Therefore national research centers of NARC will
perform most of the collaboration projects.
Number of joint studies with universities and companies in Japan are 17,638 in 2008. After taking
the same ratio of Japanese number of researcher par 1,000 populations, Indonesian joint study is
estimated as follows:
17,638×0. 175/5.19＝595
Note: National colleges include National universities, national technical colleges, and national
collaboration institutions. Public Colleges include public universities (4 years and 2 years),
and public technical colleges. Private Colleges include private universities (4 years and 2
years), and private technical colleges.
Source： Ministry of Education, Culture, Sports, Science and Technology, ‖Situation of
Business-Academia Collaboration in Colleges (2008)‖
Figure 6.3.9 Number and Budget of Collaborative Programs for the 3 Types of Colleges in Japan
(2003-2008)
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Table 6.3.2 Industry-Wide Venture Enterprises Originated from Colleges
(Tokyo University and MEXT)
Number of enterprise Percentage
Bio 85 40.5%
IT 40 19%
Others 77 36%
Unknown 5 2%
Total 205 100%
Source: Ministry of Education, Culture, Sports, Science and Technology (MEXT),
―Tracking Survey of Venture Enterprises from Colleges (May, 2011)‖
Furthermore, bio researcher ratio 0.4054 based on Table 6.3.2 of bio joint studies in Indonesia
seems to be:
595×0.405＝241
63 sq. m is Japanese standard area.
Since the figure is based on all Indonesian country, the same regional ratio used in 3) will be
applied as 0.5. The NARC related joint studies seem:
241 x 63 sq. m x 0.5 = 7,592 sq. m
7,592x 0.5 x 0.20=759
If the population ratio of Japan and Indonesia is taken into consideration from Table 6.3.1
253,000,000/127,704,040 ≒ 2
If the period of joint study is two years, the required area for bio cluster will be:
759 x 2 x 2 =3,036 sq. m
4 LIPI data of ―Indonesia‘s Science Funding and Review of Quality of Science presented at 6th Asiahoecs, Beijing, 9-12 October
2012‖ shows that Indonesian presented paper ratio of bio field is about 50% of total papers.
From statistical point of view, ratio of presented papers of bio field to total papers seems to be correlated with the ratio of joint
venture of bio field to total venture company number.
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(5) Total Required Area of NARC Laboratory
Total required area for bio cluster is estimated as below:
Required area of laboratory based on bio researcher: 1,362 sq. m. (1)
Required area of laboratory based on Joint study: 3,036 sq. m. (2)
(1)+(2) ＝4,398 sq. m.
(6) Comparison with other Asian Laboratories
Source： ‖Growing Science & Technology in Newly Developing Countries‖ WG Report
（ July 14, 2011）
Figure 6.3.10 Comparison of Number of Researchers in Asia
Figure 6.3.10 shows that Indonesian total numbers of researchers were similar to Singapore in
2008. Singapore built Biopolis and gathered top class scientists from all over the world.
Biopolis is the industrial area where public research laboratories and private company research
laboratories locate in the same area, so that public research center can collaborate with other
companies.
Now, many pharmacy companies have launched into Singapore, such as Abbott, Bayer,
Boehringer-Ingelheim, Bristol-Myers Squibb, GlaxoSmithKline, Merc-Sharp-Dohme, Genzyme,
Quintiles, Roche, Takeda, Eisai and Server etc.
The development of Biopolis was undertaken in 5 phases5.
Phase 1 costs S$500 million and was launched in 2003. It provides 200,000sq.m. of research
space which is now home to more than 2,000 scientists, researchers, technicians and
5 http://www.jtc.gov.sg/Industries/Biomedical/Biopolis/Pages/Biopolis-Development.aspx
344
administrators. The research community is fully supported by state-of-the-art infrastructure and
services catering to the full spectrum of biomedical R&D activities.
Since researcher ratio per 1,000 populations in Singapore is about 13 people as shown in Figure
6.2.10, the ratio with Indonesian in 2015 is estimated as follows:
13/0.35=37.1
The first stage area of Biopolis building is 200,000sq.m, and then Indonesian laboratory at the
first stage is calculated as follows:
200,000sqm/37.1=5,391sq.m.
This order of area is similar to the assumption above and the estimation seems to be appropriate.
6.3.4 Study of Research Clusters
Comparison with other Asian Biocluster is described asfollowing the table below. Originally,
cluster is a state in which company and research institute have numerous integrated regionally.
But recent examples of facility itself such as Biopolis in Singapore and Technology Plaza in
Taiwan, are considered to be an independent biocluster. The examples of Singapore and Taiwan
are examined as an independent center, and average floor area per center consisting cluster in
South Korea and India are studied.
Total Cluster Area (ha) Average Area per Cluster (ha)
Singapore 34.18 34.18
South Korea 19.74 0.98
Taiwan 7.26 7.26
India 655.60 50.43
Malaysia 10.45 10.45
We made a basis of floor area of each country‘s Bio-cluster in accordance with the Table 6.3.3 to
6.3.7. The floor area data of India is extremely large, so it is appropriate to consider the land area.
The data of other countries must be floor area. Biopolis of Singapore where world famous
pharmaceutical companies are attracted, has its floor area large enough, so we exclude it from our
competition. 0.98ha of Korea is the data in 2010, small scale for regional policy level.
Considering 7.26ha of Taiwan and 10.45ha of Malaysia, we assume total floor area of NARC
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research center might be suitable in the range between 7 and 10 ha. If the total of three Centers are
equal to Malaysia‘s one, a Center would be 3.48ha. The 3.48ha is total floor area, so, the building
area will be 1.16 ha in case of three stories.
In case of setting the ratio of building area to site area with 30%, including enough car parks, the
leasing land area for a Research Center will be 3.87ha.
If the land area of road, green area and vacant area will be 20% of the leasing land area, the land
area for a Research Center will be 4.7ha.
Table 6.3.3 Size of Bioclusters (Singapore)
Biopolis in Singapore
Phase 1 2 3 4 5
Year - 2006 2011 - 2013
Gross Floor Area 185,173 37,000 41,500 32,000 46,182
Cumulative m2 185,173 222,173 263,673 295,673 341,855
Source: Extracted from Chapter 2.1.1(1) Singapore
Table 6.3.4 Size of Bioclusters (South Korea)
South Korea
Research facilities composing cluster No. of
Company
Land area
(m2)
Floor area
(m2)
Ohta Techno park Bio-center 16 11,563 10,040
Chusei-Hokudo Techno park Health Care
Industry Center
10 - 738
Chusei-Hokudo Techno Park Traditional
medicine Industrial Park
9 - 400
Chusei-Nando Animal Resource Center 13 - 3,789
Shunsen Biotechnology Industry Agency (Bio
venture support center)
10 - 10,038
Shunsen Biotechnology Industry Agency
（Bio-venture industry）
- 8,783
Kouryou Science and Industry Agency
Marine Biotechnology Business Team
32 - 3,868
Keisyou-Hokudou Biotechnology industry
research Institute
28 - 33,058
Keisyou-Hokudou Marine
Bio-Industry Research Institute
30 - 5,891
Daitei Techno-park
Bio-Industry Support Center
27 5,500 4,300
Daitei Techno-park
Chinese Biotechnology Industry Support Center
- 945 4,180
Pusan Techno-park Marine Industrial
Development center
10 - 7,214
Bio 21 Century Center 30 - 36,140
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South Korea
Urakou Techno-park Information Support Center - - 2,986
Kinkai City Next-generation Biomedical Fusion Industry Support Center
14 - 17,886
Zenra-Hokudo Bio Industry Development
Institute
18 44,438 14,427
Zenra-Nando Biological Industrial Promotion
Foundation
Nano-Bio Research Center
7 16,500 5,542
Zenra-Nando Biological Industrial Promotion
Foundation
Pharmaceutical Research Center
7 28,926 5,316
Zenra-Nando Biological Industrial Promotion
Foundation
Food Industry Center
- 9,684 5,855
Zenra-Nando Biological Industrial Promotion
Foundation Natural Resources Research
Institute
3 - 17,000
Saishu Hi-tech Industrial Agency - - -
Total floor area m2 197,451
Average total floor area per center 9,873
Note: Though High-Tech Medical Complex, Daegu Innovation City, is on progress in
Korea, we aggregate existing bioclusters because the medical complex is not
Dlassified with bio-related theme.
Daegu Innovation City in Sinseo-dong has total area of 1,030,000 m2
Source: JETRO Seoul Center, ―Bio Industry in Korea and Current Status of Biocluster‖
March, 2010
Table 6.3.5 Size of Bioclusters (Taiwan)
Taiwan
Biotechnology Plaza, Nankang Software Park
The first R&D-focused biotech center in Taiwan
Total area 20- storey building 72,600 m2
Note: Hsinchu Biomedical Science Park has been developed around Hospital and Medical
Center of National Taiwan University with 600 beds.
We excluded it out of our consideration, because its theme is advanced medical.
In addition, we excluded 5 of agricultural Bio-park due to the excessive emphasis on
agriculture.
Source: Extracted from Chapter 2.1.1(3) Taiwan
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Table 6.3.6 Size of Bioclusters (India)
India
Name of the Park Area No. of Companies
Acres ha
Shapoorji Pallonji Biotech
Park, Hyderabad
300 121.41 16 companies in Phase I and 10
companies in Phase II
ICICI Knowledge Park,
Hyderabad
200 80.94 35 R&D companies
Agri Science Park,
Hyderabad
25 10.12 108 ventures have already been
incubated
Bangalore Helix, Bangalore 14 5.67 8 biotech incubators
Biotech Park, Lucknow 8 3.24 15 enterprises
Kinfra Biotech Park, Cochin 50 20.23 Expected to house 15-20 biotech
units with shared facilities like
biotech incubation center
Kinfra Biotech Park,
Thiruvanthapuram
25 10.12 Developing Stage
Golden Jubilee Biotech Park
for Women Society,
Kanchipuram
20 8.09 10 enterprises
Inspira Infrastructure
Biotech Park, Aurangabad
25 10.12 Developing Stage
International Biotech Park,
Pune
100 40.47 12 enterprises
Savli Biotech Park,
Vadodara
724 293.00 11 companies have been
recommended for land allotment in
Phase I
TICEL Bio Park, Chennai 5 2.02 12 enterprises
Agri Biotechnology Park,
Jalna
124 50.18 n.a.
Total 655.60 ha
Average size of Research Park 50.43 ha
Source: Department of Biotechnology, Government of India, Annual Report
Table 6.3.7 Size of Bioclusters (Malaysia)
Malaysia
Biotechnology park in Iskandar Malaysia, Johor
Development plan 72.53 acre 293,521.6 m2 (29.35ha）
It will be developed in three phases over a span of six years.
First phase 1.125 million square feet 104,512.5 m2（10.45ha）
Source: Extracted from Chapter 2.1.1(5) Malaysia
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6.3.5 Demand Forecast for Research Center
According to the Final Report of ―The Study on the Smart Community and Urban Development
Project in Greater Jakarta Area, Republic of Indonesia‖, November 2012, Ministry of Economy,
Trade and Industry, Japan, the number of researchers in Indonesia in 2025 is estimated at 1.0
person to a population of 1,000 populations, as quoted below:
‘Targeted GDP of Indonesia in 2025 is US$15,000 in MP3EI. To achieve this goal,
innovation-based economy is necessary. Required number of researchers can be assumed as
more than 1.0 per population of 1,000, just to follow the rate of European research efficiency.‘
Source: MP3EI
Figure 6.3.11 Economic Growth Target by Government of Indonesia
Similarly, it is described that the target number of researchers per 1,000 populations is 0.5
person in 2015, as quoted below:
‗Required floor area for NARC incubation center has been assumed. To achieve the MP3EI target
nominal GDP per capita of US$15,000 in 2025 (assumed equivalent to GDP PPP of US$11,172),
GDP per capita will need to grow to US$5, 300 by 2015 (as GDP PPP of US$6,097), if the
population will be 253 million. By extrapolating this forecast, the target number of researchers
per 1,000 populations is about 0.5.‘
GDP per Capita Target at 2025: USD14,250-15,500
GDP PPP: USD11,172
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Source: Ministry of Economy, Trade and Industry, ―Study on the Smart Community and Urban
Development Project in Greater Jakarta Area, Republic of Indonesia, Final Report,‖ 2012
Figure 6.3.12 Relations of GDP PPP per 1,000 Populations and Number of Researchers
On the other hand, LIPI states that 200,000 researchers are needed in order to catch up the level of
technology in advanced countries. The site scale of a NARC research center is described in 6.3.4.
The site scale of a research center is assumed as 4.7ha. This site scale of a research center was
agreed by each counterpart in this study. However, the future demand for research center
utilization will increase according to an increase in the number of researchers. There is enough
space for expansion of research center site in each counterpart‘s site in order to adapt itself to
these changes. JICA Study Team explained that the expansion of research center development
shall be adapted to an increase in demand and each counterpart understood necessity of such
expansion. It is convinced that adaptation to an increase in demand for concerning expansion of
Europe
Japan
USA
Source:
GDP(PPP) per popuration of 1,000
(UK,Germany, France)
Number of researcher per population of 1,000
China
GDP PPP in 2008
Thailand
GDP PPP in 2007
Indonesia
GDP PPP in 2025
USD 11,172
USD15,000 (Per
Capita GDP)
Indonesia
GDP PPP in 2015
USD6,000
Forecast
Researchers 0.5
Korea
GDP PPP in 2008
Malaysia
GDP PPP in 2007
Indonesia
GDP PPP in 2009
350
research center site can be achieved in future.
351
Chapter 7. Facility Planning, Operation and Project Cost Estimation
7.1. Site Planning
7.1.1 Sites of 3 Counterparts
Source: JICA Study Team
Figure7.1.1 Site Location
The candidate site of BPPT-NARC is located at PUSPITEK in Serpong, Tangerang, Banten, and
has 27.3ha. The candidate site of IPB-NARC is located at Dramaga Campus in Bogor West Java,
and has 10.8ha. The candidate site of ITB-NARC is located at Deltamath Industrial Park, Bekasi
West Java, and has 40.0ha.
Source: IPB
Figure 7.1.2 IPB Complex of Dramaga Campus
ITB-NARC
ITB-NARC
BPPT-NARC
352
Comparing the 3 sites in the same scale, those sites will be as shown below. The yellow rectangles
showing in each site is the building, equal to the size of Incubation Center.
Source: Map data by Google, DigitalGlobe, AfriGIS (Pty) Ltd.,
Site outline markup and design by JICA Study Team
Figure 7.1.3 Equivalent Scale Comparison of 3 Sites
BPPT-NARC
27.3ha
ITB-NARC
40.0ha
IPB-NARC
10.8ha
353
7.1.2 BPPT-NARC
The site is 27.3ha area with complex boundary shape and undulation. Incubation Center including
Support Center is located in the south of the site. The land for Research Center is 4.7ha (excluding
the area of roads). Development area including new road is 6.1ha in total.
Source: Map data by Google, DigitalGlobe, AfriGIS (Pty) Ltd.,
Site outline markup and design by JICA Study Team
Figure 7.1.4 Site Shape of BPPT-NARC
Incubation
Center 1ha
Research
Center
4.7 ha
Total Site Area: 27.3 ha
Development Area: 6.1 ha
Undeveloped Area: 21.2 ha
354
Source: BPPT Additional Writing on the Google Earth
Figure 7.1.5 Overall View of PUSPIPTEK National Research Park
LAPTIAB, existing institution of BPPT is located with L-shape, and BPPT had an old plan,
“Bio-park”, to built research wing at the courtyard. The L-shape courtyard of old Bio-park plan is
small enough to built Incubation Center and car parks. So we determine the construction site at
the new proposed area Alt3 (Figure 7.1.5) for NARC.
Source: BPPT
Figure 7.1.6 Old Construction Plan of Biopark
Biotech Center
LAPTIAB
355
7.1.3 IPB-NARC
There is 10.8ha site where is next to south of rotary, the entrance of Dramaga campus. There is a
public open road between Dramaga Campus and the site, along north boundary of the site. The
site is called “Leuwikopo”. Incubation Center is located in the center of the site and adjacent to
university campus side. The land for Research Center is 4.7ha (excluding the area of the road).
Development area including new road is 6.4ha in total.
Source: Map data by Google, DigitalGlobe, AfriGIS (Pty) Ltd.,
Site outline markup and design by JICA Study Team
Figure 6.1.7 Land Shape of IPB-NARC
Research
Center
4.7 ha
Incubation
Center 1ha
Total Site Area: 10.8 ha
Development Area: 6.4 ha
Undeveloped Area: 4.4ha
356
Red marked portion in the drawing at the end of south is the site, “Leuwikpoko” for
IPB-NARC.
Source: IPB
Figure 7.1.8 Overall Drawing of IPB Dramaga Campus
Though IPB proposed 7 candidate sites for NARC, we select “Leuwikopo” site among them,
because the site is next to Dramaga Campus, easy to access from main road and flat land.
357
Table 7.1.1 Candidate Sites for NARC Proposed by ITB
No Location Size (m2)
Available for
NARC (m2)
Designation
1 Tanah Ex. Departemen
Agronomi Baranangsiang 2,000 2,000 Office and pilot plant
2 Taman Kencana 34,578 10,000 Office
3 Sindangbarang 91,883 45,000 Experimental Field
4 SEAFAST 20,000 3,000 Research Center
5 Cikabayan Darmaga 2,430,000 20,000 Experimental Field and
Pilot Plant
6 Leuwikopo 108,450 15,000 Office and Pilot Plant
7 Sukamantri 392,150 100,000 Experimental Field
Total - 195,000
Source: IPB
Source: JICA Study Team
Figure 7.1.9 View Near the Site
358
Candidate 1: Ex. Departemen Agronomi Barannagsiang
Candidate 2: Taman Kencana
Candidate 3: Sindang Barang
359
Candidate 4: SEAFAST
Candidate 5: Cikabayan
Candidate 7: Sukamantri
Source: JICA Study Team Additional Writing on the Google Earth, etc.
Figure 7.1.10 Candidate Sites 1-7 （ Figure 7.1.7 for Site 6）
360
7.1.4 ITB-NARC
ITB had been planning “Deltamath Campus” in northern place of Deltamath Industrial Park, but
has not been realized yet. The existing campus plan originally has an original Incubation Center.
Then new Incubation Center (site area of 1ha) will be replaced at the same location of the
Incubation Center. The site, Deltamath Campus, including NARC is 40ha. The site of 4.7ha
(excluding the area of the road) adjacent to the campus at express highway side will be utilized for
the site for the Research Center. Development area including new road and incubation center
(1ha) is 6.4ha in total.
Source: Map data by Google, DigitalGlobe, AfriGIS (Pty) Ltd.,
Site outline markup and design by JICA Study Team
Figure 7.1.11 Site Shape of ITB-NARC
Incubation
Center
1ha
Research
Center
4.7 ha
Total Site Area: 40 ha
Development Area: 6.4ha
Undeveloped Area: 33.6 ha
361
Source: ITB
Figure 7.1.12 View Near the Site
Source: ITB
Figure 7.1.13 Completion Plan of Deltamath Campus
Source: ITB
Figure 7.1.14 Completion Figure of Deltamath Campus
362
7.2 Condition for Facility Planning
7.2.1 Standard Room Size
As assumed in Chapter 6, concerning the room size, the standard required space for one to five
researchers is about 50 sq. m and 100 sq. m for six to ten researchers.
7.2.2 Study of Incubation Center Size
As assumed in Chapter 6, the required area of laboratories based on bio researchers is estimated to
be 1,362 sq. m.
7.2.3 Total Required Area for NARC Laboratories
As assumed in Chapter 6, total required area for bio cluster is estimated as below:
Required area of laboratory based on bio researcher: 1,362 sq. m 1)
Required area of laboratory based on Joint study: 3,036 sq. m 2)
1)+2) ＝4,398 sq. m
This figure, 4,398 sq. m is total laboratory room area for three incubation centers.
7.2.4 Rentable Room and Total Building Area Study
In accordance with the above assumption, the incubation laboratories require 4,398 sq. m which is
to be lent to incubators or joint researchers.
After consideration of Japanese existing bio incubation centers, we designed the incubation center,
consisting of pilot plant rooms on the first floor, incubation laboratory rooms in and offices on the
second floor and on third floor.
Since there are three incubation centers, we design the area of rentable room to be minimum 1,460
sq. m (4,380 sq. m for 3 sites) and select 1,716 sq. m for each incubation center. This area includes
20 percent spare for after consideration three years contract examination can be performed.
In addition to rental laboratory, common space such as entrance, corridor, elevator, operation
office, and meeting rooms are required. The total area of incubation center is 2,964 sq. m.
Incubation center in IPB and ITB site is three-story building and 25 rental laboratories.
Laboratories are two types of 52 sq. m rental laboratory (11 rooms), 104 sq. m rental laboratory (8
363
rooms) and 52 sq. m rental offices (6 rooms).
Each incubation center also has incubation office where managing staff will work (please refer to
7.5.2 of incubation center operating staff number).
In connection to total management of three incubation centers, BPPT incubation center building
is an integrated support center.
An integrated support office and other related facilities are on the first story of BPPT incubation
center building (refer to 7.5.2 for the number of operating staff for the integrated support center).
7.2.5 Necessity of P2 and P3 level Laboratory
Currently in Japan, there are few public bio laboratories with Level P2 grade. Some “Genetically
modified organism” require P1 or P2 level laboratory but public laboratories do not have P3 level
laboratory due to high running cost. In case of Indonesian NARC, bio laboratories will handle
plants and may not handle pathogenic. Therefore it is not necessary to install P3 level laboratories
in NARC facilities.
Source: Takeda Pharmaceutical Company Ltd. HP
Figure 7.2.1 P1 Level Laboratory Configuration
364
Source： Takeda Pharmaceutical Company Ltd. HP
Figure 7.2.2 P2 Level Laboratory Configuration
The ratio of P2 laboratory of all rooms is based on the examples of Japanese bio clusters, which is
approximately 10 percent of total rooms.
7.3 Preliminary Design
NARC facilities are under three counterparts which are BPPT, IPB and ITB that run the facilities
as they own them or have the right to use them. Such locations are BPPT in Serpong, IPB in
Bogor, and ITB in Deltamas, Bekasi. Each location has its own regulations and requirements,
and also need some administrative procedures regarding the local regency government or area
management that they have to fulfill before the construction stage starts.
7.3.1 Construction Planning
(1) Basic Concept
1) To design facilities in eco-friendly consideration with earth environment and surrounding
landscape
Facility sell be designed in harmonization with surrounding building height, roof shape,
color and etc. The eco-friend technology has been developed in technology development
program by BPPT. The technology for waste water treatment in R/D facility and domestic
waste dumping site shall be considered in planning. The cost of research and installment of
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this technology are adapted in research.
Source: BPPT
Figure7.3.1 Experiment facility of BIOTOPE Technology by BPPT
2) To design facility considering with fusion of Indonesian and Japanese joint technologies
ITB is implementing the research on cooling system with solar-heat panel. To be economic
and cost-saving purpose, the facility is planned with consideration of research results from
this technology.
3) To design facility considering with economic and cost-saving
ITB is implementing the research on cooling system with solar-heat panel. To be
economic and cost-saving purpose, the facility is planned with consideration of research
results from this technology.
4) To design facility with safety and comfortableness to protect from experiment accident
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5) To design facility to be opened to society and having easy accessibility
(2) Regulations and Administration Procedures
In Indonesia there are some regulations for many things concerning to building constructions and
environment in general, also in each area sometimes they have specific restrictions depend to the
conditions and function of the area itself.
Those lists of general regulations are as follow:
Table 7.3.1 Regulations and Administrations Procedures
Law and Regulation Authority Urban Planning Regulation Local Government of West Java
Architectural Law 1. Building Requirement Local Government of Bekasi District, Bogor
City and Bogor District 2. Building Intensity Escalation Local Government of Bekasi District, Bogor
City and Bogor District 3. Building Permit Procedure Local Government of Bekasi District, Bogor
City and Bogor District 4. Facility and Accessibility Local Government of Bekasi District, Bogor
City and Bogor District 5. Green Building Law Local Government of Bekasi District, Bogor
City and Bogor District
6. Parking Regulation Ministry of Transportation Civil Law 1. Road regulation Ministry of Public Works 2. Earthquake Resistance Planning SNI 3. Reinforced Concrete Structural
Calculation for Building SNI
M/E Law
1. Fire Protection Law Ministry of Public Works & SNI 2. Sewage Water Management Local Government of Bekasi District, Bogor
City and Bogor District 3. Hazardous Waste Disposal Ministry of Health 4. Guideline of Ground Water Usage Local Government of Bekasi District, Bogor
City and Bogor District Other Law Aviation Law Ministry of Transportation
Source: JICA Study Team
NARC facilities is under three counterparts which is BPPT, IPB and ITB that run the facilities in
each location they owned or have the authority to use it. Those locations are BPPT in Serpong,
IPB in Bogor, and ITB in Deltamas Bekasi. Each location has its own regulations or requirements,
and also some administrations procedures to the government regency or area management that we
have to fulfill before the construction stage starts.
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(3) Urban Planning
Considering urban planning, each city has its own guidelines for the city to develop in harmony
with consistency as a town with their own characteristics. Each area is arranged with regulations,
land zonings, floor area ratios, building ratios, building coefficient areas, open space ratios, green
area ratios, etc. Below are maps that show land zoning of each city/regency that is issued by
government.
Source: Bekasi District Planning Department
Figure 7.3.2 Bekasi District Spatial Planning 2009-2025
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Source: Bogor City Planning Department
Figure 7.3.3 Bogor City Spatial Planning 2011-2031
Source: Bogor District Planning Department
Figure 7.3.4 Bogor District Spatial Planning 2025
The data about urban planning was collected by visiting the city planning department from each
area. Those data from each site are described as below:
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Table 7.3.2 Conditions and Restrictions on Site
Items BPPT-NARC IPB-NARC ITB-NARC Location Bogor, Gunung
sideur, pungasinan district
Bogor City and others
Bukasi Regency
Site Area 10,000m2 10,000 m
2 10,000 m
2
Plot In PUSPITEK Science Park
In Bogor University Campus
In scheduled ITB Campus in Deltamas Industrial Park
Land Usage by City Planning
High density resident area
High and low density resident area
Industrial Area
Constriction Ratio to Plot
60% 50% 60%
Restriction on Height 12m (Note 1) 15m distance from road boundary
12m (Note 2) 60m (Note 3)
8 floors
No. of Floor Restriction
Up to 3 floor Up to 3 floor Others
None
Plant Area More than 10% More than 10% More than 10% Electricity Underground cable
22000v Underground cable 22000v
Underground cable 22000v
Gas None Natural Gas None Piped Water From exist road From exist road From new
construction road Waste Water None None In survey Road Exist road 6m width Exist road 6m width New road 19.5m w.
Telephone Connection possible Connection possible
Connection possible
Internet Connection possible Connection possible
Connection possible
Present Land Usage Agricultural Field In university campus
Hill with glass
Note 1: If the building is more than 4 stories, then we have to ask permission from Halima
Perdana Kusuma airbase (source from Puspiptek Management building).
Note 2: If the building is more than 60 m, then we have to ask permission from Atang Sanjaya
airbase.
Note 3: Distance from the river side at the back of the site location.
Source: Related District and City Planning Departments
(4) Government Administrative Requirements
Local governments as the community service society should supervise every activity in their area,
therefore some permits in administration will be required before implementing construction
activity.
1) Permitting stage
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a) Halim recommendation (only for building more than 4-story high)
b) Advice planning
c) Site plan
d) IMB technical suggestion
e) IMB
f) AMDAL -----> usually take 2 years of process
g) ANDALALIN ------> from DISHUB
h) Pel Banjir (the slope of the land against rain water) --------> from Bina Marga
i) HO ----- > ijin gangguan (disturbance permit )
2) Checklist of Site Plan/ Blok Plan requirements
a) Power of attorney letter
b) Identification of the director or person in charge
c) Certificate of company establishment
d) NPWP
e) Land certificate
f) Principal approval location/ regent recommendation
g) Aspect of the land
h) Location permits
i) Master plan / advice planning
j) Blok plan area
k) Letter of land measurement
l) IPPT
m) Pre site plan drawing / last updated site plan (revision)
n) Soft copy (in CD)
3) Application site plan validation
a) Applicant data:
(i) Company name/applicant
(ii) Company owner’s name
(iii) Address / phone
(iv) Business field/ occupation
371
b) Land data
(i) Land size
(ii) Location
A. Village
B. Political district
(iii) Plan for land usage
(iv) Usage of land at present
(v) Land status
4) For consideration, some data has to be attached
a) Power of attorney letter
b) Identification of the director or person in charge
c) Certificate of company establishment
d) NPWP
e) Land certificate
f) Principal approval location/ regent recommendation
g) Aspect of the land
h) Location permits
i) Master plan / advice planning
j) Block plan area
k) Letter of land measurement
l) IPPT
m) Pre site plan drawing / last updated site plan (revision)
n) Soft copy (in CD)
o) Prove of graveyard settlement and minute of meeting
p) Landfill location recommendation
q) Street lighting recommendation
r) Pre Block plan drawing/ latest block plan drawing
(5) Building Requirements
Refer to Minister of Public Works Decree No.441/KPTS/1998 on Technical Requirement on
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Building, stated that there are some requirements for building as follows:
1) Land Use and Building Intensity
2) Architecture and the environment
3) Building Structures
4) Security against Fire Hazard
5) Entrance and Exit Facilities
6) Transport in the building
7) Emergency Lighting, Exit Signs Direction and Warning System
8) Electrical Installation Lightning Rod, and Communication in Building
9) Gas installations
10) Sanitation in the building
11) Ventilation and Air Conditioning
12) Lighting
13) Noise and Vibration
Any person or entity, including government agencies in the implementation of the construction of
the building must comply with.
7.3.2 Facility Planning
(1) Room Size and Facility Area
3-story building for ITB and IPB, with 25 rental laboratories,consisting of:
-11 rooms @ 52 sq. m rental space for laboratory
-8 rooms @ 104 sq. m rental space for laboratory
-6 rooms @ 52 sq. m rental space for office
Each floor area is 1,000 m2
and the whole area is 3,000 m2 as a building prototype.
Because NARC BPPT is a coordinator for the counterparts, the Integrated Support Center will be
added to NARC-BPPT building with floor area of 1,000 m2.
(2) Research Center/Park in General
NARC will lease the land of the research center to companies with larger research equipment and
production. Facilities will be built by companies themselves. Facilities that NARC provides are
the ground pavement, electricity and water with basic infrastructure. The research center area is
4.7 ha based on the examples of existing models in other Asian countries.
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(3) Total Floor Area for Facility
The floor area for the incubation center is about 3,000 m2 per site. The floor area for integrated
support center is approximately 1,000 m2. Therefore the total floor area is approximately 10,000
m2. Total area allows 10% of increasing and 5% decreasing in planning.
(4) Composition of Facilities
The facilities consist of following components:
-Construction of approach road (3 sites)
-Construction of Incubation Center (3 sites)
-Construction of Integrated Support Center (1site)
-Research Center (3 sites)
Table 7.3.3 Prototype Composition of Rooms for Incubation Center
(About 3000 m2x 3 sites for BPPT, IPB and ITB)
Composition of main rooms Estimated room area (m2)
Rooms for
Research and
experiment
Room for small scale plant About 104 m2ｘ 4 rooms、Ceiling H. 3.3m
P1 experiment room（ Large） About 52 m2ｘ 15 rooms
P1 experiment room（ Very
Large）
About 104 m2ｘ 4 rooms
P2 experiment room (Large) About 52 m2ｘ 2 rooms
Meeting Room（ Large） About 52 m2ｘ 3 rooms
Meeting Room（ Middle） About 26 m2ｘ 3 rooms
Meeting Room（ Small） About 13 m2ｘ 3rooms
Rooms for
Management
and Common
Usage
Office and Management Office About 104 m2
Entrance About 52 m2
Corridor About 156 m2
Staircase Adaptation
Electricity and Machine room Adaptation
Space for waste Adaptation
Toilet, Pantry Adaptation
Service entrance, terrace Adaptation
Space for management and
maintenance
Adaptation
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Outside
Electricity converter, emergency
generator
Adaptation
Out side Alley, Plant, Light, Drainage,
Open ditch, Signboard, etc.
Source: JICA Study Team
Table 7.3.4 Prototype Composition of Rooms for Supporting Center
(About 1,000 m2for BPPT)
Composition of Main Rooms Estimated Room Area (m2)
Support
Function
Convention Hall（ Large） About 494 m2 Ceiling Height
3.3m
Convention Hall（ Middle） About 104 m2 Ceiling Height
3.3m
Space for
Management
and Common
Usage
Office for supporting center About 156 m2
Entrance Hall About 52 m2
Lobby About 72 m2
Staircase and Collider Adaptation
Electricity and Machine room Adaptation
Space for waste Adaptation
Toilet, Pantry Adaptation
Service entrance, terrace Adaptation
Space for management and maintenance Adaptation
Outside Electricity converter, emergency generator Adaptation
Outside Alley, Plant, Light, Drainage,
Open ditch, Signboard and etc.
Source: JICA Study Team
Considering the avobe figures, designs of Integrated Supporting Center and Incubation Center are
planned as follows:
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Source: JICA Study Team
Figure 7.3.5 IPB and ITB Incubation Center Building: Site, Floor and Section Plans
Source: JICA Study Team
Figure 7.3.6 BPPT Incubation Center and Integrated Support Center Building: Site, Floor and
Section Plans
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7.4 Main Instruments in Common Laboratory
Several experimental equipments will be useful when provided as common use ones in “Common
laboratory” the incubation centers in order to promote collaborative research or to support
research activity of tenant companies.
Among such equipments, analytical ones will contribute quite a lot not only for the collaborative
research and the tenants’ activities as above but for the researchers outside of the incubation center.
Since analytical equipments are generally expensive, common use equipment candidates are
listed below mainly including analytical ones.
(1) BPPT-NARC
-DNA sequencer; Approx.20 million Yen
- HPLC, high performance liquid chromatography; Approx.10-20million yen
- LC-MS, liquid chromatography-mass spectroscopy; Approx.20-50million yen
Next-generation DNA sequence may be a candidate of common use equipment in the view of
current research trend. However the sequencer is not added to the list because there is still not
enough information about how much genome data BPPT will plan to analyze.
(2) IPB-NARC
-DNA sequencer; Approx.20 million Yen
-HPLC, high performance liquid chromatography; 10-20 million Yen
-LC-MS, liquid chromatography-mass spectroscopy; 20-50 million Yen
-SEM, scanning electron microscopy, Desktop type; 4-5 million Yen
-High resolution type; 60million Yen
-Ultra centrifuge without rotors; Approx.15 million Yen
Electron microscopy may be useful for identifying genera and species of collected organisms
more precisely. Desktop type will be enough, but may need its operator for a while. The prices
listed are approximate values. Prices may vary according to the specs of equipments.
(3) ITB-NARC
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-HPLC, high performance liquid chromatography; Approx.10-20 million Yen
-LC-MS, liquid chromatography-mass spectroscopy; Approx.20-50 million Yen
-GC-MS, gas chromatography-mass spectroscopy; Approx.20 million Yen
Ultra centrifuge without rotors; Approx.15 million Yen
Gene technology related equipments like DNA sequencer are not listed because there seems no
plan in ITB to construct or to modify organisms by gene technologies for improving biomass
production efficacy, etc.
Table 7.4.1 Main Instruments in Common Laboratory (Million Yen)
BPPT-NARC Main instruments Min. Max.
DNA sequencer 20
HPLC 10 20
LC-MS 20 50
Subtotal (a) 50 90
BPPT-NARC Main instruments Min. Max.
DNA sequencer 20
HPLC 10 20
LC-MS 20 50
SEM Desktop type 4 5
SEM High resolution type 60
Ultra centrifuge without rotors 15
Subtotal (b) 129 170
BPPT-NARC Main instruments Min. Max.
HPLC 10 20
LC-MS 20 50
GC-MS 20
Ultra centrifuge without rotors 15
Subtotal (c) 65 105
Total (a)+(b)+(c) 244 365
Exchange rate US$1=JP¥92.51
Total US$ 2,637,600 3,945,500
Source: JICA Study Team based on the proposal by Kihara Foundation
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7.5 Unit Price Setting of Land and Rental Laboratory
7.5.1 Unit Price of Land Leasing Rate
The latest land prices of industrial park had been surveyed by the study team shown as below.
Though we try to inquire the land leasing price at the same time, the owner did not set the price for
land leasing without building.
Table 7.5.1 Latest Land Sale Price of Industrial Park near Jakarta
Industrial Park Operator Price US$/m2
Land sale Rental
factory
/ month
Land leasing
/ month
MM2100 Industrial
Park
PT. Bekasi Fajar
Industrial Estate, Tbk
185 9.6 n.a.
GIIC
Industrial Park
PT. Puradelta Lestari
Tbk
185 8
n.a.
Kota Bukit Indah
Industrial Park
Indo Taisei Indah
Development
110-120 5 n.a.
Source: Interview with each industrial park by JICA Study Team
In the webiste of JETRO investment cost comparison table of Asia, there is a following note to
describe the land leasing price in Indonesia:“10% of the price of land and building would be equal
to land leasing rate per year”. In accordance with the note, we assumed unit price of the monthly
land lease per a square meter as shown as following table.
Table 7.5.2 Assumed Unit Price of Land Lease
Industrial Park Land sale Assumed
(Note)
Remarks
US$/ m2 US$//m
2/month
MM2100 185 1.54 US$185×10%×1/12
GIIC 185 1.54 US$185×10%×1/12
Kota Bukit Indah 110-120 0.91-1.00 US$120×10%×1/12
Note: 10% of the price of land and building would be equal to land leasing rate per a year
Source: Contents of the note by JETRO website, table made by JICA Study Team
Land lease fee of Research Center are set compared with industrial parks in Taiwan, where the
standard office rental rate is almost the same as in Jakarta and still internationally competitive. To
attract companies from overseas, NARC sets more economical rate than in Taiwan: $1~1.5 per
square meter in this feasibility study.
379
Table 7.5.3 Land Lease Rate Compared with Industrial Parks in Taiwan
Area Industry Park US$ Quoted from
Taiwan Taichung 1.98 JETRO data 2012
Tainan Science Park 2.47 JETRO data 2011
Dayuan 1.14 JETRO data 2010
Jakarta MM2100 1.54 Refer to Table 7.5.2
GIIC 1.54 Refer to Table 7.5.2
Kota Bukit Indah 0.91-1.0 Refer to Table 7.5.2
Source: Provided by JICA Study Team based on JETRO data
7.5.2. Unit Price of Rental Laboratory
NARC sets the rental rates compared with the major cities in neighboring countries in Southeast
Asia to attract research institutions of foreign companies to Indonesia. The rental rate in
Incubation Center is assumed to be equivalent to the average office in urban Jakarta to match real
estate prices in Indonesia. On the other hand, we shall refer the existing similar facility to
determine the rental rate.
Table7.5.4 Rental Rates Compared with Asian Cities
Name of City Office
Monthly
rate/ m2
(US$)
Industrial Park Engineer
wage
(US$)
Comparison
Ratio set as 1.0
for office in
Jakarta
Monthly
rate/ m2
(US$)
Buying
rate/ m2
(US$)
Yokohama 51 16.47 453.43 5,008 2.55
Seoul 51 0.19 267 2,156 2.55
Shanghai 41 3.56 158 745 2.05
Taipei 18 1.98 1350 1,378 0.9
Singapore 83 0.96-
2.85
189.94-
651.21
2,378 4.15
Ho Chi Minh 35 0.25 n.a. 286 1.75
Bangkok 20 6.95 119 641 1.00
Kuala Lumpur 23 n.a. 20-25 973 1.15
Jakarta 20 1.59 191 414 1.00
NARC site 20 1.00 -
Note: Yearly rental rate of industrial park in Jakarta to be calculated 10% of land sale price
(quoted from JETRO)
Source: JETRO material (2012)
The existing Incubation Center in IPB is located in the campus of IPB. The rental unit price per a
square meters is as shown as Table 6.5.5. We assume the unit price of new Incubation Center to be
US$18/m2, referring the existing facility, and nearly equal to the average rate of office rental in
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Taipei.
Table 7.5.5 Existing Incubation Facility in IPB
Standard Rooms Rental price US$/ m
2
6 months 3 months
IPB Incubation Facility 18 m2 17.87 19.58
Source: IPB
7.6 Operation Planning
7.6.1 Biocluster Operation
Organization of biocluster executes support for biocluster, universities, and companies, in
domestic and foreign. The operation is working not only for individual incubation center, but also
with wide network including university and companies all over the world. The followings are the
representative activity of cluster operation in Japan referring Bio network in metropolitan. We
consider that organization of NARC in early stage will operate concentrating on incubation
centers, and then, expand the field of operation as follows:
(1) Event Planning for Partnering
The organization plans event to introduce venture’s seeds and academic presentation, providing
the chances of business matching and joint research partnering by the exhibition.
(2) Support of Opening Exhibition Booth
The organization supports economic load to open booth independently.
(3) Assistance of Sales Channel Development
The organization supports partnering with overseas company or overseas expansion, cooperating
overseas agency.
(4) Management of the Bio-stakeholder Meeting
The organization manages operating Stakeholder meeting to aim for activation of ventures
mutually, forming network as the result of mutual cooperation of bioclusters.
(5) Planning Seminar of Leading Companies
The organization promotes alliance to avoidg miss-match, while announcing latest needs and
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technology trend.
(6) Implementation of the Technical Committee
The organization provides advice by specialists for various problems of ventures.
(7) Support for Management Issues of Ventures
The organization proposes strategy organizing or extracting common management and technical
issues.
(8) Information Services by WEB and Emailing Delivery
The organization sets Bio-venture directory and provids events and recruitments.
7.6.2 Operating Structure
Operation of Incubation Center, which constitutes the cluster as the main facility, is to have the
organization system shown below. Directors will be placed for each of 3 main centers, overall of
facilities will be managed by a Vice-president. Integrated Support Center cares tenants who are
the residents in each facility in a cross-sectoral manner. The center will coordinate joint research
and business matching and advise regarding law and intellectual property to the tenants. In case of
establishing SPC, a management department will be established in Integrated Support Center.
Source: JICA Study Team
Figure 7.6.1 Operating Structure
7.6.3 Organization
Overall operating organization is to be Figure 7.6.2 and necessary number of personnel is to be as
Table 7.6.1. Beside this, building maintenance, security and cleaning will be outsourced.
SPC President
Integrated Support Center
援センター
Director A
Director B
Director C
Vice-president IPB-NARC
ITB-NARC
BPPT-NARC
gra
382
Table 7.6.1 Necessary Number of Personnel in Early Stage
Role of Personnel Integrated
Support
BPPT
NARC
IPB
NARC
ITB
NARC
President 1
Vice President 1
Integrated
Support
Center
SPC Management 1
Integrated
Support
Business Match. 1
Law & Patent 1
Joint Research 1
Director 1 1 1
Tenant
Support
Incubation Manager 1 1 1
Equipment Advisor 1 1 1
General
Affairs
Accounting 1 1 1
Facility Manager 1 1 1
Source: JICA Study Team
383
Source： JICA Study Team
Figure 7.6.2 Overall Organization Chart
Concerning operation of the SPC, BPPT, IPB and ITB organize an advisory board and it proposes
and advises for operation of the SPC.
IPB-NARC Director B
ITB-NARC
Director C
SPC
President
Vice
President
Director A Tenant Support Incubation Manager
Equipment Advisor
Accounting
Facility Manager
General Affairs
BPPT-NARC
Note 1: Outsourcing
Cleaning
Security
Maintenance
Integrated Support Center
Business Matching
Integrated Support Law & Patent
Joint Research
SPC Management
384
Source： JICA Study Team
Figure 7.6.3 Advisory Board Organized by BPPT, IPB and ITB
7.6.4 Policy of Incentives for Tenants
Incentives for tenants in Incubation Center in Japan are mainly performed by local government
where the tenants located. In the case of incentives of “Leading Venture Plaza” in Yokohama,
refer to the following table. Main items of incentives for tenants are to be as follows:
(1) Tax exemption: Refer to the Chapter 4
(2) Subsidy for leasing fee by local government or central government
(3) Subsidy for research by local government or central government
IPB BPPT
Management Committee
Operational Comittee
ITB
Management Committee
Operational Comittee
NARC Steering Committee by BPPT, IPB,ITB
NARC Technical Committee by BPPT, IPB,ITB
Advisory Board
Appointment and Dispatch of Board Members
President
Vice President Director A
Director B
Director C
BPPT NARC
IPB NARC
ITB NARC
Tenant Supports
General Affairs
Venture Supports
Joint Research
Laws & IPs
BPPT
IPB
SPC or Private
ITB
Management Committee
Operational Comittee
BPPT
IPB
ITB
Advice, Opinion on Operation, Services
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Table 7.6.2 Subsidies for Research
Major Item Original Grant Contents
(1) Subsidies
for Leasing Fee of
Tenants
Yokohama
City
（Note 1）
Yokohama City subsidy emphasizing on industry;
R & D company moving in the city can get
subsidy of rental laboratory, up to 12 months,
max. 20 million yen
(2) Subsidies for
Capital investment
Yokohama
City
（Note 2）
Equipment loan lending
Max.1/2 of equipment cost by lending without
interest
(3) Subsidies for
Research
Yokohama
City
（Note 3）
Supporting small business of Yokohama from the
R&D to market expanding
(Max. 2/3 of the costs, Max. 30 million yen)
Yokohama
City
（Note 4）
Subsidy for Intellectual Property in future
Preferential loan and interest, support of IP, etc.
Kanagawa
Prefecture
（Note 5）
Subsidy for promoting ventures related to energy
(Max. 10 million yen)
Kanagawa
Prefecture
（Note 6）
Subsidy for supporting ventures in new industry
(Max. 2 million yen)
Small
Business
Agency
（Note 7）
Subsidy for manufacturing by medium and small
companies (10 million yen and Max. 2/3 of the
cost )
Ministry of
Economy
（Note 8）
After authorized “Supporting industry”,
Business proposal with subsidy by the company
and university
NEDO Contracted research and subsidy for Bio
Ministry of
Health
Contracted research and subsidy for Bio
Ministry of
Agriculture
Contracted research and subsidy for Bio
Note 1: http://www.city.yokohama.lg.jp/keizai/yuchi/support/sokusikin.html
Note 2: http://www.city.yokohama.lg.jp/keizai/shien/sbir/
Note 3: http://www.city.yokohama.lg.jp/keizai/shien/sbir/
Note 4: http://www.city.yokohama.lg.jp/keizai/shien/tizai/tizaimirai.html
Note 5: http://www.pref.kanagawa.jp/cnt/f460034/
Note 6: http://www.pref.kanagawa.jp/cnt/f480114/
Note 7: http://www.chuokai.or.jp/josei/24mh/koubo2-20130610.html）
Note 8: http://www.kanto.meti.go.jp/seisaku/seizousangyou/sapoin/index_kiban.html
Source: IDEC (Yokohama Industrial Development Corporation)
386
7.6.5 Tenants Support
Incubation manager has the role to lead person who aims entrepreneurship and independence or
young company to the achievement of business, advising against various consultation such as
knowhow of entrepreneurship and management. At thebeginning of business, the manager
supports to make business plan of how to solve funding problem, provides information of
subsidies and loan, and introduces fund.
Incubation manager is a professional to support the person who aims entrepreneurship and
establishment, from the beginning of plan to entrepreneurship or establishing. Main role of
incubation manager is as follows:
(1) Industry-university cooperation
(2) New business development
(3) Strategy development of intellectual property
(4) Market expansion (Business matching)
(5) Funding support
(6) Human resources support
For realizing the purpose, the manager tries to use subsidized project, and utilizes his/her network
with supporter, company, university, academic institution. Joint participation in exhibition (once
sometimes a year) executed in order to provide chances of exchanging business information as a
specific method for market expansion. And the manager holds networking events for tenants
exchanging each other to enhance their network.
We consider that Incubation manager in Indonesia shall coordinate not only domestic research
seeds, but also inviting joint researches from overseas companies with their research seeds.
Source: IDEC (Yokohama Industrial Development Corporation)
Figure 7.6.4 Example of Exchanging Saloon in Incubation Facility
387
Source: IDEC
Figure 7.6.5 Example of Joint Participation in Exhibition
Source: IDEC
Figure 7.6.6 Example of Exchanging Inormation by Opening Lecture
Source: IDEC
Figure 7.6.7 Example of Network Expansion Party
388
7.7 Project Cost Estimation
7.7.1 Cost Estimation of Construction
(1) Design
Design cost is assumed by 5% of the civil work cost. Basic design and detail design cost is
assumed by 7% of the architecture work cost. Design cost is not assumed in research equipment
cost.
(2) Basic Infrastructure
Undulation of the land is assumed to be developed within 1m gap. The main road in the site is
assumed to be with 19.5m wide (Walkway 2m + Car road 6m + Center belt zone 2m + Car road
6m + Bicycle zone 1.5m + Walkway 2m) , and trees and lawns 2m to be along on both side of the
road. Water supply, sewerage and power supply are estimated from the site boundary on the road,
but extra 300m is estimated for BPPT-NARC.
Paving of car park in Research Center is not included (by tenants).
(3) Facility Construction
The floor area is assumed to be Rp.11,000,000/m2.
(4) Instruments for Common Laboratory
Refer to 7.4.
(5) Others
Contingency due to inflation caused by high economic growth.is considered.
389
Table 7.7.1 Initial Costs Estimation
(Rp. Million)
BPPT-NARC IPB-NARC ITB-NARC Total
1. Civil Work（ Research Center）
Approach Road 2,953 5,313 5,047 -
Segmentation of Research Center 3,061 3,061 3,061 -
Reclamation of Research Center 15,228 15,228 15,228 -
（ Subtotal） 21,240 23,602 23,336 -
Contingency Cost 10% 2,124 2,360 2,334 -
Consultant Fee 5% 1,168 1,298 1,283 -
VAT10% 2,453 2,726 2,695 -
Subtotal 26,986 29,986 29,648 86,620
Incubation Center 3,240 3,240 3,240 -
Contingency Cost 10% 324 324 324 -
Consultant Fee 5% 178 178 178 -
VAT10% 374 374 374 -
Subtotal 4,116 4,116 4,116 12,348
Civil Work Total 31,101 34,102 33,764 98,968
2. Building Work (including parking area)
Integrated Support Center 54,530
- - -
Incubation Center 42,518 42,518 -
Contingency Cost 10% 5,453 4,252 4,252 -
Consultant Fee 7% 4,199 3,274 3,274 -
VAT10% 6,418 5,004 5,004 -
Building Work Total 70,599 55,048 55,048 180,696
3. Research Equipment
Research Equipment 859,517 1,193,773 1,002,770 -
Consultant Fee 10% 85,952 119,377 100,277 -
VAT10% 94,547 131,315 110,305 -
Total (US$) 1,040,015 1,444,466 1,213,351 -
Equipment Total (Rp. Million) 12,667 17,594 14,779 45,040
Civil/Building/Equipment Total 114,367 106,744 103,591 324,704
4. Transaction Advisory Cost
Consultant Fee 13,636 -
VAT10% 1,364 -
Total 15,000 15,000
Grand Total - 339,704
Note: The cost for approach is included in civil work cost.
Source: JICA Study Team
7.7.2 Cost Estimation of Operation and Maintenance (Outsourcing)
(1) Land Leasing Fee
390
The land will be lent with free charge by three counterparts.
(2) Facility Maintenance Cost
It is provided that the ratio of 1.1% on the institution maintenance cost to the public construction
costs in Indonesia by the interview of each research institute. And the share of costs in each five
years in maintenance period is referred to the maintenance plan of the Yokohama Joint Research
Center, and the following table 7.7.2. is considered by the same technique. These expenses area
assumed as costs for a small maintenance cost, valve exchange expense, a repair cost for
equipment for common and it is also contained heat and water expenses in common area. In
addition, repair of the light, heat and water expenses of each lease laboratory and a lease office,
valve exchange expenses, and the repair cost of equipment by tenant purchase are taken as a
tenant's burden.
Facility maintenance cost is assumed as 5% of construction costs for the costs such as small scale
maintenance costs for common area, lighting replacement and maintenance costs of common
instruments in common laboratory, and water and electricity supply costs for common space.
Table 7.7.2 Facility Maintenance Cost
(Rp.)
Period Repair (Per m2) Year Replacement Area Sub Total
From 1st year to 5th 50,000 5 0 10,920 2,730,000,000
From 6th year to 10th 100,000 5 3,000,000,000 10,920 8,460,000,000
From 11th year to 15th 150,000 5 6,000,000,000 10,920 14,190,000,000
From 16th year to 20th 100,000 5 9,000,000,000 10,920 14,460,000,000
Total Cost - - - - 39,840,000,000
Cost per year - - - - 1,992,000,000
Source: JICA Study Team
(3) Utility Cost
Utility cost is assumed by referring with yearly consumption cost of LAPTIAB in PUSPITEK.
LAPTIAB uses water at 9,800Rp/ m2/month and use electricity 10,000 Rp/ m
2/month. Utility cost
is calculated as 50 % of whole consumption as common use. Then cost per year is Rp. 655 million
for electricity. Also cost per year is Rp. 642 million for water. Total utility cost per year is 1,289
million IDR.
391
Table 7.7.3 Utility Cost
(Rp.)
Utility Per m2 Area Cost per Year Ratio Sub Total
Water 9,800 10,920 1,284,192,000 0.5 642,096,000
Electricity 10,000 10,920 1,310,400,000 0.5 655,200,000
Cost Per Year - - - - 1,297,296,000
Source: JICA Study Team
(4) Operation Cost
The breakdown of NARC’s manpower costs depending on the job title are to be assumed by
Table 7.7.5 and 7.7.6. Setting manpower unit costs against the assumed professional ranks are
determined independently in the Table 7.7.8, referring to theTable 7.7.7, Jakarta standard
manpower unit costs. Consequently operation costs are calculated as below.
Table 7.7.4 Operation Cost
(Rp.)
Place Position Salary No Sub total Month Total
BPPT-NARC Vice president 17,798,000 1 17,798,000 12 213,576,000
BPPT-NARC Account. manager 15,070,000 1 15,070,000 12 180,840,000
BPPT-NARC Business matching 15,070,000 1 15,070,000 12 180,840,000
BPPT-NARC Advisor of law and
patent
15,070,000 1 15,070,000 12 180,840,000
BPPT-NARC Attracting Joint
research
15,070,000 1 15,070,000 12 180,840,000
3 Place Director 16,434,000 3 49,302,000 12 591,624,000
Incubation manager 15,070,000 3 45,210,000 12 542,520,000
Instrument manager 15,070,000 3 45,210,000 12 542,520,000
Accounting 11,627,000 3 34,881,000 12 418,572,000
Facility manager 11,627,000 3 34,881,000 12 418,572,000
Total - - - - - 3,450,744,000
Source: JICA Study Team
392
Table 7.7.5 Personnel Expenses Breakdown (Part 1)
Facility Posts Professional rank S A B C D E
Integrated Support Center
Vice president 1 SPC manage. Account. manager 1 Integrated Support Division
Business matching 1 Advisor of low and patent
1
Attracting Joint research
1
Sub Total (person) 1 4
Source: JICA Study Team
Table 7.7.6 Personnel Expenses Breakdown (Part 2)
Facility Posts Professional rank S A B C D E
BPPT-NARC Director 1 Tenants Support Division
Incubation manager 1 Instrument manager 1
Administration Division
Accounting 1 Facility manager 1
Outsourcing Maintenance 1 4 Security 1 4 Cleaning 2
Sub Total (persons) 1 2 2 2 10
IPB-NARC Director Accounting 1
Tenants Support Division
Incubation manager 1 Instrument manager 1
Administration Division
Accounting 1 Facility manager 1
Outsourcing Maintenance 1 4 Security 1 4 Cleaning 2
Sub Total (persons) 1 2 2 2 10
ITB-NARC Director Accounting 1
Tenants Support Division
Incubation manager 1 Instrument manager 1
Administration Division
Accounting 1 Facility manager 1
Outsourcing Maintenance 1 4 Security 1 4
Cleaning 2 Sub Total (persons) 1 2 2 2 10
(Subtotal 1+2) 1 3 10 6 6 30 Total (Persons) 56
Source: JICA Study Team
393
Table 7.7.7 Unit Costs of Standard Manpower in Jakarta
Professional rank US$/month
Manager of nonmanufacturing Manager class 1,245
Staff of nonmanufacturing General staff 423
Manager of manufacturing Manager class 1,057
Engineer Mid class 433
Worker Common class 239
Source: JETRO (May, 2013)
Table7.7.8 Unit Costs of Assumed Manpower in NARC
Professional class Unit costs
US$/month
S Vice president 1,245×1.3=1.618
A Director 1,245×1.2=1,494
B
Accounting manager 1,245×1.1=1,370
Business matching
Advisor of low and patent
Attracting joint research
Incubation manager
Instrument manager
C Accounting 1,057
Facility manager
D Outsourcing Maintenance engineer 433
Security chief
E Security 239
Cleaning
Note: Class S, A and B are to be calculated extra pay depending on the job title,
based on “Manager of nonmanufacturing” in Jakarta standard manpower
costs. Class D and E are to be calculated assuming outsourcing with 20% of
company expenses on to the net labor costs.
Source: JICA Study Team
(5) Outsourcing Cost (Security, Cleaning, Maintenance)
Cost of management and maintenance is outsourcing basis. The manpower cost is assumed by
referring to Table 7.7.7. 20% of manpower cost is added on total cost.
Total cost per year is Rp.1,858 million.
394
Table 7.7.9 Outsourcing Cost (security, cleaning, maintenance)
(Rp.)
Duty Salary Personnel 12Months x
Man No. O.H Sub total
Chief of Maintenance 5,720,000 3 205,920,000 1.2 247,104,000
Chief of Sedulity 5,720,000 3 205,920,000 1.2 247,104,000
Maintenance worker 3,157,000 12 454,608,000 1.2 545,529,600
Security staff 3,157,000 12 454,608,000 1.2 545,529,600
Cleaning staff 3,157,000 6 227,304,000 1.2 272,764,800
Outsourcing Cost - - - - 1,858,032,000
Source: JICA Study Team
(6) General and Administrative Expense
It is assumed to be 5% of Overhead Cost.
Table 7.7.10 General and Administrative Expense
Cost Item Cost (Million IDR)
Maintenance and Replacement Cost 1,992
Utility Cost ( Electricity, Water) 1,298
Labor Cost for NARC (I.S. center, Incubation center) 3,451
Outsourcing Cost (security, cleaning, maintenance) 1,858
Sub total 8,599
Overhead Cost (5% of above items) 430
total 9,029
Note: Member of Integrated Support Center: 5 staffs(BPPT)
Member of Incubation Center : 5 people x 3 sites
Replacement Cost of Research Equipment is supposed to be covered by the service
tariff of the equipment
Source: JICA Study Team
7.7.3 Income Estimation of Laboratory Rental Fee and Land Leasing Fee
(1) Laboratory Rental Fee (Incubation Center)
The laboratory rental fee will be set by US$18 per square meter as considered in 7.5. Income of
the Laboratory fee is as follows. Occupancy of the rooms for financial analysis shall be 0.8 at
steady state considering the safety side, even if Incubation Center in Japan is normally 0.9.
395
Table 7.7.11 Income of Laboratory Rentable Fee (Incubation Center)
BPPT-NARC IPB-NARC ITB-NARC
Rentable area (m2) 1,612 1,612 1,612
Rentable rate (US$/ m2) 18 18 18
Sub Total (US$) 29,016 29,016 29,016
Note: The rentable area is the area which deducted searvice laboratory area from possible
rentable area.
Source: JICA Study Team
(2) Usage Fee for Instruments of Common Laboratory (Incubation Center)
Though the expensive instruments are utilized with small amount of fee by tenants in some cases
in Japan, the fee collection is aim to keep fairness among researchers. The fee should not expect
as revenue for the financial analysis, because frequency of use of researchers is not expected at
this moment that themes of tenants are unknown.
(3) Land Leasing Fee (Research Center)
The monthly land leasing unit price of Research Center will be set by US$1.5 m2 as it is the
highest rate of US$1 to 1.5, considered from the result shown in 7.5. Income from the land leasing
fee is shown in Table 7.7.12. The occupancy of Industrial Park in Jakarta is always full, but the
Research Center in NARC is considered attracting limited tenants so that the land usage is limited
for R&D. Therefore the occupancy rate shall be simulated appropriately by financial analysis.
Table 7.7.12 Income of Land Leasing Fee (Research Center)
BPPT-NARC IPB-NARC ITB-NARC
Land leasing area (ha) 3.87 3.87 3.87
Leasing rate (US$/ m2) 1.5 1.5 1.5
Sub Total (US$) 58,050 58,050 58,050
Total (US$) US$174,150
Source: JICA Study Team
396
Chapter 8. Project Structure
8.1 Basic Project Structure
Figure 8.1.1 shows the basic project structure of the NARC project with application of PPP
scheme as an example of the project scheme alternatives. Overall project structure is illustrated as
follows.
8.1.1 Research Activity Partnership
As described in Chapter 7, each NARC site has two major packages: Incubation Center (Package
1), which also includes the Integrated Support Center in the BPPT site; and Research Center
(Package 2). The Incubation Center is a building equipped with some common instruments and
facilities which provide laboratories and office space for tenant companies who engage in their
research activities. The Research Center is land lots with basic utilities prepared for larger tenant
companies who construct their research facilities there for their own use. These tenant activities
and facilities as well as their collaboration with the hosting institutions (BPPT, IPB and ITB)
collectively form the Bio cluster in the subject areas.
The public counterpart organizations (BPPT, IPB and ITB) will proactively support and
participate in this Bio cluster development and promotion. In the NARC sites, their activities take
place as cooperation and joint researches with national and international tenants who reside in and
use the facilities, as well as the advisory and monitoring of the operation of NARC. Such support
activities are described in Chapter 7 in detail. The counterparts may also use a part of the facilities
as in-kind profit sharing from the project, in accordance with the contract with the private
operator of NARC, for their own research activities or collaboration with other tenants/users.
8.1.2 NARC Facility Development and Operation
How the NARC facilities will be developed and operated is the major discussion in this Chapter.
In financial terms, the rent fee payments from the tenants are the primary revenue source for
capital and operational expenditure of NARC. However, since the unit rates are to be set at
considerably low level to be competitive enough in the research/industrial park market, it requires
some sort of government contribution to enhance the project’s viability. On the other hand, the
private sector participation in the project is deemed necessary to utilize its business matching
ability, facility designing and operation know-how, and investment capability. A typical basic
project scheme, whose details still depend on the scheme alternative chosen for the project, is
397
described as follows.
(1) Private Investor and SPC
The counterpart organizations select and contract with a private investor in accordance with
applicable regulations depending on the project scheme chosen for the project. Normally the
private investor establishes a special purpose company (SPC) to construct and operate the NARC
facilities. SPC is also responsible to financing for the initial investment such as JICA PSIF loan
among other private financing.
(2) Provision of Land Use Right
The land for the NARC sites is granted by the responsible counterpart organizations to SPC.
Certain revenue/profit sharing mechanism among the project partners (public and private) may be
prescribed in the PPP contract or other arrangements.
(3) Government Support for Initial Investment
Since it is anticipated that the project has a significant financial viability gap for a pure private
sector project, the government funding support will be necessary to cover a part of the initial
investment requirement. Depending on the project scheme alternative, this may take a form of
in-kind contribution (such as public construction of a part of project scope) or fiscal contribution
such as Viability Gap Fund (VGF) based on the PPP framework.
(4) Lease Contracts with Tenant Companies
The SPC concludes lease contracts with tenant companies for the use of Incubation Center
(Package 1) and Research Center (Package 2). The lease fee / rent payments from the tenant
companies are the primary income for the SPC to invest in and operate the facilities.
(5) Collaboration of Counterpart Organizations with Research Tenants in R&D Activities
As described earlier, some part of tenant companies in NARC are expected to be international or
Indonesian companies who want to do R&D activities in collaboration with the counterpart
organizations. The counterpart organization will make cooperation arrangement separately with
these tenant companies. Such arrangements are made by close collaboration of the counterparts
and SPC as described in Chapter 7.
398
Source: JICA Study Team
Figure 8.1.1 Basic Project Structure in Case with the PPP Scheme
8.2 Project Scheme Alternatives
Alternative options for the NARC project scheme for further analysis and consideration are
presented as follows; which represent variation of the degree of private sector participation and
the compatibility to regulatory bases as discussed in Chapter 3.
8.2.1 Alternative 1: PPP Scheme
(1) Overview
As the base case alternative for the project, this PPP scheme involves the private sector
participation for all stages of project development, i.e. “Design, Finance, Build and Operate,”
applying the PPP Regulation (PR 67/2005) as its legal basis. NARC construction will be funded
by the private partner with VGF support from the government. With this funding the SPC formed
by the private investor will construct and operate all the NARC facilities.
VGF Proposal
Land
Package 2
Research Center
Private Sector Investors- Foreign Companies
- Indonesian Companies
Land
SPC(NARC Project Implementation
and Operation)
Equity
Package 1
Integrated Support Center
Incubation Center
Facility construction,
Equipment Procurement, O&M
Financial
Institution
/ JICA PSIF
Land & Basic Infrastructure Development, O&M
Loan
Research Center
Partner Companies
Incubation Center Tenant Companies
Support Center Users
Building & Equipment
Rent Rent/ Fee
Basic Project Structure (by PPP Scheme)
VGF
Government of Indonesia
Bekasi Regency(Delta Mas site for ITB)
GCA(Gov’t Contracting Agency)
BPPT (IPB and ITB)
International/ Indonesian
CompaniesVenture Companies
(Indonesian/International)
BPPTIPB ITB
Cooperation / Joint Research, etc.
PPP Contract(profit sharing)
1
Research Activity Partnership between Partners/Tenants and BPPT/ITB/IPB
2
Facility Development and Operation (by PPP Scheme)
399
(2) VGF
Viability Gap Fund (VGF) is the government’s fiscal policy to financially support the
infrastructure provision through the PPP scheme. The facility has the legal basis in the second
amendment to PR67/2005 in 2011 (PR56/2011) where the government supports and guarantees
PPP projects is stipulated, based on which Minister of Finance regulation No.223/2013
establishes the VGF as construction cost contribution from the government for PPP projects.
VGF is allocated by the government through state budget (APBN) in the form of cash
contribution to a part of the construction cost; and it is provided that the VGF amount does not
dominate the financing of the construction cost of the project (it has to be less than 50% of the
total cost). Eligibility criteria of VGF are summarized as follows:
- The project is economically feasible but not financially viable yet.
- Minimum investment cost is Rp.100 billion.
- Private investors are selected through open and competitive bidding under the PPP
regulations.
- The cooperation agreement should set up the asset transfer and/or asset management
scheme from the investors to Government Contracting Agency (GCA) at the end of
concession period.
- The feasibility study has to be done to (i) show the optimal risk allocation between investors
and GCA; and (ii) conclude that the project is economically feasible (including technical,
legal, social, and environmental aspects) and show that the project would become
financially viable with the VGF support.
- VGF amount becomes the only financial bidding parameter.
(3) Basic Implementation and Financial Flow
- Government Contracting Agency (GCA, or BPPT for this scheme because state universities
cannot be GCAs on PR67/2005) will select a private partner to do construction and
operation of NARC through the PPP agreement.
- The Private shall construct NARC facility with VGF support from MOF.
- GCA shall provide the right to use the land to private through PPP agreement, and the state
universities shall provide that through land sharing agreement.
- The private SPC will operate NARC facility and collect rent fee from user tenants.
- The private may share some portion of its profit to GCA based on PPP agreement and to the
state universities based on the land sharing agreement.
400
Source: JICA Study Team
Figure 8.2.1 PPP Scheme
8.2.2 Alternative 2: Hybrid Scheme
(1) Overview
This Hybrid Scheme is an alternative to the PPP Scheme in case the PPP Regulation cannot be
applied due to its restriction on eligible sectors. To ensure the public contribution required to
bridge the viability gap, the public partners as GCA shall construct the Incubation and Support
Center by the national government budget (APBN), for which the use of ODA loan is an option
for its funding source though it is subject to approval of both Indonesian and Japanese
governments and considered less likely than the appropriation of national government budget.
The Private will be selected and contracted by GCA in accordance with the State Asset
Management Regulation (GR06/2006). The private SPC will conduct design and supervision for
incubation and support center construction. The SPC shall be also responsible for the construction
Alternative 1: Public Private Partnership (PPP) Scheme
Private
SPC
PPP
Agreement
GCA(BPPT)
MoF
Operation
Company
Construction
Fee
Construction
Company
Operation Fee
Financial
Institution
Loan
VGF
Private
Investors
Equity
State
Univ.
Profit Sharing
Right to use
the land
Land & Profit
sharing agreement
Profit
sharing
Right to
use the land
Cooperation agreement
Tenants(Incubation/
Support Center)
-Rent lab/office spaces-Use common instruments
Tenants(Research Center)
-Rent land lots-Construct and use own research facilities
Incubation/Support Center
Research Center
Rent Fee Rent Fee
Finance
Build Private
PrivateOperate
Private Public
PrivateDesign
401
of the Research Center, the procurement of installed equipment in NARC and the operation of the
entire NARC facilities. Note that not only the operation but the design and supervision of the
whole facilities (Support/Incubation Center and Research Center) will be conducted by the
Private in order to ensure the facility design and quality suitable to the private operation. Public
responsibility is limited to the funding and construction of Incubation and Support Center.
Periodical contribution (annual payments) will be made by SPC cover a limited part of the capital
expenditure of the government.
(2) Basic Implementation and Financial Flow
- MOF shall provide construction cost of Incubation and Support Center through APBN.
- The Private selected and contracted by the Public will get fund from financial institutions
for the design and construction of Research Center and the design of Incubation and
Support Center. GCA shall construct Incubation and Support Center based on the design
done by the Private who will also undertake the construction supervision.
- The Private will operate and maintenance whole NARC facilities and collect rent fee from
tenants.
- The Private shall pay the private contribution to GCA for a part of the cost of the land and
Incubation and Support Center.
402
Source: JICA Study Team
Figure 8.2.2 Hybrid Scheme
8.2.3 Alternative 3: Concession Scheme
(1) Overview
In this Concession Scheme, the private sector participation is limited to the operational stage. The
Public side shall construct all NARC facilities by their APBN budget (or ODA as a less probable
alternative). The Public responsibility is broad from the design through finance and construction
of the entire facilities. The private operator shall operate the NARC under the concession granted
by the GCA based on the Asset Management Regulation.
(2) Basic Implementation and Financial Flow
Private
BOT/BTO
Agreement
GCAConstruction
Company
MoF
APBN/(ODA)
Private
Contribution
Operation
Company
Donor
ODA loan
Repayment
Construction Fee
Construction Fee Construction
Company
Operation Fee
Financial
InstitutionLoan
Alternative 2: Hybrid Scheme
Incubation/Support Center
Research Center
Tenants(Incubation/
Support Center)
-Rent lab/office spaces-Use common instruments
Rent Fee Rent Fee
O&M
Tenants(Research Center)
-Rent land lots-Construct and use own research facilities
Public
Finance
Build Private
PrivateOperate
Public Private
Support /Incubation Center
Research Center
Design Private
403
- MOF shall provide the construction cost of NARC through APBN budget.
- GCA shall design and construct the whole NARC facility and grant the concession of it to
the Private based on the concession agreement.
- The Private will operate the NARC facility and collect tenant fee from users to cover the
operation and maintenance expenses. Private shall pay its contribution (concession fee) to
GCA which will cover a limited part of the government investment.
- The concession fee shall be decided in the concession agreement.
Source: JICA Study Team
Figure 8.2.3 Concession Scheme
8.2.4 Alternative 4: Outsourcing Scheme
(1) Overview
Concession
Agreement
GCAConstruction
Company
MoF
APBN/(ODA)
Concession Fee
(Private
Contribution)
Operation
Company
Donor
ODA loan
Repayment
Construction
Fee
Operation Fee
Alternative 3: Concession Scheme
Incubation/Support Center
Research Center
Tenants(Incubation/
Support Center)
-Rent lab/office spaces-Use common instruments
Rent Fee Rent Fee
O&M
Tenants(Research Center)
-Rent land lots-Construct and use own research facilities
Private
Public
Finance
Build
PrivateOperate
Public
Design Public
404
In this Outsourcing Scheme, the construction of NARC will be done in the same manner as in the
Concession Scheme: completely funded, designed and constructed by the Public. Responsibility
of the pubic counterparts is extended to the operational level, where the private partner will be
contracted only for the operation and maintenance service provision on a service fee payment
basis. Only O&M services are outsourced in this scheme so that the whole commercial (demand)
risk is borne by the Public.
(2) Basic Implementation and Financial Flow
- MOF shall provide the construction cost of NARC through APBN budget.
- GCA shall construct the NARC facility and the Private shall operate and maintain the
NARC facility based on the service agreement.
- The Private will operate NARC facility and collect tenant fee from users and transfer it to
GCA.
- GCA shall pay service fee to the Private based on its service performance. The performance
indicator shall be prescribed in the service agreement.
405
Source: JICA Study Team
Figure 8.2.4 Outsourcing Scheme
8.3 Evaluation of Project Scheme Alternatives
8.3.1 Comparison of Project Scheme Alternatives
(1) Project Implementation
Difference among the scheme alternatives in project implementation is summarized in the table
below. In both Concession and Outsourcing schemes the initial investment and construction are
done by the Public; the difference between the two is the nature of O&M by the Private; while in
Concession, the Private takes demand and commercial risk with regard to tenant fee revenue, in
Outsourcing, the role of the Private remains as one of contractors that operates and maintains the
Private
Service
Agreement
GCAConstruction
Company
MoF
APBN/(ODA)
Operation
Company
Donor
ODA loan
Repayment
Alternative 4: Outsourcing Scheme
Construction
Fee
Operation Fee
Service
Fee
Incubation/Support Center
Research Center
Tenants(Incubation/
Support Center)
-Rent lab/office spaces-Use common instruments
Rent Fee Rent Fee
Tenants(Research Center)
-Rent land lots-Construct and use own research facilities
O&M
Public
Finance
Build
PrivateOperate(O&M outsourcing)
Public
Design Public
406
facility on a fee-payment basis.
In PPP, Hybrid and Concession schemes, the operation and management including the collection
of tenant revenue are under the Private SPC’s responsibility. The most salient difference between
PPP and Hybrid is the mode of public investment (government support). In the PPP Scheme, the
VGF is a cash contribution from the government to the entire project scope constructed by the
Private, whereas the physical project scope is divided into the Public and Private portions in the
Hybrid. However, both in PPP and Hybrid, the design and construction supervision of the whole
facilities are implemented by the Private.
Table 8.3.1 Comparison of Project Scheme Alternatives (1)
Source: JICA Study Team
(2) Government Fiscal and Risk Burden
In Hybrid, Concession and Outsourcing schemes, all or a substantial part of budget required for
the public construction must be appropriated by each public counterpart through national budget
Procurement for
Private OperatorPR67/2005
- Follows PPP
regulation
- Bidding parameter:
Government Support
(VGF) amount
GR06/2006
- Follows State Asset
Management
Regulation
- Bidding parameter:
Annual private
contribution amount
GR06/2006
- Follows State Asset
Management
Regulation
- Bidding parameter:
Annual private
contribution amount
PR54/2010
- Follows
Procurement
Regulation
- Bidding parameter:
O&M fee payment
from the Public
Other Procurement NonePublic
Construction
- Public procurement
required for public
construction portion
(Support/Incubation
Center)
Funding and FinancePublic/
Private
(1) Public: VGF as
government support
(2) Private: Private
financing for entire
scope
Public/
Private
(1) Public: Research
Center infrastracture
(2) Private:
Incubation Center
instruments
Equity Investment
in SPC
Land Use Right PublicLand use right is kept
by the Public
Facility Design
Construction Works Private
SPC is responsible to
the entire project
scope (private
procurement).
Public/
Private
(1) Public:
Support/Incubation
Center
(2) Private: Research
Center and
Equipment
Construction
Supervision
Operation and
Maintenance
Private
(Outsource)
The Private operates
and maintain
facilities on a fee-
payment
outsourcing basis.
None
(No private investment in facility construction)Private
(The Private SPC supervises the construction of entire project scope.)
Private
(Private SPC will operate and manage the entire facilities including contracting with tenants.)
2Funding and
Land Provision
Public Funding
- Public funding (APBN budget/ ODA) for entire scope
Private Equity Investment
(No Equity Investment from the Public)
Private
(Land use right is granted to SPC for Concession Period)
3
Public and
Private Role
by Project
Stage
Private
(The Private SPC designs the entire project scope.)
Public(As ordinary public contruction, the Public side hires consultant to do
design and preparation works.)
Public
(The Public undertakes construction works by hiring contractors.)
Alternative 1
PPP
Alternative 2
Hybrid
Alternative 3
Concession
Alternative 4
Outsourcing
1 Procurement
Public Construction
- Public procurement required for the public construction of entire
scope.
407
allocation or external assistance such as ODA. In PPP Scheme, the government support (VGF) is
managed by MOF and made available for the projects that follow PPP framework.
Demand risk is undertaken by the Private in PPP, Hybrid and Concession schemes; however, in
Concession Scheme, the private concessionaire cannot be involved in the design and
construction; hence it may lower the private contribution (concession fee) amount proposed by
the private bidders who may not be confident with the facility quality and particulars for their
operation.
Table 8.3.2 Comparison of Project Scheme Alternatives (2)
Source: JICA Study Team
(3) Procedural and Contractual Aspects
For the PPP Scheme implementation, the PPP Regulation (PR67/2005) must be amended as
discussed in Chapter 3. Once implemented, the scheme will follow a relative linear procedure and
require only one procurement package for the private partner.
On the other hand, the Hybrid Scheme requires more complicated procedure that involves 1)
procurement of the private BOT operator and 2) procurement of public construction portion.
Moreover, since the private BOT operator will conduct the design and supervision of the entire
project scope, the BOT procurement has to take place first and the public construction must be
budgeted and procured in a timely manner. In addition, since the BOT partner, who is responsible
to the whole design, is free of facility investment for Incubation and Support Center, the design of
such portion may tend to over-spec quality, thereby lead to construction cost increase borne by the
Budgetary
Constraints
Medium
- VGF budget is
managed and made
available by MOF for
PPP projects following
PPP regulation.
-
High
- Public institutions are
required to obtain GOI
approval for the national
budget/donor assistance for
the public investment
portion.
- If only BPPT can have the
budget for the entire public
investment, the institutions
may face the asset ownership
issue.
-
High
- Public institutions are
required to obtain GOI
approval for the national
budget/donor assistance
for the public investment
portion.
- If only BPPT can have the
budget for the entire public
investment, the institutions
may face the asset
ownership issue.
-
High
- Public institutions are
required to obtain GOI
approval for the national
budget/donor assistance
for the public investment
portion.
- If only BPPT can have the
budget for the entire public
investment, the institutions
may face the asset
ownership issue.
Demand Risk
Low
- Demand risk is borne
by the SPC and
mitigated through its
full involvement in
planning, constcution
and operation
Low
- Demand risk is primarily
borne by the SPC.
- The risk mitigation is
intended by invoving the SPC
in the design and
procurement of the public
investment portion.
Medium
- Demand risk is primarily
borne by the SPC but hard
to be mitigated since the
whole facil ities is designed
and constructed by the
govt. thereby leading to
low concession fee
payments.
-
High
- Demand risk is fully
borne by the Public.
Construction
Risk
Low
- Constrcution risk is
borne by the SPC for
the entire project
scope.
Medium
- Construction risk of
Support/Incubation Center is
borne by the Public.
- Private BOT operator who’s
partially free of facil ity
investment may tend to over-
spec design which may lead
to construction cost increase
borne by the Public.
-
High
- Construction risk is borne
by the Public for the entire
project scope.
-
High
- Construction risk is borne
by the Public for the entire
project scope.
Alternative 1
PPP
Alternative 2
Hybrid
Alternative 3
Concession
Alternative 4
Outsourcing
4 Government's
Financial and
Risk Burden
408
Public.
Table 8.3.3 Comparison of Project Scheme Alternatives (3)
Source: JICA Study Team
(4) Private Sector and Donor Involvement
In the PPP Scheme, the investment opportunity among potential private sector investors covers
the entire project scope, thus comprehensive investment in facility development and management
ensures investment appetite among national and international investors; whereas in the Hybrid
Scheme it is limited to the Research Center construction.
For the public construction in Hybrid, Concession and Outsourcing schemes, ODA finance is not
probable taking into account the current government’s very selective policy on the utilization of
external assistance especially ODA loans with sovereign guarantee. For private partners in PPP
and Hybrid schemes, it is expected that donors will finance the project through their facility such
as PSIF loan.
Legal Basis
PR67/2005
- PPP regulation (PR
No.67/2005)
- Amendment is
requested by BPPT to
include R&D facil ities
GR06/2006
- State Asset Management
Regulation (GR No.6/2006)
GR06/2006
- State Asset Management
Regulation (GR No.6/2006)
PR54/2010
- Regulation on governemnt
procurement (PR
No.54/2010)
Complexity of
Contractual
Settings
Medium
- Primary PPP contract
between GCA (BPPT)
and the SPC
- Cooperation
agreement and land &
profit sharing
agreement is required
to ensure state
universities' right and
obligations
-
High
- Joint procurement/ joint
funding agreement between
the three public institutions.
- Construction contract (one
joint package or three
separate contracts
depending on the APBN
appropriation and decision
by the public institutions).
- BOT contract with SPC
Low
- Joint procurement/ joint
funding agreement between
the three public
institutions.
- Construction contract
(one joint procurement or
three separate contracts)
- Concession Agreement
with Privte Operator
Low
- Joint procurement/ joint
funding agreement between
the three public
institutions.
- Construction contract
(one joint procurement or
three separate contracts)
- Service Agreement with
Private Operator
Procurement
Process
One
Package
- Procurement of
private investor and
will be done in one
package for both
construction and
operation.
Two
Packages
at Least
- Public construction of
Support/Incubation Center
and Research Center
development/operation will
be procured separately.
Two
Packages
at Least
- Public construction and
service concession will be
procured separately.
Two
Packages
at Least
- Public construction and
operation outsourcing will
be procured separately.
Asset
Ownership
Secured
for Each
Entity
- One-package
procurement process
will start as soon as
the PPP regulation is
amended.
Owned
by the
State
- If the APBN is appropriated
to BPPT, the ownership of all
the constructed assets will
be kept by the State (BPPT).
Owned
by the
State
- If the APBN is
appropriated to BPPT, the
ownership of all the
constructed assets will be
kept by the State (BPPT).
Owned
by the
State
- If the APBN is
appropriated to BPPT, the
ownership of all the
constructed assets will be
kept by the State (BPPT).
Implementati
on Time
Faster
- One-package
procurement process
will start as soon as
the PPP regulation is
amended.
Faster
(APBN)
Slower
(ODA)
- At least two separate
procurement processes as
well as the national budget/
ODA funding are required.
- Procurement for the private
investor has to be in l ine
with the budget
appropriation for the public
construction.
- ODA finance requires extra
time to obtain the GOI
approval for the request.
Faster
(APBN)
Slower
(ODA)
- At least two separate
procurement processes as
well as the national
budget/ ODA funding are
required.
- Private concession
process may start only
after the public budgeting
and design at earliest.
- ODA finance requires
extra time to obtain the
GOI approval for the
request.
Faster
(APBN)
Slower
(ODA)
- At least two separate
procurement processes as
well as the national
budget/ ODA funding are
required.
- ODA finance requires
extra time to obtain the
GOI approval for the
request.
5 Procedural/
Contractual
Aspects
Alternative 1
PPP
Alternative 2
Hybrid
Alternative 3
Concession
Alternative 4
Outsourcing
409
Table 8.3.4 Comparison of Project Scheme Alternatives (4)
Source: JICA Study Team
It is considered that the PPP Scheme is the best suitable alternative for the NARC project as a
result of the comprehensive evaluation presented above. The second option would be the Hybrid
Scheme as an alternative in case the amendment to PPP Regulation is deemed impossible within
certain period.
8.3.2 PPP Scheme and Hybrid Scheme
(1) Comparison of PPP Scheme and Hybrid Scheme by Project Stage
1) Procurement
The procurement of PPP Scheme follows the PPP framework for the design, construction
and operation of the entire project scope; this means that the selection of a private operator
Initial
Investment
More than
50%
- All the project scope
is financed and
constructed by SPC
with the government
VGF support which
covers less than 50%.
Research
Center &
Equipment
- Only Research Center and
equipment is for the private
implementation because it
requires clear division of
project scope between public
and private.
-
None
- No private investment -
None
- No private investment
Design &
Construction
High
- All facil ity designed
and constructed by the
SPC ensures
operational efficiency
and marketing
competency.
Low
- SPC has full control over
only Research Center
infrastructure.
- With the private
involvement in only design
and supervision, it runs risks
that the facil ity design might
be over-spec and lead to the
public construction cost
increase.
-
None
- No private involvement in
design & construction
- Running risks that the
facil ity designs might not
be suitable to private
operation.
-
None
- No private involvement
in design & construction
- Running risks that the
facil ity designs might not
be suitable to private
operation.
Operation &
Management
High
- All the facil ities are
managed and operated
by the SPC.
- The SPC is fully
responsible to the
operation under the
monitoring of the
public institutions.
High
- All the facil ities are
managed and operated by the
SPC.
- The SPC is fully responsible
to the operation under the
monitoring of the public
institutions.
High
- All the facil ities are
managed and operated by
the SPC.
- The SPC is fully
responsible to the
operation under the
monitoring of the public
institutions.
-
Very
Limited
- Only opertion and
maintenance is
outsourced to the Private
who will not take any
responsibil ity in revenue
generation and overall
project management.
Atractiveness
to Investors
High
- Comprehensive
investment in facil ity
development &
management ensures
investment appetite
among national and
international
investors.
Medium
- Limited investment
opportunity only to Research
Center Infrastructure.
-
Low
- No investment
opportunity in facil ity
development leads less
interest among the private
sector.
- High risks involved by the
whole faclitities designed
and constructed by
government, which may
lead to low concession fee
payments.
-
Low
- Private involvement is
extremely l imited to
operation outsourcing
and not attractive to the
private sector.
For Public
Investment/
Support
-
None
- GOI's VGF budget will
be util ized.-
ODA
- ODA loan/grant for govt.
investment is expected.
- However, It is less probable
that GOI will approve the
request for ODA with
government guarantee.
-
ODA
- ODA loan/grant for govt.
investment is expected.
- It is less probable that
GOI will approve the
request for ODA with
government guarantee.
-
ODA
- ODA loan/grant for govt.
investment is expected.
- It is less probable that
GOI will approve the
request for ODA with
government guarantee.
For Private
Investment
PSIF Loan
- PSIF Loan for SPC is
expected.
- Government
guarantee on the loan
is not required.
PSIF Loan
- PSIF Loan for SPC is
expected.
- Government guarantee on
the loan is not required.
-
None
- No private investment -
None
- No private investment
Alternative 1
PPP
Alternative 2
Hybrid
Alternative 3
Concession
Alternative 4
Outsourcing
6 Private
Sector
Involvement
7 Potential
Donor
Finance
Items 4 ~ 7 Total = 23 = 16 = 10 = 8
410
by the public counterparts covers the whole requirement for implementation.
On the other hand, the Hybrid Scheme requires a two-fold procurement process, i.e. the
selection of the private operator and the procurement of Incubation and Support Center
construction. Design, supervision and operation of the entire facilities will be under
responsibility of the selected private operator, whilst only the funding and construction
works are separately undertaken by the public side for Incubation and Support Center and
by the private operator for Research Center and equipment, respectively.
2) Funding and Finance
In the PPP Scheme, BPPT follows the PPP framework to obtain VGF budget from MOF.
After the selection of a private operator, the private SPC is formed by the private operator
through equity investment from investors. Funding of SPC is also sourced by loans from
financial institutions including JICA PSIF loan. These funding sources (i.e. VGF and
private equity and loans) are used for the construction and operation of entire project scope.
Note that there will be no investment from BPPT, IPB or ITB into the SPC; the VGF is
government’s cash contribution (grant) and is not equity investment.
In the Hybrid Scheme, the public funding is made to the specific construction portion, i.e.
Incubation and Support Center building. The three counterparts are responsible for APBN
budget or ODA for the construction works. Private funding is made for rest of the project
scope (Research Center and equipment) in the similar form as in the PPP Scheme. There is
no VGF contribution from the government because the same effect is expected by the
public construction portion.
3) Land Use Right
Land use right of the project site is basically granted free of charge to SPC in the both
schemes and is not exchanged into any of the SPC’s company share. Certain profit sharing
mechanism for the public counterparts might be considered instead, however, note that
initially the public counterparts need the national budget funding to fill in the viability gap
of the project in both schemes (either VGF or construction budget), which means if there is
profit sharing to the public counterparts from SPC, it will only increase the national budget
amount required in the first stage (See separate section below on the profit sharing).
4) Facility Design
In the both schemes, the facility design for construction is made by the private SPC for the
entire project scope. It is expected that SPC will design the whole facilities to make them
best suitable to the operation and maintenance in later stages which is also under the
411
responsibility of SPC. The public counterparts may monitor and check if the design meets
the specifications in accordance with the contract with SPC.
5) Construction Works
In the PPP Scheme, the private SPC is responsible to the construction work of the entire
project scope. The construction contract will be made between contractors and SPC
through private procurement. The public counterparts may monitor in accordance with the
contact with SPC.
In the Hybrid Scheme, the public counterparts are solely responsible to the Incubation and
Support Center construction. Through public procurement, the construction is contracted
out as a normal APBN budget construction. This means that the construction risk (cost
overrun, defects, delay, etc.) is fully borne by the public side whereas SPC’s responsibility
of that construction portion is limited to that of the supervising engineer (consultant). Other
construction such as the Research Center will be under the responsibility of SPC like that of
PPP Scheme.
6) Construction Supervision
In the both schemes, the private SPC supervises the construction of entire project scope.
The public counterparts may monitor and check in accordance with the contract with SPC.
7) Operation and Maintenance
In both PPP and Hybrid Schemes, the SPC will operate and manage the entire facilities
including contracting with tenants. This means the demand risk is fully taken by the private
side and the marketing to attract tenant research projects is primarily the responsibility of
SPC. However, this does not mean that the public counterparts cannot or should not
undertake any control or initiative on the marketing activities, tenant contracts, or research
contents. To fulfill the NARC project purpose, BPPT, IPB and ITB will have proactive
relations with tenants and control over the tenant contracts and research activities in the
NARC facilities by appropriate PPP/BOT contract conditions for SPC (See separate
section below for details on the tenant relations).
(2) Pros and Cons of PPP Scheme and Hybrid Scheme
1) PPP Scheme
The PPP framework established by the government specifically tailored for Public-Private
Partnership projects just like the NARC project; hence, it is considered best suitable to the
NARC project. Following this framework, the single process covers preparation,
412
procurement and government support such as VGF. The whole project facilities are under
the private operator’s control in the PPP Scheme; therefore it is attractive to private
investors. Only downside is that the current PPP regulation is not applicable to the R&D
facilities and requires amendment as BPPT has already submitted the request for which
both EKUIN and BAPPENAS officials have expressed their commitment to the
government efforts in appropriate time.
2) Hybrid Scheme
Compared to the PPP scheme, the merit of using the Hybrid Scheme is that it is applicable
under the current regulatory setting. GR06/2006, the legal basis for the hybrid Scheme, is
applicable to the NARC project as it is. On the other hand there are a number of demerits of
the Hybrid Scheme. As described in the previous sections, since the procurement is
two-folded, contractual setting is more complicated and running the risk of delay in
implementation. Unlike the VGF managed by MOF, the ordinary APBN budget is used for
the public construction portion, so that it may be affected by the budget constraints of
BPPT (and/or IPB/ITB). Lastly, as mentioned before, the private SPC is responsible to
design, supervision and operation of Support/Incubation Center but not in the funding and
construction. This means SPC may tend to make over-spec design for its better operation,
which may lead to cost overrun for the public construction. In the PPP Scheme, on the other
hand, the SPC will be fully responsible to the entire project scope so that the self-control
will function toward more appropriate design work.
Pros
Cons
PPP Scheme Hybrid Scheme
Framework specifically tailored for Public-Private Partnership
Single framework covers preparation,procurement, and government support (VGFand guarantee) process of the project
Attractive to private investors
Uncertainty in PPP regulation amendment byGOI
Applicable under the current regulatorysetting
Complexity in process and contractual settings forthe public investment and the private DFBOT
APBN budget / ODA funding constraints
Asset ownership issue from construction by APBN
Longer time for operation (with ODA loan case)
Private operator who’s free of facility investment(for Support/Incubation Center) may tend to over-spec design which may lead to construction costincrease borne by the Public.
413
Source: JICA Study Team
Figure 8.3.1 Pros and Cons of PPP Scheme and Hybrid Scheme
8.4 Role and Responsibilities of Project Partners
The tables below illustrate the role and responsibilities of the public and private partners in the
PPP Scheme and Hybrid Scheme. Shaded parts in the Hybrid Scheme show the difference from
the PPP Scheme. Since the Hybrid Scheme involves the public construction portion, the related
budgeting, procurement and construction works are under the Public responsibility; whereas in
the PPP Scheme, once the PPP contract is concluded after one-package procurement, design,
construction and procurement will be comprehensively conducted by the private SPC. During the
operational stage, the both schemes applies the same division of responsibilities.
414
Table 8.4.1 Role and Responsibilities of Project Partners (PPP)
Source: JICA Study Team
BPPT IPB ITB
1 The Present JICA Preparatory Survey (Feasibility Study)
Equivalent to "Pre-Feasibility Study" as defined in PPP
framework
The study is conducted by the public sector. The present study for the
NARC project is funded by JICA and implemented by the hired
consultants.
2 Basic Planning of NARC Development The project scope and plan shall be agreed by the three parties.
3 NARC Project Scheme and Investment Planning The project scheme applied for the project must be agreed among the three
parties in consultation with other concerned parties.
4 Legal Clarification for NARC Development It is necessary to clarify with other authorities if there is no legal issues for
the project implementation.
5 Government Consensus and Approval for NARC
Development
Government consensus and approval should be declared formally.
6 Land Use Right and Permit Land use right has to be cleared before issuing tender document.
7 Other permits required for NARC development
8 Environmental Impact Assessment (EIA) EIA shall be conducted by the public sector and implemented by hired
consultants.
9 VGF and Government Guarantee The public sector needs to make necessary arrangement with MOF to
obtain VGF budget and government guarantee.
10 Incentive Assurance The public sector needs to make necessary arrangement with local
governments and other authorities to assure incentives applicable to the
11 Establishment of Procurement Committee and
procurement activities (tendering and evaluation)
The procurement committee and its procedure must be in accordance with
prevailing law and regulations.
12 Output Specification Output specification should cover the specifications for facilities and O&M
including minimum service standard.
13 Preliminary Design Preliminary design will be prepared by public as reference for private
bidders.14 Preparation of Tender Document and Draft PPP Contract () () BPPT as GCA has a major responsibility for the preparation of tender
documents. All the documents need to be issued under the consent of
BPPT and the universities.
15 "Feasibility Study" as defined in PPP framework Each private bidder shall conduct the "feasibility study" by itself before
bidding.16 Basic Design Basic design is prepared by private and might be required to submit to
GCA as a part of proposal in the bidding.
17 PPP Contract and Land & Profit Sharing Agreement
18 Risk Sharing and Mitigation Measure Each risk should be born by the party who can manage the best.
1 Establishment of SPC SPC will be established by winning bidder.
2 Financing for SPC (inluding PSIF loan) The private will get financing and equity investment for SPC including JICA
PSIF loan.
3 Detailed Design Detailed design will be prepared by the winning bidder.
4 Construction Work and Supervision Construction work will follow the output specification required in the PPP
Contract5 Procurement of Equipment and Instruments
6 Monitoring of construction work () Private shall conduct self-monitoring on its construction work; however, the
main responsibility is on the public side.
7 Confirmation for quality and completion of construction
1 Advisory Board The public partners form the Advisory Board for NARC development,
support and monitoring.
2 Tenant Condition & Criteria and Tenant Selection The tenant conditions and criteria are prescribed in the PPP contract. The
public partneers may be involved in the selection process.
3 International and National Marketing, Business Relation
and Sales of Renting Facilities
() () () The main role of marketing activity will be taken by the SPC; however, the
public sector is also required to support and conduct
4 Maintenance and management of facilities and
equipment
5 Provision of utility (such as electricity, water, gas, etc.) () () () To ensure the availability and quality of utility needed for NARC, the public
side provide necessary support and arrangement.
6 Safety and Hazard Control Management To ensure the safety of building tenants and habitants in surrounding area
7 Human resource management for research activities Private can make cooperation with BPPT, IPB and ITB to provide
researchers for the tenant companies from students and/or academic
8 Insurance Insurance for O&M services
9 Security and Information System Access control, security management and security guards, etc.
10 Intellectual Property Right (IPR) Management System IPR management system should be in accordance with prevailing law and
regulations and mutual agreement between parties involved.
11 Tariff Collection
12 Tariff Adjustment The initial tariff is prescribed in the PPP contract. Following the adjustment
mechanism, the concerned parties will determine the periodical tariff
13 Monitoring of NARC O&M Daily monitoring will be conducted by Private. Periodical and ad-hoc
monitoring will be conducted by the public partners.
14 Financial Audit of SPC Financial audit of SPC will be conducted by a public acountant funded by
the private sector.
1 Asset Transfer
2 Asset Transfer Confirmation
3 Land Clearing (if necessary)
4 Audit of Asset and Company Value The audit will be conducted by a public accountant under three party
supervision.
IV. After Concession Period
I. Planning and Preparation Stage
Basic Study and Planning
II. Design and Construction Stage
III. Operation and Maintenance Stage
Procurement
PublicItem Private Remarks
Provision for Permits and Government Contribution
415
Table 8.4.2 Role and Responsibilities of Project Partners (Hybrid)
Source: JICA Study Team
BPPT IPB ITB
1 JICA Preparatory Survey (Feasibility Study) The study is conducted by the public sector. The present study for the
NARC project is funded by JICA and implemented by the hired
consultants.
2 Basic Planning of NARC Development The project scope and plan shall be agreed by the three parties.
3 NARC Project Scheme and Investment Planning The project scheme applied for the project must be agreed among the
three parties.
4 Legal Clarification for NARC Development It is necessary to clarify with other authorities if there is no legal issues for
the project implementation.
5 Government Consensus and Approval for NARC Development Government consensus and approval should be declared formally.
6 Land Use Right and Permit Land use right has to be cleared before issuing tender document.
7 Other permits required for NARC development
8 Environmental Impact Assessment (EIA) EIA shall be conducted by the public sector and implemented by hired
consultants.
9 Budget appropriation for the public investment portion
(Support/Incubation Center)
The public sector needs to make necessary arrangement with other
ministries to obtain budget for public construction portion.
10 Incentive Assurance The public sector needs to make necessary arrangement with local
governments and other authorities to assure incentives applicable to the
project.
11 Establishment of Procurement Committee and procurement
activities (tendering and evaluation)
The procurement committee and its procedure must be in accordance with
prevailing law and regulations.
12 Output Specification Output specification should cover the specifications for facilities and O&M
including minimum service standard.
13 Preliminary Design Preliminary design will be prepared by public as reference for private
bidders.
14 Preparation of Tender Document and Draft BOT Contract GCA has a major responsibility for the preparation of tender documents.
All the documents need to be issued under the consent of BPPT and the
universities.
16 Basic Design Basic design is prepared by private and might be required to submit to
GCA as a part of proposal in the bidding.
17 BOT Contract
18 Risk Sharing and Mitigation Measure Each risk should be born by the party who can manage the best.
1 Establishment of SPC SPC will be established by winning bidder.
2 Financing for SPC (inluding JICA PSIF loan) The private will get financing and equity investment for SPC including JICA
PSIF loan.
3 Detailed Design Detailed design will be prepared by the private operator.
4 Procurement Activities of Support/Incubation Center Construction Procurement of Support/Incubation Center construction will be executed
by the public partners with support from the private operator.
5 Construction Work (Support/Incubation Center)
6 Construction Work (Research Center) Construction work will follow the output specification required in the BOT
contract.
7 Supervision of Construction Works
8 Procurement of Equipment and Instruments
9 Monitoring of construction work () Private shall conduct monitoring on its construction work; however, the
main responsibility is on the public side.
10 Confirmation for quality and completion of construction
1 Advisory Board The public partners form the Advisory Board for NARC development,
support and monitoring.
2 Tenant Condition & Criteria and Tenant Selection The tenant conditions and criteria are prescribed in the BOT contract. The
public partneers may be involved in the selection process.
3 International and National Marketing, Business Relation and Sales
of Renting Facilities
() () () The main role of marketing activity will be taken by the SPC; however, the
public sector is also required to support and conduct
4 Maintenance and management of facilities and equipment
5 Provision of utility (such as electricity, water, gas, etc.) () () () To ensure the availability and quality of utility needed for NARC, the public
side provide necessary support and arrangement.
6 Safety and Hazard Control Management To ensure the safety of building tenants and habitants in surrounding area
7 Human resource management for research activities Private can make cooperation with BPPT, IPB and ITB to provide
researchers for the tenant companies from students and/or academic
member of the institutions.
8 Insurance Insurance for O&M services
9 Security and Information System Access control, security management and security guards, etc.
10 Intellectual Property Right (IPR) Management System IPR management system should be in accordance with prevailing law and
regulations and mutual agreement between parties involved.
11 Tariff Collection
12 Tariff Adjustment The initial tariff is prescribed in the PPP contract. Following the adjustment
mechanism, the concerned parties will determine the periodical tariff
adjustment.
13 Monitoring of NARC O&M Daily monitoring will be conducted by Private. Periodical and ad-hoc
monitoring will be conducted by the public partners.
14 Financial Audit of SPC Financial audit of SPC will be conducted by a public acountant funded by
the private sector.
1 Asset Transfer (Research Center)
2 Asset Transfer Confirmation (Research Center)
3 Land Clearing (if necessary) (Research Center)
4 Audit of Asset and Company Value (Research Center) The audit will be conducted by a public accountant under three party
supervision.
Basic Study and Planning
ItemPublic
Private Remarks
I. Planning and Preparation Stage
IV. After Concession Period
Provision for Permits and Government Contribution
Procurement of Private Operator (Construction and Procurement of Research Center and Instruments)
II. Design and Construction Stage
III. Operation and Maintenance Stage
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8.5 Management of NARC Facilities
Salient discussions on the management of NARC facilities have been held among the counterpart
organizations and JICA Study Team during the present Survey. The following are the
understanding of issues related to the public counterparts’ role in tenant relations as well as the
profit sharing which are common in both the PPP and Hybrid schemes.
8.5.1 Tenant Relations
(1) Tenant Relations of Public Partners
As mentioned earlier, the SPC will operate and manage the entire facilities including contracting
with tenants in both PPP and Hybrid schemes. This means the demand risk is fully taken by the
private side and the marketing to attract tenant research projects is primarily the responsibility of
the private SPC. Nevertheless, in order to fulfill the purpose of NARC, the public counterparts
should take certain control over the marketing, tenant selection, research contents, etc. This will
be made possible by prescribing appropriate conditions in the PPP or BOT contract which SPC
will follow in its marketing activities and contracts with NARC tenants.
(2) PPP/BOT Contract Conditions on Tenant Relations
The image of such items prescribed in the PPP/BOT contract with the private partner, which is
still subject to further consideration, is summarized as follows:
1) Tenant Categories and Rent Conditions
a) Incubation Center Tenants
(i) BPPT/ IPB/ ITB Joint Research Projects
(ii) Other Research Projects
b) Research Center Tenants
As per the facility development plan, tenants are categorized into two main classifications:
a) Incubation Center tenants (smaller-scale R&D projects that reside in Incubation Center
Buildings) and b) Research Center Tenants (larger-scale companies that construct their own
R&D facilities on the Research Center land lots.) Tenant criteria and appraisal process will
be different by this classification. However, all the tenants’ R&D activities should be in line
with the strategic research field identified for each project site. However, it also should be
noted that setting excessively strict tenant criteria (e.g., all tenant projects are required to
hire the counterparts’ researchers) may lead to little interest among potential tenants and
417
low occupancy of the facilities, or simply failure in the procurement of private operator due
to the high commercial risk anticipated in the project.
Incubation Center tenants may be further classified into two types: a. Joint Research
Projects utilizing the existing BPPT/IPB/ITB resource and personnel; and b. Other
Research Projects. In order to promote joint research activities which directly benefit the
public counterparts, it is possible to differentiate the tenant conditions (lease fee and other
service fees, etc.) by these categories.
2) Tenant Company Criteria
Different criteria to evaluate tenant companies may be adapted for each tenant category.
Example of common items is as follows:
- Legal status and ownership (foreign, national, etc.)
- Financial status
- Business area and products
- Company’s strategy to utilize the R&D in NARC, etc.
3) R&D Project Criteria (Activity of the Tenant Company in NARC)
Different criteria to evaluate tenant’s R&D project may be adapted for each tenant category.
- Background, objective, relevance and necessity for research in NARC
- Research contents and activities
- Opportunity of joint research with BPPT/ IPB/ ITB
- Budget, personnel, facility and equipment requirement
- Environmental aspect and safety measures, etc.
4) Tenant Marketing and Appraisal Process
Although contracting with tenants is under SPC’s responsibility, it is possible for the public
counterparts will be involved in marketing activities as well as in the appraisal process for
tenant selection. This may take either one of the forms below, for instance:
- Tenant appraisal committee formed by SPC and the public counterpart
- Required prior concurrence by the public counterpart on each lease contract between SPC
and a tenant
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(3) Tenant Contracting Process (Tenant Criteria Setting through Tenant Contract)
1) Public Tender Documents Preparation by Public Counterparts
The draft PPP/BOT contract with SPC attached in the tender documents will prescribe the
tenant criteria and conditions for Incubation Center and Research Center as well as
contracting process to be followed by SPC. These conditions will be decided by the public
counterparts considering the NARC strategies and marketing analysis on potential tenants
for each project site.
2) Contract between Public Counterparts and SPC
Based on the draft contract above, the tenant criteria and contracting process will be
finalized through contract negotiation between the counterparts and the selected SPC.
3) Marketing of Potential Tenants
SPC is primarily responsible to the marketing activities to attract potential tenants. It is
probable for the public counterparts to cooperate also in the marketing in accordance with
the PPP/BOT contract with SPC.
4) Tenant Application
Candidate tenants will make application to SPC in accordance with the predetermined
conditions. Necessary information for tenant appraisal must also be provided by the
applicants.
5) Appraisal
SPC will do the appraisal of the tenant applications. The public counterparts may be
involved in the process as described above.
6) Lease Contract between Tenants and SPC
SPC will make a lease contract with each tenant in accordance with the lease conditions
prescribed in the PPP/BOT contract between the public counterparts and SPC. Joint
research agreement, if it is the case, will be concluded separately between each counterpart
and a tenant.
7) Monitoring of Tenant Activities
SPC will do the daily monitoring of each tenant’s activity. Periodical and ad-hoc monitoring
may be done by the public counterparts in accordance with their contract with SPC.
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8.5.2 Profit Sharing for Public Counterparts
(1) Profit Sharing Issue
In both PPP Scheme and Hybrid Scheme, there is no equity investment into SPC from the public
counterparts. The land use right is granted to SPC virtually free of charge and is not exchanged
into any of the SPC company share. Hence there is no dividend payment from SPC to the public
side. In case of the Hybrid Scheme, there will be annual private contribution payment from SPC
to the public side, but in fact this represents only a part of the construction cost of the
Support/Incubation Center building initially borne by the public side.
In addition, certain profit sharing mechanism to the public side might be planned in the both
project schemes, but its extent would be very limited. In-kind contribution from SPC in form of
free laboratory space in the Incubation Center is most probable way for the counterparts to enjoy
by utilizing vacant spaces in NARC facilities.
Considering the project’s low viability because of the large construction cost and strategically
lowered rent fees, the profit sharing by cash payments would be difficult to justify both politically
and financially.
(2) Government Contribution and Profit Sharing
Firstly, it should be noted that the project’s financial value from the public side’s point of view is
negative US$ 10-20 million unlike more profitable commercial operations typically undertaken
by state universities. Therefore, the government’s contribution as either VGF (in PPP Scheme) or
public construction (in Hybrid Scheme) is required to fill this viability gap. Additional profit
sharing from SPC to the public side will simply increase this viability gap, thereby increasing the
government contribution requirement. This will result in VGF budget increase (in PPP Scheme)
or decrease in SPC’s annual private contribution (in Hybrid Scheme). It may not be politically
justifiable because imposing the profit sharing simply causes transfer of additional government
contribution to other public entities.
(3) Potential Profit Sharing Amount
Secondly, profit sharing by cash is not very meaningful in financial terms either. The projected
annual net profit after tax of SPC is around US$ 1-2 million at maximum during the first 10 years
of operation. Assuming a 10% profit sharing to the public counterparts, for instance, it will be
only US$ 100–200 thousand for the three institutions, or around US$ 30-60 thousand per
organization annually. It is questionable to make this sort of arrangement for the public side to
have this limited amount of profit share by increasing the initial government contribution (VGF in
PPP Scheme) or by decreasing the private contribution from the SPC (in Hybrid Scheme). Note
420
also that in the latter case in Hybrid Scheme, the total annual payment amount from the SPC
(annual contribution with or without profit share) will not change because if the profit share is
required, the BOT tender participants simply will decrease its financial bid of the annual
contribution to adjust the total payment amount in accordance with their own financing and profit
requirements. See financial analysis results in Chapter 9 for more details.
(4) Profit Sharing Calculation Method
Nevertheless, in case that the profit sharing is implemented in the PPP Scheme or Hybrid Scheme,
the public counterparts shall determine (i) sharing ratio between the private and the public and (ii)
calculation method to determining the share among the public counterparts. Considering effective
incentives for marketing efforts of each counterpart, it is recommendable that the public portion
will be allocated based on the profit or revenue amount of each site.
8.6 Conclusion and Recommendations on Project Scheme Discussion
Reflecting the discussions above, the conclusion and recommendations on the project scheme
discussion are as follows:
- PPP Scheme based on PPP regulation is the best suitable project scheme for NARC
development.
- The government (KKPPI, CMEA and BAPPENAS) should expedite the amendment to PPP
Regulation (PR67/2005) to include R&D facility development in the applicable sector as
requested by BPPT in August 2013.
- Alternatively, Hybrid Scheme is the second best option for the NARC under current
regulatory setting, which requires the APBN budget appropriation for counterpart
organizations for the government construction portion.
- Upon the present Study completion, the counterpart organizations should take initiative on
the project scheme discussion with other ministries (BAPPENAS, MOF, MONEC, etc.) and
decide on the project scheme and budgeting policy, taking into account (a) latest development
of PPP Regulation amendment; (b) budget requirement; and (c) risk burden analyzed in this
Study for each project scheme, etc.
- The indicative target date for such discussion and decision would be up to June 2014. In case
the PPP Regulation is not amended by the target, it would be recommendable for the
counterparts to consider the implementation by the Hybrid Scheme.
421
8.7 Stakeholder Analysis
8.7.1 Counterpart Organizations (BPPT, IPB and ITB)
Salient features of the counterpart organizations (BPPT, IPB and ITB) are described below. See
also Table 8.7.1 and Appendix 8 for more details.
(1) Nature of Organization
As discussed in Chapter 3 in detail, BPPT and state universities have different legal status which
requires special arrangements in project structuring as mainly discussed in Chapter 3. While
BPPT is a non-ministerial government agency, the state universities are currently formed as BLU
and in transition to PTBH to regain its autonomy.
(2) Major Activities Relevant to NARC Project
Apart from other functions such as national policy formation for BPPT and higher education for
the state universities, the counterpart organizations share the similar mandates and activities in
application of scientific research to community and industry. In terms of collaboration with the
private sector in R&D, BPPT has been engaged several research projects to develop industrial
products including incubation of four business ventures in biotechnology and chemistry.
According to BPPT officials, it has a long-term target that “by 2025, 100% of technology
developed by BPPT will be utilized by industry, whose funding to BPPT activities will account
for more than 50% of its total funding needs”. Likewise, IPB has 24 Academic Business Units
engaged in industrial R&D activities mostly in agricultural, alimental and natural science fields.
(3) Commercial and Business-related Activities
“BPPT Engineering” is a BLU (Public Service Entity) under BPPT to provide technology
services on a contract basis to government agencies, state-owned enterprises as well as the private
sector. With their financial autonomy, the state universities own broader range of commercial
enterprises such as commercial property development, veterinary medicine production,
consulting services, etc.
In relation with NARC project, the three organizations share the similar activity base in
cooperation in R&D with the private sector. However, they do not have experience in projects like
NARC which involves the public-private cooperation in both investment and operation in
research facility development though the state universities have engaged in some more
profit-oriented property development projects such as hotel business, retail facility, etc.
422
Table 8.7.1 Features of Counterpart Organizations
Source: BPPT, IPB and ITB information
BPPT IPB ITBBadan Pengkajian dan Penerapan Teknologi
(Agency for Assessment and Application of Technology)
Institut Pertanian Bogor
(Bogor Agricultural University)
Institut Teknologi Bandung
(Bandung Institute of Technology)
Nature of
Organization
- Non-ministerial Government Agency
- BPPT forms a part of the State (Central Government.)
- State University (State Higher Education)
- Legal status: currently BLU (public service
entity)
- In transition to PTBH (legal entity) to regain
autonomy (See Chapter 3 for details)
- State University (State Higher Education)
- Legal status: currently BLU (public service
entity)
- In transition to PTBH (legal entity) to regain
autonomy (See Chapter 3 for details)
Location - Jakarta Headquarters
- PUSPIPTEK in Serpong, Banten Province, and others
- Five campuses throughout Bogor area, West
Java Province.
- Main campus in Bandung, West Java Province.
- Its multi-campus plan includes other locations
such as Delta Mas in Bekasi Regency, West Java.
Historical
Development
- Established as Technology and Aviation Division of Pertamina
(the state petroleum company) in 1974
- Transformed into BPPT in 1978 chaired by RISTEK minister
- BPPT became headed by the minister-level independent
chairman in 2006 (PD42/2006)
- Netherland Government founded the Institute of
Agricultural Higher Education (Landbouw
Hogeschool) in 1940.
- IPB was established in 1963 by the decree of
Minister of Higher Education and Science.
- De Techniche Hoogechool was founded in 1920.
- The government established ITB in 1959.
Major Functions - Formulation of national policy in technology assessment and
application.
- Services for technology application among public and private
entities.
- Higher education in science and technology.
- Research activities for scientific and
technological innovation in the nation, mostly
related to agriculture and natural science
- Higher education in science, technology and
arts.
- Research activities in infrastructure
development, energy, ICT, health and medicine,
biotechnology, etc.
Core Activities - Technology intermediator: Provide access for industries,
central/local/community institutions to util ize science and
technology resources.
- Technology clearing house: Conduct multidimensional study on
the technology for organizations and public policies.
- Technology assessment and audit: Evaluation and inspection on
the technology.
- Technology solution: Provide solution advices on technology
problems.
- Education: Diploma, undergraduate & graduate
programs in mostly agriculture and natural
science.
- Research & Community Activities: Institute of
Research and Community Empowerment (LPPM)
of IPB has 21 research centers.
- Education: Diploma, undergraduate & graduate
programs in 13 Academic Working Units in
technology, science and arts.
- Research & Community Activities: Institute of
Research and Community Empowerment (LPPM)
of ITB focuses on 7 areas: (i) Infrastructure,
Disaster Mitigation, and Territorial; (i i) Energy;
(i i i) Information and Communication Technology;
(iv) Food, Health and Medicine; (v) Culture and
Environment Product; (vi) Nano and quantum
technology; and (vii) Biotechnology.
R&D
Collaboration
with Private
Sector
(examples)
- New type of food products using local crops (cassava flakes and
modified sorghum flour)
- Small-scale geothermal power plant system
- BPPT has incubated four technology-driven venture enterprises
of: (i) biofertil izer, (i i) essential oil, (i i i) ZnO nano perticles, and
(iv) batik wax dissolver.
- BPPT has a long-term target that "by 2025, 100% of technology
developed by BPPT will be util ized by industry, whose funding to
BPPT activities will account for more than 50% of its total funding
needs."
- IPB has 24 Academic Business Units such as
Agropromo, Herbal Biomedical, E-Techno Fateta
IPB, BReAD (Baking Research and Development)
Unit, Corn Agro-industry, etc.
- Information not available
Commercial and
Business-related
Activities
- BPPT Enginieering is a BLU (public service entity) under by BPPT
to provide technology services on a contract basis.
- In 2012 BPPT Engineering earned Rp.22 bil l ion in terms of
contract amount by providing services to government agencies,
state-owned enterprises, private entities, etc.
- Business holding company of IPB, PT. Bogor Life
Science and Technology (PT. BLST), owns five
companies for (i) commercial property
development, (i i) seed production, (i i i)
biopharmaceutical production, (iv) avian
influenza vaccine production with a Japanese
company, and (v) publishing.
- ITB owns 14 companies such as consulting firm,
hotel, etc. through its Commercial Business Unit
Management Agency, which is an internal
organization of ITB.
Relation with
Government
- As a non-ministerial agency of the government, BPPT directly
reports to the President.
- RISTEK is the coordinating ministry for BPPT and other six
research agencies such as LIPI, BATAN, etc.
- Currently a BLU, IPB is in transition to regain
autonomy satus by becoming a PTBH (See Chapter
3.)
- MONEC supervises the higher education sector.
- Currently a BLU, ITB is in transition to regain
autonomy satus by becoming a PTBH (See Chapter
3.)
- MONEC supervises the higher education sector.
Employees, etc. - Total 2,885 employees including 232 researchers and 1,153
engineers (2012)
- Headed by the Chairman with five deputies.
- Deputy for Agro-industrial Technology & Biotechnology is in
charge of NARC project
- Total 2,780 employees including 1,199 lecturers
(2012).
- Vice Rector for Finance, Planning and
Development is in charge of NARC Project
- Total 2,710 employees including 1,182
academic staff (2011).
- Vice Rector for Research and Cooperation is in
charge of NARC Project
Financial Status
Revenue
Structure
- Total Revenue (2011) Rp.1,001 bil l ion
- Mostly funded by national budget (APBN)
- Total Revenue (2012): Rp.765 bil l ion
- of which the government subsidies: Rp.368
bill ion (48%)
- Total Revenue (2012): Rp.1,115 bil l ion
- of which the government subsidies: Rp.456
bill ion (41%)
Facility
Development
Expenditure
- Facil ities and Infrastructure Expense (2011): Rp.84 bil l ion - Information is not available for facil ity
development expenditure.
- Investment cash outflow (2012): Rp.25 bil l ion
- Information is not available for facil ity
development expenditure.
- Investment cash outflow (2012): Rp.229 bil l ion
Research
Coorperation and
Technical Services
- BPPT Engineering BLU income (2012): Rp.22 bil l ion - Reseaech and community services income
(2012): Rp.107 bil l ion
- Reseaech and community services expense
(2011): Rp.54 bil l ion
Commercial
Operation
- No commercial operation other than technical services - Commercial enterprises revenue (2012): Rp.1.7
bill ion
- Information not available
Overview
Activities
Organization
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8.7.2 Financial Conditions of Counterpart Organizations
(1) BPPT
The following table shows recent financial status of BPPT. It is noted that its revenue source
heavily relies on the national budget and most of its expenditure is allocated for its recurrent
operational needs such as human resources and R&D activities. Development budget spent for
facilities and infrastructure in 2011 accounts for Rp.84 billion, or 8% of total expenditure of the
agency.
Table 8.7.2 Financial Conditions of BPPT
Source: BPPT Information
(2) State Universities (IPB and ITB)
The tables below show the recent financial status of IPB and ITB. Both universities heavily rely
on the government subsidy which accounts for 40 to 50% of total revenue. There is no
information available on their facility development expenditure, but their net cash outflow for
investment activities was Rp.25 billion for IPB and Rp.229 billion in 2012.
Unit: million Rupiah
Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual
Revenue Allocation 583,610 N/A 560,363 516,383 713,328 678,451 1,036,029 1,001,434 942,782 896,754
Ordinary State Revenue (Pure Rupiah)/1 487,182 429,988 570,673 871,580 799,318
Non-tax State Revenue 48,483 64,560 70,820 65,651 67,654
BLU Revenue 47,945 50,000 56,897 88,350 71,598
Grant Receipt 0 15,815 14,939 10,448 4,211
Expenditure N/A N/A 560,363 516,383 713,328 678,451 1,036,369 1,001,434 N/A N/A
Human Resources Management 4,412 4,285 4,000 3,890
Implementation of Good Governance 249,263 236,799 254,939 259,711
Enhancement of Supervision and Accountability 1,325 1,259 1,325 1,304
Research and Development 115,444 94,211 181,182 156,552
Dissemination and Utilization of Science and Technology 8,744 8,693 13,000 12,813
Institutional Strenthening 37,469 33,480 79,732 77,310
Capacity Enhancement of Production System 137,106 131,253 173,151 161,457
Facilities and Infrastructure Development 6,600 6,404 6,000 5,414 85,100 84,068
1/ Pure Rupiah is the allocation of the Revenue Budget which are not derived from Loans and/or Grants.
N/A
N/AN/A
305,880
611,486
N/A N/A
290,273
660,996
N/A N/A N/A N/A
2008 2009 2010 2011 2012
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Table 8.7.3 Financial Conditions of IPB
(Rp. million)
Source: IPB financial reports
Table 8.7.4 Financial Conditions of ITB
(Rp. million)
Source: ITB financial reports
2007 2008 2009 2010 2011 2012*
Income Statement
Revenue
Tuition fee revenue 136,570 159,904 161,147 177,423 191,772 193,014
Non-tuition revenue (students educational cost) 8,047 20,848 31,384 38,806 57,291 67,908
Reseach cooperation and community empowerment revenue 67,838 116,711 117,285 81,761 99,813 107,370
Commercial enterprises revenue 6,052 3,224 3,370 1,260 850 1,650
Supporting activities revenue 7,789 7,350 9,489 11,602 11,301 10,473
Government subsidies 142,550 181,055 309,274 320,951 412,215 367,667
Donation 0 2,616 3,988 5,254 8,459 16,682
Total 368,846 491,708 635,936 637,058 781,701 764,765
Expenses
General and administration expense (1,586) (19,423) (136,440) (265,920) (131,251) (141,390)
Program expense (329,096) (430,250) (577,344) (566,290) (701,590) (710,073)
Total (330,682) (449,672) (713,785) (832,210) (832,841) (851,463)
Increase / Decrease in Net Assets 38,164 42,035 (77,848) (195,153) (51,139) (86,698)
Cash Flow Statement
Operating cash flow 7,243 135,930 32,007 (95,197) 52,148 37,885
Investment cash flow (25,206) (2,098,979) 56,679 134,419 (24,928) (25,175)
Financing cash flow 48,936 1,991,330 (64,129) (3,300) (3,300) (3,300)
Net Cash Flow 30,972 28,281 24,556 35,923 23,920 9,410
Beginning cash balance 11,811 42,782 71,064 95,620 136,399 160,319
Ending cash balance 42,782 71,064 95,620 131,543 160,319 169,728
* Unaudited (Year 2012)
2007 2008 2009 2010 2011 2012*
Income Statement
Revenue
Fund from public 373,627 430,058 450,553 487,031 510,538 659,534
Fund from government 94,013 109,767 222,604 170,277 352,699 455,609
Total 467,640 539,825 673,157 657,308 863,237 1,115,143
Expenses
Education and scholarship (241,281) (267,519) (165,733) (121,309) (788,049) (873,652)
Research and community services (237,050) (318,804) (558,133) (556,634) (23,291) (54,248)
Total (478,331) (586,323) (723,866) (677,943) (811,340) (927,900)
Increase / Decrease in Net Assets (10,691) (46,498) (50,709) (20,635) 51,897 187,243
Cash Flow Statement
Operating cash flow 46,474 107,494 90,419 112,107 145,032 237,287
Investment cash flow (59,599) (103,310) (92,616) (92,106) (179,261) (228,805)
Financing cash flow (684) (626) 61 (547) 0 0
Net Cash Flow (13,809) 3,558 (2,136) 19,454 (34,229) 8,482
Beginning cash balance 74,027 60,218 63,926 61,790 81,244 47,015
Ending cash balance 60,218 63,776 61,790 81,244 47,015 55,497
* Unaudited (Year 2012)
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8.7.3 Other Organizations Concerned
(1) RISTEK and PUSPIPTEK
Ministry of Research and Technology (RISTEK) was established in 1962 with duties to conduct
affairs on research, science and technology in the government. Functions delegated to Minister of
RISTEK are as follows:
1) Formulating and policy making on research and technology
2) Coordinating and synchronizing policy implementation on research and technology
3) Managing property of state which is being responsibility of Ministry of Research and
Technology
4) Monitoring on duties implementation in the Ministry of Research and Technology
On formulating direction and main priority of science and technology development as well as
preparing strategic policy for national science and technology development, RISTEK is
supported by Dewan Riset National (DEN: National Research Board). Based on Presidential
Decree No.103 of 2001, RISTEK has role to coordinate non-ministerial government agencies
such as BPPT, LIPI, etc. RISTEK also manages several research parks throughout Indonesia
including PUSPIPTEK.
PUSPIPTEK is the biggest research area in Indonesia which was established in 1976.
PUSPIPTEK is located at Serpong, South Tangerang City, Banten Province. To achieve objective
of PUSPIPTEK on supporting industrialization in Indonesia, PUSPIPTEK is design to be an area
that synergize educated and skilled human resource, the most complete research equipment and
technical services as well as technology and expertise which has accumulated for more than a
quarter century. Based on its Master Plan, PUSPIPTEK will be divided into 3 areas, i.e.: (i)
laboratories area; (ii) industry area; and (iii) higher education area.
In total, 35 laboratories have been operated through technical coordination between LIPI, BPPT,
and BATAN from RISTEK and two other laboratories under Ministry of Environment.
(2) Bekasi Regency (Kabupaten Bekasi)
Bekasi Regency is a part of West Java Province. The Regency’s territory is divided into 23
districts that cover 5 urban villages and 182 rural villages. In 2011, Bekasi Regency population
accounts for 2.8 million people. Economy of Bekasi Regency is supported by agriculture, trading,
and industries. There are many manufacturing enterprises in industrial parks in Bekasi, such as
Jababeka Industrial Area, Greenland International Industrial Center (GIIC), Kota Deltamas, EJIP,
Delta Silicon, MM2100, BIIE, etc. as an International Economic Zone.
426
(3) Ministry of National Education and Culture (MONEC)
Ministry of National Education and Culture (MONEC) is Indonesia’s prime governing body in
the education sector. Directorate General of Higher Education of MONEC supervises state
universities across the country including IPB and ITB. To obtain national budget (APBN) the
universities are required to make proposals with MONEC. However, since state universities have
certain autonomy on their activities, MONEC does not have authority on their investment
decision; hence, MONEC will not play a primary role in the NARC development.
427
8.8 Implementation Program
8.8.1 Innovation Ecosystem as Supreme Implementation Program Target
(1) Overall Scenario of Creating Innovation Ecosystem in Indonesia
“Innovation” is one of the most critical elements of competitiveness in world economy today.
Indonesia is not exceptional from this logic and looking at its future the same way.
Final goal of NARC is to create a tool as an ignition project for Indonesia toward next generation
of innovation-based economy as described in MP3EI as the supreme implementation program of
NARC.
Source: Master Plan for the Acceleration and Extension of the Indonesian Economic
Development (MP3EI), 2011
Figure 8.8.1 Toward Innovation-Based Economy
By this positioning in national goal-setting, NARC should be implemented in various frameworks
of stakeholders.
428
(2) Goal-Setting
First, the goal-setting should be in accordance with national policy-making of Indonesia.
Following is the overall structure of stakeholder in Indonesia for “Policy on Science, Technology
and Innovation (STI).”
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT : STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.2 Structure of Indonesian STI System with BPPT
President’s initiative on S&T policy is prescribed as “1-747” that includes S&T park policies, etc.
429
Source: “President’s initiative: 1-747”
Figure 8.8.3 President’s Initiative: 1-747
Among these stakeholders on S&T policy, BPPT is expected to play the leading role of project
creation for the purpose.
(3) Role of BPPT
Second, BPPT plays a role of detail policy coordination and development as shown in the figure
below.
430
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT : STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.4 Stakeholders’ Involvement in Formulation of STI Policy: Innovation Governance
(4) Service by BPPT
Third, BPPT is to offer services of R&D aiming at competitiveness toward industrialization as
shown in the figure below.
431
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT : STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.5 Role of BPPT
Regulational framework, on the other hand, is outlined as follows:
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT : STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.6 National Policy Framework on STI
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“National Research Agenda (NRA) 2010-2014” stipulates “Strategic Plan of MRT 2010-2014”
(5) Policy of BPPT
Fourth, based on these plans, BPPT has its own policy:
as one of its “6 Innovation Policy Framework”
“5. Develop and strengthen integrated efforts of innovation system and industrial cluster
development (at the national and regional levels).”
and
as two of its “5 Strategic Initiatives”
“1. Strengthening Regional Innovation System (RIS): as a vehicle to strengthen pillars for
fostering creativity-innovation at regional levels (as an integral part of the National Innovation
System).
2. Industrial Cluster Development: as a vehicle to develop the best collective potentials and to
enhance industrial competitiveness.”
These policies are listed in:
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT : STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.7 Framework of Policy on STI (BPPT)
(6) Strategy of BPPT
Fifth, to implement these policies and initiatives, BPPT has strategies of pilot projects as
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successful stories (good practices). NARC is to be one of the projects.
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT: STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.8 Implementation Strategy in Strengthening Innovation System
The resulting NARC project, through BPPT’s initiatives of both regional innovation system and
industrial cluster development, would become one of the national projects as one for
improvement of regional innovation infrastructure and superstructures together with regional
development perspective.
434
Source: BPPT, Dr. Tatang A. Taufik, Deputy Chairman, “COUNTRY REPORT: STI Indonesia,
ISTIC-KISTEP S&T Policy Training Program for High Level Policy Makers 2012”
Figure 8.8.9 An Example of Performance Information in BPPT’s Program Architecture for a Pilot
Project in a Region 2012
8.8.2 Biocluster Implementation
(1) Roles of Players: “in Harmony We Progress”
Following players of NARC have major roles as:
Central government: National policy support to implement cluster development
Local government: Regional support as land use policy for regional cluster
development
Academic organizations: Competitive R&D subjects with intellectual property and
academic human resource supply
Private industries and
associations as tenants
and investors:
Give and take involvement: funding and share outputs of R&D
All these players in NARC should play their roles in harmony to cherish Win-Win relationships
among each other.
The activities can roughly be summarized in the following and related chapters, but can span out
of these definitions considering special conditions and restrictions in the region.
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(2) Required Activity Elements of Bioclusters Implementation
Basic social/cultural background of the nation to foster good education system and commitment
to science and technologies are prerequisites for bioclusters creation.
On top of the basic social background, following systematic devices should be constructed by
integrated efforts by all stakeholders involved1:
1) Research and Development System
Level of existing R&D competency in terms of bio/life science innovation capacity of
Indonesia has already been at a certain level to invite a new cluster in this MPA region. The
existing R&D organizations including universities in the region should be one of the most
important infrastructures for the project.
2) R&D Finance System
Subject-wise R&D projects should be able to collect enough fund from the nation, region,
industries, and external funding devices from overseas. Public incentives should form a
part of this finance system.
3) Technology Transfer Mechanism
Transfer of technologies, through transfer of human resources, should be the most effective
way of the transfer. Spill-over from universities or spin-out from companies should be
promoted in this kind of environment. TLO (Technology Licensing Office) should function
mainly on this marketing activity.
4) Reinforce Existing Industry and Attracting Enterprises
Although small-and-medium-size enterprises are expected to play major roles in
innovation these days, existing enterprises should also be reinforced and promoted to join
R&D activities not only to allow spin-out but also stimulate the region by
merger-and-acquisition through its brand and resources. Big anchor tenants could also
attract more enterprises by its value.
5) Entrepreneur Support
Environment for networking and integration would stimulate in the cluster to foster
entrepreneurs. The movement will also be strengthened by financial and legal support from
government and private sectors.
1 Development Bank of Japan , “10 Steps to create new industry cluster”, 2002
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Support for contract/financing administration within cluster will also help the movement.
6) Venture Business Support (Incubation Function)
Funding for venture, small, and medium size companies who can attract many investors
should be provided. Technical support can be provided by universities and organizations,
but program of coaching at this stage should carefully be prepared and executed by CIO
(Chief Incubation Officer) of the cluster. Sharing knowhow among ventures on business
development by networking may be one of the crucial function of incubation facility at this
phase. There might be several fund raisers to one venture.
7) Seeds Fund
Startup phase of a new R&D subject require the fund that is different from venture fund in
its nature. Though risks at this stage is high, there should be ways of public and private
funding to stimulate the movement by securing ways for lenders to share equity in the form
of IP, etc.
8) Cluster Formation
Earnest stakeholder, staffing including Chief Innovation Officer, funding, attractive
habitat/environment, basic technology seeds, joint R&D environment facility construction,
operation, management, etc
Economical incentives to motivate the stakeholder can only accelerate this phase of
creation.
(3) Daily Operation of Bioclusters
After creation of the cluster, following are one of examples for daily operation activities as
implementation of bioclusters2:
1) Acquisition of Third Party Funding for Projects (Public Funds)
-Acquisition of R&D and non-R&D projects on behalf of cluster members
-Distribution of information about funding programs
2) Collaborative Technology Development, Technology Transfer and R&D Projects
-Organization of tasks forces/working groups
-Management of projects on behalf of cluster members
-Legal advice, e.g. on IPR
2 VDI/VDE 2012
437
3) Internal Networking among Cluster Members
-Regular meetings, get-togethers, thematic events/workshops for cluster members
-Internal newsletter, databases etc.
4) Development of Human Resources
-Participation in the development and implementation of vocational training or study
courses together with external partners such as universities
-Training courses for cluster members
5) Development of Entrepreneurship
-Consulting and coaching
-Acquisition of financing (e.g. venture capital, banks, public funds) on behalf of
entrepreneurs
6) Matchmaking and Networking with External Partners/Promotion of the Cluster Location
-Information material, website, press releases, publications
-Presentation of the cluster and its members on trade fairs or conferences
-Events/workshops to present the cluster
-Matchmaking/partnering events
7) Internationalization of the Cluster
-Presentation of the cluster and its members on trade fairs or conferences, networking visits,
study tours
-Offices or other permanent representations abroad
-Cooperation with export promotion agencies
(4) Legal Establishment Implementation of Bioclusters
After identifying applicable laws an necessary regulation environment, this paragraph will be
drafted.
(5) Physical Construction Implementation of Bioclusters
After finalizing sites location and facility planning, this paragraph will be drafted.
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Chapter 9. Financial and Economic Analysis
9.1 Methodology
In the financial analysis, the project’s financial viability and sustainability was evaluated based on
the estimated capital investment and O&M cost, predicted project revenue and other assumptions.
Cash flow analysis has been conducted under both PPP scheme and Hybrid scheme proposed in
the “Chapter 8 Project Structure”.
In this survey, the revenue is predicted based on the case study of the similar research cluster in
the surrounding countries and land price of SEZ area in Indonesia (Chapter 7). The capital cost
and O&M cost of the project is also estimated based on the design and past record (Chapter 7).
Based on the said revenue and expenditure of the project for 20 years of project period, the cost is
basically larger than the revenue as shown in the Figure 9.1.1 and 9.1.2.
Under PPP scheme (Figure 9.1.1), the difference between the revenue amount (left bar) and cost
(right bar) will be subsidized by (1) VGF (Viability Gap Fund) so that the SPC can make a
reasonable profit.
Under Hybrid scheme (Figure 9.1.2), the public side procures the building of the I.S. (Integrated
Support) center and incubation center (right top bar), and because of that financial support, the
SPC can make higher profit in the business. Therefore, the excess profit will be returned back to
counterparts during an O&M phase by means of (2) Private Contribution. The fee amount is
determined by mutual agreement in the contract.
For the financial analysis, the expected cost of equity is assumed to be 15% based on the answers
from possible investors.
439
a
Under such condition, the estimated financial indicators of the project FIRR, NPV (Net Present
Value) and DSCR (Debt Service Coverage Rate) of each case are calculated.
Furthermore, the sensitivity analysis of changes in cost, revenue and other constraints is
conducted for evaluating the financial impact of each risk and vulnerability of the business profit.
In addition to the financial analysis, the economic analysis was conducted to evaluate the social
impact of the Project on the whole society. Increase in industrial manufacturing cluster which will
be operated in the surrounding area of NARC project, induced by the Project influence is
considered as the main benefit of the project. EIRR, B/C, NPV is calculated based on the benefit
and cost flow of the project.
Regarding the profit share among stakeholders, the cash transfer is not considered, but the
102m2 of incubation center is assumed to be provided to each counterpart in the site as the
in-kind provision. The incentives provided from the government to the SPC are only considered
onto the exemption of House and Land Acquisition Tax, and the other incentives are not
considered in the present calculation.
9.2 General Assumptions of the Financial Analysis and Economic Analysis
(1) Project Period
The total project period is set for 20 years including 2 years of construction period and 18 years of
O&M period from the 3rd year.
Rent Fee of Research
Center
Repayment of Capital
Investment Cost
Rent Fee of Incubation
Center
O&M Cost
TAX payment
Government Support
(VGF)
Revenue Cost
Public : IS center +Incubation Center
(55%)
Rent Fee of Research
Center
Private: ResearchCenter + Research Equipment (45%)
Rent Fee of Incubation
Center
O&M Cost
TAX payment
Private Contribution
Revenue Cost
Source: JICA Study Team
Figure 9.1.1 Basic Concept
of VGF Calculation
Source: JICA Study Team
Figure 9.1.2 Basic Concept of Private Contribution Calculation
(1)
(2)
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Total project period: 20 years
Construction period: First 2 years
O&M period: 18 years
(2) Exchange Rates
The following exchange rate of US$, Japanese Yen and Indonesian Rupiahs are used. The rate
was obtained from the JICA standard rate for accounting in January, 2014.
US$1 = JPY 104.71, US$1 = Rp.12,180
(3) Inflation Rate
The future inflation rate is predicted by the latest 5 years average from 2008 to 2012. The inflation
rate of foreign currency is estimated as using the history data in G7 countries.
Table 9.2.1 Inflation Rate of Foreign and Local Cost
Country (currency) 2008 2009 2010 2011 2012 5 years Average
Indonesia (IDR) 9.8% 4.8% 5.1% 5.4% 4.3% 5.9%
Foreign Cost 1.6%
USA (US$) 2.2% 0.9% 1.3% 2.1% 2.4% 1.8% UK (BTP) 3.2% 2.2% 3.1% 2.3% 1.7% 2.5%
Canada (CN$) 4.1% -1.9% 2.9% 5.7% 1.7% 2.5% Japan (JPY) 1.4% -1.3% -0.7% -0.3% 0.0% -0.2% Germany (EURO) 2.6% 0.3% 1.1% 2.1% 2.0% 1.7% France (EURO) 2.5% 0.7% 1.0% 1.3% 1.5% 1.4% Italy (EURO) 2.5% 2.1% 0.4% 1.4% 1.7% 1.6%
Source: World Development Indicators, World Bank
9.3 Financial Analysis
9.3.1 Anticipated Revenue
The total revenue is estimated by summing up the revenue of incubation center and research
center in three project sites. The revenue of each facility (incubation, research center) is
calculated by the below formula.
Revenue = Rentable Area x Occupation Rate x Rent Fee
(1) Land Use Plan
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The available land area and used area for land and building of three project sites are summarized
in the following table.
Table 9.3.1 Land Use Plan of Each Site
(m2)
Land Area of Integrated Support
Center and Incubation Center
Land Area of Research
Center
Rentable Area of Integrated Support
Center and Incubation Center
(*)
Rentable Area of Research Center
BPPT 10,000 47,000 1,612 38,700 IPB 10,000 47,000 1,612 38,700 ITB 10,000 47,000 1,612 38,700 Total 30,000 141,000 4,836 106,100
Note: Area of 104 m2 of incubation center in each site is excluded from the rentable area as it is
assumed to be provided to the counterpart as the in-kind provision from the SPC.
Source: JICA Study Team
(2) Rent Fee of Each Facility
The rent fee of incubation center and research center of each sites are set at the level which attracts
the tenants and investors as mentioned in the previous Chapter 7.7.3 “Income Estimation of
Laboratory Rental Fee and Land Leasing Fee.” The fee is set as stipulated below:
Table 9.3.2 Rent Fee
(Rp./m2/month)
Incubation
Center Research
Center
US$ 18.0 US$ 1.5
BPPT 219,240 18,270 IPB 219,240 18,270 ITB 219,240 18,270
Note: The above fee includes 10% of VAT (Value Added TAX) Source: JICA Study Team
(3) Occupation Rate
For PPP scheme, the occupation rate of incubation center gradually increases from the 3rd year to
5th year up to 80% and the rate is retained until the project termination. The occupation rate of
research center increases from 3rd year to 7th year up to 100 % as considering the construction
period of tenants, and the rate will be retained at 100% afterward.
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Table 9.3.3 Forecast of Occupation Rate (under PPP Scheme)
Year 1 - 2 3 4 5 6 7 - 20
Incubation Center
BPPT 0.0% 50.0% 70.0% 80.0% 80.0% 80.0% IPB 0.0% 50.0% 70.0% 80.0% 80.0% 80.0% ITB 0.0% 50.0% 70.0% 80.0% 80.0% 80.0%
Research Center BPPT 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% IPB 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% ITB 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Source: JICA Study Team
For Hybrid scheme, the start of operation is assumed to delay for half year compared with the PPP
scheme as the integrated support center and incubation center will be constructed by the Public,
and the supervision and transfer procedure might takes time. The occupancy rate under Hybrid
scheme is assumed as the following table.
Table 9.3.4 Forecast of Occupation Rate (under Hybrid Scheme)
Year 1 - 2 3 4 5 6 7 8 - 20
Incubation Center
BPPT 0.0% 40.0% 60.0% 80.0% 80.0% 80.0% 80.0% IPB 0.0% 40.0% 60.0% 80.0% 80.0% 80.0% 80.0% ITB 0.0% 40.0% 60.0% 80.0% 80.0% 80.0% 80.0%
Research Center BPPT 0.0% 10.0% 30.0% 50.0% 70.0% 90.0% 100.0% IPB 0.0% 10.0% 30.0% 50.0% 70.0% 90.0% 100.0% ITB 0.0% 10.0% 30.0% 50.0% 70.0% 90.0% 100.0%
Source: JICA Study Team
(4) Currency
The rent fee is collected in Indonesian Rupiah.
(5) Adjustment Method of Rent Fee
The rent fee of incubation center and research center is assumed to be increased in proportion to
the CPI rate in Indonesia, every year.
(6) Profit Sharing
The profit sharing among stakeholders (payment from SPC to counterparts) is not considered in
the calculation.
9.3.2 Estimated Expenditure
(1) Capital Investment Cost
The capital cost of the project is summarized in the following Table 9.3.5, as estimated in the
Chapter 6.7, “Cost Estimation”. Transaction Advisory cost, assumed to be Rp.15,000 million, is
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included in the Project cost as the cost will be borne on the winning SPC as it has stipulated in the
PPP guideline.
Table 9.3.5 Summary of Capital Investment Cost under PPP/Hybrid scheme
(Rp. million)
Under Hybrid scheme, based on the assumption of the construction year, and the responsible part
of the work, the cost is allocated to the public and private part. The disbursement schedule is
summarized in the following table.
CurrencyFund Source
under Hybrid
Const.
Year
Direct
CostContingency
Consultant
FeeVAT Total
1. Civil Work 10% 5% 10%
Aproach Road local Private 1st 13,312 1,331 732 1,538 16,913
Segmentation of Research
Centerlocal Private 2nd 9,182 918 505 1,061 11,666
Reclamation of Research
Centerlocal Private 2nd 45,684 4,568 2,513 5,277 58,042
Subtotal 68,178 6,818 3,750 7,875 86,620
10% 5% 10%
Reclamation of Incubation
Centerlocal Private 1st 9,720 972 535 1,123 12,349
2. Building Work 10% 7% 10%
local Public 1st 139,565 13,957 10,747 16,427 180,695
3. Research Equipment 10% 10%
(US$) 3,056,060 305,606 336,167 3,697,833
(IDR) Foreign Private 1st 37,223 3,722 4,095 45,040
4. Transaction Advisory Cost 10%
Foreign Public 1st 13,636 1,364 15,000
Grand Total 268,322 21,746 18,753 30,882 339,704
Legend for Hybrid Scheme : Public Portion, 1st year
: Private Portion, 1st year
: Private Portion, 2nd yearSource: JICA Study Team
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Table 9.3.6 Disbursement Schedule of Capital Investment Cost under PPP/Hybrid Scheme
(Rp. Million)
Scheme Fund
Source Work Items
Schedule Fund Source of
Private
1stYear 2
ndYear Total
Loan (70%)
Eauity (30%)
- PPP Private/ Public (VGF)
All items 273,316 66,388 339,704 237,793 101,911
- Hybrid
Public
Building Work, (Transaction Advisory Cost)
183,873 0 183,873 - -
Private
Civil Work, Research Equipment, Consultant Fee
89,443 66,388 155,831 109,082 46,749
Total 273,316 66,388 339,704
Note: Transaction Advisory Cost is included in the Public part under Hybrid Scheme as it should be paid by Public by their own budget. Source: JICA Study Team
(2) O&M Cost
As explained in the previous Chapter 7.7.2, the O&M cost is assumed as follows:
Maintenance Cost of Facility
: Rp. 1,992 million /year (1.11% of Total Building Cost in average, from 3rd year)
Labor Cost of Operation : Rp. 3,451 million /year Outsourcing Cost : Rp. 1,858 million /year Utility Cost : Rp. 1,297 million /year Overhead Cost : Rp. 430 million /year (from 3
rd year, 5.0% of above O&M cost)
(3) Replacement Cost
The replacement cost for the building is included in the above maintenance cost.
The replacement cost of research equipments is assumed to be covered by the equipment service
charge which will be collected from equipment users. Therefore, there is no maintenance cost
included in the cash flow.
9.3.3 Financing Condition
(1) Conditions of the PSIF Loan
Whole loan of SPC is assumed to be procured by PSIF. Interest rate and other repayment
condition of PSIF are assumed as follows:
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Currency : Japanese Yen Interest Rate in JPY : 3.0% Exchange Risk Premium : 4.7% Total Interest Rate : 7.7% Repayment Period : 20 years (including grace period) Grace Period : 4 years Repayment : Linear amortization Upfront Fee : 0.3%
The interest rate is assumed as adding the anticipated interest rate for loan in Japanese Yen, and
exchange risk premium between Japanese Yen and Indonesian Rupiah.
The risk premium of exchange rate is calculated based on the regulation of MOF for Japanese
ODA loan arrangement (PMK.06/2005). MOF has been borrowed the ODA loan and transferred it
to the implementation organization in either Japanese Yen or Local currency with commission
charge. The commission charge is determined in the agreement depending on the lending
currency. The rate is set at 5.02% in IDR and 0.35% in JPY. The difference between the above two
interest rates, 4.67% is considered as the risk premium of the exchange rate and applied for the
estimation.
(2) Composition of Equity and Loan
The rate of return and the Equity/Loan rate is assumed at 30% to 70%. The WACC (Weighted
Average Cost of Capital) rate becomes 9.2%, under the assumption that the expected rate of return
of the equity is 15.0% as shown in the Table below:
Table 9.3.7 Composition of Financing
Composition Rate
Equity 30.0% Rate of Return 15.0% Loan (PSIF) 70.0% Interest Rate 7.7%
WACC (Weighted Average Cost of Capital)
9.9%
Source: JICA Study Team
9.3.4 Conditions of Accounting, Tax and Incentives
(1) Depreciation
The depreciation is assumed as follows:
Calculation Method: Straight line depreciation
Life Period of Building: 20 years
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Life Period of Research Equipments: 12 years3
(2) Tax and Incentives
The assumption of Tax is set as follows:
Corporate Tax Rate : 25.0 % of pretax profit
Property Tax : *0.20% of property value
House and Land Acquisition Tax : None
VAT (Value Added Tax) : 10.0%
Tax Holiday Years : None
The above Tax rate is based on the present prevailing law in Indonesia. Regarding to the
property Tax, the exemption amount is neglected because of its small amount. The land value is
assumed to become US$ 185 which corresponds to the present land value of the surrounding
industrial area reffering to the Table 7.5.1.The booked value of asset is used for the value of
building. The house and land acquisition Tax is not considered in the cash flow calculation as it
can be exempted by the approval of the local government. The VAT borne on income and
expenditure is offset and the surplus amount of the VAT borne on income is paid back to the
government at the end of year.
The Tax holiday and other incentives are not considered in the calculation at this moment.
Tax Incentives for SPC and tenants will be arranged by MOF by each project basis after the
application from counterparts after this study, which makes the positive impact on the cash flow
of the SPC.
9.3.5 Result of Financial Analysis
(1) Result of Financial Analysis under PPP Scheme
The cash flow is shown in the Appendix 9.1.
Under the condition of retaining the Equity IRR of SPC at 15.0%, the necessary VGF amount
becomes 42% of total CAPEX. As it has been stipulated in the previous chapter 8.2.1, the VGF
amount is less than 50% of total investment cost as regulated by the Presidential Regulation (PR
No.67/2005). The necessary VGF amount under the said assumptions satisfies the regulation rule.
3 By Indonesian Accounting Rules, the life period of machines for chemical industry is 16 years and food/agriculture industry is 8
years. The average life period of equipments are assumed to be 12 years.
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Table 9.3.8 Result of Financial Analysis under PPP scheme
Indicators Value
Equity IRR 15.0%
Project FIRR 14.0% NPV (Rp. million) 77,398 DSCR (Debt Service Coverage Rate), 5th
– 20th
year 1.10～8.61
VGF amount (Rp. million) 142,124 Percentage of VGF out of total CAPEX 42% Real Subsidy Amount (Rp. million) 72,879
Source: JICA Study Team
The DSCR value starts at 1.10 in the 5th year, and gradually increases as the project proceeds up
to 8.61 in the 20th year.
The real subsidy amount, which is calculated by subtracting the total Tax payment (corpotate
TAX, property TAX, and VAT) from the initial capital cost by GOI (VGF amount), becomes
Rp.72,879 million at present value. The discounted rate is set at 8.4%/year based on the 20 years
national bond rate of Indonesia in 2013. Out of the paid VGF amount of Rs. 142,124 million at
initial phase, 49% is calculated to be recollected in the future by means of taxation from SPC.
(2) Result of Financial Analysis under Hybrid Scheme
The cash flow is shown in the Appendix 9.2.
Under the condition of retaining the Equity IRR of SPC at 15.0%, the payment of land lease fee
from SPC to the public becomes Rp.1,345 million. The Private Contribution (lease fee) is a fixed
rate with adjustment with corporation to the CPI rate, each year.
Table 9.3.9 Result of Financial Analysis under Hybrid scheme
Source: JICA Study Team
The DSCR value starts at 1.03 in 5th year, and increases up to 10.31 in the 20th year.
The real subsidy amount becomes Rp.83,545 million at present value. 55% of the paid amount of
Rs. 183,873 million on the construction of integrated support center and reserech centers will be
Indicators Value
Equity IRR 15.0% Project FIRR 15.1% NPV (Rp. million) 85,669 DSCR (Debt Service Coverage Rate), 5th
– 20th year 1.03～10.31
Cost by the Public side (Rp. million) 183,873 Percentage of Public Budget out of total CAPEX 54% Private Contribution (Rp. Million/year) 1,345 Real Subsidy Amount (Rp. million) 83,522
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returned back from the SPC in the future by TAX. Compared with the PPP scheme, the real
subsidy amount under Hybrid scheme is Rp.10,643 million higher. The difference mainly came
from the delay of the operation for half year.
9.3.6 Sensitivity Analysis
The sensitivity analysis is also conducted to evaluate the vulnerability of business profit under
negative business conditions. All the simulation is conducted based on the cash flow under PPP
scheme. The cash flow is shown in the Appendix 9.3 - 9.6.
The occupation rate of 10% less than the base case (case1), cost increase of 10% of capital cost
and O&M cost (case2), delay of starting time for 1 year (case3), and the devaluation of IDR at
20% (case4) are simulated.
Determined by the Presidential Regulation, the maximum VGF amount should to be 50% of total
project cost. This maximum amount is set as the hurdle rate, and the allowed condition change of
each factor is also analyzed.
Table 9.3.10 Result of Sensitivity Analysis under PPP scheme
Negative Business Cases Project FIRR
Financial Loss in Present Value
(Rp.Million) D.R. = 9.9%
Equity IRR
DSCR (5th
- 20th
year)
Necessary VGF rate per Total Project cost to make Equity IRR
15%
Base Case 14.0% - 15.0% 1.07-8.66 42%
Case1: Reduction of Occupation Rate for I.S. center, Incubation center and Research center (x 90%)
12.2% -35,700 12.1% 0.90-7.46 50%
Case2: Cost Increase (Capital cost, O&M cost +10%)
12.4% -28,000 13.2% 0.91-7.46 47%
Capital cost, O&M cost +16.5% Maximum rate: 50%
Case3: Delay of starting Operation (1 year, total project period is not extended)
12.3% -28,400 11.7% 0.65-8.61 53%
Delay of approx. 3/4 year, total project period is not extended Maximum rate: 50%
Case4: Decrease in IDR value by Exchange Rate Change (-20%)
14.0% -23,400 12.2% 0.85-6.89 49%
Decrease in IDR value by Exchange Rate Change, -22% Maximum rate: 50%
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Source: JICA Study Team
Among all alternative cases, the case study of the low occupation rate (90% of estimated, case1)
makes the highest financial loss, which is Rp.35,700 million at present value. To recover the loss
of the SPC, the expected VGF amount should be at 50% of total project cost. As the 50% of VGF
is the maximum amount under the regulation, further reduction more than 10% is not allowed
from financial view.
Under case2 (cost increase +10%), the financial loss becomes Rp.28,000 million. To retain the
Equity IRR at 15% under the same cost condition, VGF needed to be 47%. If VGF is provided up
to 50%, the cost increase is allowed until 16.5%.
Under case3 (1 year delay), the financial loss is Rp.28,400 million. The said financial loss shows
the similar amount of case2. However, the financial indicators of Equity IRR and minimum
DSCR range show the significant inferior figure at 11.7% and 0.65. Affected by the delay of the
operation, the revenue in the early years is much smaller than the other cases, and the repayment
during the period becomes more difficult. Even under the condition that the VGF is granted at
maximum amount of 50%, the delay of operation is allowed only until 9 months (3/4 year) than
projected.
In case the Indonesian Rupiah devalued at 20% (case4), which means the repayment of loan
becomes 25% higher than projected in IDR, the financial loss is Rp.23,400 million. To retain the
reasonable Equity IRR level at 15.0%, the VGF should be provided up to 49% of the project cost.
In case the VGF is given at 50% of total cost, the devaluation is allowed up to 22% from the
present value.
In conclusion, the effect of low occupation rate and delay of start operation makes the largest
negative impact on the profitability. If the reduction of occupancy rate more than 10%, or the
delay of operation start longer than 9 months make the project implementation difficult. To
minimize such risks, the preliminary agreement with possible key tenants before the tendering,
and the careful schedule control during the construction, and close coordination of stakeholders
before the operation is inevitable. Also for cost control and measurement for exchange rate risk
should be well prepared by the SPC.
9.4 Economic Analysis
While previous financial analysis provides a measure of the commercial (financial) viability of
the project from the view point of the project-operating entity, the economic analysis tries to
clarify the real worth of a project to the country.
9.4.1 Basic Assumptions Employed for the Analysis
450
Research and development cluster area is typically located with associated manufacturing clusters.
Development of NARC is expected to induce manufacturing areas development (such as
industrial park). In this analysis, three industrial parks having land area of 10 ha each are assumed
to be developed near the three planned NARC sites.
Economic analysis of NARC project was made incorporating costs and benefits of
above-mentioned industrial parks.
The discount rate to be used is the 12%, which is the commonly used value for economic analysis
in the country.
The expected economic benefit of the Project, which is difficult to quantify in financial value, is
summarized in 9.4.5.
9.4.2 Economic Cost of the Project
(1) Capital Investment
NARC project is expected to be jointly financed by private and public funds. As shown in the
following table, total capital investment for the NARC project is estimated to be around Rp. 1,017
billion. The cost excludes the VAT to avoid the transaction cost.
It is assumed that foreign currency portion occupied 15% of total project cost of tenants in
research center. The research equipments and consultant fee is categorized as the foreign cost, and
the rest of the capital cost is considered as the local cost. The construction cost of the associated
industrial area is assumed to be the same unit cost per area (Rp. million/ha) as the whole NARC
facility including the cost of SPC and tenant companies.
Economic cost of the whole project was calculated to be Rp.2,570 billion using standard
conversion factor of 0.9 on the local cost.
Table 9.4.1 Financial and Economic Cost of the Project
(Rp. Million)
Source: JICA Study Team
Facility Construc-
tion Year
Land
(ha)
Financial Cost
Economic cost Total
Foreign
Cost
Local
Cost
NARC 1-2 year
17.1
308,822 69,612 239,210 284,902
933,088 Tenants (Research
Center) 3-7 year 708,400
106,260
(15%)
602,140
(85%) 648,186
Associated
Industrial Area 5-9 year 30.0 1,637,000
Total
2,570,088
451
(2) Operation and Maintenance Cost
Estimated Operation and maintenance (O&M) cost of the Project facilities for NARC is Rp. 9,028
million per year excluding VAT, which corresponds to 2.9% of capital investment cost. The O&M
costs of tenants in research center and associated industrial parks were estimated as applying the
same percentage (2.9%) for each capital investment cost, to be Rp.18,797 million and Rp.47,473
million per year. Adopting the standard conversion factor at 0.9, the economic cost for O&M
become Rp.8,125 million, Rp.16,918 million and Rp.42,726 million, respectively.
(3) Economic Cost of Land
Land usage right required for NARC project (17.1 ha in total) is expected to be provided by
counterparts and local government to SPC. On the other hand, lands for three associated industrial
parks (30 ha in total) may need to be acquired or be rented by private developers of the area.
Since, any land used to the project is necessarily taken away from some other use (even if that use
is speculation), economic cost of land should be included as the economic cost
The land value for the calculation of property tax (NJOP) in 2013 in each area is as shown in the
Table below. The average value in three sites is approximately Rp. 4,000 million/ha. The annual
rental cost is assumed to be 10% of the present value, which is approximately Rp. 400 million/ha.
The land value is assumed to be the same during the project period, and included in the calculation.
Table 9.4.2 Land Value for Property Tax calculation (NJOP) in 2013
Land Area Location Land Value (Rp. million /ha)
BPPT NARC land Puspitek-Serpong 820 – 3,350
IPB NARC land Leuwikopo 2,000 – 5,370
ITB NARC land Deltamas 350 – 8,000
Land Value adopted for Economic Analysis 4,000
Source: JICA Study Team
9.4.3 Economic Benefit of the Project
Economic benefits of the Project can be broadly divided into “benefit generated from R&D
activities within NARC” and “benefit generated from manufacturing activities within the
associated industrial parks”. Since the former one is quite difficult to quantify, this analysis
tried to quantify only for the latter benefit.
The estimated direct benefit of the significant sectors (medical, food and beverage, energy) of
452
each NARC sites and indirect benefit to be induced by the related sector is included in the
calculation as the economic benefit. As the construction of the said industrial parks will be
conducted from 5-9 year of the project, and the said direct and indirect benefit is assumed to
occur from 7th year and gradually increases until 11th year and the benefit amount is remained
afterward.
Table 9.4.3 Forecast of Occupation Rate in the surrounding Manufacturing Area
Year 1 - 6 7 8 9 10 11 - 20
Manufacturing Area
BPPT 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% IPB 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% ITB 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Source: JICA Study Team
(1) Direct Economic Benefit
Manufacturing industries located inside the associated industrial parks purchase intermediate
goods and services outside the industrial parks, processes them using their own equipment and
labor, and then sell their products outside. Value of gross output can be divided into “added
value” and “intermediate consumption (input cost).” Of which, added value (= value added)
refers to the additional value created at a particular stage of production. Value added can be
divided into operating surplus, payment of taxes, and worker’s compensation (wage and salary).
These value added resulting from the economic activities of locators in the associated industrial
parks is considered as direct economic benefit of the project.
Such direct economic benefit was estimated using following formula;
3
1
3
1
)1()1(j
iiiijii
i
WSOSTAXLAWFVOEB
where: EB = economic benefit i = type of industries located within the industrial parks (i= 1~3), please refer to
following table VOi = value of output of industrial sector “i” per work force (refer to following table) WFi = number of workforce per ha of land area of industrial sector “i” (refer to following
table) LAj= total land area of associated industrial park “j” occupied by tenant companies γ= percentage of tenant companies relocated from other area of the country (value
added generated from such companies could not regarded as incremental benefit to the country, tentatively assumed as 30%)
TAXi = percentage of tax payment in value of output of industrial sector “i”, please refer to following table
OSi = percentage of operating surplus in value of output of industrial sector “i”, please refer to following table
i = percentage of surplus that goes to foreign shareholder of industrial sector “i”
453
(tentatively assumed as 30%) WSi = percentage of wage and salary paid to employees (=worker’s compensation) in
value of output of industrial sector “i”, please refer to following table ε = shadow wage rate: SWR (0.75)
4
Table 9.4.4 Financial and Economic Cost of the Project
Associated Industrial Park
Type of Industry
Sector ID in the survey
data
WFi = No. of
workforce per ha
VOi: Gross Output per employee
(Rp. Million)
WSi: Wage and
Salary Ratio
OSi: Operating Surplus Ratio
TAXi: Tax
Ratio
BPPT-NARC Medical Industry sector
21011-21 45.7 1,040 0.047 0.440 0.006
IPB-NARC Manufacture of Food /Beverage
10311-99,10611-33,10710-99,11010-5
0
156.3 295 0.102 0.354 0.009
ITB-NARC Energy Industry 20117-19 45.7 2,282 0.023 0.444 0.015
Source: WF is estimated by JICA Study Team based on the past projects; BPS Indonesia,
“Large and Medium Manufacturing Establishment Survey 2011”
Economic benefits generated within the associated industrial parks were calculated to be Rp.
529 billion per annum (BPPT-NARC: Rp.131 billion, IPB-NARC: Rp.121 billion and
ITB-NARC: Rp. 277 billion).
(2) Induced (Indirect) Economic Benefit
Inter-industrial linkages may influence industrial structure and economic development in a
country. Production activities in one sector may have effects that directly and indirectly induce
those in other sectors. A unit increase in final demand for an industry in the associated industrial
parks with strong inter-industrial linkages can induce a larger increase in production and thus
promote economic development even outside the associated industrial parks.
Table 9.4.5 Main Data for Calculating Indirect Economic Benefits
Associated Industrial Park
Type of Industry
Sector ID in Input/Output Table
Direct Benefit
(Rp.Billion)
Impact Co-efficient
Indirect Benefit
(Rp. Billion)
BPPT-NARC Medical Industry sector
40 (Chemical Industry) 131 2.23427 293
IPB-NARC Manufacture of Food/Beverage
1,5 (paddy, fruits/vegetable) 121 1.33186 161
ITB-NARC Energy Industry 41 (Petroleum refining) 277 2.04274 419
Total 529 873
Source: BPS, “I/O table with 66 economic sectors in 2008”
4 SWR used for ADB Study in Indonesia in Dec. 2002, Source: ERD Technical Note 11. Shadow Exchange Rate
for Project Economic Analysis, Feb. 2004, ADB
454
Such indirect economic effect (value added induced outside the associated industrial parks) was
estimated to be Rp. 873 billion based on the above-mentioned direct economic benefit and inverse
matrix calculated using Input-Output Table with 66 economic sectors5 of Indonesia 2008.
9.4.4 Results of Economic Analysis
(1) Calculation of Economic Internal Rate of Return
Economic costs and benefits during the evaluation period are shown in the benefit, cost stream
in the following table. The calculated EIRR was 24.7%, which exceeds the economic
opportunity cost of 12%. In addition, ENPV (Economic Net Present Value) discounted at rate of
12.0% was worked out at Rp. 1,818 billion.
These calculation results proved that the NARC and associated industrial parks development
projects are feasible from the economic point of view.
(2) Sensitivity Analysis
Economic benefit-cost analysis is based on forecasts of quantifiable variables such as capital cost,
O&M cost and benefit scenario. The values of these variables are influenced by a great number of
factors, and the actual values may differ considerably from the forecasted values.
It is therefore useful to consider the effects of likely changes in the key variables on the viability
of a project. Sensitivity analysis was made using following adverse scenarios; a) increase in
capital cost +20%, b) decrease in economic benefit -20%, and c) worst case, a) + b). The cash
flow is shown in the following table.
Table 9.4.6 Results of Sensitivity Analysis
EIRR ENPV
Base Case 24.7% Rp.1,818 billion
a) Increase in Economic Cost +20% 21.3% Rp.1,467 billion
b) Decrease in Economic Benefit -20% point 20.6% Rp.1,104 billion
c) a) + b) 17.3% Rp.754 billion
Source: JICA Study Team
As shown in the above table, EIRR of three alternative cases exceed the 12%, and the economic
viability of the NARC project is considered robust under the various adverse scenarios.
5 Input Output table describes the sale and purchase relationships between producers and consumers within an
economy. The table can be produced by illustrating flows between the sales and purchases (final and
intermediate) of industry outputs.
455
S
ou
rce:
Stu
dy T
eam
Ye
ar
Are
a (
ha)
To
tal
12
34
56
78
91
01
11
21
31
41
51
61
71
81
92
0
CA
PE
X2
,57
0,0
88
NA
RC
28
4,9
02
230,5
84
54,3
18
00
00
00
00
00
00
00
00
00
Tenants
64
8,1
86
00
129,6
37
129,6
37
129,6
37
129,6
37
129,6
37
00
00
00
00
00
00
0
Indust
rial Z
one
1,6
37
,00
00
00
0327,4
00
327,4
00
327,4
00
327,4
00
327,4
00
00
00
00
00
00
0
LA
ND
use
co
st
I.S
. +
Incubation C
ente
r3.0
72
,00
03,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
3,6
00
Rese
arc
h C
ente
r14.1
10
1,5
20
00
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
5,6
40
Indust
rial Z
one
30.0
19
2,0
00
00
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
12,0
00
O&
M c
ost
NA
RC
2.9
%1
52
,93
70
6,6
87
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
8,1
25
Tenants
28
1,9
61
00
03,7
59
7,5
19
11,2
78
15,0
38
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
18,7
97
Indust
rial Z
one
61
7,1
49
00
00
09,4
95
18,9
89
28,4
84
37,9
78
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
47,4
73
To
tal
Co
st
3,9
87
,65
52
34
,18
46
4,6
05
14
7,0
02
15
0,7
62
49
3,9
21
50
7,1
75
52
0,4
29
40
4,0
46
41
3,5
41
95
,63
59
5,6
35
95
,63
59
5,6
35
95
,63
59
5,6
35
95
,63
59
5,6
35
95
,63
59
5,6
35
95
,63
5
Be
ne
fit
Occu
ran
ce
Rate
0%
0%
0%
0%
0%
0%
20
%4
0%
60
%8
0%
10
0%
10
0%
10
0%
10
0%
10
0%
10
0%
10
0%
10
0%
10
0%
10
0%
Dir
ect
Benefi
t6
,34
8,0
00
00
00
00
105,8
00
211,6
00
317,4
00
423,2
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
529,0
00
In-d
irect
Benefi
t1
0,4
76
,00
00
00
00
0174,6
00
349,2
00
523,8
00
698,4
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
873,0
00
To
tal
Be
ne
fit
16
,82
4,0
00
00
00
00
28
0,4
00
56
0,8
00
84
1,2
00
1,1
21
,60
01
,40
2,0
00
1,4
02
,00
01
,40
2,0
00
1,4
02
,00
01
,40
2,0
00
1,4
02
,00
01
,40
2,0
00
1,4
02
,00
01
,40
2,0
00
1,4
02
,00
0
Base
Case Y
ear
EIR
RE
NP
V1
23
45
67
89
10
11
12
13
14
15
16
17
18
19
20
Eco
no
mic
Co
st
-234,1
84
-64,6
05
-147,0
02
-150,7
62
-493,9
21
-507,1
75
-520,4
29
-404,0
46
-413,5
41
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
-95,6
35
Eco
no
mic
Be
ne
fit
00
00
00
280,4
00
560,8
00
841,2
00
1,1
21,6
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
1,4
02,0
00
Bala
nce
24.7
%1,8
17,5
94
-234,1
84
-64,6
05
-147,0
02
-150,7
62
-493,9
21
-507,1
75
-240,0
29
156,7
54
427,6
59
1,0
25,9
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
Se
nsit
ivit
y A
nals
yis
Ye
ar
EIR
RE
NP
V1
23
45
67
89
10
11
12
13
14
15
16
17
18
19
20
Econom
ic c
ost
+20%
-281021
-77526
-176403
-180914
-592705
-608610
-624515
-484855
-496249
-114762
-114762
-114762
-114762
-114762
-114762
-114762
-114762
-114762
-114762
-114762
Econom
ic b
enefi
t -2
0%
00
00
00
224320
448640
672960
897280
1121600
1121600
1121600
1121600
1121600
1121600
1121600
1121600
1121600
1121600
Base
Case
24
.7%
1,8
17
,59
4-2
34,1
84
-64,6
05
-147,0
02
-150,7
62
-493,9
21
-507,1
75
-240,0
29
156,7
54
427,6
59
1,0
25,9
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
1,3
06,3
65
Case
a):
Co
st
+2
0%
21
.3%
1,4
67
,44
4-2
81,0
21
-77,5
26
-176,4
03
-180,9
14
-592,7
05
-608,6
10
-344,1
15
75,9
45
344,9
51
1,0
06,8
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
1,2
87,2
38
Case
b):
Be
ne
fit
-20
%2
0.6
%1
,10
3,9
24
-234,1
84
-64,6
05
-147,0
02
-150,7
62
-493,9
21
-507,1
75
-296,1
09
44,5
94
259,4
19
801,6
45
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
1,0
25,9
65
Case
c):
Case
a)+
b)
17
.3%
75
3,7
73
-281,0
21
-77,5
26
-176,4
03
-180,9
14
-592,7
05
-608,6
10
-400,1
95
-36,2
15
176,7
11
782,5
18
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
1,0
06,8
38
Table
9.4
.7 C
ash
Flo
w o
f th
e E
conom
ic A
naly
sis
(unit
: ID
R m
illi
on)
456
9.4.5 Intangible Benefit of the Project
NARC is starting point which is expected to give wider effects, not only for related
stakeholders but also for public life. The expected intangible benefits in financial term are
summarized below per each beneficiary.
(1) For Counterparts
NARC gives high opportunity for counterparts (BPPT, IPB, ITB) to collaborate and having
partnership with industries. Through the collaboration and partnership with industries, a lot of
benefit can be perceived by counterparts.
1) Enhancement of Human Resources Capabilities
Collaboration and partnership between counterparts and industries will aid the transfer of
technology and business skills. The counterpart’s researchers will have chance to develop
their skills, knowledge, and capabilities through collaboration and partnership with
industrial sector. IPB and ITB, as university, can involve their students in collaboration
and partnership research with industries, which will lead to development of learning
process and enhancement of potential researcher’s capabilities. The experience for
students to work together with real industrial sector has good learning value for students;
creating competitive advantage. NARC will increase access to quality science,
technology, and engineering education to grow a pipeline of future talent.
There are opportunities that industries accept students for internships and co-op programs
creating new relationships. NARC can be places where more senior faculty and
postgraduate researchers can effectively interface with bioresource entrepreneurs and
existing and emerging companies. In addition, NARC also might open job opportunity
for students after completion of their university degree, either as researcher or R&D
management.
457
2) Increase in Promotion Opportunity of Research Results
There are a lot of research results which is ended in laboratories scale because there is no
opportunity to bring the research to the next level (commercialization). Existence of
NARC is good marketing facility for counterparts to promote their technology and other
research results. NARC will foster early engagement with industries and accelerate the
maturation and transition of technology to the marketplace.
(2) For Industries
In today’s global knowledge economy where innovation drives competitive advantage for
industry, development of NARC will encourage industrial growth.
1) Increase in Competitiveness of Existing Industries
The advantages of collaboration are greater network involvement in problem solving and
testing, a reduction in transaction costs to acquire new knowledge, and a reduction in
licensing costs when firms can access knowledge produced by the collaborative network
at low or no cost. Results of the research will support a new start-up venture or new
product line for an existing corporation. It will improve quality standard of industrial
product. At the end, it will boost competitiveness of existing companies.
2) Creation of New industries
Innovations technology, and knowledge generated by the companies and research
institutions lead to the creation of new start-up companies. It will encourage the
formation of innovative high technology companies.
3) Increase in Supporting industries
Development of industries, either existing industries or new industries, will encourage
development of supporting industries, such as raw material supplier, machinery supplier,
etc.
(3) For Surrounding NARC area
NARC will boost improve of livelihood and economic development at surrounding NARC
area. NARC and industries development will open job opportunity. Indirectly, it will also open
opportunity for the community at surrounding NARC area to develop household business, such
as restaurant, mini market, etc.
Development of NARC and industries at surrounding NARC area will be supported with
infrastructure development in the area. Infrastructure development can also be perceived by
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community in surrounding area.
(4) For Indonesia
1) Increase in Working Opportunity
As explained, NARC will generate employment. As explained in Chapter 6, the total
bio-related researcher number near NARC region is estimated to be 12,751. Indirectly,
NARC will encourage investment growth in Indonesia. The development of industries
-as one of effect of NARC development- also will generate employment. Therefore,
NARC development will affect to decrease number of unemployment and indirectly it
will reduce poverty in Indonesia.
2) Acceleration of Economic Growth by Human Resource Development and Technology
Improvement
NARC will create an environment that fosters collaboration and innovation and
promotes the development, transfer and commercialization of technology. It will open
opportunity for increasing human resources capabilities. Increasing human resources
capabilities and industries will accelerate economic growth and international
competitiveness.
3) Enhancement of competitiveness of the Nation in Science Field
NARC will enable Indonesia to compete effectively in a Global Economy. As stated in
previous chapter, by focusing on a specific area of life sciences development that
encompasses multiple projects and multiple organizations, Indonesia can be positioned
as a global leader. These transformative initiatives in specific areas of life sciences
development must address the focused goals of:
- Advancing world-class “basic to translational” research and innovation capacity,
- Attracting and generating top talent,
- Focusing on commercialization,
- Fostering the growth of existing firms, creation of new firms, and attraction of firms to
Indonesia, and
- Generating a health care dividend for Indonesia.
(5) Worldwide
1) Increase in Working Opportunity
2) Enhance welfare in the world
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NARC will be beneficial, not only for Indonesia but also for other countries. NARC
opens opportunity for foreign countries to invest, either in R&D or industry. Results of
NARC activities as well as industries production of NARC results would be used by
whole people in the world. It will increase health and welfare, increase efficiency of
energy resources, etc. NARC will contribute for better human-life in the future.
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Chapter 10. Risk Analysis and Mitigation Measures
10.1 Methodology of Risk Analysis
For implementing the PPP project, all the risks which may be occurring in the project period
should be clearly allocated to either public or private side before the contract. If there is any
uncertainty in the allocation, the financial loss during the business may enter into the arbitration
which takes a long time and requires unnecessary cost. Theoretically, the appropriate risk
allocation contributes to minimize the project cost during the whole project period.
Referring to the “Risk Allocation Guideline” published by Indonesia Infrastructure Guarantee
Fund (IIGF) in March, 2011, the principle of risk allocation is defined as follows:
“A risk should be allocated to party which is relatively able to manage the risk, or having the
least cost of absorbing such risk. If this principle is implemented properly, it is expected that the
risk premium and the project cost would be lower leading to positive impact to the project
stakeholders.”
The risk analysis was conducted in the following method.
(1) Risk matrix is made for both PPP scheme and Hybrid Scheme to recognize the risks under
different contract condition.
(2) The risk mitigation (reduction, transfer, avoidance) method is considered for identified major
risks.
(3) Financial impact of several risks is estimated by anticipating the change in the revenue and
cost. The result is described in the sensitivity analysis of financial analysis in “Chapter 9.3.6
Sensitivity Analysis.”
In the latter part of the Chapter, the outline of contract and its major contents are indicated for
two schemes under consideration of the above risk analysis.
10.2 Draft Risk Matrix under PPP Scheme and Hybrid Scheme
In this study, two risk matrixes are made assuming the NARC Project is implemented under PPP
scheme or Hybrid scheme, as the characteristics of risks and the proper entity which owns risk is
different in each case.
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The risks are categorized into 10 groups based on the Risk Allocation Guideline (IIGF,
March/2011). The level of impact and probability6, and mitigation measures of each risk are
drafted by JICA Study Team and reviewed by counterparts.
The draft risk matrix is attached in the Appendix 10.1 and 10.2. The further revise of the matrix
is needed before completing the tender document.
10.3 Important Risks and Measures for Risk Mitigation and Reduction
The risks with lower probability and lower financial impact could be owned by the SPC without
any mitigation measures. The characteristics and its mitigation methods of important risks,
which have the middle or high impact and/or probability, are described below.
(1) Site Risk
Risks of “delay and cost increase of land acquisition”, “land use right can't be obtained entirely”,
“complex resettlement process”, are considered as the major risks related to the Project site. The
impact of the said risks is high for any infrastructure project. In respect to the NARC project, the
project sites have been obtained by 3 counterparts, and the land use right is cleared from legal
aspect. Therefore, the probability of such site risks is assumed to be low.
(2) Design, Construction and Commissioning Risks
Risks of “delay in completing construction works” and “construction cost increase due to
designing/construction issues” are considered as main risks in the category. Basically, the entity
which has the fault of the said delay and/or cost increase needs to bear the financial cost. For
example, if the construction work is delayed because of the slow approval process of the public
side, the expected revenue of delayed period should be compensated to SPC.
In case the project is implemented under Hybrid scheme, the risk related to the construction of
“Integrated Support center and Incubation center” is basically owned by the public, as the budget
is procured by the public side. Some part of financial damage could be shared with SPC as they
are in charge of designing and supervision of the construction. However, the compensation
amount by SPC for any design error would be limited to the remuneration fee of the consulting
fee.
If the construction cost increases because of the error of construction company, the financial cost
can be transfer to the construction company based on penalty clause of the c contract.
Only under Hybrid Scheme, there is the risk that the “SPC designs the over-spec (expensive)
6 Definition of Impact level (High: More than 15%, Middle: 4-14%, Low: Less than 3% to the revenue), Definition of Probability
level (High: More than 50%, Middle: 6-49%, Low: Less than 5% during the project period)
462
facility of integrated support center and incubation center to attract more tenants,” as the budget
is only procured by the public and the SPC is not motivated to economize such cost. To avoid
this unnecessary cost increase, the installation of better monitoring system for design work or any
incentive mechanism for achieving the optimal design is expected.
(3) Sponsor Risks
The project continues for long time (assumed to be 20 years), and a risk of “Default by the
SPC/project sponsors” exists. Basically, for PPP project, the financial cost of the sponsor default
is shouldered by SPC. To reduce the possibility of such risk, the limitation of the number of
stockholders, precise preliminary evaluation for possible sponsor and careful contract making
between SPC and sponsor for default case are expected.
(4) Financial Risks
The risk of “Fail to achieve financial close,” the SPC usually takes the risk except for the fault of
the public side.
The “Foreign exchange rate risk” is one of the main issues for PPP project in the world. To avoid
or transfer this risk, the SWAP trade of foreign exchange and/or the connection of rent tariff rate
to foreign currency are the main possible measures. Adoption of these financial instruments
becomes an additional cost for SPC, and the tariff setting is quite sensitive issues for potential
tenants. Therefore, the optimization of these countermeasures should be well managed by the
SPC based on their own business strategy.
(5) Operation Risks
Among others, the important risk in the category is “O&M cost overrun risk.” The SPC needs to
control the whole expenditure of the labor cost, utility cost, outsourcing cost, and maintenance
cost for building and research equipments. The control of the expenditure is quite important to
make the business profitable. The SPC can reduce the financial damage by including the CPI
factor to tariff adjustment, making fixed outsourcing fee in longer term and any other possible
efforts by their own responsibility.
During the operation and maintenance phase, there is a risk of insufficient service level provided
by SPC. Considering the project scheme, these risks can be controlled by making an appropriate
contract between stakeholders and SPC. The service level should be basically determined in the
contract based on the Output Basis service factors. If the service level stipulated in the contract is
not satisfied, the SPC would be ordered to resolve the fault or penalized.
(6) Revenue Risks
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For business implementation, the revenue risk has the direct and most significant impact on the
business cash flow.
“Decrease in the demand volume on Incubation Center and Research Center” is one of the
biggest risks in the Project. The profound market survey of the R&M sector is critical for
estimating the future demand. The SPC needs to achieve the high service level, including the
provision of the capable human resources, information about business and research. The
obtention of fiscal and non-fiscal incentives for tenants is also important to keep the occupancy
rate of NARC.
“Development of other competitive public facility in the same region” is considered as the
important risk to be borne by the public. The related ministries and public organizations need to
prohibit the establishment of the similar facility around the NARC sites to avoid the critical
financial damage on the business profitability. The said condition should be agreed beforehand
and clearly declared in the MOU or any other official document.
Regarding the tariff setting, the risks of “Failure of proposed tariff changes caused by the private,”
“Periodical tariff adjustment is delayed caused by public,” “Level of the adjusted tariff is lower
from initially projected” are considered as important, as it has high financial impact when it
really happens. It is assumed that the approval of public entity is not necessary for annual tariff
adjustment. The possibility of miscalculation or failure by the private rarely happens as the
private sector pays much attention on the revenue procurement.
(7) Interface Risks
Under Hybrid scheme, risks of “fault in designing and construction of Integrated Support center
and Incubation center,” “Interface error of installation of research equipment,” “Interface error
of land civil work” are identified as interface risk. Probability of such risks is considered low,
provided that the SPC is assigned to design and supervise all the buildings and facilities.
(8) Political Risks
The majority of the political risks should be borne by the public, as the private companies cannot
basically manage political issues. The major risks identified in the risk analysis is such as,
“Currency inconvertibility,” “Currency non-transfer,” “Expropriation risk,” “Discriminatory or
project specific change in law (including tax),” “Delay in achieving planning approval,” “Fail or
delay in obtaining necessary consents (excl. Planning).” The IIGF has function to guarantee such
political risks for smoother project implementation under PPP scheme, and the SPC might be
guaranteed after the approval.
Some small legal changes, “General change in law (including tax)” could be shouldered by SPC,
provided that the definition of “general change” is agreed and clearly stipulated in the contract.
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(9) Force Majeure Risks
The main risks in the category are “Natural disasters,” “Political force majeure,” “Extreme
weather,” and “Economic Downturn in Indonesia.” The said force majeure risks which influence
the business profitability should be mainly shouldered by the public, as the private cannot avoid
some immense change in externalities. However, the private side is expected to share some
responsibility so that they are motivated to minimize the damage on facility and services.
For prevention measures of force majeure, the SPC needs to make insurance contract with
insurance company for contingency cases. The setting of unnecessary level causes high
insurance cost, so the SPC needs to arrange the most optimal insurance condition among many
choices.
(10) Asset Ownership Risks
“Problem of asset transfer after the PPP contract” is an important risk in the category. The
transfer condition for building and equipments should be clearly determined in the contract. The
public side needs to manage the transfer procedure without delay.
10.4 Financial Impact of Major Risks
The quantification of major risks on the financial cash flow is implemented in “Chapter 9.3.6
Sensitivity Analysis”. The result is shown in the previous Table 9.3.10.
The evaluated alternative cases in the sensitivity analysis and the related major risks, which have
been identified in the Risk Matrix are shown in the following Table.
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Table 10.4.1 Condition of Sensitivity Analysis and Related Major Risks
Case Condition Related Risk identified in the Risk Matrix
Case1: Reduction of Occupation Rate for I.S. center, incubation center and Research center. (-10%)
- Decrease in the demand volume on Incubation Center - Decrease in the demand volume on Research Center - Development of other competitive public facility in the same region
Case2: Cost increase (Capital cost and O&M cost, + 10%)
- Increase in construction cost due to designing issues - Design brief risk - Construction cost increase - O&M cost overrun risk - Increase in energy costs - Increase in maintenance and replacement cost of research equipment
Case3: Delay of starting operation (1 year, with 20 years of project period)
- Delay and cost increase of Land Acquisition - Delay in completing construction works - Delay in achieving planning approval
Case4: Decrease in IDR value by exchange rate change (-20%)
- Foreign exchange rate risk - Economic Downturn in Indonesia
Source: JICA Study Team
Regarding the Case 1 condition, the financial loss by decrease in occupation rate of 10% makes
the worst financial loss on the cash flow. Therefore, the control of service level and securing the
incentive for tenants is considered as the key factor to secure the profitability of the business.
The SPC who has the best relationship with many R&D manufactures or preliminary agreement
with key tenants can result in the highest profitability.
For the Case 2, risk of cost increase (+10% of CAPEX and OPEX) could be transferred or shared
with the construction company and outsourcing company with careful contract designing. The
optimal operation management is needed by the private company who has the profound
knowledge and experience on the project management.
For Case 3, the delay of operation start (1 year) makes the second highest impact, and the
financial condition is especially worsened in the early period of the project. The control of
construction work to start the work, and arrangement of tenants for early operation start-up is
what the SPC needs to focus on at the beginning stage of the Project. Basically, the private sector
has the better supervision and management work rather than the public, and they can minimize
the idle time for the early start of the project under PPP scheme. This merit cannot be achieved
under Hybrid scheme as the approval procedure for facilities is needed before the operation.
The impact of Indonesian Rupiah devaluation risk (Case 4) is slightly smaller than the other
cases. The SPC should decide if they take risk or mitigate applying financial instruments or
linking rental fee of some tenants to the value in foreign currency.
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10.5 Contracts Necessary for Project and Major Contents of Contracts
10.5.1 PPP Project
(1) Contractual Framework
Prior to conducting procurement process, BPPT, IPB and ITB shall make Cooperation
Agreement. Since only BPPT can be GCA under PR67/2005, those three parties need to have
agreement for scope of work, risk sharing and procurement, etc. The most important contract
for the project is PPP contract between BPPT (GCA) and Private company (SPC). This
contract would specify the right and obligation of GCA and SPC during the project period.
Additional contract, Land and Profit Sharing Agreement, is required for this project. Since IPB
and ITB cannot be a part of PPP Contract, those two universities would not have direct
contractual relation with the Private without the Land and Profit Sharing Agreement. This
agreement basically prescribes that the universities would provide land to the project and
would be shared the profit from the project.
Source: JICA Study Team
Figure 10.5.1 Contractual Framework of PPP Project
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(2) Contents of Contract
The following is the major contents of the Cooperation Agreement, the PPP Contract, and the
Land and Profit Sharing Agreement.
1) Cooperation Agreement among BPPT, IPB and ITB
- Mutual understanding; definitions, interpretation and effective Date
- Form of cooperation
- Scope of works for BPPT and IPB and ITB
- Land Provision (transfer right of use from universities to BPPT)
- Procurement committee and mechanism
- Output Specification of all facilities
- Preliminary Design
- Project schedule
- Ownership of the facilities
- Risk allocation between BPPT and IPB and ITB
- Assets transfer mechanism at the end of contract
2) PPP Contract between GCA and Private
- Mutual understanding; definitions, interpretation and effective date
- Form of cooperation
- Scope of works between GCA and private
- Cooperation Period
- Land provision from BPPT to SPC
- Performance Bond
- Tariff and adjustment mechanism
- Right & Obligation between GCA and Private (including Risk allocation between
Public and Private)
- Output Specification/ Performance Standard
- Basic Design
- Transfer of shares before the project commercially operate
- Event of Default & consequence (in the case the parties failed to meet the provisions of
the agreement)
- Indemnity
- Termination of Agreement
- Financial Statement of private audited by independent auditor and publish on mass
media in national scale
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- Dispute Settlement
- Supervision mechanism
- Ownership of the facilities (Including Asset Transfer at the end of contract)
- Force Majeure
- Representation and Warranties
- Language
- Prevailing law
3) Land and Profit Sharing Agreement between Universities and Private
- Mutual understanding; definitions, interpretation and effective date
- Form of cooperation
- Land provision from IPB and ITB to SPC
- Ownership of the facilities
- Risk allocation on land between IPB, ITB and SPC
- Profit sharing between IPB, ITB and SPC
- Default & sanction on land (in the case the parties failed to meet the provisions of the
agreement)
10.5.2 Hybrid Project
(1) Contractual Framework
In case of Hybrid Scheme, the different contractual arrangement is required. Since the
construction of Incubation and Support Center shall be done by Public and that of Research
Center shall be done by the Private, at least two contracts are required; one is EPC contract and
another is BOT contract.
EPC contract shall be based on Presidential Regulation No.54 Year 2010 on Government
Procurement of Goods/Services (herein after “PR54/2006). Since PR54/2006 allows BPPT,
IPB and ITB to be GCA, there is a possibility for all three parties to be GCA for the project.
Also, Article 53 of PR54/2006 prescribes the joint procurement among different public entity
to conduct procurement together.
Legal basis of BOT contract shall be Government Regulation No.6 Year 2006 on State/Region
Assets Management (herein after “GR6/2006”). Under GR6/2005, not only BPPT but also the
national universities are able to be GCA; however, nothing is mentioned regarding to joint
procurement in GR6/2005.
Under the above-mentioned legal condition, two types of contractual frame work can be
considered. One is that BPPT shall be only one GCA and has EPC contract with EPC
469
contractor and PPP contract with PPP contractor (See Figure 10.5.2). Another is that BPPT,
IPB and ITB would be GCA jointly (See Figure 10.5.3).
1) Single GCA (BPPT)
In case of BPPT as single GCA, BPPT, IPB and ITB shall make Cooperation Agreement.
Since only BPPT can be GCA, those three parties need to have agreement for scope of
work, risk sharing and procurement among three parties for both EPC and BOT contract.
The BOT contract shall be taken first, which include the design for all NARC facility
(including incubation and support center), construction of Research Center and operation
of all NARC facility. Next, the EPC contract shall be made for the construction of
incubation and support center based on the design which the BOT contractor made.
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Source: JICA Study Team
Figure 10.5.2 Contractual Framework of Hybrid Project (BPPT as Single GCA)
2) Joint GCA (BPPT, IPB, ITB)
When BPPT, IPB and ITB are joint GCA, Cooperation Agreement shall be required to
cooperate toward joint procurement. The BOT contract and EPC contract shall be made
between GCA (BPPT, IPB and ITB) and the Private.
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Source: JICA Study Team
Figure 10.5.3 Contractual Framework of Hybrid Project (BPPT, IPB and ITB as GCA)
(2) Contents of Contract
1) Cooperation agreement among BPPT, IPB, and ITB
The major contents of cooperation agreement among BPPT, IPB and ITB for Hybrid
472
Scheme are the follow:
- Mutual understanding; definitions, interpretation and effective Date
- Form of cooperation
- Scope of Works for BPPT and IPB and ITB
- Right and Obligation of three parties
- Land Provision (transfer right of use from universities to BPPT)
- Land lease fee mechanism/Fix Contribution and Profit Sharing(in case of BPPT as
single GCA)
- Procurement committee and mechanism
- Output Specification of all facilities
- Preliminary Design
- Project Schedule
- Ownership of the facilities
- Assets transfer mechanism at the end of contract
2) BOT Contract between GCA and the Private
The major contents of BOT Contract between GAC and the Private for Hybrid Scheme
would be the follows:
- Mutual understanding; definitions, interpretation and effective date
- Form of cooperation
- Scope of Works between Public and Private
- Cooperation Period
- Land provision from BPPT to SPC
- Performance Bond
- Tariff and adjustment mechanism
- Right & Obligation between GCA and Private (including Risk allocation between
Public and Private)
- Output Specification/ Performance Standard
- Basic Design
- Transfer of shares before the project commercially operate
- Event of Default & consequence (in the case the parties failed to meet the provisions
of the agreement)
- Indemnity
- Termination of Agreement
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- Financial Statement of private audited by independent auditor and publish on mass
media in national scale
- Land lease fee mechanism from Private to Public
- Dispute Settlement
- Supervision mechanism
- Ownership of the facilities (Including Asset Transfer at the end of contract)
- Force Majeure
- Representation and Warranties
- Language
- Prevailing law
3) EPC Contract between GCA (BPPT) and EPC Contractor
The major contents of EPC Contract among GCA (BPPT, IPB and ITB) and EPC
Contractor for Hybrid Scheme would be the follows:
- Mutual understanding; definitions, interpretation and effective date
- Scope of Work
- Provision of Site
- Origin of Material/Service
- Use of Contract and Information (e.g. technical specification, draw)
- Intellectual Property
- Security/Bond (advance payment bond, performance bond, maintenance bond)
- Insurance during construction & warranty period
- Payment Mechanism
- Price
- Personnel
- Temporary Evaluation of Work
- Discovery (e.g. fossils, artifacts & antiquities)
- Compensation
- Suspension of work
- Take over of site
- Guidelines to operate and maintenance
- Price adjustment
- Amendment of Contract
- Right and obligation of the parties
- Schedule of work
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- Supervision and inspection
- Delay of work
- Force Majeure
- Good faith
- Termination of contract
- Dispute Settlement
- Language and Law
- Tax
- Correspondence
- Prioritization of Micro, Small, and Cooperative.
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Chapter 11. Environmental Impact Survey
11.1. Regional Characteristic Analysis at 3 Sites
In this section, the alternative sites for development of BPPT-NARC, IPB-NARC and
ITB-NARC are compared and evaluated from environmental consideration viewpoints. The
information for comparison of each site was collected by interview survey and field
reconnaissance.
11.1.1 Proposed Site for BPPT-NARC
BPPT proposed 3 alternative sites for development of NARC. All sites are located at
PUSPIPTEK in Southern area of Tangerang city. The satellite image of each alternative site is
shown in Chapter 7. All of the alternative sites are located around existing research facilities of
PUSPIPTEK. The comparison result of 3 alternative sites is summarized in Table 11.1.1. The
existing condition of each site is as follows.
(1) Status of Landownership
All of the alternative sites are owned by PUSPIPTEK for development of facilities for research
objectives. BPPT does not have a plan to acquire new land for development of NARC. BPPT has
already have agreement with PUSPIPTEK to use the land for research objectives.
(2) Vegetation and Land Use Condition
Each site has basically same type of natural vegetation, comprising of secondary wood land,
glass land, bare land, and agricultural field such as cassava. According to PUSPIPTEK,
PUSPIPTEK and local farmers who use the land as agricultural field have made agreements that
farmers can use the land till PUSPIPTEK plans to develop the area PUSPIPTEK explained that
they will preliminary announce farmers when they plan new projects around three to six months
before commencement of the projects.
(3) Existing Infrastructure and Local Economy
Each alternative site does not have infrastructure concerning with local daily life and economy.
The surrounding area comprises of local residential areas and agricultural lands. The area
adjacent to the alternative 3 site, there is a concentrated residential area developing with
PUSPIPTEK.
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(4) Cultural Heritage
Based on the interview survey and field reconnaissance, there is no cultural heritage at each site.
(5) Information of Indigenous and Ethnic People
Based on the interview survey and field reconnaissance, settlement of indigenous and ethnic
people is not found at each alternative site.
(6) Hydrology and Water Usage Condition
In and around the alternative sites, there are no rivers. By filed reconnaissance, any condition
suggesting high ground water level was not observed. At each alternative site, there is no system
to use water intensively, and no important water source.
When appropriateness of each alternative site is examined, the following condition can be
pointed out, from environmental and social consideration viewpoints.
1) Basically, each site has similar characteristics from environmental and social viewpoints.
2) Alternative 1 site is smallest area among 3 sites, and additional land acquisition process
may be required if NARC is extended.
3) Alternative 2 site is angulated area. For development of NARC, earthworks for
development of NARC site will be necessary, and impact by surplus soil may be larger
than other two sites.
Considering above condition, it is considered that the alternative 3 site is more recommendable
than other sites for development of NARC.
Under the JICA Guidelines for Environmental and Social Consideration, to be applied for JICA
study, a case without implementation of the project, named “zero-option”, should be examined
as one of alternatives for evaluating possible impacts and benefits by the proposed project. As
mentioned above, the site is owned by PUSPIPTEK for development of facilities for research
objectives, so other facilities may be developed in the future at the site, and possible
environmental and social impacts are considered as same level. Therefore, the site is
recommended for development of NARC even though considering the “zero-option” which is a
case that the project will not be implemented. The BPPT-NARC project is expected to provide
advanced outcomes to contribute to improvement of public health and development of
Indonesian economy by research activity on medicine manufacture sector proposed as one of the
main targets by NARC activity. Therefore, it is recommended to conduct the project for
development of BPPT-NARC with proper environmental management plan to avoid or mitigate
prospected impacts from the viewpoint of environmental and social consideration.
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Table 11.1.1 Comparison of Alternative Sites for Development of BPPT-NARC from
Environmental and Social Consideration Viewpoints
Category Item Name of Site
Alternative 1 Alternative 2 Alternative 3
Location The area between
alternative 2 site
and alternative 3
site
The area adjacent to
Biotech Center
The area adjacent
to Serpon Raya
road
Natural
Environment
Topographic
and
Vegetation
Condition
Flat area with
secondary forest,
glass land, bare
land, and
agricultural land
Angulated area with
secondary forest,
glass land, bare
land, and agricultural
land
Flat area with
secondary forest,
glass land, bare
land, and
agricultural land
Hydrology No large river No large river No large river
Social
Environment
Status of
Land
Ownership
Owned by
PUSPIPTEK
Owned by
PUSPIPTEK
Owned by
PUSPIPTEK
Possibility of
Resettlement
Agricultural land
may be affected
depending on
allocation of NARC
site and facilities.
Agricultural land
may be affected
depending on
allocation of NARC
site and facilities.
Agricultural land
may be affected
depending on
allocation of
NARC site and
facilities.
Land Use Secondary forest,
glass land, bare
land, and
agricultural land
Secondary forest,
glass land, bare
land, and agricultural
land
Secondary forest,
glass land, bare
land, and
agricultural land
Cultural
Heritage
Not exist Not exist Not exist
Condition of Surrounding Area Secondary wood
land, bare land and
agricultural field
Secondary wood
land, bare land and
agricultural field
The site is adjacent
to trunk road, and
a residential zone.
Evaluation Acceptable
The available area
may be not
enough for
development of
NARC
Acceptable
The site is angulated
area, and scale of
required earthwork is
larger than other two
sites.
Recommendable
The site is adjacent
to residential zone,
and impact to the
area should be
examined.
Note: Result of evaluation is described as following words.
Recommendable: The site is considered more suitable then other alternative sites for
development of NARC.
Acceptable: The site is considered as available site for development of NARC.
Not recommendable: The site is not recommendable for development of NARC.
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Source: JICA Study Team
11.1.2 IPB-NARC
Based on the discussion between IPB and JICA Study Team in September 2013, 3 sites were
nominated as the alternative site for IPB-NARC, named Sindangbarang, Cikabayan Darmaga,
and Leuwikopo area. All of the 3 alternative sites are located within the area where IPB has
rights for utilization. The satellite image of each site is shown in Chapter 7. The comparison
result of 3 alternative sites is shown in Table 11.1.2. The existing condition of each site is as
follows:
(1) Status of Landownership
All of the alternative sites are owned by national government. IPB does not have a plan to
acquire new land for development of NARC. IPB already has right of utilizing the land for
research objectives.
(2) Vegetation and Land Use Condition
The alternative site, Sindang Barang and Leuwikopo are occupied by agricultural experimental
field. The Sindang Barang area is also used as storage area. Regarding the alternative site,
Cikabayan Darmaga, has wider area than other sites with hilly condition. The site is also used as
agricultural experimental field. However, some area of the site is forest land occupied by
dominant species such as sengon (Paraserienthes falcataria), acacia (Acacia sp.), kemlandingan
(Leucaena glauca), flamboyant (Delonix regia),pine (Pinus spp.) and gmelina (Gmelina
arborea). According to the field survey by IPB, some species to be protected was found, such as
ebony (Diospyros celebica Bakh.), agatis (Agathis dammara.), and ironwood (Eusideroxylon
zwageri),
(3) Existing Infrastructure and Local Economy
Each alternative site does not have infrastructure concerning with local daily life and economy.
The surrounding area comprises of local residential areas and agricultural lands. The area,
Leuwikopo, is in front of Leuwikopo Campus. So if NARC is developed at this site, IPB can
cooperate with NARC activities closely. The area, Sindang Barang is adjacent to the army
complex.
(4) Cultural Heritage
Based on the interview survey and field reconnaissance, there is no cultural heritage at each
479
alterative site.
(5) Information of Indigenous and Ethnic People
Based on the interview survey and field reconnaissance, settlement of indigenous and ethnic
people is not found at each alternative site.
(6) Hydrology and Water Usage Condition
The alternative site, Cikabayan Darmaga is surrounded by Cihideung River and Chiapus River,
which is tributary of Cisadane River. The alternative site, Leuwikopo is adjacent to Cihideung
River. Water of these river is used as domestic water excluding drinking purpose. Water of the
Cihideung River is used for utilizing by Bogor Darmaga Campus. Regarding the alternative site,
Sindang Barang river systems are not existed at and around the site.
When appropriateness of each alternative site is examined, the following condition can be
pointed out, from environmental and social consideration viewpoints.
1) A part of Cikabayan Darmaga area is occupied by forest area. Therefore, if the project is
implemented at the site, the impact on the area should be examined. The forest area is
adjacent to Cihideung River and Chiapus River,, so function of the forest area for
sustaining regional biodiversity condition related to river system also should be
examined.
2) Other two areas are utilized as agricultural experimental field.
3) The area, Leuwikopo, is in front of Leuwikopo Campus. So if NARC is developed at this
site, IPB can cooperate with NARC activities closely.
4) Each area is adjacent to residential zone or settlement. Therefore, possible impacts to the
local residents lining in adjacent area of the project site should be examined.
Considering above condition, it is considered that the area, Sindang Barang and Leuwikopo are
better than Cikabayan Darmaga, because those are used as agricultural experimental field in
current condition. As mentioned above, the area, Leuwikopo, is in front of Leuwikopo Campus.
So if NARC is developed at this site, IPB can cooperate with NARC activities closely. Therefore,
it is considered that Leuwikopo area is more recommendable than other sites for of
IPB-NARC.
Under the JICA Guidelines for Environmental and Social Consideration, to be applied for JICA
study, a case without implementation of the project, named “zero-option”, should be examined
as one of viewpoint for evaluating possible impacts and benefits by the proposed project. As
mentioned above, the proposed site, Leuwikopo, is utilized as agricultural experimental field by
480
IPB in current condition, so possible environmental and social impacts is considered as same
level if development of NARC is not actualized. Therefore, the site, Leuwikopo, is
recommended for development of NARC even though considering “zero-option” which is a case
that the project will not be implemented. The IPB-NARC project is expected to provide
advanced outcomes to contribute to providing safety daily life and development of Indonesian
economy by research activity on agriculture and food production sector proposed as one of main
targets of NARC activities. Therefore, it is recommended to conduct the project for development
of IPB-NARC with proper environmental management plan to avoid or mitigate prospected
impacts from the viewpoint of environmental and social consideration.
Table 11.1.2 Comparison of Alternative Sites for Development of IPB-NARC from
Environmental and Social Consideration Viewpoints
Category Item Name of Site
Sindang
Barang,
Cikabayan
Darmaga,
Leuwikopo
Location and
Area
Located at
IPB area, of
which area is
around 9 ha
Located at
IPB Darmaga
Campus, of
which area is
243 ha
Adjacent to IPB
Darmaga
Campus, of
which area is
around 11 ha
Natural
Environment
Topographic and
Vegetation Condition
Flat area
used as
experimental
field and
storage area
Hilly area
with forest,
glass land
and
agricultural
experimental
field
Flat area used as
experimental
field
Hydrology No large
river
Surrounded
by Cihideung
River and
Chiapus
River, which
is tributary of
Cisadane
River
Adjacent to
Cihideung River
Social
Environment
Status of Land Ownership Owned by
national
government
Owned by
national
government
Owned by
national
government
Possibility of Resettlement No residents No residents No residents
Land Use Experimental
field
Experimental
field, glass
land and
forest area
Experimental
field
481
Category Item Name of Site
Sindang
Barang,
Cikabayan
Darmaga,
Leuwikopo
Cultural Heritage Not exist Not exist Not exist
Condition of Surrounding Area The site is
surrounded
by residential
zones
The site is
adjacent to
residential
zone.
The site is
adjacent to
settlements, and
IPB Darmaga
Campus
Evaluation Available
The site is
surrounded
by residential
zone, and
impact to the
area should
be examined.
Available
The area has
forest
condition
connecting
with river
system, so it
is necessary
to evaluate
the impact if
NARC is
developed.
Recommendable
It is noted that
the site is
adjacent to
settlement and
impact to the
area should be
examined.
Note: Result of evaluation is described as following words.
Recommendable: The site is considered more suitable then other alternative sites for
development of NARC.
Acceptable: The site is considered as available site for development of NARC.
Not recommendable: The site is not recommendable for development of NARC.
Source: JICA Study Team
11.1.3 ITB-NARC
For ITB-NARC development, ITB proposed one candidate site in the planned site of ITB Bekasi
Campus, located at Deltamas Integrated Newtown in Bekasi City, around 37 km east from the
central Jakarta. The satellite image of the site is shown in Chapter 7. The Deltamas Integrated
New Town is being developed as a new town for Bekasi City. The planned site of ITB Bekasi
Campus is located adjacent area to the zone of the Center for Business and Commercial of the
Deltamas Integrated Newtown.
(1) Status of Landownership
The land owned by Bekai City. ITB does not have a plan to acquire new land for development of
NARC. ITB already made agreement with Bekasi Regency to use the land for research
objectives.
482
(2) Vegetation and Land Use Condition
The land has hilly condition with glass land with scattered wood lands. Some of the area is used
as agricultural field for rice cropping and grazing.
(3) Existing Infrastructure and Local Economy
The site is in Deltamas Integrated New Town, and does not have infrastructure concerning with
local daily life and economy. The developed area is distributed in surrounding area.
The surrounding area comprises of local residential areas and agricultural lands. The area,
Leuwikopo, is in front of Leuwikopo Campus. So if NARC is developed at this site, IPB can
cooperate with NARC activities closely. The area, Sindang Barang is adjacent to the army
complex.
(4) Cultural Heritage
Based on the field reconnaissance, there is no cultural heritage at the site.
(5) Information of Indigenous and Ethnic People
Based on the field reconnaissance, settlement of indigenous and ethnic people is not found at the
site.
(6) Hydrology and Water Usage Condition
The site is surrounded by developed road for Deltamas Integrated New Town, and there is no
river system adjacent to the site. When field reconnaissance is implemented, small ponds were
observed at the site in glass land area.
From the natural environment conservation viewpoint, the site is acceptable for development of
NARC site. Regarding social environmental viewpoint, when NARC is developed, impacts on
existing agricultural land should be examined.
Under the JICA Guidelines for Environmental and Social Consideration, to be applied for JICA
study, a case without implementation of the project, named “zero-option”, should be examined
as one of viewpoint for evaluating possible impacts and benefits by the proposed project. As
mentioned above, the proposed site, is planned to be used for research objectives by ITB in
current condition, so possible environmental and social impacts is considered as same level if
development of NARC is not actualized. Therefore, the site is recommended for development of
NARC even though considering “zero-option” which is a case that the project will not be
implemented. The ITB-NARC project is expected to provide advanced outcomes to contribute
to actualize environmental-friendly society in Indonesia by the research activities targeted by
483
NARC. Therefore, it is recommended to conduct the project for development of ITB-NARC
with proper environmental management plan to avoid or mitigate prospected impacts from the
viewpoint of environmental and social consideration.
484
11.2. Examination of the Condition to be Given for Construction and Operation of NARC
11.2.1 Preliminary Examination of Possible Environmental and Social Impacts
The detail plan of NARC has not been finalized for each NARC. However, it is considered that
the main research activity in NARC will be as follows:
-Medicine manufacture sector such as research of bio resource for herbal medicines,
producing of new vaccines and antibiotics,
-Agriculture and food production sector such as innovation and diversify of agricultural
technique, and producing of added value food production, and
-Bio-industrial sector such as producing of bio fuel.
Possible environmental and social impacts were examined on the above research activities
preliminary.
(1) Possible Impacts on Medicine Manufacture Sector
By research activity on medicine manufacture sector, various types of chemicals will be used.
For producing of new vaccines and antibiotics, pathogenic bacteria will be handled. These
materials for experiment may increase risks on health to surrounding residents if appropriate
measure is not adapted. The NARC should develop regulations to handle these materials on
measure to control transportation, storage and usage of these materials should be established.
The introduction of simple Pollutant Release and Transfer Register (PRTR) system is
recommended to manage the materials for experiment with information disclosure to the
concerned stakeholders. Waste from research center should be also treated and disposed under
proper way by each tenant to avoid environmental pollution by generated solid waste. In case
that generated waste is categorized as B3 waste which should be handled by specific way
under Indonesian regulation, the SPC should instruct and manage the way of solid waste
disposal by tenant. Environmental pollution by wastewater may occur if wastewater is treated
unsuitable way. Regarding The NARC is expected to have centralized wastewater treatment
system to treat organic pollutant, but treatment of specific materials should be conducted by
each tenant to avoid impact to surrounding environment.
(2) Possible Impacts on Agriculture and Food Production Sector
One of the important matters to be examined for research activity on agricultural and food
sector is gene recombination experiment. If such experiment is implemented, the products
485
should be controlled carefully to avoid disordered spreading of generated gene resources. In
agricultural and food processing sector, various chemicals will be used, and insects carrying
diseases germs may be handled. Therefore, proper management of these materials should be
planned and implemented same as medicine manufacture sector. In this sector, some research
activity may be implemented under outdoor condition. IPB can use their deep experiences on
this matter to avoid environmental pollution such as soil erosion, water pollution and impacts
on biodiversity of surrounding area due to experimental activity.
(3) Possible Impacts on Bio-Industrial Sector
The scale of the impact is not large, but air pollution due to combustion test of produced fuel
should be controlled. Generated waste by producing of biofuel such as residue of raw materials
should be treated, cooperating with local solid water management system after checking
hazardousness of the waste to avoid environmental pollution by solid waste. Wastewater from
the research facilities will include oil substances. Therefore, tenant or NARC should have
proper treatment process of wastewater such as simple oil separator. It is considered that the
risk is not so serious, but generation of odor in the process of generating biofuel may be
affected to surrounding area, so the impact is recommended to be examined.
11.2.2 Scoping of Possible Environmental and Social Impacts
Based on the preliminary examination of possible environmental and social impacts mentioned
in 11.1.1, preliminary scoping on development of NARC was summarized. The summarized
result is shown in Table 11.2.1 to 11.2.3 by each NARC.
486
Table 11.2.1 Preliminary Scoping of Possible Environmental and Social Impacts by
Development of BPPT-NARC
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
Involuntary
resettlement
B- D D - By development of NARC, the farming households
cultivating the project site will lose their income
source.
Impact on local
economy
D B- C - During the construction work, some impacts on
local economy may occur such as traffic congestion
due to operation of construction vehicle.
- Development of NARC is expected to contribute to
social and economical development by research
activities and outcomes of the invited tenants. It
may give benefit to local economy in the future.
Land use D D D - The project site is planned to be used for research
activity by PUSPIPTEK. Therefore, development
of NARC has consistency with the land use plan of
PUSPIPTEK.
Community division D D D - There is no plan to construct facilities to arise
community division.
Existing social
infrastructure and
service
D D D - Water supply system and electricity distribution
system will be constructed as a part of network in
PUSPIPTEK.
- Around the project site, there is no rainwater and
wastewater collection system. For developing
NARC, new system should be developed for
discharging wastewater to the Chisadane River or
connecting with wastewater collecting system of
research facilities operated by PUSPIPTEK.
Poverty, indigenous,
ethnic people
D D D - Based on the field reconnaissance and interview
with PUSPIPTEK, no poverty group and
indigenous or ethnic people found at the project
site.
- Surrounding area of the project site is residential
suburb with farming land, and there is no
information on specific community comprising of
indigenous and ethnic people.
Misdistribution of
benefits and damages
D D C - NARC will raise positive benefits by research
activities and outcomes by the invited tenants, but
may not provide direct benefit to surrounding
communities. Before starting the project, suitable
measures for sharing benefit arisen by NARC
should be examined for surrounding local society.
Conflict and dispute
of local community
D D D - The PUSPIPTEK has implemented research
activities during more than 10 years. Therefore, it is
considered that local communities have basic
487
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
understanding on research activities.
Water usage and right
of water
D D C - Basically, water for NARC will be distributed by
the PUSPIPTEK water supply network system,
pumping up water from the Chisadane River. When
the tenants of the incubation center, and research
center are nominated, water supply plan should be
developed to avoid serious impact on regional
water right, depending on amount of water usage
by each tenant.
Public health D B- C - During construction work, risk on infectious
disease may increase.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Natural hazard D D B- - After constructing NARC, run-off from altered area
may affect to drainage condition of surrounding
area.
Cultural heritage D D D - Based on the interview with PUSPIPTEK and field
reconnaissance in January 2014, no cultural
heritage and religious facilities are existed at the
project site.
Topography/Geology D D D - The project site is flat area, and no large impact will
arise by earthworks for construction of relevant
facilities of NARC.
Soil erosion D B- D - During construction work, in case that disposal of
surplus soil is insufficient, soil erosion may affect
to the surrounding area.
Groundwater D D C - During construction period, there is no plan to
pump up groundwater massively.
- In case that ground water is used for operation of
NARC, water supply plan should be developed to
avoid serious impact on ground water usage at
surrounding communities of the project site,
depending on amount of water usage by each
tenant.
Hydrology D D D - At the project site, no river is existed, and there is
no plan to implement construction work to alter
regional river system.
- There is no plan to use large scale of water usage
that may affect regional hydrology during
operation of NARC.
Coastal zone D D D - The project site is inland area.
Ecological system D B- B- - The project site comprises of grassland, bare land,
488
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
wood land, and agricultural land that are affected
by human activities.
- At the project site, small flat wood lands are
scattered. In case that such environmental
condition is altered, regional ecosystem may be
affected.
Climate D D D - There is no activity affecting regional climate
condition.
Landscape D D D - The project site and its surrounding area are suburb
area, and no specific landscape to be reserved.
Global warming D D D - Main research sector of the BPPT-NARC will be
medicine manufacturer sector, so it is considered
that the research activity will not so contribute to
mitigation of global warming.
Air pollution D B- D - During construction work, air pollution due to
construction vehicles may occur.
- Main research sector of the BPPT-NARC will be
medicine manufacturer sector, so certain extent of
air pollution impact will not be predicted.
Water pollution D B- B- - During construction work, water pollution due to
earthworks may occur.
- In case that insufficient treatment of wastewater
from the incubation center and the research center
may cause water pollution.
Soil pollution D C B- - Currently, any activity arisen soil pollution is not
carried out. To confirm possibility of soil pollution
due to construction work, survey on soil quality is
necessary.
- In case that insufficient disposal of solid waste
generated from NARC, soil pollution may occur.
Solid waste D B- B- - During construction work, surplus soil may raise
issue on solid waste if its disposal is insufficient.
- Environmental pollution may occur due to
insufficient treatment of solid waste generated from
NARC by research activity
Noise and vibration D B- C - During construction work, noise and vibration
generated by construction work at the project site
may affect the surrounding household.
Subsidence D D D - During construction period and operation period of
NARC, there is no plan to pump up groundwater
massively.
Offensive odor D D D - Main research sector of the BPPT-NARC will be
medicine manufacturer sector, so it is considered
that large scale of offensive odor will not be arisen.
489
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
Accident D B- C - Main research sector of the BPPT-NARC will be
medicine manufacturer sector, so it is considered
that large scale of offensive odor will not be arisen.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Note: A-: Significant negative impact is expected
A+:Significant positive impact is expected
B-: Negative impact is expected to some extent
B+: Positive impact is expected to some extent
C-: Extent of Negative/Positive impact is unknown. Examination is needed.
D: No impact or a small impact is expected.
Source: JICA Study Team
Table 11.2.2 Preliminary Scoping of Possible Environmental and Social Impacts by
Development of IPB-NARC
Item Scoping Remark
Pre
par
atio
n
Const
ruct
ion
Oper
atio
n
Involuntary
resettlement
D D D - The recommended project site is existing
agricultural experimental land of IPB, and there is
no residents.
Impact on local
economy
D B- C - During the construction work, some impacts on
local economy may occur such as traffic congestion
due to operation of construction vehicle.
- Development of NARC is expected to contribute to
social and economical development by research
activities and outcomes of the invited tenants. It
may give benefit to local economy in the future.
Land use D D D - The project site is being used and planned to be
used for research activity by IPB. Therefore,
development of NARC has consistency with the
land use plan of IPB.
Community division D D D - There is no plan to construct facilities to arise
community division.
Existing social D D D - Existing water supply system and electricity
distribution system will be used for NARC.
490
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
infrastructure and
service
- Around the project site, there is no wastewater
collection system. For developing NARC, new
system will be developed for connecting with
wastewater collecting system of research facilities
operated by IPB.
Poverty, indigenous,
ethnic people
D D D - Based on the field reconnaissance and interview
with IPB, no poverty group and indigenous or
ethnic people found at the project site.
- Surrounding area of the project site is residential
suburb with farming land, and there is no
information on specific community comprising of
indigenous and ethnic people.
Misdistribution of
benefits and damages
D D C - NARC will raise positive benefits by research
activities and outcomes by the invited tenants, but
may not give direct benefit to surrounding
communities. Before starting the project, suitable
measures for sharing benefit arisen by NARC
should be examined for surrounding local society.
Conflict and dispute
of local community
D D D - The IPB has implemented research activities during
more than 10 years. Therefore, it is considered that
local communities have basic understanding on
research activities.
Water usage and right
of water
D D C - Basically, water for NARC will be distributed by
the IPB water supply network system, pumping up
water from the Chisadane River. When the tenants
of the incubation center, and research center are
nominated, water supply plan should be developed
to avoid serious impact on regional water right,
depending on amount of water usage by each
tenant.
Public health D B- C - During construction work, risk on infectious
disease may increase.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Natural hazard D D B- - After constructing NARC, run-off from altered area
may affect to drainage condition of surrounding
area.
Cultural heritage D D D - The recommended project site is existing
agricultural experimental field, and no cultural
heritage exists.
Topography/Geology D D D - The project site is flat area, and no large impact will
arise by earthworks for construction of relevant
491
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
facilities of NARC.
Soil erosion D B- D - During construction work, in case that disposal of
surplus soil is insufficient, soil erosion may affect
to the surrounding area.
Groundwater D D C - During construction period, there is no plan to
pump up groundwater massively.
- In case that ground water is used for operation of
NARC, water supply plan should be developed to
avoid serious impact on ground water usage at
surrounding communities of the project site,
depending on amount of water usage by each
tenant.
Hydrology D D D - At the project site, no river is existed, and there is
no plan to implement construction work to alter
regional river system.
- There is no plan to use large scale of water usage
that may affect regional hydrology during
operation of NARC.
Coastal zone D D D - The project site is inland area.
Ecological system D D D - The project site is existing agricultural
experimental field. Even though after developing
NARC, agricultural experimental area may exist
around NARC, so it is considered that impact on
ecological system will be small.
Climate D D D - There is no activity affecting regional climate
condition.
Landscape D D D - The project site and its surrounding area are suburb
area, and no specific landscape to be reserved.
Global warming D D D - Main research sector of the IPB-NARC will be
agricultural sector, so it is considered that the
research activity will not so contribute to mitigation
of global warming.
Air pollution D B- D - During construction work, air pollution due to
construction vehicles may occur.
- Main research sector of the IPB-NARC will be
agricultural sector, so certain extent of air pollution
impact will not be predicted.
Water pollution D B- B- - During construction work, water pollution due to
earthworks may occur.
- In case that insufficient treatment of wastewater
from the incubation center and the research center
may cause water pollution.
Soil pollution D C B- - Currently, any activity arisen soil pollution is not
carried out. To confirm possibility of soil pollution
492
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
due to construction work, survey on soil quality is
necessary.
- In case that insufficient disposal of solid waste
generated from NARC, soil pollution may occur.
Solid waste D B- B- - During construction work, surplus soil may raise
issue on solid waste if its disposal is insufficient.
- Environmental pollution may occur due to
insufficient treatment of solid waste generated from
NARC by research activity
Noise and vibration D B- C - During construction work, noise and vibration
generated by construction work at the project site
may affect the surrounding household.
Subsidence D D D - During construction period and operation period of
NARC, there is no plan to pump up groundwater
massively.
Offensive odor D D D - Main research sector of the IPB-NARC will be
agricultural sector, so it is considered that large
scale of offensive odor will not be arisen.
Accident D B- C - Main research sector of the IPB-NARC will be
agricultural sector, so it is considered that large
scale of offensive odor will not be arisen.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Note: A-: Significant negative impact is expected
A+:Significant positive impact is expected
B-: Negative impact is expected to some extent
B+: Positive impact is expected to some extent
C-: Extent of Negative/Positive impact is unknown. Examination is needed.
D: No impact or a small impact is expected.
Source: JICA Study Team
493
Table 11.2.3 Preliminary Scoping of Possible Environmental and Social Impacts by
Development of ITB-NARC
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
Involuntary
resettlement
D D D - In Deltamas City, farming households exist, and
agricultural and grazing activity is being
implemented in some area. However, according to
existing facility development plan of NARC, it is
predicted that no farming land will be affected.
Impact on local
economy
D B- C - During the construction work, some impacts on
local economy may occur such as traffic congestion
due to operation of construction vehicle.
- Development of NARC is expected to contribute to
social and economical development by research
activities and outcomes of the invited tenants. It
may give benefit to local economy in the future.
Land use D D D - The project site is planned to be used as a part of
IPB Deltamas Campus. Therefore, development of
NARC has consistency with the existing land use
plan of Deltamas City and IPB.
Community division D D D - There is no plan to construct facilities to arise
community division.
Existing social
infrastructure and
service
D D D - Water supply system and electricity distribution
system will be constructed as a part of network in
Deltamas City.
- Around the project site, there is no rainwater and
wastewater collection system. For developing
NARC, new system should be developed for
discharging wastewater, collecting to the system of
Deltamas City.
Poverty, indigenous,
ethnic people
D D D - Based on the field reconnaissance, no poverty
group and indigenous or ethnic people found at the
project site.
- Surrounding area of the project site will be
developed as a new suburb residential area in
Deltamas City, and there is no information on
specific community comprising of indigenous and
ethnic people.
Misdistribution of
benefits and damages
D D C - NARC will raise positive benefits by research
activities and outcomes by the invited tenants, but
may not give direct benefit to surrounding new
residential area developed in Deltamas City. Before
starting the project, suitable measures for sharing
benefit arisen by NARC should be examined for
surrounding local society.
494
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
Conflict and dispute
of local community
D D D - The project site is planned to be developed for
research activities as a part of IPB Deltamas
Campus. Therefore, it is considered that local
communities have basic understanding on research
activities.
Water usage and right
of water
D D C - Basically, water for NARC will be distributed by
Deltamas City water supply network system. When
the tenants of the incubation center, and research
center are nominated, water supply plan should be
developed to avoid serious impact on regional
water right, depending on amount of water usage
by each tenant.
Public health D B- C - During construction work, risk on infectious
disease may increase.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Natural hazard D D B- - After constructing NARC, run-off from altered area
may affect to drainage condition of surrounding
area.
Cultural heritage D D D - Based on the field reconnaissance in January 2014,
no cultural heritage and religious facilities are
existed at the project site.
Topography/Geology D B- D - The project site is hilly area, so topographic
condition will be changed due to construction work
for NARC development.
Soil erosion D B- D - During construction work, in case that disposal of
surplus soil is insufficient, soil erosion may affect
to the surrounding area.
Groundwater D D C - During construction period, there is no plan to
pump up groundwater massively.
- In case that ground water is used for operation of
NARC, water supply plan should be developed to
avoid serious impact on ground water usage at
surrounding communities of the project site,
depending on amount of water usage by each
tenant.
Hydrology D D D - At the project site, no river is existed, and there is
no plan to implement construction work to alter
regional river system.
- There is no plan to use large scale of water usage
that may affect regional hydrology during
operation of NARC.
495
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
Coastal zone D D D - The project site is inland area.
Ecological system D B- B- - The project site comprises of grassland, bare land,
and wood land that are affected by human
activities.
- At the project site, small wood lands are scattered.
In case that such environmental condition is
altered, regional ecosystem may be affected.
Climate D D D - There is no activity affecting regional climate
condition.
Landscape D D D - The project site and its surrounding area are suburb
area, and no specific landscape to be reserved.
Global warming D D B+ - Main research sector of the IPB-NARC will be
bio-industrial sector, so it is considered that the
research activity will contribute to mitigation of
global warming by research on bio-fuel.
Air pollution D B- B- - During construction work, air pollution due to
construction vehicles may occur.
- Main research sector of the BPPT-NARC will be
bio-industrial sector, so certain extent of air
pollution impact should be cared with research
activity on bio-fuel.
Water pollution D B- B- - During construction work, water pollution due to
earthworks may occur.
- In case that insufficient treatment of wastewater
from the incubation center and the research center
may cause water pollution.
Soil pollution D C B- - Currently, any activity arisen soil pollution is not
carried out. To confirm possibility of soil pollution
due to construction work, survey on soil quality is
necessary.
- In case that insufficient disposal of solid waste
generated from NARC, soil pollution may occur.
Solid waste D B- B- - During construction work, surplus soil may raise
issue on solid waste if its disposal is insufficient.
- Environmental pollution may occur due to
insufficient treatment of solid waste generated from
NARC by research activity
Noise and vibration D B- C - During construction work, noise and vibration
generated by construction work at the project site
may affect the surrounding household.
Subsidence D D D - During construction period and operation period of
NARC, there is no plan to pump up groundwater
massively.
Offensive odor D D C - Main research sector of the BPPT-NARC will be
496
Item Scoping Remark
Pre
par
atio
n
Co
nst
ruct
ion
Op
erat
ion
bio-industrial sector, so it is considered that some
impact of offensive odor may be arisen.
Accident D B- C - Main research sector of the ITB-NARC will be
medicine manufacturer sector, so it is considered
that large scale of offensive odor will not be arisen.
- In incubation center, there is no plan to use virus or
pathogenic bacteria. Hazardous chemicals should
be treated carefully depending on the tenants
invited.
Note: A-: Significant negative impact is expected
A+:Significant positive impact is expected
B-: Negative impact is expected to some extent
B+: Positive impact is expected to some extent
C-: Extent of Negative/Positive impact is unknown. Examination is needed.
D: No impact or a small impact is expected.
Source: JICA Study Team
11.2.3 Required Actions in Further Step
(1) Conducting EIA under Indonesian Regulation
For development of NARC, environmental approval to commence the project should be
obtained. There are two processes to get environmental approval in Indonesia, which are 1)
implementing of EIA (named “AMDAL” in Indonesian) study, and 2) preparing of
environmental management plan (named “UPL” in Indonesian) and environmental monitoring
plan (named “UKL” in Indonesian) without implementing of EIA study. The process to be
adapted depends on type and size of the proposed project. In the Environmental Ministry
Regulation No.05/2012, type and size of the project to be implemented EIA is designated.
Based on the regulation, development of NARC is categorized as a project for construction of
building. For this type of project, if the project alters equal or more than 5 ha of land, or
constructing of building, of which total floor space is equal or more than 10,000 m2, such
project should conduct EIA study as shown in Table 11.2.4.
497
Table 11.2.4 Type and Size of Project Required EIA in Indonesia
(For Building Construction Project)
Type of Project Scale Items to be Examined
Construction of buildings
- Area of land, or
- Building
> 5 ha
>10.000 m2
a. Land acquisition
b. Carrying capacity of the
land
c. Levels of daily water needs
d. Waste generated
e. Effects of development on
the surrounding environment
(vibration, noise, air
pollution, etc.)
f. The number and type of
trees that may be missing.
g. Social conflicts due to land
acquisition
h. Structure of buildings and
basement causing problems
and disorders caused stakes to
aquifer water source nearby
i. Traffic condition
j. Parking needs of visitors.
k. Inundation / flooding issue
Note: Above criteria is extract of the regulation.
Source: Environmental Ministry Regulation No.05/2012
The procedure on EIA is stipulated in governmental decree No.27/1999 as show in Figure
11.2.1. The Ministry of Environment or the concerned local governments will consider the
necessity of EIA depending on the project plan submitted by the executing agency. The
executing agency will publicize the project plan for 30 days to get the proposal and/or opinions
from the public. After that, executive agency will prepare the TOR for EIA (named
KA-ANDAL in Indonesian), which will be evaluated by the AMDAL Committee.
KA-ANDAL will be publicized as well as evaluated by the AMDAL Committee. After
approval of KA-ANDAL, the executing agency will conduct EIA study with the consultant
which has certification stipulated under the Decree of the Ministry of Environment No.7/2010,
and will commence the study. The result of the study will be summarized in the Environmental
Impact Statement (named ANDAL in Indonesian), Environmental Management Plan and
Environmental Monitoring Plan, and submitted to the AMDAL Committee for their evaluation
and approval. During the evaluation, environmental impact statement with environmental
498
management plan and environmental monitoring plan will be publicized to obtain public
opinion.
Source: Preparation of Decree No.27/1999
Figure 11.2.1 Procedure of EIA under Indonesian Regulation
(2) Draft TOR for EIA Study
Notice to proceed by executing agency to
organization of project execution
Notice of Project Plan
Preparation of KA-ANDAL and
submission to AMDAL Committee by
executing agency
Public Opinion
from residents
about the Project
Public Opinion
from residents
about the Project
about KA-ANDAL
Evaluation of requirement
of AMDAL of State Ministry
of Environment Decree No.
11/2006
Submission of KA-ANDAL to the
approving organization Approval of KA-ANDAL by the approving
organization
Preparation of ANDAL, RKL and RPL
and submission to AMDAL Committee by
executing agency
Public Opinion
from residents
about the Project
about KA-ANDAL
Evaluation of requirement
of AMDAL of State Ministry
of Environment Decree No.
11/2006
Preparation of ANDAL, RKL and RPL
and submission to AMDAL Committee by
executing agency
Approval of ANDAL, RKL and RPL by the
approval organization
Preparation of
UPL and UKL
Revision of
ANDAL, RKL
and RPL by
executing
agency
Preparation of KA-ANDAL
and submission to AMDAL
Committee by executing
agency
Revision of
KA-ANDAL by
executing agency
Draft EIA
Stage
Scoping
Stage
Screening
Stage
Within 75
working
days
Within 30
working
days
Within 75
working
days
No
requirement
of AMDAL
Requirement
of AMDAL
499
Based on the scoping results described in the Section 11.2.2, the following draft TOR for EIA
Study is recommended.
Terms of Reference of the EIA Study consists of the following tasks;
1) Task-1: Collection of Secondary Data
The project proponent will conduct to collect secondary data of existing environmental
information around the project site for preparation of TOR for EIA. Expected secondary
data are shown as follows;
a) Related laws, regulations, decrees, and decisions
b) Information on natural environment (climate, topography, geology, hydrology, flora and
fauna, distribution of endangered species, and landscape)
c) Information on social environment (population, land use, economic condition, social
condition, public facility, transportation, cultural heritage, public health, accident)
d) Information on environmental quality (air quality, water quality, noise and vibration,
generation and management of solid waste)
2) Task-2: Preparation of TOR for Environmental Impact Assessment (KA-ANDAL)
The project proponent will prepare TOR for Environmental Impact Assessment
(KA-ANDAL) in accordance with Decree of Minister of Environment No. 8/2006. The
expected contents of KA-ANDAL are as follows;
a) Introduction (background, objective and effective of the project, and related laws and
regulations)
b) Scoping (outline of the project, existing environmental and social conditions around the
project site, and target items of EIA)
c) Methodologies of EIA (collection of secondary data, prediction and analysis of
environmental impact, and assessment of environmental impact)
d) Implementation bodies to conduct the EIA Study (project proponents, hired consultants
for EIA Study, implementation cost for the EIA study, period of the EIA study)
e) Others (reference, detailed project description, comments from stakeholders etc.)
The project proponent will hold stakeholders meetings for explanation of outline of TOR
of EIA (KA-ANDAL). Outline of the stakeholder meetings are shown in the following
table.
500
Table 11.2.5 Outline of Stakeholders Meeting for KA-ANDAL
Items Outline
Objectives To disseminate project outline
To consult with stakeholders on draft TOR for EIA (KA-ANDAL)
including draft environmental scoping
Scheduled Timing After preparation of draft environmental scoping and draft TOR
for EIA Study
Agendas for the Meeting Presentation on the project outlines
Explanation and consultation on draft environmental scoping and
draft TOR for EIA Study
Explanation and consultation on conceivable environmental/social
impacts
Number and Location of
Venues
Three (3) locations at each NARC site
Participants - Project executing bodies
- Local government bodies
- Representatives of relevant local communities
Public Notification Invitation to individuals, public notification on newspaper etc.
Source: JICA Study Team
The project proponent will also hold the AMDAL Committee meeting about explanation
of outline of TOR of EIA (KA-ANDAL). The AMDAL Committee will be held two or
three times for approval of TOR of EIA.
3) Task-3: Field Survey, Sampling, and Laboratory Analysis
The following field survey shall be conducted to obtain latest and proper site
information.
a) Air Quality Measurement
(i) Survey location: 1 sites at srrounding area of each NARC site
(ii) Survey duration: Continuous survey during 5 days for 24 hours including weekday
and a weekend. 1 hour average data shall be estimated based on the measurement
(iii)Survey items: sulfur dioxide, nitrogen monoxide, nitrogen dioxide, ozone,
haydrocarbon, suspended particle (TSP, PM10, PM2.5), lead, fluoride, chroride
b) Noise and Vibration Level Measurement
(i) Survey location: 1 sites at srrounding area of each NARC site
(ii)Survey duration: 24 hours for one location in a weekday and a weekend. 10 minutes
continuous measurement per hour.
(iii)Survey items: Average noise level (Leq (dB)A) and vibration level (L10 (dB)) per
10 minutes.
501
c) Water Quality Measurement
(i)Survey location: 3 locations at the river/channel for each NARC site (planned
wastewater discharge point, and its upstream and downstream points)
(ii)Survey duration: 2 times (rainy and dry seasos)
(iii)Survey items: water temperature, dissolved solid, suspendid solid, pH, BOD, COD,
dissolved oxygen, phospate, nitarate nitorogen, ammonium nitorgen, arsenium,
cobalt, balium, boron, selen, cadmium, hexavalent chromium, copper, iron, lead,
manganese, mercury, zinc, chrolide, cyanide, fluoride, nitrate, sulfate, fecal
coliform, coliform oil and grease, MBAS, phenol
d) Soil Contamination Study
(i)Survey location: 3 points at each NARC project site
(ii)Survey duration: volatile organic compounds, cadmiumu, hexavalet chromium, lead,
mercury, pesticides, BHC, DDT
4) Task-4: Preparation draft Environmental Impact Assessment Report (ANDAL),
Environmental Management Report (RKL), and Environmental Monitoring Report
(RKL)
The project proponent will prepare Environmental Impact Assessment Report (ANDAL),
Environmental Management Report (RKL), and Environmental Monitoring Report
(RPL) in accordance with Decree of Minister of Environment No. 8/2006. The expected
contents of ANDAL, and RKL, and RPL are as follows:
a) ANDAL
(i) Introduction (background, objective, and effective of the project, and related laws
and regulations)
(ii) Project description (project proponent, outline of planned project)
(iii) Environmental Conditions
(iv) Scope of Study (items to be studied, significant of environmental and social impact,
study boundaries)
(v)Impact prediction (pre-construction phase, construction phase, and operation phase)
(vi)Impact evaluation (pre-construction phase, construction phase, and operation phase)
(vii) Implementation bodies to conduct the EIA Study (project proponents, hired
consultants for EIA study, implementation cost for the EIA study, period of the EIA
study)
502
(viii)Others (reference, detailed project description, comments from stakeholders, etc.)
b) RKL
(i) Introduction (Purpose of RKL, approach, Benefit of RKL)
(ii) Environmental Management Approach (technological approach, socio-economic
approach, institutional approach)
(iii) Environmental Management Plan (pre-construction phase, construction phase, and
operation phase)
c) RPL
(i) Introduction (purpose of RPL, approach, benefit of RPL)
(ii) Environmental Monitoring Plan (pre-construction phase, construction phase, and
operation phase)
Table 11.2.6 Outline of Stakeholders Meeting for draft ANDAL, RKL, and RPL
Items Outline Objectives - To disseminate project planning
- To consult with stakeholders on draft ANDAL RKL, and RPL Scheduled Timing After preparation of draft ANDAL RKL, and RPL Agendas for the Meeting - Presentation on progress of the project planning
- Presentation and consultation on the results of EIA study - Presentation and consultation on the Environmental Monitoring Plan - Presentation and consultation on the Environmental Management Plan
Number and Location of Venues
Three (3) locations at each NARC
Participants - Project executing bodies - Local government bodies - Representatives of relevant local communities
Public Notification Invitation to individuals, public notification on newspaper etc.
Source: JICA Study Team
The project proponent will hold the AMDAL Committee meeting about explanation of
outline of draft ANDAL, RKL, and RPL to get approval.
5) Work Schedule
The example of EIA study schedule is shown in Table 11.2.7. It should be noted that the
implementation schedule shown below will be changed depending on the required time
for approval of KA-ANDAL and ANDAL, RKL, and RPL.
503
Table 11.2.7 Example of Work Schedule of EIA
Tasks/Report Month
1st 2nd 3rd 4th 5th 6th 7th
Task-1: Collection of Secondary Data
Task-2: Preparation of TOR for
Environmental Impact Assessment
(KA-ANDAL)
Task-3: Field Survey, Sampling, and
Laboratory Analysis
Task-4: Preparation draft Environmental
Impact Assessment Report (ANDAL),
Environmental Management Report
(RKL), and Environmental Monitoring
Report (RKL)
Stakeholder Meetings ▲ ▲
Submission of KA-ANDAL ▲
Submission of draft ANDAL, RKL, RPL ▲
Source: JICA Study Team
(3) JICA Guidelines for Environmental and Social Considerations
The JICA Guidelines for Environmental and Social Considerations has been applied since
April 2010. The guideline is prepared to clarify the responsibility and procedure of
environmental and social consideration by JICA and the requirement for the target country. In
case that a project is supported by JICA, the principals of JICA Guidelines showing below
should be respected.
Projects must comply with the laws, ordinances, and standards related to
environmental and social considerations established by the governments that
have jurisdiction over project sites (including both national and local
governments).
Appropriate follow-up plans and systems, such as monitoring plans and
environmental management plans, must be prepared.
Projects must be adequately coordinated so that they are accepted in a
manner that is socially appropriate to the country and locality in which they
are planned.
Hereafter, to satisfy the above requirements, environmental management plan and
environmental monitoring plan should be developed, and the decision making process
should be monitored for development of NARC. The contents to be included in the
environmental management plan and environmental monitoring plan are shown in the
following tables.
504
505
Table 11.2.8 Contents to be Included in Environmental Management Plan
(Pre-construction phase and construction phase)
Item Contents Location Remark
Involuntary
resettlement
- Survey plan on income of affected
farming households by agricultural
activity
- Consultation plan on alternative measures
for livelihood restoration
- Examination on alternative measures for
income restoration
Construction
site and
relevant area
BPPT-NARC
only
Impact on
local
economy
- Construction work schedule for mitigating
traffic congestion
Construction
site and
relevant area
-
Public
health
- Construction workers’ public health
management plan for reducing risk on
infectious disease
Construction
site -
Soil erosion - Surplus soil disposal plan Construction
site -
Ecological
system
- Construction work facilities allocate plan
for avoiding cut of wood land by
temporary facilities
Construction
site -
Air
pollution
- Air pollution control plan with water
sprinkle for prevention of scattering of
dust
- Construction vehicle maintenance plan for
checking exhaust apparatus condition
Construction
site
-
Water
pollution
- Countermeasure on turbid water
discharged by construction work such as
construction of settling pond
Construction
site -
Solid waste - Measure on disposal of constriction waste
and municipal solid waste from lodging
house
- Hazardous waste disposal plan by
contracting with enterprises specialized in
hazardous waste management
Construction
site
-
Noise and
vibration
- Examination of countermeasures for
reducing noise level such as setting of
noise barrier
- Examination of construction working time
Construction
site -
Accident - Planning of safety measures and accident
prevention plan
Construction
site and
relevant area
-
Source: JICA Study Team
506
Table 11.2.9 Contents to be Included in Environmental Management Plan
(Operation phase)
Item Contents Location Remark
Public
health
- Hazardous waste management plan
following “Government regulation of the
Republic Indonesia No.74/2001 on
Hazardous and Toxic Substance
Management”
NARC site
-
Ecological
system
- Maintenance plan of greenery area in NARC
site
NARC site -
Air
pollution
- Obligation for tenants of NARC on
submission of air pollution control measures
- Air pollution control measure on combustion
test using bio fuel
NARC site
ITB-NARC
only
Water
pollution
- Obligation for tenants of NARC on
submission of water pollution control
measures
- Construction and operation guidelines for
tenants of NARC to construct wastewater
pre-treatment system considering
characteristics of wastewater discharged
from each tenant
- Construction and operation plan of
wastewater treatment system of NARC
NARC site
-
Solid
waste
- Obligation for tenants of NARC on
submission of solid waste management plan
- Hazardous waste management plan
following “Government regulation of the
Republic Indonesia No.74/2001 on
Hazardous and Toxic Substance
Management”
- Guidelines for sub-contracting with special
enterprises on hazardous solid waste
disposal
- Municipal solid waste disposal plan by
NARC
NARC site
and
relevant
area
-
Noise and
vibration
- Obligation for tenants of NARC on noise
and vibration control plan
NARC site -
Accident - Obligation for tenants of NARC on accident
prevention measures
- Obligation for tenants of NARC on
emergency response plan in accidental cases
- Chemicals management plan following
“Ministry of Manpower Decree
No. 187/MEN/1999 on chemicals control at
work place” and “Regulation of the Minister
of Trade No. 04/M-DAG/PER/2/2006 on
Distribution and Monitoring
of Hazardous Materials”
NARC site
-
Source: JICA Study Team
507
Table 11.2.10 Contents to be Included in Environmental Monitoring Plan
(Pre-construction phase and construction phase)
Item Contents Location Remark
Involuntary
resettlement
- Condition of livelihood restoration of
affected farming households
- Complaints from affected farming
households
Affected
households
BPPT-NARC
only
Impact on
local
economy
- Condition of traffic congestion Relevant
area -
Public
health
- Occurrences of infectious disease Construction
site -
Soil erosion - Condition of surplus soil disposal Construction
site -
Ecological
system
- Compliance status of construction work
facilities allocate plan for avoiding cut of
wood land by temporary facilities
Construction
site -
Air
pollution
- Air quality measurement (Measured
parameters will be same as ones in EIA
study.)
- Complaints from local residents
Construction
site -
Water
pollution
- Construction wastewater quality
measurement (Analyzed parameters are
suspended solid and turbidity.)
- Complaints from local residents
Construction
site -
Soil
pollution
- Surplus soil quality measurement
(Analyzed parameters will be same as
ones in EIA study.)
Solid waste - Condition of disposal of constriction
waste and municipal solid waste from
lodging house
- Complaints from local residents
Construction
site -
Noise and
vibration
- Noise and vibration measurement
(Measured parameters will be same as
ones in EIA study.)
- Complaints from local residents
Construction
site -
Accident - Condition of safety measures
- Occurrence of accidents
- Complaints from local residents
Construction
site and
relevant area
-
Source: JICA Study Team
508
Table 11.2.11 Contents to be Included in Environmental Management Plan
(Operation phase)
Item Contents Location Remark
Public
health
- Compliance status of hazardous waste
management plan following “Government
regulation of the Republic Indonesia
No.74/2001 on Hazardous and Toxic
Substance Management”
- Complaints from local residents
NARC site
-
Ecological
system
- Status of greenery area in NARC site NARC site -
Air
pollution
- Compliance status of air pollution control
measures submitted by tenants
- Air quality measurement (Measured
parameters will be same as ones in EIA
study.)
- Complaints from local residents
NARC site
ITB-NARC
only
Water
pollution
- Amount of discharged wastewater by NARC
and tenants
- Compliance status of water pollution control
measures submitted by tenants
- Operation condition of wastewater
pre-treatment system by tenants and
wastewater quality measurement (Analyzed
parameters will be set depending on activity
of each tenant.)
- Operation condition of wastewater treatment
system by NARC (Analyzed parameters will
be same as ones in EIA study.)
- Complaints from local residents
NARC site
-
Solid
waste
- Amount of generated waste by NARC and
tenants
- Compliance status of solid waste
management plan submitted by tenants
- Compliance status of hazardous waste
management plan following “Government
regulation of the Republic Indonesia
No.74/2001 on Hazardous and Toxic
Substance Management”
- Contents of sub-contract agreement and
TOR with special enterprises on hazardous
solid waste disposal
- Compliance status of municipal solid waste
disposal plan by NARC
- Complaints from local residents
NARC site
and
relevant
area
-
Noise and
vibration
- Compliance status of noise and vibration
control plan submitted by tenants
- Complaints from local residents
NARC site
-
Accident - Occurrence of accident
- Compliance status of chemicals
NARC site -
509
Item Contents Location Remark
management plan following “Ministry of
Manpower Decree No. 187/MEN/1999 on
chemicals control at work place” and
“Regulation of the Minister of Trade
No. 04/M-DAG/PER/2/2006 on
Distribution and Monitoring
of Hazardous Materials”
- Complaints from local residents
Source: JICA Study Team
510
Chapter 12. Implementation Procedure and Schedule
12.1 Implementation Procedure
12.1.1 PPP Scheme
(1) Overview
Implementation procedure of the PPP Scheme follows the Presidential Regulation No.67 of
2005 (PR67/2005 or PPP Regulation) as well as other related regulations. According to these
regulations, the process consist of 1) Planning; 2) Project Preparation; 3) Transaction; and 4)
Contract Management (See also Figure 12.1.1).
1) Phase 1: Planning
Identification of PPP project as well as project prioritization
2) Phase 2: Project Preparation
Preparation of “Outline Business Case” and project readiness assessment
3) Phase 3: Transaction
Completion of Pre-feasibility study (Final Business Case) and procurement (planning and
implementation of public tender)
4) Phase 4: Contract Management
Management plan of PPP agreement and management implementation
The process is characterized as a) a single, linear flow specifically prescribed for the private
sector participation in infrastructure development; and b) fiscal and institutional government
support made available such as VGF and government guarantee supports and PPP-related
institutional setup (Directorate of PPP Development of BAPPENAS, Risk Management Unit of
MOF, etc.)7
7 See Appendix 12 for detail.
511
Source: Official Translation of Regulation No.3/2012 of BAPPENAS
Figure 12.1.1 Phasing of PPP Process
(2) Planning and Preparation
The NARC project was initially identified and listed on MPA, which is understood prioritized in
the government’s sector development policies. Since it is an MPA project, the NARC project is
categorized as a solicited project.
The present Feasibility Study (JICA Preparatory Survey) is regarded as the “Pre-feasibility study
(Pre-F/S)” or “Final Business Case” in the PPP framework. The Study started in July 2013 and
will complete in March 2014. The most crucial requisite for the next phase is the amendment to
the PPP Regulation to include R&D facility development in the eligible sectors. Once the
amendment is duly legalized, BAPPENAS will evaluate the project readiness and the
completeness of required documents. Before proceeding to the procurement, the project is listed
on the PPP Book by BAPPENAS. The in-principle approval on the government support (VGF)
is granted after the appraisal of the Pre-F/S by RMU-MOF. Prior to the tender process, the GCA
512
must complete the following prerequisite:
- Pre-F/S
- In-principle approval of government support (VGF)
- Environmental Feasibility Certificate and Environmental Permit from regional government
- Designation of project location approved by the authority concerned
(3) Transaction: Procurement of Private Partner
Procurement process for PPP Scheme is summarized as follows. GCA (BPPT) is primarily
responsible to all activities and normally supported by hired transaction advisors.
1) Procurement Preparation
- Formation of Procurement Committee
- Preparation of Procurement Plan
- Prequalification Document
- Owner’s estimate
- Public Tender Documents
- Market sounding
2) Prequalification
Prequalification of the tender participants is held by the Procurement Committee to
shortlist at least three prequalified participants.
3) Public Tender
Pre-bid meeting (Aanwijzing) shall be held before the bidding to explain the subject
tender details. For PPP contracts, the bidding is conducted in two-envelope method. In the
bid evaluation, technical proposal is only evaluated on a pass-or-fail basis. After opening
the financial bid, the qualified bidder with the lowest VGF bid will be awarded the
contract.
(4) Implementation and Monitoring
After conclusion of the PPP contract, private financing is finalized by the private partner
(financial close). The project will be implemented by the SPC formed by the private partner.
Periodical and ad-hoc monitoring is conducted by GCA in accordance with the contract.
513
12.1.2 Hybrid Scheme
(1) Overview
Implementation of the Hybrid Scheme follows the State and Regional Asset Management
Regulation (GR06/2006) and the Government Procurement Regulation (PR54/2010) and other
related regulations. The Hybrid Scheme requires a two-fold procurement process, i.e. the
selection of the private BOT operator and the procurement of Support and Incubation Center
construction. Design, supervision and operation of the entire facilities will be under
responsibility of the selected private BOT operator, whereas only the funding and construction
works are separately undertaken by the public side for the Support and Incubation Center and by
the private partner for Research Center and equipment, respectively.
Sequence of the implementation process in the Hybrid Scheme is summarized as follows. See
also Appendix 12 for details.
1) Budgeting
GCA shall include the project in its work plan to access further budgeting process either
through APBN for the public construction.
2) BOT Contract Procurement
GCA will conduct tender to select and contract a private sector partner (X) which will
implement the one package contract of:
- Design, Construction Supervision, Operation for Incubation Centers on the three
locations and Support Center in the BPPT site
- “Build, Operate and Transfer” (BOT) of Research Center on three locations
3) Public Construction Procurement
After the design works completion, GCA will conduct tender to select a private sector
contractor (Y) for constructing Incubation Centers on the three locations and Support
Center.
4) Public Construction Supervision
The selected contractor (Y) will construct Incubation Centers and Support Center. The
construction supervision will be conducted by the private partner (X) and monitored by
GCA.
514
5) Operation and Management
The private partner (X) will operate and maintain the entire facilities, collect the lease fee
from tenants, and pay the private contribution to GCA.
(2) Planning and Preparation
After the completion of the present feasibility study, the public counterparts need to agree on the
project implementation plan based on the study results. Prerequisites for the procurement are
considered as follows:
- APBN budget appropriation
- Environmental clearance such as Environmental Feasibility Certificate
- Land use permits approved by the authority concerned
(3) Procurement
GCA and concerned parties will form the Procurement Committee and conduct two sets of
procurement. The Committee should be supported by hired transaction advisors in the BOT
contract procurement. The public construction procurement will be supported by the private
partner (BOT contractor).
1) BOT Contract Procurement
- Preparation of procurement plan and Tender Documents for Open Public Tender
- Prequalification
- Public Tender (Two-envelope method)
- Bid evaluation (Scoring System) and contract award
- Contract negotiation
- BOT contract agreement and financial close
Note that in accordance with the regulations, GCA should execute the bid evaluation
following the Scoring Method by which (i) technical proposals are first evaluated on a
pass-or-fail basis; and (ii) both technical and financial proposals of qualified bidders are
comprehensively evaluated based on the predetermined scoring system to determine the
winning bidder. Unlike other methods in which financial bid is the only factor to
determinate the tender result, this method allows the technical evaluation to be included in
the final decision. Taking into account the nature of NARC project in which the technical
competency is highly important for the implementation, this method must be followed to
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select the BOT contractor. The regulation requires the weight of financial bid evaluation to
be 70% to 90% of the total. In the financial bid, the annual contribution amount to be paid
from the private partner to GCA is used as the bid parameter.
2) Public Construction Procurement
After the BOT contract conclusion, the private partner will design the whole facilities
including the Support and Incubation Centers for which it also prepares the tender
documents for the public procurement. The Procurement Committee and GCA will
conduct the Open Public Tender for the construction works following the Procurement
Regulation.
(4) Implementation and Monitoring
Construction works are separately conducted by the EPC contractor for Support and Incubation
Center and by the private partner, but the private partner supervises the entire scope of
construction works. The private SPC formed by the Private will operate and maintain the whole
facilities and pay the private contribution to GCA. The public counterparts will monitor on a
periodical and ad-hoc basis.
12.1.3 Comparative Summary
The table below shows the comparative summary of the implementation process in PPP Scheme
and Hybrid Scheme. The critical path that the PPP Scheme depends on in its implementation
process is the amendment to the PPP Regulation, whereas that of the Hybrid Scheme is obtaining
access to the national budget appropriation for the public construction. Procurement of the
private partner will take similar flow for both schemes. However, the bid evaluation of Hybrid
Scheme applies Scoring System which takes into account the technical evaluation to determine
the winning bidder; thus it is more suitable to the nature of NARC project rather than VGF
amount is only bidding parameter in the PPP Scheme procurement.
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Table 12.1.1 Implementation Procedure of PPP Scheme and Hybrid Scheme
PPP Scheme Hybrid Scheme
1 Regulatory Basis PPP Regulation (PR67/2005), etc
(Amendment required)
State and Regional Asset Management
Regulation (GR06/2006)
Government Procurement Regulation
(PR54/2010), etc.
2 Budgetary
Appropriation
In-principle approval of VGF by MOF APBN budget for the public construction
(Incubation and Support Centers)
3 Procurement for Private Partner
Special support for
proponent bidder
None
(The project is considered solicited)
None
(Regulation does not provide such treatment)
Prequalification Yes Yes
Bidding Method Two-envelope Method Two-envelope Method
Bid Evaluation Evaluation for PPP contract tender
- Technical: Pass or Fail
- Winning bidder: Only financial
bid is evaluated
Scoring System
- Technical: Pass or Fail
- Winning bidder: Comprehensive
evaluation of technical and financial
proposals (financial: 70-90%)
Bidding Parameter Required VGF amount
(Lowest bid wins)
Annual private contribution amount
(Highest bid takes highest financial scoring)
4 Other
Procurement
None
(Private partner is responsible to
construction works)
Procurement for the public construction
- Supported by the private partner
- Tender documents, PQ and Public tender
5 Operation and
Management
With appropriate contract conditions, the both scheme can ensure the same operation and
management setup. (The Private is responsible to the whole operation and the Public does
monitoring.)
Source: JICA Study Team
12.2 Implementation Schedule
The figures below illustrates indicative implementation schedule of NARC project in PPP
Scheme and Hybrid Scheme. Assuming a favorable scenario in which the amendment to PPP
Regulation is legalized in June 2014, the operation of NARC will commence in the first quarter
of 2018. In the Hybrid Scheme, it should be noted that the procurement process takes place two
times for the BOT contract and the public construction separately, which take longer period than
in the PPP Scheme. In case that the ODA finance is requested for the hybrid scheme, it may take
additional one year and half at least for GCA to obtain the funding for the public construction.
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Source: JICA Study Team
Figure 12.2.1 Indicative Implementation Schedule (PPP Scheme)
NARC Project Indicative Implementation Schedule (PPP Scheme)
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
(1) Operation Commencement Private
(2) Operation and Monitoring Private, (BPPT, IPB, ITB)
12. Establishment of SPC and Financing Private
13. Design and Construction Work Private
14. Operation of NARC (2018 Q1 - 20~25 years)
(6) Bid Evaluation and Determination of Winning Bidder BPPT, IPB, ITB
(7) Contract Negotiation incl. Risk Mitigation Measures BPPT, IPB, ITB, Private
(8) PPP Contract Signing incl. other related agreements BPPT, IPB, ITB, Private
(3) Tender Documents, Draft Contracts, PQ Documents, Owner's
Estimate, etc.BPPT, IPB, ITB
(4) Prequalification BPPT, IPB, ITB
(5) Tender BPPT, IPB, ITB
11. Procurement of Private Partner
(1) Formation of Procurement Committee and Procurement Plan BPPT, IPB, ITB
(2) Selection of Transaction Advisory BPPT, IPB, ITB
10. APBN Budgeting Process
(1) Inclusion of NARC in RPJM and RENSTRA (mid-term plan) BAPPENAS, BPPT, IPB, ITB
(2) Budgeting Process for Procurement ProcessBAPPENAS, MOF (BPPT, IPB,
ITB)
(7) Agreement Signing PT. PII (BPPT, IPB, ITB)
8. EIA ProcedureBPPT, IPB, ITB and concerned
parties
9. Land Use Right ClearanceBPPT, IPB, ITB and concerned
parties
(4) Appraisal PT. PII (BPPT, IPB, ITB)
(5) Structuring PT. PII (BPPT, IPB, ITB)
(6) In-principle Approval PT. PII (BPPT, IPB, ITB)
(1) Consultation PT. PII (BPPT, IPB, ITB)
(2) Screening & Guarantee Application Package (GAP)
PreparationPT. PII (BPPT, IPB, ITB)
(3) Guarantee Application Package Submission PT. PII (BPPT, IPB, ITB)
(3) Final Approval MOF (BPPT, IPB, ITB)
(4) Viability Support Letter MOF (BPPT, IPB, ITB)
7. Guarantee Process
6. VGF Support Process
(1) In-principle Approval MOF (BPPT, IPB, ITB)
(2) Viability Support Amount Approval MOF (BPPT, IPB, ITB)
3. Pre-feasibility Study Review BAPPENAS
4. Public Consultation BPPT, IPB, ITB
5. Market Sounding BPPT, IPB, ITB, BAPPENAS
2. Amendment to the PPP Regulation (PR67/2005) KKPPI, CMEA, BAPPENAS
Item Responsible Agency2014 2016 2017 2018
1. JICA Preparatory Survey (Pre-feasibility Study) BPPT, IPB, ITB
2015
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Source: JICA Study Team
Figure 12.2.2 Indicative Implementation Schedule (Hybrid Scheme)
NARC Project Indicative Implementation Schedule (Hybrid Scheme)
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
(3) Bid Evaluation and Determination of Winning Bidder BPPT, IPB, ITB
9. Procurement of Package 2 Construction (Public
Construction)
2018
(3) Budgeting Process for Procurement of Public ConstructionBAPPENAS, MOF (BPPT, IPB,
ITB)
(1) Prequalification BPPT, IPB, ITB
BPPT, IPB, ITB, (EPC
Contractor)(4) Contract Negotiation
(2) Operation and Monitoring Private, (BPPT, IPB, ITB)
10. Construction Works
11. Operation of NARC (2018 Q4 - 20~25 years)
(1) Package 1 (Support and Incubation Center)
(5) EPC Contract SigningBPPT, IPB, ITB, (EPC
Contractor)
BPPT, IPB, ITB, (EPC
Contractor)
(1) Operation Commencement Private
(2) Package 2 (Research Center and Equipment) Private
Private (BPPT, IPB, ITB)
BPPT, IPB, ITB(2) Tender
(5) Tender BPPT, IPB, ITB
(6) Bid Evaluation and Determination of Winning Bidder BPPT, IPB, ITB
(7) Contract Negotiation incl. Risk Mitigation Measures BPPT, IPB, ITB, Private
(8) BOT Contract Signing incl. other related agreements BPPT, IPB, ITB, Private
7. Establishment of SPC and Financing Private
8. Design Works and Preparation of Tender Documents
(Public Constriction)
(2) Selection of Transaction Advisory BPPT, IPB, ITB
(3) Tender Documents, Draft Contracts, PQ Documents, Owner's
Estimate, etc.BPPT, IPB, ITB
(4) Prequalification BPPT, IPB, ITB
5. Land Use Right ClearanceBPPT, IPB, ITB and concerned
parties
6. Procurement of Private Partner (BOT Contract)
(1) Formation of Procurement Committee and Procurement Plan BPPT, IPB, ITB
(2) Budgeting Process for Procurement of Private PartnerBAPPENAS, MOF (BPPT, IPB,
ITB)
(4) Budgeting Process for Public ConstructionBAPPENAS, MOF (BPPT, IPB,
ITB)
4. EIA ProcedureBPPT, IPB, ITB and concerned
parties
(1) Inclusion of NARC in RPJM and RENSTRA (mid-term plan) BAPPENAS, BPPT, IPB, ITB
1. JICA Preparatory Survey (Pre-feasibility Study) BPPT, IPB, ITB
Item Responsible Agency2014 2015 2016 2017
2. APBN Budgeting Process
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Chapter 13. Ex-ante Evaluation of Project Effects
Regarding to the evaluation of the Project impact, the counterparts and the JICA Study Team are
planning to adopt the following Evaluation Indicators. The Ex-Post Evaluation could be
conducted at 4th year of the Project, which is after 2 years of the construction completion.
13.1 Quantitative Effects
The expected quantitative project outcomes are as shown in the following table:
Table 13.1.1 Project Effectiveness Indicators
Effect Indicators Target
PPP Scheme Hybrid Scheme
1. Occupancy rate of the Integrated Support Center, Incubation Center and Research Center
I.S. Center and Incubation Center
70%, 4th year
(80%, 8th year)
60%, 4th year
(80%, 8th year)
Research Center 40%, 4
th year
(100%, 8th year)
30%, 4th year
(90%, 8th year)
2. Increase in employment in Research Center
BPPT/ITB: 47.5 people/ha IPB: 156.3 people/ha
399 people, 4th year
(998 people, 8th year)
299 people, 4th year
(898 people, 8th year)
3. FIRR (Financial Internal Rate of Return), NPV (Net Present Value)
Cost: Project cost Revenue: Project revenue
FIRR: 14.4% NPV: Rp. 83,619
million
FIRR: 15.1% NPV: Rp. 85,628
million
4. EIRR (Economic Internal Rate of Return), ENPV (Net Present Value)
Cost: Economic project cost Benefit: Increase in surrounding manufacturing area
EIRR: 24.7% ENPV: Rp. 1,834
billion -
Source: JICA Study Team
The occupation rate of the Integrated Support Center, Incubation Center and Research Center
will show the direct impact of the Project. Under PPP scheme, the rate of Integrated Support
Center and Incubation Center is planned to be 70% of the rentable area in 4th year. The rate of
Research center is 40% in 4th year.
The direct beneficiaries of the Project are the employees in NARC facility. The people living
around Jakarta area is the indirect beneficiaries. According to the estimation by the JICA Study
Team, the employment of researchers would be approximately 998 people in the Research
Center including the researchers and administration staff, if the whole area is rented. 40% of the
above number, 399 people will be expected to work in the 4th year.
The financial and economic IRRs were calculated by cash flow analysis as described in the
previous Chapter 9.3.5 and 9.4.4. Those financial and economic numbers will be also monitored
in the evaluation. However, in terms of the economic analysis, the economic benefit from
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surrounding manufacture area is not easy to identify, and the benefit supposed to occur from the
7th year. Therefore, it might be difficult to survey it in the early stage of the project period.
The following indicators are the draft operation indicators of the Project, which should be
monitored every year to evaluate the service level provided by SPC. The target number of each
indicator is to be described in the Output Based contract made between SPC and counterparts.
Table 13.1.2 Project Operation Indicators (Draft)
Operation Indicators Target
Number of cooperative researches conducted between counterparts and tenants in NARC
To be fixed in the contract
Number of innovation technologies which has been consulted by the specialist of intellectual property in Integrated Support Center
Number of Business Matching Events by NARC
Usage frequency of Research Equipments
Source: JICA Study Team
13.2 Qualitative Effects
The following qualitative effects are expected to be generated by the project implementation.
The related information should be also collected during the project implementation phase to
perceive the project impact of the NARC project.
(1) Capacity development of researchers in the private companies and universities in Indonesia
The R&D activities conducted in the NARC enhance the human capacity of the researchers
employed in the private company and the universities.
(2) Improvement of research environment of bio sector and other related sectors in Indonesia
Influenced from the implementation of R&D activities, facility investment, and human
resource development in NARC, the research environment in Indonesia in the specific sector,
bio and others, will be improved.
(3) Improvement of livelihood and economic development in the surrounding area of the project
site
The living standard around the project area will be improved because of the increase in the
working opportunity in the NARC and associated industrial area, improvement of civil
infrastructure and social facilities.
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Appendix
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MEMORANDUM
Ref. No. : 041/LM/HJ/VIII/13
Date : 28 August 2013
To : Chiyoda Corporation, Mitsubishi Corporation, Battelle Japan, Nippon Koei,
and KRI International Corp.
Attn : Mr. Tomonori Yamada of Chiyoda Corporation
From : Hermawan Juniarto
Topic : Legal Analysis on the Applicability of PPP Regulations Towards the New
Academic Research Center (NARC) Project
This Memorandum is prepared to assist the study conducted by Chiyoda Cooperation,
Mitsubishi Corporation, Battelle Japan, Nippon Koei, and KRI International Corp. (the
"Study Team") with respect to preparatory survey for New Academic Research Cluster
(NARC) PPP Project (the "Project"). The Project is proposed to be located in 3 different
areas: (1) land located in Serpong which is known to be owned by Pusat Penelitian Ilmu
Pengetahuan dan Teknologi ("Puspitek"); (2) land located in Bogor which is known to be
owned by Institut Pertanian Bogor ("IPB"); and (3) land located in Bogor which is known to
be owned by Institut Pertanian Bogor ("IPB").
We have been retained by the Study Team to specifically address the following legal issues:
(1) the applicability of PR 67/2005 (defined below); and
(2) potential alternative schemes which could be considered in the event PR
67/2005 is not applicable.
Based on the information provided to us, we understand that the success of the Project will
require a substantial amount of support the government. Such support could either be in the
form of cash contribution, asset/ land contribution or a combination thereof. Accordingly, our
analysis is geared towards this view.
APPENDIX 3-1 Legal Review 1
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Set out in this Memorandum is our legal analysis relating to issues above which are dealt in
turn.
This Memorandum is given only to the party to whom it is addressed and in connection with
the transaction/matter described herein and may not be relied upon (unless specifically
specified) by any other party without our prior written consent. We assume no obligation to
advise you of any change in law subsequent to the delivery of this Memorandum which may
have any effect of the opinions rendered herein. A copy of this Memorandum may be
delivered for information only to (but not relied on by) any government institution which is
regularly engaged in the Project.
1. APPLICABILITY OF PR 67/2005
1.1. General Application of PR 67/2005
The Presidential Regulation ("PR") No. 67 of 2005 on Cooperation between Government
and Business Entities in Infrastructure Provision (which has been amended by PR No. 13 of
2010 and PR No. 56 of 2011) ("PR 67/2005") general covers the regulatory framework for
the implementation of a public private partnership in the infrastructure sector. PR 67/2005
provides that the state ministries, head of institution and head of region (commonly referred
as government contracting agency or "GCA") is grant certain business entities to conducts
"Infrastructure Provision" pursuant to a "Cooperation Agreement" or "Operating License".
"Infrastructure Provision" is defined as any activity which involves construction work to
develop or improve infrastructure capabilities, infrastructure management, and/or
infrastructure maintenance.
Based on PR 67/2005, all PPP projects must be subject to public tender. In order to facilitate
private sector participation in PPP projects the Government of Indonesia has established
several regulatory frameworks for provision of support, among others, in the form of land
acquisition, government guarantee and viability gap funding.
1.2. Implementing the Project from Sector Regulation Perspective
The development and operation of research cluster is stipulated under Law No. 18 of 2002
on Research, Development, and Application of Science and Technology ("Law 18/2002").
Article 14 of Law 18/2002 provides that the national government, regional government
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and/or business entities are allowed to develop an area, exhibition center and facility or
infrastructure, such as science and technology park. The Law 18/2002 does not provide
more clarity on how this provision could be implemented, and there are no detailed
guidelines for procuring, or granting licenses to, business entities to develop such areas.
1.3. Implementing the Project as a PPP Project Pursuant to PR 67/2005
Article 4 of PR 67/2005 provides that the type of infrastructure that may become a subject of
cooperation with business entity includes:
(a) transportation infrastructure, including airport services, port services, and
railway facilities and infrastructure;
(b) road infrastructure, including toll road and toll bridge;
(c) irrigation infrastructure, including raw water canal;
(d) drinking water supply infrastructure, including raw water intake, transmission
network, distribution network and water treatment plant;
(e) waste water infrastructure, including waste water treatment plant, collecting
network and main network, and the waste management facility comprising the
waste transportation and disposal site;
(f) telecommunication and informatics infrastructure, including telecommunication
network and e-government infrastructure;
(g) electricity infrastructure, including power generation (covering geothermal
power plant) transmission, or distribution facility;
(h) oil and gas infrastructure, including transmission and/or distribution of oil and
gas.
Based on the above, it is clear that development and operation of research cluster (including
NARC) is not listed in PR 67/2005. We note, however, that there is no indication that the list
of sectors currently established are exhaustive of eligible sectors for PPP projects.
We note that the Study Team is considering to implement the Project as a PPP project
pursuant to PR 67/2005 on the basis of potential receiving support from the government.
There are several considerations that must be carefully considered which we summarized
525
as follows:
(a) We do not identify any requirement in the sector regulations (including Law
18/2002) which requires for the Project to be tendered.
(b) The Project is not listed in the project list provided in PR 67/2005. Although
there is no indication that this list are conclusive, it is not clear whether or not
the Project could potentially receive any support facility from the government,
including land acquisition support, VGF and government guarantee. The
Ministry of Finance ("MOF") and PT Penjaminan Infrastruktur Indonesia
("IIGF") could potentially apply strict adherence to PR 67/2005. Clarification on
MOF and IIGF’s position in this regard is important to analyze further the
advantage of having this project as a PPP under PR 67/2005.
(c) In consideration that MOF and IIGF could potentially refuse to provide
guarantee and support, there may need to be an amendment to PR 67/2005 to
include the Project in the list of infrastructure which can become the subject of
cooperation with business entities.
(d) Note that, under PR 67/2005, any private entity may propose an unsolicited
PPP project. However such project must remain to be tendered and the project
initiator is entitled to receive certain compensation to be determined. Note that
unsolicited projects are not eligible to receive government support in the form of
fiscal contribution (e.g. VGF), although they may still be eligible for government
guarantee.
2. REVIEW OF POTENTIAL ALTERNATIVE SCHEMES
2.1. General
As alternatives to the implementation of the Project through PPP scheme under PR 67/2005,
there are several alternatives that could be considered as follows:
(a) Joint venture between the government and private entities.
The national government could potentially enter into a joint venture with private
entities in order to develop the Project. The participation of the national
government in the joint venture will be subject to the laws and regulations
526
governing State Owned Enterprises. The joint venture itself must be in the form
of a limited liability company, established pursuant to Law No. 40 of 2007 on
Limited Liability Company ("Law 40/2007").
The capital participation of the national government in the joint venture can be
made by making cash injection or in kind contribution (land or otherwise). In
return to such participation, the national government (through the Ministry of
State Owned Enterprises) will own certain shares in the project company.
In order to make the participation, the national government will need to obtain
approval from the parliament (Dewan Perwakilan Rakyat or "DPR") and a
promulgation of a government regulation (peraturan pemerintah).
(b) Optimization of State-Owned Assets.
The optimization of state owned assets is governed under the Law No. 1 of
2004 on State Treasury ("Law 1/2004") and Government Regulation ("GR") No.
6 of 2006 on State or Region Owned Assets (which has been amended by GR
No. 38 of 2008) (collectively "GR 6/2006").
Under GR 6/2006, a national government instrumentality, as asset user of state
owned assets, is allowed to conduct optimization of assets under its custody
upon approval from the Ministry of Finance. Assuming that any of the assets
which will be required for the Project are categorized as state-owned assets,
then the relevant organization (who holds the assets in its custody) can
potentially conduct an optimization assets by entering into cooperation with
private entities.
There are several forms of cooperation that could be selected; one of which is
optimization through build-operate-transfer ("BOT") or build-transfer-operate
("BTO"). Under this scheme, the public sector (asset owner) will provide a land
and private sector (developer) will build certain facilities, and the developer
must return the land and all built facilities to the asset owner. The duration of
BOT/BTO is limited up to 30 years. Under GR 6/2006, as a consideration of the
use of assets, the developer must make certain fixed contribution, which
amount is to be determined by a special team.
Based on GR 6/2006, the developer is to be selected through an open tender
with minimum 5 participants. There is no such concept of unsolicited project
527
under GR 6/2006.
A similar regime applies for assets owned by regional government. In the
context of region owned assets, the asset optimization must be approved by
the relevant head of region.
(c) Cooperation under the Special Economic Zone Framework.
Another alternative that could be considered is the implementation Project by
cooperation under the special economic zone ("SEZ") framework. SEZ is
regulated under Law No. 39 of 2009 on Special Economic Zone ("Law
39/2009") and GR No. 2 or 2011 on Implementation of Special Economic Zone
(as amended by GR No. 100 of 2012) (collectively "GR 2/2011").
Stipulation of SEZ
SEZ is defined the area with certain border in the jurisdiction of Republic of
Indonesia which is designated to implement certain economic function and
obtain certain facility. SEZ may comprise of one or more zones. Under the GR
2/2011, a SEZ may, among others, be designated for the purposes of
technology development (including activities for research and technology,
design and engineering, applied technology, development of software and
technology information related services) (Article 3 of Law 39/2009).
A location to be designated as a SEZ must satisfy the following criteria:
(1) compliant with spatial plan and do not potentially harm to protection
area (kawasan lindung)
(2) there is a support from the related provincial/regency/municipal
government to determine the project as SEZ;
(3) the location is closed to international trading hub or near to international
shipping lanes in Indonesia, or located in an area with prime resources
potentials; and
(4) have clear boundaries.
The initiative to establish SEZ may be proposed to National Council of SEZ by:
(1) business entity (private (PT), BUMN, BUMD, cooperative, or joint
venture established to manage SEZ);
528
(2) regency/municipal government; or
(3) provincial government (Article 5 of Law 39/2009).
The SEZ will be determined by President and stipulated by issuance of
government regulation (GR).
Cooperation to Develop and Operate SEZ
Development, including land acquisition and physical construction, of SEZ may
be financed by:
(1) business entity (private (PT), BUMN, BUMD, cooperative, or joint
venture establish to manage SEZ);
(2) cooperation of national government, regional government, and business
entity (public private partnership);
(3) state budget and/or regional budget; and/or
(4) other legitimate sources in accordance with laws and regulations.
As noted above, a business entity (private entity) is allowed to propose for an
establishment of SEZ, and in which case such private entity may be
immediately appointed as the SEZ developer without the need for public tender.
However, if the SEZ is proposed by private entity, then the land acquisition and
all financing of the SEZ will become the full responsibility of the appointed
business entity (SEZ developer). In the other words, if it is proposed by
business entity, then such SEZ cannot be implemented as a PPP project.
If the SEZ is to be financed through PPP or state/ regional budget, then the
selection of the SEZ operator must be done through applicable procurement
rules. GR 2/2011 provides a detailed mechanism for tendering of SEZ
developer in case of PPP project. If the SEZ is to be financed by the
state/regional budget, then the general public procurement rules apply.
Incentives and Facilities
There are several facilities in the SEZ that can be enjoyed by investor or
business entity which conduct business activities. Every taxpayer which
529
conducts business activities in the SEZ will get facility of income tax and also
can be added in accordance with zone characteristics (Article 30 of Law
39/2009). Tax facility also may give to the investor in certain period in the form
of reduction of building tax (Article 31 of Law 39/2009). Import of goods to SEZ
may get facilities in the form of:
(1) the suspension of import duties;
(2) the exemption of tax, to the extent such goods are raw materials and
production supporting materials;
(3) the exemption of value added tax or sales tax on luxury goods for
taxable goods; and
(4) no admission for import income tax.
In addition, every taxpayer which conducts business activities in SEZ may be
given incentives in the forms of exemption or reduction of regional tax and tax
retribution in accordance with laws and regulations in tax (Article 35 of Law
39/2009).
The business field which open with condition (negative list) does not apply in
the SEZ, except for the business field that reserves for small-medium
enterprise and cooperative (Article 39 of Law 39/2009).
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MEMORANDUM
Ref. No. : 045/LM/HJ/XI/13
Date : 27 September 2013
To : Chiyoda Corporation, Mitsubishi Corporation, Battelle Japan, Nippon Koei,
and KRI International Corp.
Attn. : Mr. Tomonori Yamada of Chiyoda Corporation
From : Hermawan Juniarto
Topic : NARC Project – Legal Capacity of ITB, IPB, and BPPT
This Memorandum is prepared to assist the study conducted by Chiyoda Cooperation,
Mitsubishi Corporation, Battelle Japan, Nippon Koei, and KRI International Corp. (the
"Study Team") with respect to preparatory survey for New Academic Research Cluster
(NARC) PPP Project (the "Project"). The Project is proposed to be executed by The Agency
for the Assessment and Application of Technology (Badan Pengkajian dan Penerapan
Teknologi ("BPPT"), Institut Pertanian Bogor ("IPB"), and Institut Teknologi Bandung
("ITB").
We have been retained by the Study Team to specifically address the following legal issues:
(1) Institutional Framework of BPPT, IPB, and ITB;
(2) BPPT, IPB, and ITB as the Government Contracting Agency (GCA) under current
Presidential Regulations No. 67 of 2005 on Cooperation Between Government and
Business Entities in Infrastructure Provision as amended by Presidential Regulation
No. 13 of 2010 and Presidential Regulation No. 56 of 2011 ("PR 67/2005"); and
(3) potential alternative contract structure which could be considered in the event PR
67/2005 would not be amended.
Based on the information provided to us, we understand that the success of the Project will
require the participation of national universities in the Project whether the national
universities will be act as government contracting agency in the PPP scheme or potential
alternatives contract structure to participate the national universities in the Project.
APPENDIX 3-2 Legal Review 2
531
Accordingly, our analysis is geared towards this view.
Set out in this Memorandum is our legal analysis relating to issues above which are dealt in
turn.
This Memorandum is given only to the party to whom it is addressed and in connection with
the transaction/matter described herein and may not be relied upon (unless specifically
specified) by any other party without our prior written consent. We assume no obligation to
advise you of any change in law subsequent to the delivery of this Memorandum which may
have any effect of the opinions rendered herein. A copy of this Memorandum may be
delivered for information only to (but not relied on by) any government institution which is
regularly engaged in the Project.
A. General
National universities are a university established and/or implemented by national
government. Based on Law 12 of 2012 on Higher Education ("Law 12/2012"),
national universities can take the form of Public Service Agencies (Badan Layanan
Umum or "BLU") or national university in the form of legal entity (Perguruan Tinggi
Nasional Berbadan Hukum or "PTBH").
Article 97 of Law 12/2012 stipulates that all universities which have been formed
as BLU shall be transformed into PTBH within two years after issuance of this law.
This law also mandates issuance of implementing regulations (in the form of
government regulations). As long as this government regulations has not been
issued, these universities must remain apply the BLU system.
The legal capacity of ITB and IPB to make investment will be dependent on the
legal status of ITB and IPB (whether it is a BLU or a PTBH). Set out below is the
description of each BLU and PTBH.
B. BLU
Article 1 point 1 of Government Regulation No. 23 of 2005 on Financial
Management of Public Service Agency ("GR 23/2005") defines BLU as agency
within national/regional government established to provide public service by
selling goods and/or service without prioritizing profit in conducting its activities
532
and shall be conducted based on efficiency principle and productivity. Article 68
paragraph (2) of Law 1 of 2004 on State Treasury provides that assets of BLU are
inseparable state/regional assets which manage and full utilize to implement
activities of related BLU.
The principles of BLU are:
1. BLU operates as work unit of ministry/agency/regional government for
public service purpose, which the management is based on authority
delegated by related holding agency (ministry/agency/regional
government);
2. BLU is the part of state ministry/agencies/regional government in achieving
its objectives, thus the legal status of BLU is not separated from its holding
agency;
3. Minister/head of agency/governor/regent/mayor/ is responsible for
implementation of policy for public service that delegated to BLU;
4. Assigned officer to manage BLU shall be responsible for implementation
activities of public service delegated to him/her from minister/head of
agency/governor/regent/mayor;
5. BLU implement its activities without prioritizing profit;
6. Work plan and budget including financial and performance report is
prepared and provided as inseparable part of work plan and budget of
ministry/agency/regional task force/regional government;
7. BLU manage public service implementation in accordance with health
business practice.
Investment
BLU is prohibited to conduct long-term investment, except obtain approval from
Minister of Finance ("MOF")/Governor/Regent/Mayor in accordance with its
authority prior to long-term investment. Based on elucidation of Article 19
paragraph (1) of GR 23/2005, the form of long-term investments are as follows:
1. Capital participation;
533
2. Owning bond for long term; or
3. Direct investment (establishment of company).
If BLU is established/purchased legal business entity, then the ownership of such
legal business entity is under MOF/Governor/Regent/Mayor in accordance with its
authority.
Management of Assets
Inventory goods (i.e. consumables goods, goods for processed or sell, and other
goods which not satisfy requirements as fixed assets) may be sold, exchanged, or
granted by BLU to other parties. The transfer of inventory goods by BLU shall be
reported to related minister/head of agency/head of regional work unit.
BLU is prohibited to transfer and/or remove fixed asset except obtain approval
from related authority officer (i.e. MOF for state assets or Governor/Regent/Mayor
for regional assets). Utilization of fixed assets for activities which not related
directly with main task and function of such BLU shall obtain approval from related
authority officer in accordance with laws and regulations regarding utilization of
state assets.
C. PTBH
PTBH is regulated under Law 12/2012. Based on Article 65 paragraph (3) of Law
12/2012, PTBH has governance and authority as follows:
1. Preliminary assets in the form of separated state assets except for land;
2. Governance and independent decision making;
3. Unit that implement accountability function and transparency;
4. Rights to manage fund independently, transparent, and accountable;
5. Independent authority to appoint and dismiss of lecturer/education manpower;
6. Authority to establish business entity and develop endowment fund;
7. Authorities to open, implement, and close of study program.
Article of association/statute of legal entity national universities is stipulated by
government regulation. In absence of this implementing regulation, it is difficult to
534
further analyze what legal capacity PTBH in terms of managing its assets.
As shown in paragraph (1) above, the law indicates that no land will be regarded as
owned by PTBH. It is not clear whether PTBH is allowed to contribute the land
which is not owned by it without prior approval from the MOF.
D. Legal Capacity of IPB and ITB
Status of IPB and ITB
After the issuance of Law 12/2012 on 10 August 2012, then on 28 August 2012 the
national government has issued Government Regulation N0. 74 of 2012 on
Amendment of Government Regulation No. 23 of 2005 on Financial Management
of Public Service Agency (BLU) ("GR 74/2012"). GR 74/2012 has stipulated that
financial management in ITB and IPB are implementing financial management of
BLU with status full BLU.
Article 37B of GR 74/2012 provides that all assets (including state assets that
stipulated as preliminary assets of IPB and Airlangga University) of ITB and IPB
are transferred to Ministry of Education and Culture ("MEC"), in which the transfer
of assets will be further regulated under MOF Regulation.
Based on GR 74/2012, currently, status of IPB and ITB are full BLU. In Article 65
paragraph (2) of Law 12/2012 provides that national university which implement
financial management of BLU have governance and authority of management in
accordance with laws and regulations on BLU.
As the BLU there are several matters shall be considered in respect with the
Project, as follows:
1. BLU is the part of state ministry/agencies/regional government in achieving
its objectives, thus the legal status of BLU is not separated from its holding
agency (ministry/government agency/regional government). Currently, IPB
and ITB are BLU under MEC;
535
2. Assets of BLU are inseparable from state/regional assets. As mentioned in
Article 37B of GR 74/2012, currently the status of assets of IPB and ITB is
under authority MEC;
3. As a BLU, ITB and IPB will need approval from MEC and MOF to:
a. conduct long-term investment;
b. utilize BLU’s fixed assets for activities which not related directly with
main task and function of such BLU.
Autonomy of IPB and ITB as universities
Under Law 12/2012, universities have their own autonomy to manage its agencies
by their self as implementation centre of Tridharma8. Autonomy of universities shall
conduct based on the following principles:
1. Accountability;
2. Transparency;
3. Nonprofit;
4. Quality assurance;
5. Effectiveness and efficiency.
Elucidation of Article 63 of Law 12/2012confirms the meaning of nonprofit principle
that universities conduct activity which have purpose not pursue profit, so then all
result of net income from such activity must be reinvested to universities to
improve capacity and/or quality of education service.
Autonomy of universities covers academic and non-academic sectors, such as:
1. Academic: establishment of norms and operational policy including
implementation of Tridharma;
2. Non-academic, covers as follows:
a. Organizations;
b. Financial;
c. Students;
d. Manpower; and
8Thridarma is responsibility of universities to implement education, research, and public service.
536
e. Facilities and infrastructure.
Implementation of autonomy in universities may be given selectively from MEC
based on performance evaluation of BLU or by establishment of PTBH to produce
high-quality higher education.
Law 12/2012 regulates several matters that may be cooperated by universities
with other party, as follows:
1. Universities may cooperate with MEC, other ministries, non-ministry
government agency, and/or profession organization to held profession
education (Article 17 and Article 24).
2. Universities may cooperate with MEC, other ministries, non-ministry
government agency, and/or profession organization to held specialist
education (Article 25).
3. Universities may cooperate with profession organization, training agency, or
accredited certification to issue competency certificate (Article 44).
4. Universities may cooperate with businesses, industries, and communities
for conduct research and dedication to the public (Article 48).
5. Universities may conduct international cooperation with foreign universities
in overseas and other foreign party in education, research, and dedication to
public (Article 50).
E. Legal Capacity of BPPT
Presidential Decree No. 103 of 2001 concerning Status, Duty, Function,
Organizational Structure and the System of Work of Non-Ministerial Government
Institution (which has been severally amended, the latest by Presidential
Regulation No. 3 of 2013) (“PD 103/2001”) stipulated that BPPT is included as
Non-Ministerial Government Agency (Lembaga Pemerintah Non-Kementerian or
“LPNK”).
BPPT is LPNK under coordination of Ministry of Research and Technology, which
has the task to carry out government duties in the field of assessment and
application of technology.
537
Article 58 of PD 103/2001 stipulates that BPPT has task to conduct government
task in assessment and application of technology in accordance with laws and
regulations. BPPT, in implementation its task, has function to:
1. assess and prepare national policy in assessment and application of
technology;
2. coordinate functional activities in implementation of BPPT’s task;
3. monitor, guide, and serve for government agency and private activities in
assessment and application of technology, in order of innovation, diffusion,
and capacity development, including development of technology transfer;
4. implement development and service of general administration in general
plan, administration, organization and procedures, employment, finance,
archives, regulation, code, equipment, and household.
Based on Article 60 of PD 103/2001, BPPT has authority, as follows:
1. Preparation of national plan at the macro level related to its sector;
2. Preparation of policy in its sector to support development at the macro level;
3. Stipulation of information system in its sector;
4. Other authority in accordance with laws and regulations, such as:
a. Preparation and implementation of certain policy in assessment and
application of technology;
b. Submit recommendation of application of technology and conduct
audit of technology.
F. Authority to Conduct R&D Infrastructure
The development and operation of research cluster is stipulated under Law No. 18
of 2002 on Research, Development, and Application of Science and Technology
("Law 18/2002").
Article 14 of Law 18/2002 provides that the national government, regional
government and/or business entities are allowed to develop an area, exhibition
center and facility or infrastructure, such as science and technology park. The Law
18/2002 does not specify who is in the national government organization which has
the duty to provide such research and development ("R&D") infrastructure.
Accordingly, any organization as long as it does not violate its main mandate, is
538
authorized to conduct R&D infrastructure.
Mandate of BPPT
The main mandate of BPPT is stipulated under PD 103/2001. Pursuant to mandate
of BPPT as described in section D, the statute of BPPT does not expressly specify
that BPPT is mandated to carry out R&D infrastructure.
However, we believe this mandate is implied, because BPPT is generally authorized
to carry out assessment and application of technology.
Mandate of ITB and IPB
The main mandate of ITB and IPB as university is stipulated under Law 12/2012.
The main mandate of ITB and IPB includes:
1. Development of capability and create character and civilization of nation In
order to educate dignified life of the people;
2. Development of civitas academica with innovative, responsive, creative,
qualified, competitive, and cooperative through implementation of
Tridharma; and
3. Development of science and technology with regard and implement of
humanities value.
Law 12/2012 does not provide specific mandate for ITB and IPB to conduct R&D
infrastructure.
Authority to Utilize Assets
BPPT, ITB, and IPB are authorized to utilize the assets of the states for
implementing their main mandate. If they want to utilize these state assets for
purposes other than what is stipulated in their mandate, then BPPT, ITB, and IPB
must obtain approval from MOF (as state asset manager).
Note that if the assets are owned by other party, then consent from the owner is
required.
G. Contract Structure with Amendment of PR 67/2005
The Study Team has proposed the intended contract structure as below:
539
Structure 1:
Structure 1 description:
a. BPPT and state university shall be contracting agencies. Procurement is to
be held jointly.
b. Merit: Rights and obligations of 4 parties (BPPT, ITB, IPB, Private) can be
prescribe in one PPP contract. The most simple among other alternatives.
c. Demerit: Need to amend PR 67/2005 to include state universities as
executing agencies.
Comment:
Joint procurement is not stipulated under PR 67/2005 (there is no concept of joint
GCA). Joint procurement exist in public procurement of goods and services (in
Presidential Regulation No. 54 of 2010 on Procurement of Government
Goods/Service as amended severally and the latest by Presidential Regulation No.
70 of 2012).
Structure 2:
540
Structure 2 description:
a. Only BPPT and private investor make PPP contract. The rights and
obligations between BPPT and state universities shall be prescribed in
cooperation agreement.
b. Merit: No need to amend PR 67/2005 to include state universities as
executing agencies and contractual framework is rather simple.
c. Demerit: State Universities cannot be a part of PPP contract; therefore, all
the public risks would be borne by BPPT initially. State universities shall not
have the right to enforce the obligation of private investor directly.
Comment:
This structure could potentially be implemented under the regime of PR 67/2005.
The lease/rent fees are to be by SPC to BPPT. In order for BPPT to pay to state
universities, the payment mechanism must follow the state budget mechanism.
State universities might not prefer this structure; due to State universities cannot
receive the revenue directly from SPC.
Structure 3:
541
Structure 3 description:
a. Only BPPT and Private investor make PPP contract. Land Sharing
Agreement shall be made among State Univ. and SPC.
b. Merit: No need to amend PR 67/2005 to include state universities as
executing agencies, land sharing and profit sharing can directory prescribed
in Land Sharing Agreement.
c. Demerit: State universities cannot be a part of PPP contract. The Land
Sharing Agreement can cover only the right and obligation relating
to land.
Comment:
We understand that this structure is a modification of structure 2. We do not
understand the intention of having partnership agreement. We have assumed that
the intent of partnership agreement is intended for (1) access to land owned by ITB
and IPB; and (2) SPC to pay profit sharing from the use of land. If so, we would
suggest the partnership agreement is replaced with land sharing agreement to be
entered individually between SPC - state universities.
Structure 4:
542
Structure 4 description:
a. Only BPPT and Private investor make PPP contract. BPPT and state
universities shall invest to SPC and make Shareholders Agreement.
b. Merit: No need to amend PR67/2005 to include state universities as
executing agencies.
c. Demerit: ITB and IPB cannot be a part of PPP contract. BPPT cannot invest
to SPC directly.
Comment:
As BLU, if state universities willing to make capital participation, then state
universities shall obtain approval from MOF (Article 19 of GR 23/2005). In addition,
as BLU, state universities will not be the shareholder of such capital participation,
in this matter the shareholder will hold by MOF (elucidation of Article 19 paragraph
(1) of GR 23/2005). As PTBH, Article 65 paragraph (3) of Law 12/2012 stipulates
that PTBH is allowed to establish business entity. However, current regulations
have not clearly described implementation to establish business entity by PTBH
(i.e. prior approval, assets, and etc.).
Based on PR 103/2001, BPPT is LPNK or national government agencies, which
has no authority to conduct investment. Authority to invest of national government
is granted to MOF based on Law 1/2004. Article 41 paragraph (3) of Law 1/2004
stipulates that capital participation of national government in state/regional/private
company shall be stipulated by government regulation. In addition, based on
543
Article 6 of Law 17/2003 stipulates that MOF is representative of national
government in ownership of separated state assets. Thus, capital participation of
BPPT to SPC (private) shall be conducted by MOF.
State universities are not authorized to make in kind contribution If the land to be
contributed is a state asset. Land due diligence must be conducted to verify
ownership status of the land to be contributed.
Structure 5:
Structure 5 description:
a. BPPT and MEC shall be contracting agencies. Procurement is to be held
jointly. The state universities shall invest to SPC and make Shareholders
Agreement
b. Merit: No need to amend PR67/2005 to include state universities as
executing agencies.
c. Demerit: No clear guidance on having joint GCA between BPPT and MEC.
Unless MEC has direct interest in the NARC project, involvement of MEC is
not clear (e.g. owning the land).
Comment:
Article 48 of paragraph (4) of Law 12/2012 stipulates that national government
facilitating cooperation and partnership among universities, and between
universities with industries and business sector in terms of research. However,
Law 12/2012 does not determine who will be the representative of government to
conduct such facilitation.
544
Article 7 paragraph (3) of Law 12/2012 stipulates that MEC may conduct other
tasks to ensure development and achievement of the purposes of universities.
One of purpose of universities is to produce science and technology through
conducting research (Article 5).
Thus, MEC is possible to be a contracting agency for provision of R&D
infrastructure in the universities. The role of MEC as contracting agency can be
considered as facilitation of national government in research sector.
In addition, based on structure above we have assumed that BPPT and MEC will
conduct joint procurement contract. The description regarding joint procurement
contract has been described in the Structure 1.
We hope the above would be of assistance. Please do not hesitate to contact us should you
wish to discuss any of the above.
Sincerely yours,
HERMAWAN JUNIARTO
545
COMPARISON BETWEEN THE TRANSITION STATUSES OF HIGHER EDUCATION
PTN – UPT (Unit
Pelaksanaan Teknis
[Technical
Implementation Unit]
PTN- BHMN (Badan
Hukum Milik Negara)
[State Owned Legal
Entity]
PTN-BHP (Badan
Hukum
Pendidikan)[Education
Legal Entity]
PTN-BLU (Badan
Layanan
Umum)[Public Service
Entity]
PTN-BH (Badan
Hukum) [Legal
Entity]
Legal Basis 1. Undang – Undang No.
2 Tahun 1989 Tentang
Sistem Pendidikan
Nasional (Law No. 2 of
1989 on National
Education System)
2. Peraturan Pemerintah
No. 60 tahun 1999
tentang Pendidikan
Tinggi (Government
Regulation No. 60 of
1999 on Higher
Education)
Peraturan Pemerintah
No. 61 Tahun 1999
Tentang Penetapan
Perguruan Tinggi
sebagai Badan Hukum
dan Penjelasannya
(Government Regulation
No. 61 of 1999 on
Determination of State
Higher Education as a
Legal Entity and its
explanation)
1. Undang – Undang
No. 20 Of 2003
Tentang Sistem
Pendidikan
Nasional (Law No.
20 of 2003 on
National Education
System)
2. Undang – Undang
No. 9 Tahun 2009
tentang Badan
Hukum Pendidikan
(Law No. 9 of 2009
on Education Legal
Entity)
1. Peraturan
Pemerintah Nomor
17 Tahun 2010
Tentang
Pengelolaan dan
Penyelenggaraan
Pendidikan/
Government
Regulation No. 17
of 2010 on
Management and
Operation of
Education
2. Peraturan
Pemerintah No. 66
tahun 2010
Tentang
Perubahan atas
Peraturan
Undang – Undang
No. 12 tahun 2012
tentang Pendidikan
Tinggi/ Law No 12 of
2012 on Higher
Education
APPENDIX 3-3
546
Pemerintah Nomor
17 Tahun 2010
Tentang
Pengelolaan dan
Penyelenggaraan
Pendidikan/
Government
Regulation No. 66
of 2010 On
Amendment to
Government
Regulation No. 17
of 2010 Concerning
the Management
and Operation of
Education
3. Peraturan
Pemerintah No
23 tahun 2005
tentang
Pengelolaan
Keuangan
Badan Layanan
Umum/
Government
547
Regulation No.
23 of 2005 on
Financial
Management of
Public Service
Entity
4. Peraturan
Pemerintah No. 74
Tahun 2012
Tentang
Perubahan Atas
Peraturan
Pemerintah No. 23
Tahun 2005
Tentang
Pengelolaan
Keuangan Badan
Layanan Umum/
Government
Regulation No. 74
of 2012 on The
Amendment of
Government
Regulation No. 23
of 2005 on
548
Financial
Management of
Public Service
Entity
Employees Civil Servants BHMN Employees
(GR No. 61 of 1999,
Article 24)
Civil Servants, Non
Civil Servants/ the
employee of
Education legal
Entity (Law No. 9
of 2009, Article 55,
Section 2)
BLU Employees:
Civil Servants,
Non Civil
Servants
(GR No. 66 of
2010, Article 170)
Civil Servants,
Non Civil
Servants (Law
No 12 of 2012
Article 69
Section 2)
Authority to
appoint and
dismiss own
Lecturer and
education
personnel (Law
No 12 of 2012
Article 65
Section 3)
Governance Responsible to
Minister of Education
and other related
Minister
Responsible to Board
of Trustee/ Majelis
Wali Amanah
(GR No. 61 of 1999,
Responsible to
Organ Badan
Hukum
Pendidikan/
Responsible to
Minister of
Education and
Ministry of
Responsible to
Minister of
Education and
other related
549
(GR No. 60 of 1999
Article 29, Section 2a
and 2b)
Under control of
Ministry of National
Education (Law No. 2
of 1989 Article 49, 50
& 53) (GR No. 60 of
1999 Article 29,
Section 2a and 2b)
Independently
technical operational
Article 8&9)
Independent legal
entity and entitled to
perform all legal
action as befits an
institution in
General (GR No. 61
of 1999, explanation
Article 2)
Education legal
Entity Organ. (Law
No. 9 of 2009,
Article 15, Section
2)
Serves to provide
educational
services to
students (Law No.
9 of 2009, Article
2)
Finance
(GR No. 23 of
2005, Article 3
and its
explanation on
General)
Remains as a
government
agency that is not
separated
(GR No. 23 of
2005, Article 1, 3)
ministry (Law
No 12 of 2012
Article7)
Initial assets
which are
separately from
state except
land. personnel
(Law No 12 of
2012 Article 65
Section 3)
Governance and
decision-making
independently
(Law No 12 of
2012 Article 65
Section 3)
Units that carry
out the functions
of accountability
and
transparency
(Law No 12 of
2012 Article 65
Section 3)
550
Autonomy Autonomy for academic
(Law No. 2 of 1989
Article 22) (Government
Regulation No. 60 of
1999 Article 17 – 20)
Autonomy for academic
and non-academic
(GR No. 61 of 1999,
explanation on General)
Autonomy for academic
and non-academic (Law
No. 9 of 2009, Article
4, Section 1&2)
Autonomy for
academic and
non-academic but
should be in BLU form
(GR No. 66 of 2010,
Article 58F, Section
2&3)
Autonomy for
academic and
non-academic (Law
No 12 of 2012, Article
64)
Fund
Management
Fund management,
budgetary and
financial report
should be in
integrated with
Ministerial Budget
(GR No. 60 of 1999
Article 29, Section 2b,
Article 116)
Revenue and
expenditure budget of
State University
should be proposed by
related Ministry to
get the approval from
Ministry of Finance
((GR No. 60 of 1999
Independently Fund
Management
separately from
government
(GR No. 61 of 1999,
Article 5 and
Explanation on
Article 2)
Basically the
operation is
non-profit but can
organize other
activities and
establish the
business unit, of
which the results are
used to support the
Principled as
non-profit and be
able to manage
funds
independently to
improve the
education unit
(Law No. 9 of
2009, Article 4,
section 1)
All the rest of the
results of
operations of
education legal
entity activities
must be re-invested
to education legal
Non-profit fund
management,
focus on service
(GR No. 23 of
2005, Article 1, 3
Section 5,7)
Financial
Management,
budgetary and
financial report
should be in line
with Ministerial
budget program.
(GR No. 23 of
2005, Article 3
section 6)
Entire income
Right to manage
funds
independently,
transparently,
and
accountability
(Law No 12 of
2012 Article 65
Section 3d)
Given authority
to establish a
business entity
and develop
endowment
funds, and
authority to
open, organize,
551
Article 116)
Autonomy in finance
for university held by
the government
includes the authority
to receive, store and
use the funds derived
directly from the
community (GR No.
60 of 1999 Article 115)
implementation of
the main functions of
the higher education
(GR No. 61 of 1999,
Explanation on
Article 2)
entity to improve
the capacity and /
or the quality of
education services
(Law No. 9 of
2009, Article 4,
section 1)
obtained from
non-GOI budget /
Regional Gov
budget should be
accountability
reported and
consolidated into
GOI/ Regional
Gov budget report
(GR No. 23 of
2005 explanation
on General)
and close the
Study Program
(Law No 12 of
2012 Article 65
Section 3f and
3g)
Funding
Resource
Funding can be
obtained from
government,
community, and
foreign parties. (GR
No. 60 of 1999 Article
114, Section 2)
Initial assets
derived from State
assets which are
separated from
APBN (Gov. Budget)
(GR No. 61 of 1999,
Article 5, Section 1)
Initial assets are the
entire state assets
embedded in Higher
Education
concerned, except
the land (GR No. 61
Initial asset are
separately from
founder (Law No. 9
of 2009, Article
37)
Formal education
fund become
responsible of
Government, Local
Government and
Community (Law
No. 9 of 2009,
Article 41 Section
BLU operational
revenue earned
from
- Budget received
from the APBN
(state budget) /
APBD (Regional
Budget)
- Services
rendered to the
public
- Untied grants
obtained from
Initial asset are
separately from
state except land
(Law No 12 of
2012 Article 65,
Section 3a)
Operational
revenue earned
from :
- Budget
received from
the APBN
(state budget) /
552
of 1999, Article 5,
Section 2)
State assets in the
form of land used
entirely for the
benefit of the
concerned Higher
Education (GR No.
61 of 1999, Article 5,
Section 4)
The results of the
use of land asset
become revenue of
Higher Education
and used for the
implementation of
duties and functions
of Higher Education
(GR No. 61 of 1999,
Article 5, Section 5)
2)
Operational cost:
minimum 1/2
borne by
government, borne
by students max
1/3 (Law No. 9 of
2009, Article 41
Section 6 & 8)
Can generate fund
from society (Law
No. 9 of 2009,
Article 45)
Can do investment
in the form of
portfolio (Law No.
9 of 2009, Article
42)
Can do investment
by establishing
legal business
entity (Law No. 9
of 2009, Article
43)
the public or
other agencies
- Joint
cooperation
with other
parties or
revenue from
other business
(GR No. 23 of
2005, Article 14)
APBD
(Regional
Budget) (Law
No 12 of 2012
Article 83)
- Funding from
community in
the form of
grant,
individual or
company
donation or
others. (Law
No 12 of 2012
Article 83)
- Education/
Tuition fee
from student
(Law No 12 of
2012 Article
85)
553
This translation is only shown the part of the agreement. Also this translation is not
legally reviewed.
COOPERATION AGREEMENT
NO: 423.1/09.05-DTR/2007
031/K01/DN/2007
BETWEEN
GOVERNMENT OF BEKASI DISTRICT
WITH
BANDUNG INSTITUTE OF TECHNOLOGY
ABOUT
ITB CAMPUS DEVELOPMENT, AND EDUCATION DEVELOPMENT ACTIVITIES,
TRAINING, RESEARCH AND COMMUNITY SOCIAL RESPONSIBILITY IN
BEKASI DISTRICT
On Tuesday the third day of July, 2007 the undersigned:
I. Drs. H. SA’DUDDIN, MM : Bekasi Regent Position, addressed at the Central
Office in Bekasi Sukamahi Village, Cikarang Sub
District in his duties in the office, therefore
legitimate to represent and act for and on behalf
of the Government of Bekasi District, hereinafter
called as FIRST PARTY.
II. Prof.Dr.Ir.Djoko Santso, MS.c : Rector of ITB Position, addressed at Jl.
Tamansari No.64, Bandung, therefore legitimate
to represent and act for and on behalf of the
Bandung Institute of Technology, hereinafter
called as SCOND PARTY.
APPENDIX 3-4 Cooperation Agreement between Bekasi Regency and ITB
554
Chapter I
PURPOSE & GOAL
Article 1
(2) Bringing ITB closer to the center of the industry growth in order to participate in the
science and technology development through activities Tri Dharma Perguruan Tinggi.
Chapter II
SCOPE OF AGREEMENT
Article 2
(1) Developing academic activities of ITB in Bekasi District in the form of the expansion
of educational activities that included Master Degree (S2) and Doctoral Degree (S3),
research that supports development activities in Bekasi District such as industrial
activities, training and similar activities also community service responsibility.
(2) Developing Diploma 3 (D3) and Undergraduate (S1) through higher education
affiliated with SECOND PARTY and/or FIRST PARTY.
(3) Implementing the coaching of High School and Vocational School in Bekasi District
to be excellent schools recommended by FIRST PARTY.
Chapter III
ITB CAMPUS DEVELOPMENT
Article 3
(1) ITB campus development in Bekasi District included infrastructure and facilities on
Social Facility land, use right of Bekasi District Government on the 40 Ha which is
located in Deltamas Cikarang, Pasir Tanjung & Pasir Ranji villages, Cikarang Pusat sub
district as stated in the attached map which is an inseparable part of this agreement.
(2) ITB campus development on that land included, as follow :
a. Administration and Information building.
b. Lecture building.
c. Library.
d. Laboratory.
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e. Mosque/religion building.
f. Security Post.
g. Parking area.
h. Convention Hall.
i. Sport Hall.
j. Lecturer Housing complex.
k. Polyclinic.
l. Student Centre.
m. Other building is necessary as the master plan which will be decided later.
Article 4
ALL PARTIES responsible for the implementation of the ITB campus development
included infrastructure and facilities as stated in the Article 3.
Chapter V
FORMATION OF FOUNDATION
Article 6
(1) ALL PARTIES agreed to form a foundation to manage higher education activities.
(2) Founder of the foundation consist of :
a. Government of Bekasi District.
b. ITB
Chapter VI
COOPERATION WITH THIRD PARTIES
Article 7
(1) Team collaboration on behalf of ALL PARTIES may make cooperation with third
parties in order to carry out the task well and on matters relating to the Agreement.
(2) Cooperation with third parties as stated on the paragraph (1) if it concerns the use of
the name, the emblem of each party, for commercial purposes must obtain prior written
approval from THE PARTIES.
(3) Operational cost of the Cooperation Team from THIRD PARTY maximum 2% of the
556
acquisition funds from the Third Party.
Chapter VII
DEVELOPMENT FINANCING
Article 7
(1) To realize the development, the financing from various legitimate sources and is not
binding.
(2) Donations can be in physic, building and equipment either in cash money.
(3) Results of fundraising by Cooperation Team paid over to a designated bank on behalf
of Cooperation Team which the usage will be decided based on THE PARTIES approval.
Chapter VIII
DURATION OF DEVELOPMENT AND DEVELOPMENT
Article 8
Implementing of ITB campus development included infrastructure and facilities as well
provision of necessary laboratory equipment, will be conducted gradually started on 2007
to 2017.
Chapter IX
OBLIGATION OF THE PARTIES
Article 11
(1) OBLIGATION OF FIRST PARTY :
a. Issuing all necessary permits, included:
1. Master plan.
2. Land Use Advisory Letter.
3. Location Permit.
4. Allotment of Land Use Permit (IPPT).
5. Advice Planning.
6. Block Plan & Site Plan.
7. Flood benchmark.
8. Traffic Impact Analysis.
9. EIA.
10. Building Permit (IMB).
557
b. Recommending High schools / Vocational School level to be excellent schools which
will be coached by SECOND PARTY.
c. Recommending high school/vocational school teachers who will be coached by
SECOND PARTY.
d. Providing the necessary financing for the development of schools and teachers are
superior seed.
e. Providing scholarships for students who cannot afford a minimum of 10% of the
number of students accepted
(2) OBLIGATION OF SECOND PARTY :
a. Establish and maintain of excellent schools.
b. Establish and train the teachers.
c. Held a post-graduate program that supports the activities and industrial development in
Bekasi District.
d. Developing Diploma 3 (D3) and Undergraduate (S1) through higher education
affiliated with SECOND PARTY and/or FIRST PARTY.
e. Providing an opportunity for Undergraduate students at least 10% for the exam as a
transfer student and completed his studies at ITB.
f. Providing an opportunity for the 10% best of Diploma graduate for the exam as a
transfer student and completed his studies at ITB.
g. Implementing selection admissions for undergraduate student through Nusantara
partnership programs which is recommended by Government of Bekasi district.
h. Carrying out research and community service activities that support the development
of industry and government Bekasi accordance with ITB program.
i. Assisting the FIRST PARTY to seek a budget with a THIRD PARTY to operation
activity and not burden the budget for ITB campus in Bandung.
j. The implementation of the Master Plan and DED with financing by the FIRST PARTY.
Chapter X
OWNERSHIP AND ASSET MANAGEMENT
Article 12
558
Asset ownership decides as follow :
a. For land and buildings became the FIRST PARTY assets.
b. For equipment became the SECOND PARTY assets.
Article 13
FIRST PARTY handed over the management of land and buildings to the SECOND
PARTY for the utilization of land and buildings for the purposes of educational
development activities, training, research and community service in Bekasi, and the
management cannot be terminated unilaterally.
Chapter XII
SETTLEMENT ISSUES
Article 15
(1) Any disagreements that occur in the implementation of the Cooperation Agreement will be
resolved by both parties by deliberation and consensus and the two sides strive to always maintain
good relations of mutual benefit.
(2) If the disagreement is not reached then the parties agree to settle with having their domicile
remains in Bekasi District Court Clerk.
Chapter XIV
VALIDITY
Article 17
The Cooperation Agreement valid since it was signed by THE PARTIES.
559
SECOND PARTY FIRST PARTY
ITB BEKASI REGENT
Prof.Dr.Ir.Djoko Santoso,MS.c Drs.H.Sa’duddin,MM
WITNESS OF SECOND PARTY WITNESS OF FIRST PARTY
VICE RECTOR HEAD OF LEGAL
ORGANIZATION & PLANNING DIVISION SECRETARY OF BEKASI
IR. LEKSANANTO G, M.Ing H. AZIS DIAN MUSTAFA
560
Appendix 8. Counterpart Organizations
1. BPPT
(1) Overview
Badan Pengkajian dan Penerapan Teknologi (BPPT: The Agency for the Assessment and
Application of Technology) is a non-ministerial government agency that reports directly to the
President. The origin of BPPT dates back in 1974, when Government established the Technology
and Aviation Division of Pertamina, the state-owned oil and gas company. In 1976, the division
was renamed to be Advance Technology Division of Pertamina. This Advance Technology
Division is embryo of BPPT establishment. BPPT was established in 1978 through Presidential
Decree No.25/1978. Until 2006, BPPT was chaired by Minister of Research and Technology
(RISTEK) but since enactment of Presidential Decree No.42/2006, BPPT has been chaired by its
own independent chairman. According to Presidential Decree No.103/2001 the main mandate of
BPPT is carrying out government duty on assessment and application of technology in
accordance with provisions of applicable law and regulation. Its vision, mission, function and
history are summarized in the table below.
Table A.8.1 BPPT’s Vision, Mission, Function and Brief History
Vision - Technology Leading Center that prioritizes partnership maximizing utilization of
technology and engineering output.
Mission - Encourage technology and engineering to increase industrial competitiveness;
- Encourage technology and engineering to increase government institution and public
services;
- Encourage technology and engineering for national independence
Functions - Assessment and formulation of national policy in the field of technology assessment
and application;
- Coordination of functional activities on BPPT’s task execution;
- Monitoring, coaching, and services on public and private entities’ activities in the field
of technology assessment and application in the context of innovation, dissemination,
and capacity development as well as fostering transfer of technology;
- Implementation of coaching and general administration services in the field of general
planning, administration, organization and governance, officialdom, finance, archival,
law, coding, equipment and household
Brief History
January 1974
PD76/M/1974
Establishment of Pertamina Technology and Aviation
Technology Division (ATTP)
April 1, 1976 ATTP was renamed to be Pertamina Advance
Technology Division (ATP)
August 1978
PD25/1978
Amended by PD31/1982
Amended by PD47 1991
Establishment of Agency for the Assessment and
Application of Technology (BPPT).
BPPT was chaired by Minister of Research and
Technology
April 2006
PD42/2006
BPPT became chaired by the minister-level independent
chairman
Note: PD = Presidential Decree.
Source: BPPT website, July 2013 and BPPT Catalog, 2012.
561
(2) Activities
The table below illustrates major roles of BPPT as institution.
Table A.8.2 BPPT’s Roles
Role
Technology
Intermediation
Provide access for industries, central/local/community institutions to utilize science
and technology resources
from BPPT or other science and technology institutions within and outside the
country.
Technology
Clearing
House
Conduct systematic multidimensional study on the technology to create understanding
about readiness of the technology, technology value as an intellectual asset as well as
risk, impact, and/or implication to the organization and public policies.
Technology
Assessment
and Audit
Evaluation, comparison, inspection on the technology or existing technology that
applied by industry/institution/community based on standard or certain
requirement/criteria.
Technology
Solution Provide solution advices on technology problems.
Source: BPPT website, July 2013 and BPPT Catalog, 2012.
To implement its roles, BPPT provides several services, including recommendation, advocacy,
technology transfer, examination, consultation, operational services, survey, pilot project, pilot
plant and prototype. Some examples of BPPT’s activities are described as follows:
BPPT has provided professional services in technology related assessment,
recommendation and consultation on National Electronic ID Card (e-KTP) pilot program.
BPPT had produced a model/prototype of mortar calculator (ballistic calculator) system.
Through funding support from the National Research Incentive (INSINAS), Ministry of
Research and Technology, BPPT has done the analysis of water flow around the submarine
body using computational fluid dynamics (CFD) and has run a series of mini submarine
hydrodynamics tests.
BPPT has developed a biology-based technology to remove oil pollution by combining the
bioremediation and phytoremediation processes.
BPPT also collaborates with private and public entities in execution of their program. According
to BPPT officials, it has a long-term target that “by 2025, 100% of technology developed by
BTTP will be utilized by industry, whose funding to BPPT activities will account for more than
50% of its total funding requirement thereby reducing its dependence on national budget.”
Following are some examples of BPPT’s partnership with the private sector:
562
Development of new type of potential food (cassava flakes and modified sorghum flour).
BPPT has conducted this technology development in collaboration with PT. Sinar Fajar
Timur Lampung, an Indonesian company which has a core business of starch-based
industrial products. The company has contributed in providing production cost and
marketing of products.
BPPT has developed Geothermal Power Plant (GPP) technology. This activity focuses on
the development of a small-scale GPP with a capacity up to 5 MW of Condensing Turbine
and Binary Cycle technology through cooperation with domestic manufacturers, such as PT.
Nusantara Turbin dan Propulsi (turbines), PT. Pindad (generators), PT. Boma Bisma Indra
(condensers, demisters, and ejectors), etc. A pilot plant with condensing turbine based GPP
of 3MW has been already constructed and installed in the Kamojang Geothermal Field,
West Java, under cooperation with PT. Pertamina Geothermal Energy (steam supplier),
Balai Besar Konservasi Sumber Daya Alam (Centre of Natural Resources Conservation) of
West Java (land owner), and PT. PLN (electricity distribution).
BPPT had implemented the business incubation which is aimed to create strong,
independent and competitive, new technology-based entrepreneurship. Until 2012, BPPT
has incubated four new technology-based entrepreneurs: PT. Mikata Sukses Mandiri
(technofert biofertilizer production), CV. Nusaroma (high quality essential oil production),
CV. Nanotech (production of nano particles of zinc oxide) and PT. Surya Utama Teknik
(production of batik wax dissolver, in collaboration with the Technology Incubator of
Pekalongan).
(3) Organization
BPPT is a non-ministerial institution that directly reports to the President. In accordance with the
Presidential Regulation No.64/2005, every non-ministerial institution is coordinated by a minister
in carrying out their duties. From the Cabinet, Ministry of Research and Technology (RISTEK) is
the assigned ministry to coordinate BPPT with other six scientific research and technology
development agencies such as LIPI (Indonesian Institute of Sciences), LAPAN (National Institute
of Aeronautics and Space), BATAN (National Nuclear Energy Agency), BAPETEN (Nuclear
Energy Regulatory Agency), BAKOSURTANAL (National Coordinating Agency for Surveys
and Mapping), and BSN (National Standardization Agency). Coordination between RISTEK and
these agencies includes the coordination on policy formulation related to other government
institutions as well as solution to the problems that arise on the policy implementation.
BPPT have five deputies and each deputy consist of several directorates and technology services
centers. Deputy for Agro-industrial Technology and Biotechnology is in charge of the NARC
project development. The figure below illustrates BPPT’s current organizational structure.
563
As of the end of December 2012, BPPT’s human resource accounts for 2,885 civil employees,
consisting of 1,691 on functional position (232 researchers, 1,153 engineers, and others) and the
remaining on non-functional position, such as administrative staff, etc.
564
Source: BPPT Website, July 2013
Figure A.8.1 BPPT’s Organizational Structure
Chairman of BPPT
Inspectorate
BPPT Engineering
Deputy for Technology Policy
Assessment
Directorate for Assessment of
Technology Innovation Policy
Directorate for Assessment of
Technology Diffusion Policy
Directorate for Assessment of
Competitiveness Improvement
Policy
Directorate of Technology Audit
Center for Technology Incubator
Deputy for Natural
Resources Development
Technology
Directorate of Natural
Resources Inventory
Technology
Directorate of Mineral
Resources Technology
Directorate of Land, Region and
Disaster Mitigation Technology
Directorate of Environmental
Technology
Center for Technology of
Maritime Survey
Center for Environmental
Technology
Center for Technology of
Weather Modification
Deputy for Agro-industrial
Technology & Biotechnology
Directorate of Agricultural Production Technology
Directorate of Agro-industrial
Technology
Directorate of Bio-industrial
Technology
Directorate of Pharmaceutical
and Medical Technology
Center for Biotechnology
Assessment
Center for Starch Technology
Deputy for Information,
Energy & Material
Technology
Directorate of Information and Communication
Technology
Directorate of Energy Resources
Development Technology
Directorate of Energy
Conversion and Conservation Technology
Directorate of Material
Technology
Center for Engineering Design and Technology
System
Center for Science and Technology Information
Center for Polymer
Technology Assessment
Center for Energy Technology
Center for Development of
Arts and Technology for Ceramics and
Porcelain
Deputy for Industrial
Technology Design and Engineering
Directorate of Technology for
Processing Industry
Directorate of Technology for Manufacturing
Industry
Directorate of Technology for
Security and Defense Industry
Directorate of Technology for Transportation
Industry and Transportation
System
Center for Thermodynamics,
Motor, and Propulsion
Center for Coastal Dynamics
Assessment
Center for Machining, Production
Technique, and Automation
Center for Assessment and
Research for Hydrodynamics
Center for Structural Strength
Technology
Center for Aero-Gas Dynamics and Vibration
Principal Secretariat
Bureau of Planning
Bureau of Human Resource and Organization
Bureau of Finance
Bureau of General Affairs
and Public Relations
Center for Development, Education and
Training
Center for Data, Information and Standardization
President
Ministry of Research & Technology
565
(4) BPPT Engineering
BPPT Engineering is one of working units in BPPT that has duties to apply the results of BPPT’s
technology research and assessment to business and public communities through its technology
services, project management and cooperation agreement along with general administration of
technology services. BPPT Engineering was established on April 21, 2006 through Regulation of
Chairman of BPPT No.170/KP/BPPT/IV/2006. Based on Decree of MOF No.158/KMK05/2007
dated March 20, 2007, BPPT was determined as government institution that applied the Financial
Management System of Public Service Agency (BLU). BPPT Engineering also takes
responsibilities to implement BPPT’s role on intermediary, technology clearing house,
technology assessment, technology audit, and providing technology solutions on a contract basis
through its services consisting of recommendation, advocacy, technology transfer, examination,
consultation, operational services, survey, pilot project, pilot plant and prototype production. All
the BPPT Engineering’s activities are aimed to provide technology services to support public
welfare improvement.
The table below shows BPPT Engineering’s technology services based on contract and type of
services in 2012.
Table A.8.3 Technology Services of BPPT Engineering (2012)
Technology Services by Contract Amount (million Rp.)
Government State-owned
Enterprises
Private Others Total
5,463 3,009 3,552 9,519 21,543
Technology Services by Service Type
Recommendation Pilot Project Prototype Survey Examination Total
22 2 4 2 1 31
Source: BPPT Annual Report 2012
566
2. IPB
(1) Overview
Institut Pertanian Bogor (IPB: Bogor Agricultural University) is a state university located in
Bogor, West Java. IPB’s development began with the institutions of secondary and higher
education in agriculture and veterinary medicine in Bogor in the early 20th century. IPB was
established in 1963 through Decree of the Minister of Higher Education and Science No.92/1963.
In 2000, the status of IPB was changed to be a state-owned legal enterprise and this status made
IPB have its autonomy. This autonomy status implies a freedom for IPB to manage its own
business. This status only applied for less than 2 years and through Presidential Regulation
No.43/2012 IPB’s status was changed again to be a higher education under the government’s
management. Therefore, the budget for IPB management is currently funded from APBN and
other sources in accordance with applicable law and regulation.
Table A.8.4 IPB’s Vision, Mission, Objectives and Brief History
Vision - To become a leading research-based university in the world with the major competence in tropical agriculture, bioscience, and entrepreneurship.
Mission - Conducting high quality higher education and comprehensive supervision of students for the purpose of promoting the nation’s competitiveness.
- Developing science and technology based on the current needs of the communities and the future trends.
- Building a system of higher education management having the characteristics of entrepreneurship, effectiveness, efficiency, transparency and accountability.
- Promoting the formation of civil society on the basis of truth and human rights.
Functions - To produce qualified graduates capable of developing and applying science and technology.
- To develop scientific and technological innovation for the improvement of national development and the welfare of mankind.
- To establish IPB as power for moral force of the entire Indonesian civil society. - To respond to the dynamic changes which occur in society over time and changed
community needs.
Brief History
1940 The Dutch Government founded the Institution of Agricultural Higher Education in Bogor with the name Landbouw Hogeschool
October 31, 1941 Landbouw Hogeschool was renamed to be Landbowkundige Faculteit.
September 1, 1963 Decree of the Minister of Higher Education and Science (PTIP) No.92 Year 1963 ratified by PD No.279 Year 1965
Establishment of IPB.
December 26, 2000 Government Regulation No.154 Year 2000
Decision of IPB as State-Owned Legal Enterprise.
April 12, 2012 PD No.43 Year 2012
Decision of IPB as university under Government management.
Source: IPB website, July 2013.
IPB has five campuses in several locations. The main candidate sites for the NARC project are
567
located in Darmaga Campus.
1) Darmaga Campus of IPB (267 ha) as the Rectorate office and the learning center for
S1, S2 and S3 programs. There are also social and public facilities.
2) Baranangsiang Campus of IPB Bogor (11.5 ha) as the center for research activities
and community empowerment as well as postgraduate education for the executives
or professionals. In this campus IPB has built the IPB International Convention
Center.
3) Gunung Gede Campus of IPB, Bogor (14.5 ha) as the center for business and
management education that will be equipped with a techno-park.
4) Cilibende Campus of IPB Bogor (3.2 ha) as the center for vocational education
(three-year diploma program).
Taman Kencana Campus of IPB Bogor (3.4 ha) is planned for the establishment of
an international hospital.
5) IPB has 385 physical laboratories and 12 Experiment Stations / Land in Darmaga
(33 ha), Sukamantri (39.13 ha), Sindangbarang (937 ha), Pasir Kuda (1.86 ha),
Tajur (20.42 ha), Babakan (10.51 ha), Jonggol-Bogor Regency (268.74 ha), Pasir
Sarongge-Cianjur (7.13 ha), Mount Walat (350 ha) and Pelabuhan Ratu-Sukabumi
(5.23 ha), Ancol-Jakarta (0.2 ha), and Pulau Tinjil-Pandeglang (600 ha).
(2) Activities
As a state university, activities of IPB aim to perform (i) education; (ii) research; and (iii)
community services.
On education, IPB provides education services for diploma program, undergraduate program, and
graduate program. The diploma program of IPB offers 14 study fields through three-year program.
The undergraduate program at IPB is a four-year program, consisting of 37 departments in 9
faculties. For the graduate program, IPB currently has 65 major courses for master’s degree
program and 43 major courses for doctoral degree program.
The research and community services activities of IPB are handled by the Institute of Research
and Community Empowerment of IPB (LPPM). LPPM was established on 6 November 2003
through Decree of Rector of IPB No. 180/K13/OT/2003, as the merger of Institute of Research
(LP) and Institute of Community Services (LPM). LPPM has established 21 Research Centers,
such as Research Center for Biopharmaca (Biofarmaka), Enterpreneurship Research and
Development Center (P3K), Center for Research on Engineering Application in Tropical
Agriculture (CREATA), Research Center for Bioresources and Biotechnology (PPSHB), etc.
568
1) Academic Business Unit
Since IPB’s legal status was the state-owned legal enterprise, IPB had been developed
some business activities held by Academic Business Units. Each Academic Business Unit
is held by a department, a faculty and/or a central institution as application of science and
technology to serve society’s needs in the outside of IPB. Until 2012, IPB has had 24
Academic Business Units, such as Agropromo, Herbal Biomedical, E-Techno Fateta IPB,
BReAD (Baking Research and Development) Unit, Corn Agro-industry, etc.
2) Supporting Business Unit
Supporting Business Units are held by IPB separately from its academic activities, mostly
aiming at faculties and students’ welfare needs.
3) Commercial Business Unit
Commercial Business Unit is held by the holding company of IPB, PT. Bogor Life
Science and Technology (PT. BLST). As of 2012, PT. BLST owns five companies, i.e.:
a) PT. Bogor Anggana Cendekia (BAC), which is a joint venture between PT. BLST
and PT. Pustaka Bhakti Nusantara (PT. PBN) to build and operate a shopping mall,
namely Botani Square. For this joint venture, PT. BLST provided only the land and
PT. BLST got 20% of the company’s share and IPB Convention Center building
within the Botani Square area. The concession period is 30 years.
b) PT. Bogor Seed, which produces seeds for food crops and horticulture.
c) PT. Indoani Lab, which is engaged in biopharmaceutical production. Its main
activity is production of polio vaccine through cooperation with PT. Biofarma.
d) PT. IPB-Shigeta Pharmaceutical, which is a joint venture of PT. BLST and PT.
Shigeta (Japan) to develop and produce avian influenza vaccine. PT. BLST has 20%
of share from providing land and knowledge.
e) PT. IPB Press, which is engaged in publishing scientific books, especially in the
area of tropical, bioscience and entrepreneurship. PT. IPB Press has cooperation
with Gramedia, Gunung Agung, Utama, Tiga Serangkai, Semesta, and Gudang
Buku Book Store.
(3) Organization
IPB is an institute of higher education under the government management. Currently, IPB status is
BLU, as discussed in Chapter 3.
IPB’s staff with civil servant status divided into two categories, i.e., lecturers and educational
569
personnel. In 2012, civil servants in IPB account for 2,780 people; consisting of 1,199 lecturers
and 1,581 educational personnel.
According to Decision of Board of Trustees No. 125/MWA-IPB/2013, the organizational
structure of IPB is as per the figure below. IPB representative for NARC project is the Vice Rector
for Research and Collaboration. There are two directorates under coordination of the Vice Rector
for Research and Collaboration: (a) Directorate of Research and Strategic Assessment; and (b)
Directorate of Collaboration and International Program.
570
Source: BPPT Annual Report 2012
Figure A.8.2 IPB’s Organizational Structure
Supporting Units:
The Executive Boards: Administrative Units:
Board of Trustees
The Academic
SenateRector
Board of
ProfessorsBoard of Auditor
Secretary of the
Institute
Bureau of Finance
General Bureau
Office of Law, Promotion, and PR
Office of Rector Secretariat
Office of Quality Management
Office of Internal Audit
Vice Rector for Academic and Student Affairs
Directorate of Academic Administration
Directorate of Academic Program
Development
Directorate of Student Affairs
Vice Rector for Resources and Strategic
Assessment
Directorate of Human Resources
Directorate of Planning and
Development
Directorate of Strategic Assessment
and Agriculture Policies
Vice Rector for Research and Cooperations
Directorate of Research and
Innovation
Directorate of Career Development
and Alumni Relationship
Directorate of Cooperations and
International Program
Vice Rector for Facilities and Business
Directorate of Facilities/Infrastructure
Development
Directorate of Data Integration and
Information System
Directorate of Business Development
General Meeting
of Shareholders
Commercial
Business Unit
Supporting
Business Unit
Dean of School and Faculty:
Faculty of
Agriculture
Faculty of
Veterinary
Medicine
Faculty of
Fisheries and
Marine Science
Faculty of Animal
ScienceFaculty of Forestry
Faculty of
Agricultural
TechnologyGraduate School
Management and
Business Program
School of First
CommonDiploma Program
Directorate of
Research and
Community
Services (LPPM)
Center of
Research and
Community
Services (LPPM)
Faculty of
Mathematics and
Natural Science
Faculty of
Economics and
Management
Faculty of Human
Ecology
Department Department Department Department Department Department Department Department Department
Library University FarmLanguage Training
Unit
Teaching Hospital
for Veterinary
Medicine Students
Integrated
Chemical
Laboratories
Green TV Dormitories Sport and Art Unit PoliclinicCampus Security
Unit
Procurement
Services UnitArchive Unit
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3. ITB
(1) Overview
Institut Teknologi Bandung (ITB: Bandung Institute of Technology) is a state university located at
Bandung, West Java under management of Government of Indonesia.
In 1920, De Techniche Hoogeschool te Bandung was established and it was be embryo of ITB
establishment in 1959. In 1959, the present ITB (Bandung Institute of Technology) was founded
by the Government of Indonesia as an institution of higher learning of science, technology, and
fine arts, with a mission of education, research, and service to the community.
Through Government Regulation No. 155 Year 2000, status of ITB was became State-Owned
Legal Enterprise. In 2012, ITB’s status changed to be a university under Government
management, thus, the budget for ITB management is funded from APBN and other sources that
accordance with applicable laws and regulation. The table below shows ITB’s vision, mission,
and brief history.
Table A.8.5 ITB’s Vision, Mission and Brief History
Vision - Being an university that excellent, dignified, independent, and be recognized
worldwide as well as guide the changes that can improve the welfare of the
Indonesian nation and the world.
Mission - Creating, sharing, and applying knowledge, technology, art and humanity as well
as producing superior human resources to make Indonesia a better world.
Brief History July 3, 1920 Establishment of De Techniche Hoogeschool te
Bandung which was embryo of ITB establishment.
March 2, 1959 Establishment of ITB was inaugurated by
Government.
December 26, 2000
Government Regulation
No. 155 Year 2000
Decision of ITB as State-Owned Legal Enterprise
April 12, 2012
PD No. 44 Year 2012
Decision of ITB as university under Government
management.
Source: ITB website, July 2013
As a research university, ITB needs to develop facilities and infrastructure to support their
activities. Because of limitation of land area and access to the industrial centers as potential
partners in development and implementation of research in applicable technology, ITB has
planned to develop ITB Multi-campus. Main objectives of ITB Multi-campus development are to
increase role of ITB on research and contribute to the human resources development. In general,
ITB Multi-campus consists of (i) ITB On-G which is the present ITB located on Jl. Ganesha,
Bandung; and (ii) ITB Off-G which is development of ITB campus located in other areas.
One of the Off-G campus plans is the development of ITB Delta Mas Campus in Bekasi which is
a cooperation project of ITB and the Government of Bekasi Regency. The plan is based on the
572
ITB’s future vision to improve quality of human resources, cooperation between industry and
academic community in the industrial area. According to ITB’s plan, the total area of the ITB
Delta Mas Campus is 40 ha and divided into five clusters, i.e. Engineering Center, Incubation
Center, Laboratories test/services, Administration Center and Specialized Laboratories, and
Supporting Facilities.
(2) Activities
ITB has 13 Academic Working Units including science, technology and art for bachelor degree,
master degree and doctoral degree programs.
Research and community services of ITB are handled by the Institute of Research and
Community Services of ITB (LPPM). LPPM is an organization within academic unit of ITB and
institutionally responsible for facilitation and coordination of collaboration in research and
community services activities so as to increase mutual synergy of academic competence of ITB
and the community. LPPM was established at the end of 2001 wherein the Institute for Research
of ITB, established in 1959, merged with the Institute for Community Services of ITB.
LPPM’s services include research, education and training, consultancy services, intellectual
property right management, and partnership development.
Research in ITB for 2010-2020 is focused on seven areas, i.e., (i) Infrastructure, Disaster
Mitigation, and Territorial; (ii) Energy; (iii) Information and Communication Technology; (iv)
Food, Health and Medicine; (v) Culture and Environment Product; (vi) Nano and quantum
technology; and (vii) Biotechnology.
ITB also divided into three Activity Units, i.e. Academic Unit, Property and Fund Management
Unit, and Commercial Business Unit. Commercial Business Unit does profit-oriented activities
held by commercial entities which are established and fully owned by the institute in order to
support funding for implementation of its academic activities. The Commercial Business Unit is
managed by Commercial Business Unit Management Agency, which is part of internal
organization of ITB. As of January 2010, ITB has 14 companies, as shown in table below.
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Table A.8.6 Companies of ITB Business Unit
No Name ITB Share (%) 1. PT. LAPI ITB 99.99% 2. PT. Ganesha ITB 85.2% 3. PT. LAPI Ganeshatama Consulting 80.0% 4. PT. Ganesha Jaya Sejahtera Gajah 52.0% 5. PT. LAPI Indowater Consultant 50.0% 6. PT. LAPI Divusi 30.0% 7. PT. LETMI ITB 30.0% 8. PT. Ganesha Patra Sejahtera 26.4% 9. PT. Elektroteknika Utama ITB 25.0% 10. PT. Ganesha Petro 25.0%
11. PT. Ganesha Environmental & Energy Services
20.0%
12. PT. Gada Energi 20.0% 13. PT. LAPI Indowater ITB EPC 20.0% 14. PT. LAPI Manufaktur 20.0% 15. Hotel Bumi Sawunggaling Not available 16. Sasana Budaya Ganesha Not available
Source: ITB information
(3) Organization
Similar to IPB, ITB is a higher education institute under the government management. As
discussed in Chapter 3, the current status of ITB is BLU. In 2011, ITB’s population comprises of
22,150 people; consisting of 19,440 students, 1,182 academic staff, and 1,528 non-academic staff.
As a state university under the government management, ITB is responsible to the Minister of
National Education and Culture. The figure below illustrates ITB’s organizational structure. The
ITB representative for NARC project is the Vice Rector for Finance, Planning and Development.
There are three directorates under coordination of the Vice Rector for Finance, Planning and
Development: (i) Directorate of Finance; (ii) Directorate of Planning; and (iii) Directorate of
Development.
574
Source: ITB website, July 2013
Figure A.8.3 ITB’s Organizational Structure
575
Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Capital Investment with inflation * -201,497 -131,192 -70,305 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Total 645,560 -131,192 -70,305 2,718 11,947 20,653 28,654 37,525 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Accumulated -131,192 -201,497 -198,779 -186,832 -166,179 -137,525 -100,000 -60,261 -18,176 26,391 73,586 123,567 176,496 232,548 291,907 354,770 421,341 491,839 566,498 645,560
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV
Project IRR NPV
Project Life: 20 years 14.0% 77,398
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -278,140 0 0 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Depreciation (Equipment, 12 years linear) -40,944 0 0 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 0 0 0 0 0 0
Total -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 60,449 39,358 21,091
Total Debt 141,047 91,834 49,213
Upfront Fee 423 423
Total Debt + Upfront Fee 141,470 92,257 49,213
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
Repayment of Principal -141,470 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Repayment of Interest -108,932 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
Accumulated Debt Amount -48,906 92,257 141,470 141,470 141,470 132,628 123,786 114,944 106,103 97,261 88,419 79,577 70,735 61,893 53,051 44,209 35,368 26,526 17,684 8,842 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 105,184 0 0 1,168 2,061 2,910 3,698 4,569 4,839 5,124 5,426 5,746 6,086 6,445 6,825 7,227 7,654 8,106 8,584 9,090 9,626
VAT on Maintenance Cost -28,178 0 0 -920 -975 -1,032 -1,093 -1,158 -1,226 -1,298 -1,375 -1,456 -1,542 -1,633 -1,729 -1,831 -1,939 -2,054 -2,175 -2,303 -2,439
VAT 77,006 0 0 248 1,086 1,878 2,605 3,411 3,613 3,826 4,051 4,290 4,544 4,812 5,096 5,396 5,715 6,052 6,409 6,787 7,187
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Depreciation -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment of Interest -108,509 423 0 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
VAT -77,006 0 0 -248 -1,086 -1,878 -2,605 -3,411 -3,613 -3,826 -4,051 -4,290 -4,544 -4,812 -5,096 -5,396 -5,715 -6,052 -6,409 -6,787 -7,187
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -6,290 0 0 -638 -604 -569 -534 -500 -465 -430 -396 -361 -326 -292 -257 -223 -195 -167 -139 -111 -83
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 308,123 -348 -816 -27,244 -18,870 -10,635 -2,702 6,017 8,681 11,461 14,361 17,390 20,557 23,867 27,331 34,369 38,161 42,134 46,299 50,670 27,440
Corporate TAX -92,184 0 0 0 0 0 0 -1,504 -2,170 -2,865 -3,590 -4,348 -5,139 -5,967 -6,833 -8,592 -9,540 -10,533 -11,575 -12,668 -6,860
Profit after TAX 215,939 -348 -816 -27,244 -18,870 -10,635 -2,702 4,513 6,511 8,596 10,771 13,042 15,418 17,900 20,498 25,777 28,621 31,601 34,724 38,002 20,580
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Cash Flow Available for Debt Service (DCADS) 847,057 0 0 2,718 11,947 20,653 28,654 37,525 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
DSCR (Debt Service Coverage Ratio) 0.25 1.10 1.06 1.53 2.08 2.29 2.52 2.79 3.08 3.42 3.79 4.22 4.72 5.28 5.93 6.69 7.57 8.61
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -60,449 -39,358 -21,091
Profit After TAX 215,939 -348 -816 -27,244 -18,870 -10,635 -2,702 4,513 6,511 8,596 10,771 13,042 15,418 17,900 20,498 25,777 28,621 31,601 34,724 38,002 20,580
Depreciation 319,084 0 0 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 13,907 13,907 13,907 13,907 13,907 41,721
Repayment of Principal -141,470 0 0 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Total 333,104 -39,706 -21,907 -9,925 -1,551 -2,158 5,775 12,990 14,988 17,074 19,249 21,519 23,895 26,377 28,975 30,842 33,686 36,666 39,789 43,067 53,460
Cash Balance -39,706 -61,613 -71,538 -73,090 -75,247 -69,473 -56,483 -41,495 -24,421 -5,173 16,346 40,242 66,619 95,594 126,436 160,122 196,788 236,577 279,644 333,104
Equity IRR IRR NPV NPV
20 Years 15.0% 92 43,261
D.R.=15%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -142,124 -142,124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 175,480 0 0 886 1,690 2,447 3,139 5,415 6,248 7,121 8,037 8,999 10,009 11,071 12,186 14,211 15,450 16,752 18,123 19,566 14,130
Total Cash Flow of Public 33,356 -142,124 0 886 1,690 2,447 3,139 5,415 6,248 7,121 8,037 8,999 10,009 11,071 12,186 14,211 15,450 16,752 18,123 19,566 14,130
Government's real Subsidy
Initial Subsidy Amount -142,124
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -72,879 51% of initial subsidy amount
(20years)
Appendix 9.1 Cash Flow under PPP Scheme (Base Case)
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Appendix 9.2 Cash Flow under Hybrid Scheme
Revenue Share with SPC and GOI
Land Lease Fee (fixed) 1,345 Million IDR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total 1,138,023 0 0 8,562 18,135 28,808 37,288 46,668 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
SPC 1,089,066 -1,345 -1,425 7,053 16,537 27,116 35,496 44,771 51,215 54,238 57,437 60,825 64,415 68,214 72,239 76,500 81,016 85,796 90,856 96,219 101,893
GOI 48,957 1,345 1,425 1,509 1,598 1,692 1,792 1,897 2,009 2,128 2,254 2,386 2,527 2,676 2,834 3,002 3,179 3,366 3,565 3,775 3,998
Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,089,066 -1,345 -1,425 7,053 16,537 27,116 35,496 44,771 51,215 54,238 57,437 60,825 64,415 68,214 72,239 76,500 81,016 85,796 90,856 96,219 101,893
Capital Investment with inflation * -159,748 -89,443 -70,305 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Total 619,356 -90,788 -71,730 -3,072 5,815 15,761 23,472 32,037 37,730 39,957 42,313 44,809 47,454 50,253 53,218 56,357 59,684 63,205 66,933 70,884 75,064
Accumulated -90,788 -162,518 -165,590 -159,774 -144,013 -120,541 -88,504 -50,775 -10,818 31,496 76,304 123,758 174,010 227,228 283,585 343,270 406,474 473,408 544,291 619,356
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV Project IRR NPV
Project Life: 20 years 15.1% 85,669
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -78,080 0 0 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -3,904 -11,712
Depreciation (Equipment, 12 years linear) -40,944 0 0 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 0 0 0 0 0 0
Total -119,024 0 0 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -3,904 -3,904 -3,904 -3,904 -3,904 -11,712
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 47,924 26,833 21,091
Total Debt 111,823 62,610 49,213
Upfront Fee 335 335
Total Debt + Upfront Fee 112,158 62,945 49,213
Repayment -198,520 0 0 -8,636 -8,636 -15,376 -14,836 -14,297 -13,757 -13,217 -12,677 -12,138 -11,598 -11,058 -10,518 -9,979 -9,439 -8,899 -8,359 -7,820 -7,280
Repayment of Principal -112,158 0 0 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010
Repayment of Interest -86,362 -8,636 -8,636 -8,366 -7,827 -7,287 -6,747 -6,207 -5,667 -5,128 -4,588 -4,048 -3,508 -2,969 -2,429 -1,889 -1,349 -810 -270
Accumulated Debt Amount 62,945 112,158 112,158 112,158 105,148 98,138 91,128 84,119 77,109 70,099 63,089 56,079 49,069 42,059 35,049 28,040 21,030 14,020 7,010 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 99,007 -122 -130 641 1,503 2,465 3,227 4,070 4,656 4,931 5,222 5,530 5,856 6,201 6,567 6,955 7,365 7,800 8,260 8,747 9,263
VAT on Maintenance Cost -28,178 0 0 -920 -975 -1,032 -1,093 -1,158 -1,226 -1,298 -1,375 -1,456 -1,542 -1,633 -1,729 -1,831 -1,939 -2,054 -2,175 -2,303 -2,439
VAT 70,829 0 0 0 528 1,433 2,134 2,912 3,430 3,633 3,847 4,074 4,314 4,568 4,838 5,124 5,426 5,746 6,085 6,444 6,824
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,089,066 -1,345 -1,425 7,053 16,537 27,116 35,496 44,771 51,215 54,238 57,437 60,825 64,415 68,214 72,239 76,500 81,016 85,796 90,856 96,219 101,893
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Depreciation -119,024 0 0 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -7,316 -3,904 -3,904 -3,904 -3,904 -3,904 -11,712
Repayment of Interest -86,027 335 0 -8,636 -8,636 -8,366 -7,827 -7,287 -6,747 -6,207 -5,667 -5,128 -4,588 -4,048 -3,508 -2,969 -2,429 -1,889 -1,349 -810 -270
VAT -71,360 0 0 0 -528 -1,433 -2,134 -2,912 -3,430 -3,633 -3,847 -4,074 -4,314 -4,568 -4,838 -5,124 -5,426 -5,746 -6,085 -6,444 -6,824
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -2,148 0 0 -238 -223 -209 -194 -180 -165 -150 -136 -121 -106 -92 -77 -62 -55 -47 -39 -31 -23
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 472,500 -1,781 -2,241 -20,126 -11,803 -2,532 4,975 13,255 18,920 21,432 24,056 26,803 29,682 32,695 35,855 42,579 46,049 49,690 53,514 57,533 53,945
Corporate TAX -127,746 0 0 0 0 0 -1,244 -3,314 -4,730 -5,358 -6,014 -6,701 -7,420 -8,174 -8,964 -10,645 -11,512 -12,423 -13,378 -14,383 -13,486
Profit after TAX 344,754 -1,781 -2,241 -20,126 -11,803 -2,532 3,731 9,941 14,190 16,074 18,042 20,102 22,262 24,521 26,891 31,934 34,537 37,267 40,136 43,150 40,459
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,089,066 -1,345 -1,425 7,053 16,537 27,116 35,496 44,771 51,215 54,238 57,437 60,825 64,415 68,214 72,239 76,500 81,016 85,796 90,856 96,219 101,893
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Cash Flow Available for Debt Service (DCADS) 779,104 -1,345 -1,425 -3,072 5,815 15,761 23,472 32,037 37,730 39,957 42,313 44,809 47,454 50,253 53,218 56,357 59,684 63,205 66,933 70,884 75,064
Repayment -198,520 0 0 -8,636 -8,636 -15,376 -14,836 -14,297 -13,757 -13,217 -12,677 -12,138 -11,598 -11,058 -10,518 -9,979 -9,439 -8,899 -8,359 -7,820 -7,280
DSCR (Debt Service Coverage Ratio) -0.36 0.67 1.03 1.58 2.24 2.74 3.02 3.34 3.69 4.09 4.54 5.06 5.65 6.32 7.10 8.01 9.06 10.31
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -47,924 -26,833 -21,091
Profit After TAX 344,754 -1,781 -2,241 -20,126 -11,803 -2,532 3,731 9,941 14,190 16,074 18,042 20,102 22,262 24,521 26,891 31,934 34,537 37,267 40,136 43,150 40,459
Depreciation 119,024 0 0 7,316 7,316 7,316 7,316 7,316 7,316 7,316 7,316 7,316 7,316 7,316 7,316 3,904 3,904 3,904 3,904 3,904 11,712
Repayment of Principal -112,158 0 0 0 0 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010 -7,010
Total 303,696 -28,614 -23,332 -12,810 -4,487 -2,226 4,037 10,247 14,497 16,380 18,348 20,408 22,568 24,827 27,197 28,828 31,432 34,161 37,030 40,044 45,161
Cash Balance 932,095 -28,614 -51,946 -64,756 -69,243 -71,469 -67,432 -57,185 -42,688 -26,308 -7,960 12,448 35,016 59,843 87,040 115,868 147,300 181,461 218,491 258,535 303,696
Equity IRR IRR NPV
20 Years 15.0% 34 D.R.=15%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -183,873 -183,873 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 201,254 0 0 238 751 1,642 3,572 6,406 8,325 9,141 9,997 10,896 11,840 12,834 13,879 15,831 16,993 18,216 19,502 20,858 20,333
Revenue from SPC 48,957 1,345 1,425 1,509 1,598 1,692 1,792 1,897 2,009 2,128 2,254 2,386 2,527 2,676 2,834 3,002 3,179 3,366 3,565 3,775 3,998
Total Cash Flow of Public 66,338 -182,528 1,425 1,747 2,349 3,334 5,364 8,303 10,334 11,269 12,251 13,282 14,367 15,510 16,713 18,833 20,172 21,582 23,067 24,633 24,331
(PPP) -15,032 -179,517 1,592 276 824 1,501 3,517 6,063 6,662 7,326 8,053 8,716 9,508 10,300 11,156 12,481 13,405 80 15,442 16,557 31,026
Government's real Subsidy
Initial Subsidy Amount -182,528
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -83,522 46% of initial subsidy amount
(20years)
KRI-a6402:
VATは他に無いか
KRI-a6969:残存分を一括計上
KRI-a6969:
Replacement Cost計上
577
Appendix 9.3 Cash Flow under PPP Scheme (Case 1)
Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,041,319 0 0 11,559 20,402 28,808 36,610 45,233 47,901 50,730 53,722 56,890 60,248 63,801 67,566 71,552 75,775 80,246 84,979 89,995 95,302
Capital Investment with inflation * -201,497 -131,192 -70,305 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Total 529,860 -131,192 -70,305 1,434 9,680 17,453 24,586 32,499 34,416 36,449 38,598 40,874 43,287 45,840 48,545 51,409 54,443 57,655 61,056 64,660 68,473
Accumulated -131,192 -201,497 -200,063 -190,383 -172,930 -148,344 -115,845 -81,429 -44,980 -6,382 34,492 77,779 123,619 172,164 223,573 278,016 335,671 396,727 461,387 529,860
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV
Project IRR NPV
Project Life: 20 years 12.2% 41,696
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -278,140 0 0 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Depreciation (Equipment, 12 years linear) -40,944 0 0 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 0 0 0 0 0 0
Total -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 60,449 39,358 21,091
Total Debt 141,047 91,834 49,213
Upfront Fee 423 423
Total Debt + Upfront Fee 141,470 92,257 49,213
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
Repayment of Principal -141,470 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Repayment of Interest -108,932 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
Accumulated Debt Amount -48,906 92,257 141,470 141,470 141,470 132,628 123,786 114,944 106,103 97,261 88,419 79,577 70,735 61,893 53,051 44,209 35,368 26,526 17,684 8,842 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 94,666 0 0 1,051 1,855 2,619 3,328 4,112 4,355 4,612 4,884 5,172 5,477 5,800 6,142 6,505 6,889 7,295 7,725 8,181 8,664
VAT on Maintenance Cost -28,178 0 0 -920 -975 -1,032 -1,093 -1,158 -1,226 -1,298 -1,375 -1,456 -1,542 -1,633 -1,729 -1,831 -1,939 -2,054 -2,175 -2,303 -2,439
VAT 66,488 0 0 131 880 1,587 2,235 2,954 3,129 3,314 3,509 3,716 3,935 4,167 4,413 4,674 4,950 5,241 5,550 5,878 6,225
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,041,319 0 0 11,559 20,402 28,808 36,610 45,233 47,901 50,730 53,722 56,890 60,248 63,801 67,566 71,552 75,775 80,246 84,979 89,995 95,302
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Depreciation -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment of Interest -108,509 423 0 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
VAT -66,488 0 0 -131 -880 -1,587 -2,235 -2,954 -3,129 -3,314 -3,509 -3,716 -3,935 -4,167 -4,413 -4,674 -4,950 -5,241 -5,550 -5,878 -6,225
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -6,290 0 0 -638 -604 -569 -534 -500 -465 -430 -396 -361 -326 -292 -257 -223 -195 -167 -139 -111 -83
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 202,941 -348 -816 -28,411 -20,931 -13,544 -6,400 1,448 3,842 6,337 8,934 11,643 14,472 17,423 20,507 27,141 30,506 34,029 37,716 41,580 17,813
Corporate TAX -68,348 0 0 0 0 0 0 -362 -960 -1,584 -2,234 -2,911 -3,618 -4,356 -5,127 -6,785 -7,627 -8,507 -9,429 -10,395 -4,453
Profit after TAX 134,593 -348 -816 -28,411 -20,931 -13,544 -6,400 1,086 2,882 4,753 6,700 8,732 10,854 13,067 15,380 20,356 22,879 25,522 28,287 31,185 13,360
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,041,319 0 0 11,559 20,402 28,808 36,610 45,233 47,901 50,730 53,722 56,890 60,248 63,801 67,566 71,552 75,775 80,246 84,979 89,995 95,302
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Cash Flow Available for Debt Service (DCADS) 731,357 0 0 1,434 9,680 17,453 24,586 32,499 34,416 36,449 38,598 40,874 43,287 45,840 48,545 51,409 54,443 57,655 61,056 64,660 68,473
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
DSCR (Debt Service Coverage Ratio) 0.13 0.89 0.90 1.31 1.80 1.98 2.19 2.41 2.67 2.96 3.29 3.66 4.08 4.57 5.14 5.79 6.56 7.46
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -60,449 -39,358 -21,091
Profit After TAX 134,593 -348 -816 -28,411 -20,931 -13,544 -6,400 1,086 2,882 4,753 6,700 8,732 10,854 13,067 15,380 20,356 22,879 25,522 28,287 31,185 13,360
Depreciation 319,084 0 0 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 13,907 13,907 13,907 13,907 13,907 41,721
Repayment of Principal -141,470 0 0 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Total 251,758 -39,706 -21,907 -11,092 -3,612 -5,067 2,077 9,563 11,359 13,231 15,178 17,209 19,331 21,544 23,857 25,421 27,944 30,587 33,352 36,250 46,240
Cash Balance -39,706 -61,613 -72,705 -76,318 -81,384 -79,308 -69,745 -58,386 -45,155 -29,978 -12,769 6,563 28,107 51,964 77,385 105,329 135,916 169,268 205,518 251,758
Equity IRR IRR NPV
20 Years 12.1% -16,045
D.R.=15%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -142,124 -142,124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 141,126 0 0 769 1,484 2,156 2,769 3,816 4,554 5,328 6,139 6,988 7,879 8,815 9,797 11,682 12,772 13,915 15,118 16,384 10,761
Total Cash Flow of Public -998 -142,124 0 769 1,484 2,156 2,769 3,816 4,554 5,328 6,139 6,988 7,879 8,815 9,797 11,682 12,772 13,915 15,118 16,384 10,761
Government's real Subsidy
Initial Subsidy Amount -142,124
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -84,529 59% of initial subsidy amount
(20years)
578
Appendix 9.4 Cash Flow under PPP Scheme (Case 2)
Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Capital Investment with inflation * -221,646 -144,311 -77,335 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -340,959 0 0 -11,137 -11,794 -12,490 -13,227 -14,007 -14,834 -15,710 -16,636 -17,617 -18,657 -19,757 -20,923 -22,158 -23,465 -24,850 -26,316 -27,869 -29,512
Total 594,414 -144,311 -77,335 1,706 10,875 19,518 27,451 36,252 38,390 40,656 43,055 45,594 48,285 51,133 54,150 57,344 60,730 64,312 68,105 72,125 76,379
Accumulated -144,311 -221,646 -219,940 -209,065 -189,547 -162,096 -125,844 -87,454 -46,798 -3,743 41,851 90,136 141,269 195,419 252,763 313,493 377,805 445,910 518,035 594,414
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV
Project IRR NPV
Project Life: 20 years 12.4% 49,436
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -305,940 0 0 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -15,297 -45,891
Depreciation (Equipment, 12 years linear) -45,036 0 0 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 -3,753 0 0 0 0 0 0
Total -350,976 0 0 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -15,297 -15,297 -15,297 -15,297 -15,297 -45,891
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 66,494 43,293 23,201
Total Debt 155,153 101,018 54,135
Upfront Fee 465 465
Total Debt + Upfront Fee 155,618 101,483 54,135
Repayment -275,444 0 0 -11,983 -11,983 -21,334 -20,585 -19,836 -19,088 -18,339 -17,590 -16,841 -16,092 -15,343 -14,594 -13,845 -13,096 -12,347 -11,598 -10,849 -10,101
Repayment of Principal -155,618 0 0 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726
Repayment of Interest -119,826 -11,983 -11,983 -11,608 -10,859 -10,110 -9,361 -8,612 -7,864 -7,115 -6,366 -5,617 -4,868 -4,119 -3,370 -2,621 -1,872 -1,123 -374
Accumulated Debt Amount -53,797 101,483 155,618 155,618 155,618 145,892 136,166 126,440 116,714 106,987 97,261 87,535 77,809 68,083 58,357 48,631 38,905 29,178 19,452 9,726 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 105,184 0 0 1,168 2,061 2,910 3,698 4,569 4,839 5,124 5,426 5,746 6,086 6,445 6,825 7,227 7,654 8,106 8,584 9,090 9,626
VAT on Maintenance Cost -30,994 0 0 -1,012 -1,072 -1,135 -1,202 -1,273 -1,349 -1,428 -1,512 -1,602 -1,696 -1,796 -1,902 -2,014 -2,133 -2,259 -2,392 -2,534 -2,683
VAT 74,190 0 0 156 989 1,775 2,496 3,296 3,490 3,696 3,914 4,144 4,390 4,649 4,923 5,213 5,521 5,847 6,192 6,556 6,943
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -340,959 0 0 -11,137 -11,794 -12,490 -13,227 -14,007 -14,834 -15,710 -16,636 -17,617 -18,657 -19,757 -20,923 -22,158 -23,465 -24,850 -26,316 -27,869 -29,512
Depreciation -350,976 0 0 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -19,050 -15,297 -15,297 -15,297 -15,297 -15,297 -45,891
Repayment of Interest -119,361 465 0 -11,983 -11,983 -11,608 -10,859 -10,110 -9,361 -8,612 -7,864 -7,115 -6,366 -5,617 -4,868 -4,119 -3,370 -2,621 -1,872 -1,123 -374
VAT -74,190 0 0 -156 -989 -1,775 -2,496 -3,296 -3,490 -3,696 -3,914 -4,144 -4,390 -4,649 -4,923 -5,213 -5,521 -5,847 -6,192 -6,556 -6,943
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -6,919 0 0 -702 -664 -626 -588 -550 -511 -473 -435 -397 -359 -321 -283 -245 -214 -184 -153 -122 -92
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 236,569 -306 -816 -31,049 -22,726 -14,510 -6,569 2,159 4,827 7,605 10,501 13,521 16,672 19,963 23,402 30,751 34,507 38,434 42,549 46,864 20,788
Corporate TAX -78,137 0 0 0 0 0 0 -540 -1,207 -1,901 -2,625 -3,380 -4,168 -4,991 -5,851 -7,688 -8,627 -9,609 -10,637 -11,716 -5,197
Profit after TAX 158,432 -306 -816 -31,049 -22,726 -14,510 -6,569 1,619 3,620 5,704 7,876 10,141 12,504 14,972 17,551 23,063 25,880 28,825 31,912 35,148 15,591
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -340,959 0 0 -11,137 -11,794 -12,490 -13,227 -14,007 -14,834 -15,710 -16,636 -17,617 -18,657 -19,757 -20,923 -22,158 -23,465 -24,850 -26,316 -27,869 -29,512
Cash Flow Available for Debt Service (DCADS) 816,060 0 0 1,706 10,875 19,518 27,451 36,252 38,390 40,656 43,055 45,594 48,285 51,133 54,150 57,344 60,730 64,312 68,105 72,125 76,379
Repayment -275,444 0 0 -11,983 -11,983 -21,334 -20,585 -19,836 -19,088 -18,339 -17,590 -16,841 -16,092 -15,343 -14,594 -13,845 -13,096 -12,347 -11,598 -10,849 -10,101
DSCR (Debt Service Coverage Ratio) 0.14 0.91 0.91 1.33 1.83 2.01 2.22 2.45 2.71 3.00 3.33 3.71 4.14 4.64 5.21 5.87 6.65 7.56
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -60,449 -39,358 -21,091
Profit After TAX 158,432 -306 -816 -31,049 -22,726 -14,510 -6,569 1,619 3,620 5,704 7,876 10,141 12,504 14,972 17,551 23,063 25,880 28,825 31,912 35,148 15,591
Depreciation 350,976 0 0 19,050 19,050 19,050 19,050 19,050 19,050 19,050 19,050 19,050 19,050 19,050 19,050 15,297 15,297 15,297 15,297 15,297 45,891
Repayment of Principal -155,618 0 0 0 0 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726 -9,726
Total 293,341 -39,664 -21,907 -11,999 -3,676 -5,186 2,755 10,943 12,943 15,028 17,200 19,465 21,828 24,296 26,875 28,633 31,451 34,396 37,483 40,719 51,756
Cash Balance -39,664 -61,571 -73,570 -77,245 -82,432 -79,677 -68,734 -55,791 -40,762 -23,562 -4,097 17,732 42,027 68,903 97,536 128,987 163,383 200,866 241,585 293,341
Equity IRR IRR NPV
20 Years 13.2% -10,426
D.R.=15%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -142,124 -142,124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 159,246 0 0 858 1,653 2,401 3,084 4,386 5,208 6,070 6,974 7,921 8,917 9,961 11,057 13,146 14,362 15,640 16,982 18,394 12,232
Total Cash Flow of Public 17,122 -142,124 0 858 1,653 2,401 3,084 4,386 5,208 6,070 6,974 7,921 8,917 9,961 11,057 13,146 14,362 15,640 16,982 18,394 12,232
Government's real Subsidy
Initial Subsidy Amount -142,124
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -78,517 55% of initial subsidy amount
(20years)
579
Appendix 9.5 Cash Flow under PPP Scheme (Case 3) Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,113,144 0 0 0 13,600 24,007 33,897 43,078 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Capital Investment with inflation * -201,497 -131,192 -70,305 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Total 601,685 -131,192 -70,305 -10,125 2,878 12,652 21,873 30,344 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Accumulated -131,192 -201,497 -211,622 -208,744 -196,092 -174,219 -143,875 -104,136 -62,051 -17,484 29,711 79,692 132,621 188,673 248,032 310,895 377,466 447,964 522,623 601,685
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV
Project IRR NPV
Project Life: 20 years 12.3% 48,958
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -278,140 0 0 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Depreciation (Equipment, 12 years linear) -40,944 0 0 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 0 0 0 0 0 0
Total -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 60,449 39,358 21,091
Total Debt 141,047 91,834 49,213
Upfront Fee 423 423
Total Debt + Upfront Fee 141,470 92,257 49,213
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
Repayment of Principal -141,470 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Repayment of Interest -108,932 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
Accumulated Debt Amount -48,906 92,257 141,470 141,470 141,470 132,628 123,786 114,944 106,103 97,261 88,419 79,577 70,735 61,893 53,051 44,209 35,368 26,526 17,684 8,842 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 101,194 0 0 0 1,236 2,182 3,082 3,916 4,839 5,124 5,426 5,746 6,086 6,445 6,825 7,227 7,654 8,106 8,584 9,090 9,626
VAT on Maintenance Cost -28,178 0 0 -920 -975 -1,032 -1,093 -1,158 -1,226 -1,298 -1,375 -1,456 -1,542 -1,633 -1,729 -1,831 -1,939 -2,054 -2,175 -2,303 -2,439
VAT 73,016 0 0 0 261 1,150 1,989 2,758 3,613 3,826 4,051 4,290 4,544 4,812 5,096 5,396 5,715 6,052 6,409 6,787 7,187
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,113,144 0 0 0 13,600 24,007 33,897 43,078 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Depreciation -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment of Interest -108,509 423 0 -10,893 -10,893 -10,553 -9,872 -9,191 -8,510 -7,829 -7,149 -6,468 -5,787 -5,106 -4,425 -3,745 -3,064 -2,383 -1,702 -1,021 -340
VAT -73,936 0 0 0 -261 -1,150 -1,989 -2,758 -3,613 -3,826 -4,051 -4,290 -4,544 -4,812 -5,096 -5,396 -5,715 -6,052 -6,409 -6,787 -7,187
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -6,290 0 0 -638 -604 -569 -534 -500 -465 -430 -396 -361 -326 -292 -257 -223 -195 -167 -139 -111 -83
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 267,318 -348 -816 -39,839 -27,114 -17,908 -8,867 -511 8,681 11,461 14,361 17,390 20,557 23,867 27,331 34,369 38,161 42,134 46,299 50,670 27,440
Corporate TAX -90,680 0 0 0 0 0 0 0 -2,170 -2,865 -3,590 -4,348 -5,139 -5,967 -6,833 -8,592 -9,540 -10,533 -11,575 -12,668 -6,860
Profit after TAX 176,638 -348 -816 -39,839 -27,114 -17,908 -8,867 -511 6,511 8,596 10,771 13,042 15,418 17,900 20,498 25,777 28,621 31,601 34,724 38,002 20,580
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,113,144 0 0 0 13,600 24,007 33,897 43,078 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Cash Flow Available for Debt Service (DCADS) 803,182 0 0 -10,125 2,878 12,652 21,873 30,344 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Repayment -250,402 0 0 -10,893 -10,893 -19,395 -18,714 -18,033 -17,352 -16,671 -15,991 -15,310 -14,629 -13,948 -13,267 -12,586 -11,906 -11,225 -10,544 -9,863 -9,182
DSCR (Debt Service Coverage Ratio) -0.93 0.26 0.65 1.17 1.68 2.29 2.52 2.79 3.08 3.42 3.79 4.22 4.72 5.28 5.93 6.69 7.57 8.61
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -60,449 -39,358 -21,091
Profit After TAX 176,638 -348 -816 -39,839 -27,114 -17,908 -8,867 -511 6,511 8,596 10,771 13,042 15,418 17,900 20,498 25,777 28,621 31,601 34,724 38,002 20,580
Depreciation 319,084 0 0 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 13,907 13,907 13,907 13,907 13,907 41,721
Repayment of Principal -141,470 0 0 0 0 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842 -8,842
Total 293,803 -39,706 -21,907 -22,520 -9,795 -9,431 -390 7,966 14,988 17,074 19,249 21,519 23,895 26,377 28,975 30,842 33,686 36,666 39,789 43,067 53,460
Cash Balance -39,706 -61,613 -84,133 -93,929 -103,359 -103,750 -95,784 -80,796 -63,722 -44,474 -22,955 941 27,318 56,293 87,135 120,821 157,487 197,276 240,343 293,803
Equity IRR IRR NPV
20 Years 11.7% -21,073
D.R.=15%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -142,124 -142,124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 170,906 0 0 638 865 1,719 2,523 3,258 6,248 7,121 8,037 8,999 10,009 11,071 12,186 14,211 15,450 16,752 18,123 19,566 14,130
Total Cash Flow of Public 28,782 -142,124 0 638 865 1,719 2,523 3,258 6,248 7,121 8,037 8,999 10,009 11,071 12,186 14,211 15,450 16,752 18,123 19,566 14,130
Government's real Subsidy
Initial Subsidy Amount -142,124
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -75,764 53% of initial subsidy amount
(20years)
580
Appendix 9.6 Cash Flow under PPP Scheme (Case 4)
Cash Flow for Project IRR analysis (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue with inflation 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Capital Investment with inflation * -201,497 -131,192 -70,305 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
O&M Cost with inflation -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Total 645,560 -131,192 -70,305 2,718 11,947 20,653 28,654 37,525 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Accumulated -131,192 -201,497 -198,779 -186,832 -166,179 -137,525 -100,000 -60,261 -18,176 26,391 73,586 123,567 176,496 232,548 291,907 354,770 421,341 491,839 566,498 645,560
* The capital investment cost of SPC is included (government portion is excluded) for the calculation.
Project IRR and NPV
Project IRR NPV
Project Life: 20 years 14.0% 77,398
Disount Rate= 9.9% (WACC)
Calculation of Depreciation (Million IDR/year)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation (Building, 20 years linear) -278,140 0 0 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Depreciation (Equipment, 12 years linear) -40,944 0 0 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 -3,412 0 0 0 0 0 0
Total -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment Plan (Linear Amortization)
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity 60,449 39,358 21,091
Total Debt 141,047 91,834 49,213
Upfront Fee 423 423
Total Debt + Upfront Fee 141,470 92,257 49,213
Exchange rate risk 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%
Repayment -313,002 0 0 -13,616 -13,616 -24,243 -23,392 -22,541 -21,690 -20,839 -19,988 -19,137 -18,286 -17,435 -16,584 -15,733 -14,882 -14,031 -13,180 -12,329 -11,478
Repayment of Principal -176,838 0 0 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052
Repayment of Interest -136,165 -13,616 -13,616 -13,191 -12,340 -11,489 -10,638 -9,787 -8,936 -8,085 -7,234 -6,383 -5,532 -4,681 -3,830 -2,979 -2,128 -1,277 -426
Accumulated Debt Amount -111,506 92,257 141,470 141,470 141,470 132,628 123,786 114,944 106,103 97,261 88,419 79,577 70,735 61,893 53,051 44,209 35,368 26,526 17,684 8,842 0
Calculation of VAT payment
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
VAT on Revenue 105,184 0 0 1,168 2,061 2,910 3,698 4,569 4,839 5,124 5,426 5,746 6,086 6,445 6,825 7,227 7,654 8,106 8,584 9,090 9,626
VAT on Maintenance Cost -28,178 0 0 -920 -975 -1,032 -1,093 -1,158 -1,226 -1,298 -1,375 -1,456 -1,542 -1,633 -1,729 -1,831 -1,939 -2,054 -2,175 -2,303 -2,439
VAT 77,006 0 0 248 1,086 1,878 2,605 3,411 3,613 3,826 4,051 4,290 4,544 4,812 5,096 5,396 5,715 6,052 6,409 6,787 7,187
Calculation of Profit
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Depreciation -319,084 0 0 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -17,319 -13,907 -13,907 -13,907 -13,907 -13,907 -41,721
Repayment of Interest -135,742 423 0 -13,616 -13,616 -13,191 -12,340 -11,489 -10,638 -9,787 -8,936 -8,085 -7,234 -6,383 -5,532 -4,681 -3,830 -2,979 -2,128 -1,277 -426
VAT -77,006 0 0 -248 -1,086 -1,878 -2,605 -3,411 -3,613 -3,826 -4,051 -4,290 -4,544 -4,812 -5,096 -5,396 -5,715 -6,052 -6,409 -6,787 -7,187
Land and House Acquisition TAX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Property TAX (Building) -6,290 0 0 -638 -604 -569 -534 -500 -465 -430 -396 -361 -326 -292 -257 -223 -195 -167 -139 -111 -83
Property TAX (Land) -28,045 -771 -816 -864 -915 -969 -1,026 -1,087 -1,151 -1,219 -1,291 -1,367 -1,448 -1,533 -1,624 -1,719 -1,821 -1,928 -2,042 -2,163 -2,290
Profit before TAX 280,890 -348 -816 -29,968 -21,594 -13,273 -5,170 3,719 6,553 9,504 12,574 15,773 19,110 22,590 26,225 33,433 37,395 41,538 45,873 50,415 27,355
Corporate TAX -88,016 0 0 0 0 0 0 -930 -1,638 -2,376 -3,144 -3,943 -4,778 -5,648 -6,556 -8,358 -9,349 -10,385 -11,468 -12,604 -6,839
Profit after TAX 192,874 -348 -816 -29,968 -21,594 -13,273 -5,170 2,789 4,915 7,128 9,430 11,830 14,332 16,942 19,669 25,075 28,046 31,153 34,405 37,811 20,516
Calculation of DSCR
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Total Revenue 1,157,019 0 0 12,843 22,669 32,008 40,678 50,259 53,224 56,366 59,691 63,211 66,942 70,890 75,073 79,502 84,195 89,162 94,421 99,994 105,891
Total Operation Cost -309,962 0 0 -10,125 -10,722 -11,355 -12,024 -12,734 -13,485 -14,281 -15,124 -16,016 -16,961 -17,961 -19,021 -20,143 -21,332 -22,591 -23,923 -25,335 -26,829
Cash Flow Available for Debt Service (DCADS) 847,057 0 0 2,718 11,947 20,653 28,654 37,525 39,739 42,085 44,567 47,195 49,981 52,929 56,052 59,359 62,863 66,571 70,498 74,659 79,062
Repayment -313,002 0 0 -13,616 -13,616 -24,243 -23,392 -22,541 -21,690 -20,839 -19,988 -19,137 -18,286 -17,435 -16,584 -15,733 -14,882 -14,031 -13,180 -12,329 -11,478
DSCR (Debt Service Coverage Ratio) 0.20 0.88 0.85 1.22 1.66 1.83 2.02 2.23 2.47 2.73 3.04 3.38 3.77 4.22 4.74 5.35 6.06 6.89
Equity Cash Flow
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Equity -60,449 -39,358 -21,091
Profit After TAX 192,874 -348 -816 -29,968 -21,594 -13,273 -5,170 2,789 4,915 7,128 9,430 11,830 14,332 16,942 19,669 25,075 28,046 31,153 34,405 37,811 20,516
Depreciation 319,084 0 0 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 17,319 13,907 13,907 13,907 13,907 13,907 41,721
Repayment of Principal -176,838 0 0 0 0 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052 -11,052
Total 274,672 -39,706 -21,907 -12,649 -4,275 -7,007 1,096 9,056 11,182 13,395 15,697 18,097 20,599 23,209 25,935 27,930 30,901 34,008 37,260 40,665 51,185
Cash Balance -39,706 -61,613 -74,261 -78,536 -85,543 -84,446 -75,391 -64,209 -50,814 -35,117 -17,021 3,579 26,787 52,723 80,652 111,553 145,561 182,821 223,487 274,672
Equity IRR IRR NPV NPV
20 Years 12.2% -16,047 19,813
D.R.=15% D.R.=9.9%
Calculation of Real Subsidy Amount
Year Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Subsidy -142,124 -142,124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TAX income 171,312 0 0 886 1,690 2,447 3,139 4,841 5,716 6,632 7,591 8,594 9,648 10,752 11,909 13,977 15,259 16,604 18,016 19,502 14,109
Total Cash Flow of Public 29,188 -142,124 0 886 1,690 2,447 3,139 4,841 5,716 6,632 7,591 8,594 9,648 10,752 11,909 13,977 15,259 16,604 18,016 19,502 14,109
Government's real Subsidy
Initial Subsidy Amount -142,124
Discount Rate 8.4% National 20 years Bond in July/2013 12%? ADB
Real public payment (discounted) -74,629 53% of initial subsidy amount
(20years)
581
Appendix 10.1 Risk Matrix of NARC Project (under PPP Scheme)
Risks Description Impact Probability Public SPC Tenant Mitigation Method Note
1. Site Risk
* 1Delay and cost increase of
Land Acquisition
Delay and costs increase due to
unclear and then prolonged land
acquisition process
High Low x
Basically the public sector
already has a right to use the
project site.
2Land use right can't be
obtained entirely
Unable to acquire the land use right
due to legal issuesHigh Medium x
Basically the public sector
already has a right to use the
project site.
3Complex resettlement
process
Costs overrun and delay due to a
complicated resettlement processHigh Low x
Basically the public sector
already has a right to use the
project site.
4Difficulties of site
conditions
Delay due to uncertainty of ground
conditionsMedium Low x (x)
Precise land survey during
the preparation phase of
tender document
Unforeseen Issue Medium Low x
Unforeseeable/uncontrollable
risk is better taken by the Public
sector.
5
Damage of unknown
artifacts and antiquites in
the site
Medium Low x (x)
Precise land survey during
the preparation phase of
tender document
Unforeseeable/uncontrollable
risk is better taken by the Public
sector.
6Damage of existing building
or facilityLow Low x
7 Fail in keeping site safetyDamage to neighbors and construction
workersLow Low x
Describe the safety
standard in the contract
document. Arrange the
safety measures during the
constructuion.
8Contamination/pollution to
the site environmentUnforeseen Issue Medium Low x
Precise land survey during
the preparation phase of
tender document
Since EIA is conducted, the risk
occurrence is low
Contaminated after the Contract Medium Low x
Contamination found after the
Contract but due to reasons
before the contract are to be
treated as "Unforeseen Issue"
2. Design, Construction and Commissioning Risks
1Increase in construction
cost due to designing issuesCaused by Private High Medium x
Caused by Public High Medium x
2 Design brief riskTime and cost overruns due to
unclear/ incomplete design briefMedium Medium x
3Additional design works
required by operatorMedium Low x
4 Delay in completing
construction worksBy fault of Public Medium Medium x Guarantee from IIGF
By fault of Private Medium Medium x
5 Construction cost increase By fault of Public High Medium x
By fault of Private High Medium x
3. Sponsor Risks
1Poor performance of
contractorsMedium Medium x
Careful Technical
Evaluation at PQ
2 Default by contractors Medium Low x
3 Default by operators Medium Low x
4 Default by the SPCSPC’s default leading to termination
and/or step-in by financiersHigh Low (x) x
Close monitoring of SPC's
financial condition
The compensation should be
limited to project finance to
attract investors
5 Default of project sponsorSponsor (or a member of
consortium)'s defaultMedium Low x
The compensation should be
limited to project finance to
attract investors
582
4. Financial Risks
1Fail to achieve financial
close
Inability to achieve financial close due
to market uncertaintyHigh Medium x
Close coodination with
public, private and lender
The compensation should be
limited to project finance to
attract investors
2 Financial structure riskInnefficiency due to inoptimal project's
capital structureMedium Medium x
3 Foreign exchange rate risk(non extreme) fluctuation of foreign
exchange rateHigh High x (x)
Utilization of foreign
exchange swap
For example, some portion of
tenants fee could be paid by
USD or hard currency basis.
Extreme currency fluctuation
should be categorized as Force
Majeure.
4 Inflation rate risk Medium Medium x (x)
Check the sensitivity of the
profit by the inflation rate
increase
Tenants fee could be increased
based on CPI of Indonesia.
Hyper inflation should be
categorized as Force Majeure.
5 Insurance risk (1)
Insurance cover for a certain risk is
no longer available from reputable
insurers in the market
Medium Medium x
The minimum insurance
coverage should be determined
by the Public to make the
optimum selection.
6 Insurance risk (2)
substantial increases in the rates at
which insurance premiums are
calculated
Low Medium x
The minimum insurance
coverage should be determined
by the Public to make the
optimum selection.
5. Operating Risks
1Unqualified performance of
servicesMedium Low x
Development of monitoring
system, and installment of
incentive mechanism
2 Problem in subcontractorProblems (strike, lockout, go slow,
etc) by subcontractor staffMedium Low x
General social disorder should
be categorized as Force
Majeure.
3 O&M cost overrun risk Mis-estimation of O&M costs High Medium x
4Estimation of life cycle
expenditure is incorrectLow Low x
5 Increase in energy costs Medium Medium x (x)
Include the tariff
adjustment mechanism
linked to CPI in the
contract
6
Increase in maintenance
and replacement cost of
research equipment
Medium Medium x (x)
Include the tariff
adjustment mechanism
linked to CPI in the
contract
* 7Accident by the fault of
Tenant
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
* 8Accident by the fault of
SPC
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
* 9Accident by the fault of
Public
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
Do not provide human source Medium Low x
Inefficient transparency of research
contents from PublicMedium Medium x
Inefficient transparency of research
contents from PrivateMedium Medium x (x)
No support for incoming Tenent of
Incubation center and Research
center
Medium Low x
10
Insufficient cooperation
among Stakeholders (SPC,
BPPT and universities)
583
Fault of Public (before connection) Medium Low xStorage facility, emergency
generator etc.
Fault of Private (after connection) Medium Low xStorage facility, emergency
generator etc.
Prolonged unavailability is to be
classified as Force Majeure.
12Obsolescence of Research
EquipmentsMedium Medium x x
Include the tariff
adjustment mechanism
13Inefficient service level of
Research Equipment
Break down, no support engineer, no
test chemicals, etc.Medium Low x
13Inefficient service level for
Business Matching
No expected event or information is
provided.Medium Low x
14Inefficient service level for
Property Right IssuesNo information provided. Medium Low x
6. Revenue Risks
* 1
Decrease in the demand
volume on Incubation
Center
High Medium (x) xProper planning of
incentives.
* 2
Decrease in the demand
volume on Research
Center
High Medium (x) xProper planning of
incentives.
3
Development of other
competitive public facility in
the same region
Medium Medium x
If similar facility is constructed
near NARC, the occupancy
ratio would be affected.
4Incorrect estimation of
revenueMedium Low x
Precise evaluation for
demand estimation
5Failure to collect payment
from tenantMedium Low x
Qualification of financial
capacity of tenants
6Failure of proposed tariff
changes caused by private
Inability of SPC to request change of
tariff levels due to failure in achieving
agreed level of service
High Medium xCareful management of
providing service level
7Periodical tariff adjustment
is delayed caused by public
(in case, the approval is needed for
tariff adjustment)High Medium x
The automatic tariff adjustment
is preferred by investors.
8
Level of the adjusted tariff
is lower from initially
projected
Especially after tariff indexation and
tariff rebasingHigh Low x
The limited financial loss is
preferred by private.
9Miscalculation of the tariff
estimatesMedium Low x
Make additional contract
with financial consultants
The limited financial loss is
preferred by private.
10
The emitted waste water
or gas does not satisfy the
environmental regulation
level
Medium Low x x
7. Political Risks
1 Currency inconvertibility
Inavailability and/or incovertibility of
local currency to the investor's home
currency
Medium Low x
Local financing
Off-shore account
Guarantee from central
bank
Guarantee by IIGF
2 Currency non-transfer
inability to transfer funds in foreign
currency to the investor's home
country
Medium Low x
Local financing
Off-shore account
Guarantee from central
bank
Guarantee by IIGF
3 Expropriation risk Medium Low x
Mediation
Government guarantee
Guarantee by IIGF
4General change in law
(including tax)Medium Low x Guarantee by IIGF
Detail should be stipulated in the
contract. Grandfathering and/or
grace period for change in law
would be a welcome protection
for international tenants.
5
Discriminatory or project
specific change in law
(including tax)
High Low x Guarantee by IIGF
The financial loss of SPC should
be basically compensated by the
public
6Delay in achieving planning
approval
Only if it caused by the public sector's
unilateral/improper decisionHigh Medium x Guarantee by IIGF
The financial loss of SPC should
be basically compensated by the
public
Unavailabile utilities (water,
electricity, gas)11
584
7
Fail or delay in obtaining
necessary consents (excl.
Planning)
Only if it caused by the public sector's
unilateral/improper decisionMedium Low x Guarantee by IIGF
The financial loss of SPC should
be basically compensated by the
public
8Delay in gaining access to
the site
Only if it caused by the public sector's
unilateral/improper decisionMedium Low x
The financial loss of SPC should
be basically compensated by the
public
9Termination due to
Authority defaultMedium Low x Government guarantee
The financial loss of SPC should
be basically compensated by the
public
8. Force Majeure Risks
1 Natural disasters Catastrophic god’s act events High Low x (x)
Guarantee by IIGF
Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
2 Political force majeureEvents of war, riots, civil disturbance,
huge social strikesHigh Low x (x)
Guarantee by IIGF
Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
3 Extreme weather Medium Low x (x)Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
4 Prolonged force majeure
<Tentative> If above 6 to 12 months,
it could cause economic problems on
the affected party (esp. if insurance is
no longer available)
High Low x x
Either party should be able
to terminate the PPP
contract and trigger an
early termination buyout of
the project
5Economic Downturn in
Indonesia
Decrease in service demand, Financial
loss from echange risk and/or hyper
inflation
High Medium x (x)
Private side needs to share
some amount of risk for
minimizing the financial damage.
9. Asset Ownership Risks
* 1 Asset loss event riskFire, explosion, etc. except for Force
Majeure case.High Low x Insurance
2Problem of asset transfer
after the PPP contractHigh Low x
The condition of the assets
and the timing of their
transfer should be clearly
defined in the contract at
the beginning of the
project.
3Inspection fault after the
Asset TransferMedium Low x
* Impact level (High, Middle, Low) is determined by the following definition.
The amount of negative impact on the Revenue. High: More than 15%, Middle: 4-14%, Low: Less than 3%
* Probability level (High, Middle, Low) is determined by the following definition.
The ocurrence rate. High: More than 50%, Middle: 6-49%, Low: Less than 5% during the project period
585
Appendix 10.2 Risk Matrix of NARC Project (under Hybrid Scheme)
Risks Description Impact Probability Public SPC Tenant Mitigation Method Note
1. Site Risk (Research
Center)
Risk of I.S. Center and
Incubation Center whould be
owned by Public as the
construction will be conducted
by Public
* 1Delay and cost increase of
Land Acquisition
Delay and costs increase due to
unclear and then prolonged land
acquisition process
High Low x
Basically the public sector
already has a right to use the
project site.
2Land use right can't be
obtained entirely
Unable to acquire the land use right
due to legal issuesHigh Medium x
Basically the public sector
already has a right to use the
project site.
3Complex resettlement
process
Costs overrun and delay due to a
complicated resettlement processHigh Low x
Basically the public sector
already has a right to use the
project site.
Delay due to uncertainty of ground
conditionsMedium Low x (x)
Precise land survey during
the preparation phase of
tender document
Unforeseen Issue Medium Low x
Unforeseeable/uncontrollable
risk is better taken by the Public
sector.
5
Damage of unknown
artifacts and antiquites in
the site
Medium Low x (x)
Precise land survey during
the preparation phase of
tender document
Unforeseeable/uncontrollable
risk is better taken by the Public
sector.
6Damage of existing building
or facilityLow Low x
7 Fail in keeping site safetyDamage to neighbors and construction
workersLow Low x
Describe the safety
standard in the contract
document. Arrange the
safety measures during the
constructuion.
Unforeseen Issue Medium Low x
Precise land survey during
the preparation phase of
tender document
Since EIA is conducted, the risk
occurrence is low
Contaminated after the Contract Medium Low x
Contamination found after the
Contract but due to reasons
before the contract are to be
treated as "Unforeseen Issue"
2. Design, Construction and Commissioning Risks
Caused by Private High Medium x
Caused by Public High Medium x
2
Increase in construction
cost of the I.S. center and
Incubation center
By Hybrid scheme, there is the risk
that the SPV designs the over-spec
facility to achieve the higher service
level for O&M services to attact more
tenants with the budget borne by
public
High Medium x
Better monitoring system
for designing and
supervision work
Time and cost overruns due to
unclear/ incomplete design brief
(I.S. Center and Incubation Center)
Medium Medium (x) x
Part of financial damage could
be shared with Public for I.S.
center and Incubation center.
(Research Center) Low Low x
4Additional design works
required by operatorMedium Low x
5
Delay in completing
construction tender of I.S.
center and Incubation
center
High Medium x
Loss of expected revenue
during the delayed period should
be conpensated to the Private.
(I.S. Center and Incubation Center) Medium Medium x (x)
Part of financial damage could
be shared with Private for I.S.
center and Incubation center as
the SPC is in charge of
Supervison of the construction
work.
By fault of Public (Research Center) Medium Low x
By fault of Private (Research Center) Medium Low x
(I.S. Center and Incubation Center) High Medium x
By fault of Public (Research Center) High Medium x
By fault of Private (Research Center) High Medium x
Design brief risk3
6Delay in completing
construction works
7 Construction cost increase
4Difficulties of site
conditions
8Contamination/pollution to
the site environment
1Increase in construction
cost due to designing issues
586
3. Sponsor Risks
(I.S. Center and Incubation Center) Medium Medium x (x)Careful Technical
Evaluation at PQ
Part of financial damage could
be shared with Public for I.S.
center and Incubation center.
(Research Center) Medium Medium xCareful Technical
Evaluation at PQ
(I.S. Center and Incubation Center) Medium Low x
(Research Center) Medium Low x
3 Default by operators Medium Low x
4 Default by the SPCSPC’s default leading to termination
and/or step-in by financiersHigh Low (x) x
Close monitoring of SPC's
financial condition
The compensation should be
limited to project finance to
attract investors
5 Default of project sponsorSponsor (or a member of
consortium)'s defaultMedium Low x
The compensation should be
limited to project finance to
attract investors
4. Financial Risks
1
Fail to procure the budget
for construction work of
I.S. center and Incbation
center.
High Medium x
Any expenditure spent by SPC
should be conpensated by the
Public.
2Fail to achieve financial
close
Inability to achieve financial close due
to market uncertaintyHigh Medium x
Close coodination with
public, private and lender
The compensation should be
limited to project finance to
attract investors
3 Financial structure riskInnefficiency due to inoptimal project's
capital structureMedium Medium x
4 Foreign exchange rate risk(non extreme) fluctuation of foreign
exchange rateHigh High x (x)
Utilization of foreign
exchange swap
For example, some portion of
tenants fee could be paid by
USD or hard currency basis.
Extreme currency fluctuation
should be categorized as Force
Majeure.
5 Inflation rate risk Medium Medium x (x)
Check the sensitivity of the
profit by the inflation rate
increase
Tenants fee could be increased
based on CPI of Indonesia.
Hyper inflation should be
categorized as Force Majeure.
6 Insurance risk (1)
Insurance cover for a certain risk is
no longer available from reputable
insurers in the market
Medium Medium x
The minimum insurance
coverage should be determined
by the Public to make the
optimum selection.
7 Insurance risk (2)
substantial increases in the rates at
which insurance premiums are
calculated
Low Medium x
The minimum insurance
coverage should be determined
by the Public to make the
optimum selection.
5. Operating Risks
1Unqualified performance of
servicesMedium Low x
Development of monitoring
system, and installment of
incentive mechanism
2 Problem in subcontractorProblems (strike, lockout, go slow,
etc) by subcontractor staffMedium Low x
General social disorder should
be categorized as Force
Majeure.
3 O&M cost overrun risk Mis-estimation of O&M costs High Medium x
4Estimation of life cycle
expenditure is incorrectLow Low x
5 Increase in energy costs Medium Medium x (x)
Include the tariff
adjustment mechanism
linked to CPI in the
contract
6
Increase in maintenance
and replacement cost of
research equipment
Medium Medium x (x)
Include the tariff
adjustment mechanism
linked to CPI in the
contract
* 7Accident by the fault of
Tenant
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
* 8Accident by the fault of
SPC
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
* 9Accident by the fault of
Public
Accident includes explosion, leakage,
any facility damageMedium Medium x Insurance, Safety Facility
2 Default by contractors
1Poor performance of
contractors
587
Do not provide human source Medium Low x
Inefficient transparency of research
contents from PublicMedium Medium x
Inefficient transparency of research
contents from PrivateMedium Medium x (x)
No support for incoming Tenent of
Incubation center and Research
center
Medium Low x
Fault of Public (before connection) Medium Low xStorage facility, emergency
generator etc.
Fault of Private (after connection) Medium Low xStorage facility, emergency
generator etc.
Prolonged unavailability is to be
classified as Force Majeure.
12Obsolescence of Research
EquipmentsMedium Medium x x
Include the tariff
adjustment mechanism
13Inefficient service level of
Research Equipment
Break down, no support engineer, no
test chemicals, etc.Medium Low x
14Inefficient service level for
Business Matching
No expected event or information is
provided.Medium Low x
15Inefficient service level for
Property Right IssuesNo information provided. Medium Low x
6. Revenue Risks
* 1
Decrease in the demand
volume on Incubation
Center
High Medium (x) xProper planning of
incentives.
* 2
Decrease in the demand
volume on Research
Center
High Medium (x) xProper planning of
incentives.
3
Development of other
competitive public facility in
the same region
Medium Medium x
If similar facility is constructed
near NARC, the occupancy
ratio would be affected.
4Incorrect estimation of
revenueMedium Low x
Precise evaluation for
demand estimation
5Failure to collect payment
from tenantMedium Low x
Qualification of financial
capacity of tenants
6Failure of proposed tariff
changes caused by private
Inability of SPC to request change of
tariff levels due to failure in achieving
agreed level of service
High Medium xCareful management of
providing service level
7Periodical tariff adjustment
is delayed caused by public
(in case, the approval is needed for
tariff adjustment)High Medium x
The automatic tariff adjustment
is preferred by investors.
8
Level of the adjusted tariff
is lower from initially
projected
Especially after tariff indexation and
tariff rebasingHigh Low x
The limited financial loss is
preferred by private.
9Miscalculation of the tariff
estimatesMedium Low x
Make additional contract
with financial consultants
The limited financial loss is
preferred by private.
10
The emitted waste water
or gas does not satisfy the
environmental regulation
level
Medium Low x x
7. Interface Risks
1
Fault in designing and
construction of I.S. Center
and Incubation center
Facility does not satisfy the expected
service level stipulated in the tender
document and contract.
High Low x
SPC is in responsible for the
designing and supervision of the
facility.
2
Interface error of
installation of research
equipment
Research Equipment could not be
installed in the Incubation center
beceause of the design and
construction error.
Low Low x
SPC is in responsible for the
designing and supervision of the
facility.
3Interface error of land civil
work
Interface of incubation center and
connection road does not fit.Low Low x
SPC is in responsible for the
designing and supervision of the
facility.
11Unavailabile utilities (water,
electricity, gas)
10
Insufficient cooperation
among Stakeholders (SPC,
BPPT and universities)
588
8. Political Risks
1 Currency inconvertibility
Inavailability and/or incovertibility of
local currency to the investor's home
currency
Medium Low x
• Local financing
• Off-shore account
• Guarantee from central
bank
2 Currency non-transfer
inability to transfer funds in foreign
currency to the investor's home
country
Medium Low x
• Local financing
• Off-shore account
• Guarantee from central
bank
3 Expropriation risk Medium Low x• Mediation
• Government guarantee
4General change in law
(including tax)Medium Low x
Detail should be stipulated in the
contract. Grandfathering and/or
grace period for change in law
would be a welcome protection
for international tenants.
5
Discriminatory or project
specific change in law
(including tax)
High Low x
The financial loss of SPC should
be basically compensated by the
public
6Delay in achieving planning
approval
Only if it caused by the public sector's
unilateral/improper decisionHigh Medium x
The financial loss of SPC should
be basically compensated by the
public
7
Delay in starting the
operation of NARC
business
By the fault of public approval or any
legal procedureHigh Low x
The financial loss of SPC should
be basically compensated by the
public
8
Fail or delay in obtaining
necessary consents (excl.
Planning)
Only if it caused by the public sector's
unilateral/improper decisionMedium Low x
The financial loss of SPC should
be basically compensated by the
public
9Delay in gaining access to
the site
Only if it caused by the public sector's
unilateral/improper decisionMedium Low x
The financial loss of SPC should
be basically compensated by the
public
10Termination due to
Authority defaultMedium Low x • Government guarantee
The financial loss of SPC should
be basically compensated by the
public
9. Force Majeure Risks
1 Natural disasters Catastrophic god’s act events High Low x (x)Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
2 Political force majeureEvents of war, riots, civil disturbance,
huge social strikesHigh Low x (x)
Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
3 Extreme weather Medium Low x (x)Insurance, to the
reasonable level
Private side needs to share
some amount of risk for
minimizing the financial damage.
4 Prolonged force majeure
<Tentative> If above 6 to 12 months,
it could cause economic problems on
the affected party (esp. if insurance is
no longer available)
High Low x x
Either party should be able
to terminate the PPP
contract and trigger an
early termination buyout of
the project
5Economic Downturn in
Indonesia
Decrease in service demand, Financial
loss from echange risk and/or hyper
inflation
High Medium x (x)
Private side needs to share
some amount of risk for
minimizing the financial damage.
10. Asset Ownership Risks
* 1 Asset loss event riskFire, explosion, etc. except for Force
Majeure case.High Low x Insurance
2Problem of asset transfer
after the PPP contractHigh Low x
The condition of the assets
and the timing of their
transfer should be clearly
defined in the contract at
the beginning of the
project.
3Inspection fault after the
Asset TransferMedium Low x
* Impact level (High, Middle, Low) is determined by the following definition.
The amount of negative impact on the Revenue. High: More than 15%, Middle: 4-14%, Low: Less than 3%
* Probability level (High, Middle, Low) is determined by the following definition.
The ocurrence rate. High: More than 50%, Middle: 6-49%, Low: Less than 5% during the project period
589
Appendix 12. Procurement Procedures for NARC Project
1. Procurement Procedure of PPP Scheme
1.1 Overview
Procurement procedure of the PPP scheme follows Presidential Regulation No.67/2005 which
was amended by Presidential Regulation No.13/2010, Presidential Regulation No.56/2011, and
Presidential Regulation No.66/2013 (hereinafter collectively referred to as “PR67/2005”).
In accordance with PR67/2005, the present JICA Feasibility Study (JICA Preparatory Survey) is
considered as the “pre-feasibility study (Pre-F/S)”, or the “Final Business Case”, as defined in the
regulation. Then, after completion of this Study, the NARC project may enter the procurement
stage. Before the procurement process, following activities must be done:
(1) GCA shall prepare the following documents:
1) Final appraisal of Pre-F/S (Final Business Case), consisting of:
a. Approval of the stakeholders pertaining to the PPP Project;
b. Update and confirmation of Preliminary Appraisal of Pre-F/S (OBC);
c. Confirmation of the PPP Project readiness;
d. Confirmation pertaining to the market interest;
e. Determination of tariff structure;
f. Confirmation pertaining to the availability of budget for land acquisition;
and
g. Decision on the implementation mechanism of government support and/or
government guarantee as well as the funding structure.
2) Procurement plan:
a. Procurement plan for private business entity, covering:
(i) Formation of the Procurement Committee;
(ii) List of prospective tender participants, tender evaluation criteria, and
procurement process;
(iii) Procurement implementation stages, implementation time on each
stage, and required resources;
(iv) Calculation method for the project value and tariff structure.
b. Contents of PPP contract regarding scope of the PPP contract, rights and
obligations of the parties, period of agreement and others.
590
(2) GCA shall do the market sounding to obtain inputs and to know interest among
prospective investors and prepare the list of prospective investors interested in the
PPP project.
1.2 Procurement Planning
Procurement planning includes: (1) formation of Procurement Committee; and (2) preparation of
procurement plan.
(1) Formation of Procurement Committee
Provisions to be fulfilled on the formation of Procurement Committee are as follows:
The number of Procurement Committee members shall be odd-numbered, not less than five
persons, and consisting of Chairman, Vice Chairman, Secretary who also functions as a
member, and other members.
Procurement Committee members shall be from the GCA itself and may be from its related
agency, working unit and/or professionals.
One of Procurement Committee members shall be a member of PPP Project Management
Team.
Procurement Committee members must consist of the parties who know, understand and
master on:
- Procurement procedures;
- Scope of work of the PPP Project;
- Law of contract and provisions of laws and regulations prevailing in the subject
infrastructure sector;
- Technical aspects; and
- Financial aspects.
Procurement Committee members are not allowed to have any affiliation relationship with
members of another Procurement Committee or with a prospective tender participant or its
consultant.
In the event that, at the time of implementation of procurement, it is found out that one of
the members of Procurement Committee has an affiliation relationship with a member of
another Procurement Committee or with a prospective tender participation, a tender
participant or its consultant, then the said member of the Procurement Committee shall
convey to the GCA pertaining to that matter and the GCA shall substitute the said member
of the Procurement Committee.
Every decision of the Procurement Committee shall be made based on deliberation to reach
591
consensus.
In the event that a decision cannot be made through a deliberation to reach consensus, then
the decision making shall be carried out based on majority votes. Each member of the
Procurement Committee has one vote that may not be represented by another member of
the Procurement Committee.
(2) Preparation of Procurement Plan
Preparation of procurement plan consists of at least five activities, i.e. (i) preparation of
procurement schedule and concept of the procurement announcement, (ii) preparation of
Prequalification Document, (iii) preparation of HPS (owner’s estimate), (iv) preparation of Public
Tender Documents, and (v) market sounding.
1) Prequalification Document
Prequalification Document is prepared by Procurement Committee and determined by GCA.
The Prequalification Document at least includes the following items:
a. Brief explanation of the PPP project;
b. Rights and obligations of tender participant candidates, including compensation which is
right of tender participant candidates if prequalification is canceled after the
prequalification results;
c. Form of Expression of Interest;
d. Implementation schedule and evaluation procedure of prequalification
2) Owner’s Estimate
HPS or owner’s estimate is prepared by Procurement Committee based on the Pre-F/S report of
the Project and determined by GCA. The Procurement Committee can be supported by
consultants to prepare the owner’s estimate. The estimation should include the investment cost
which consists of project cost, interest provision, interest assumption, and escalation. Project cost
consists of planning cost, construction cost, monitoring cost, and operational and maintenance
cost as well as land acquisition if any. Interest consists of interest during construction period and
interest of loan principal.
3) Public Tender Documents
Procurement Committee also shall prepare the Public Tender Documents, including:
a. Invitations to the tender participants;
b. Instructions to the tender participants, which at least contain:
i) General information: scope of work, source of fund, requirements and qualifications
592
of the tender participant, quantity of tender documents, and observation of work sites;
ii) Contents of public tender documents: explanation and any change in the contents;
iii) Language to be used in the tender, the writing of offered price, proposed currency and
method of payment, validity period of the offer, letter of the offer guarantee,
alternative proposal offers by the tender participant, offer form, signing of the offer
letter;
iv) Method of covering and marking the envelope of the offer, expiry of offer submission,
the treatment for late offer, and the prohibition to change and withdraw of the offers
which has been submitted;
v) Tender opening procedure, confidentiality and restrictions, tender documents
clarification, examination of the comprehensiveness of the tender documents,
arithmetic correction, conversion into single currency, tender evaluation system
including its criteria, formulation and evaluation procedure, and also the assessment of
price preference;
vi) Evaluation system;
vii) Proposal to form a Business Entity with Indonesian legal status in case that the tender
participant is a Foreign Legal Entity.
c. Draft PPP agreement;
d. List of quantity and price;
e. Technical specification and drawings;
f. Form of offer letter;
g. Form of cooperation;
h. Form of offer guarantee letter;
i. Form of performance bond letter;
j. Method of submitting a tender document.
4) Other Activities in Procurement Preparation
Besides the abovementioned activities, GCA shall carry out the market sounding to obtain inputs
and to know the interest of prospective investors on the proposed PPP project. The market
sounding may be carried out in various forms, such as a series of road show, one-to-one meetings
with potential national and international financial institutions and so on. The market sounding
may be conducted more than once. Based on the results of the market sounding conducted by the
GCA, the Procurement Committee may take alteration to the concept of the public tender
documents.
1.3 Procurement Implementation
593
Before entering the prequalification stage, the following requirements shall be fulfilled:
Pre-F/S report;
In-principle approval of Government Support and/or Government Guarantee;
Environmental Feasibility Certificate and Environmental Permit from Regional
Government; and
Designation of project location from Governor.
Steps of procurement implementation are described in the following figure:
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.1 Steps of PPP Procurement Implementation
(1) Announcement and Participant Registration
Public tender shall be widely announced at least through one printed medium with national
circulation and one printed medium with circulation in location of the PPP project. If possible, the
public tender shall be also announced through the website of GCA. To attract foreign investors for
the PPP project, the public tender may also be announced through printed media with
international circulation.
The announcement must contain at least the following information:
Announcement and participant
registration for Prequalification
Prequalification
Drafting of bidders list, delivery of invitation and
acquiring the public tender document
Aanwijzing
Evaluation of bid
Preparation of minutes of tender
result (BAHP)
Announcement of winning bidder
Objection of tender participant
Issuance letter of declaration of
winning bidder
Submission and opening of the bid
document
Determination of winning bidder
1
2
3
4
8
7
6
5
9
10
11
594
Name and address of Minister/Head of Institution/Head of the Region who conducts the
public tender;
Brief description on the scope of work;
Project cost estimation;
Requirements of tender participants;
Place, date and time to acquire the public tender documents.
(2) Prequalification
After the announcement, GCA shall continue the process of prequalification. Following are
procedure of prequalification implementation:
1) Announcement for public tender prequalification shall follow the provisions
mentioned above;
2) Procurement Committee shall open registration on the date stated in the
announcement of public tender prequalification. Prospective tender participants
shall submit Expression of Interest as requirement to acquire prequalification
documents;
3) Prospective tender participants shall submit the prequalification document to the
Procurement Committee on schedule;
4) Evaluation and clarification of prequalification document;
5) Determination of tender participants who have passed the prequalification
(shortlisted bidders) by the Procurement Committee;
6) Legalization of prequalification result by the Procurement Committee;
7) Announcement of prequalification results by the Procurement Committee;
8) The shortlisted bidders are entitled to retrieve Public Tender Document from the
Procurement Committee by paying certain amount of money, in accordance with
the provisions of law and regulation;
9) Objection to the prequalification results, by tender participants who have not been
prequalified, must be submitted to the GCA within 7 working days since date of
prequalification result announcement with provision of objection guarantee;
10) Investigation and follow-up on the objection to prequalification results shall be
provided within 7 working days after the objection is received by GCA;
11) Re-examination by the Procurement Committee within 7 working days after the
exception/objection proved to be true. Based on the re-examination result, the
Procurement Committee shall announce the re-examination result, with provisions
as follow:
a. If there are less than three prequalified tender participants, then
595
re-announcement and re-prequalification shall be conducted by inviting new
tender participants. The tender participants who have passed the
prequalification do not need to follow the re-prequalification.
b. If there are no additional tender participants or still less than three
participants in after re-announcement and re-prequalification, then:
i) If the total tender participants are two, then Procurement Committee will
continue the public tender;
ii) If there is only one tender participant then it shall be determined as a single
bidder.
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.2 PPP Prequalification
Evaluation criteria for prequalification include the following:
Validity of permits owned in order to be able to carry out business activities thereof;
Deed of establishment and articles of association thereof;
Authority to sign a PPP contract;
Structure of the board of directors and the board of commissioners;
Statement letter pertaining to the status of prospective tender participant declaring that the
Prequalification procedures:
Announcement for public tender
prequalification
Registration and acquiring of
prequalification document
Submission of prequalification
document
Evaluation and clarification of
prequalification document
Re-examination if there are any
exception/objection proved to be true and announcement of re-
examination result(7 working days)
Objection submission by tender participants who
does not passed prequalification to the
GCA, if any (7 working days)
Announcement of prequalification result
Legalization of prequalification result
Determination of shortlisted bidder
Investigation and follow up to the objection of prequalification result
(7 working days)
596
participant is not bankrupt or in remission, its business activity is not suspended, and/or not
serving any criminal cases. If the prospective tender participant is an Indonesian business
entity, the statement letter shall be signed over a duty stamp. If it is a foreign business entity,
the said statement letter shall be notarized by a public notary and certified by an Indonesian
embassy or consulate in the country where the said statement letter was signed);
Experience in the similar Infrastructure Provision to the subject PPP Project;
Ability to provide facilities and equipment as well as personnel;
Audited financial statements of latest three fiscal years (if the company is founded less
than one year, it shall provide the financial statements of its holding company);
Letter of financial support from bank;
Letter of support from shareholders (sponsorship agreement);
Availability of special equipment, special expert required, or certain experience for
special/specific/high technology work.
If the prospective tender participant is a consortium, the evaluation above shall cover each
member of the consortium. The consortium shall submit its consortium agreement that clearly
shows the lead member. If the prospective tender participant is a limited liability company,
completion of the above documents also covers its shareholders.
(3) List of Prequalified Bidders, Invitation to Prequalified Bidders and Delivery of Public
Tender Document
List of prequalified tender participants (shortlisted bidders) shall be prepared by Procurement
Committee and legalized by GCA. The shortlisted bidders shall be announced on the official
bulletin or the website of GCA and invited to take the Public Tender Documents.
(4) Pre-bid Meeting (Aanwijzing)
Pre-bid meeting shall be carried out in determined place and time and attended by tender
participants or parties appointed through legal power of attorney. Following information shall be
explained:
Procurement method;
Procedure of Bid Document submission;
Documents to be attached in the Bid Document;
Procedure of Bid Document opening;
Bid evaluation method;
Events that may cause abortion of the tender;
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Concept of the PPP agreement;
Provisions and method of bid evaluation regarding the price preference on use of domestic
products in accordance with applicable laws and regulations;
Amount, validity period and parties who may issue the bid bond.
If needed, the Procurement Committee may provide further information by conducting a field
survey. Especially to discuss the concept of PPP Agreement, the Procurement Committee can
conduct a meeting with each prospective tender participant separately (competitive dialogs) to
obtain inputs or comments from each participant on the concept of PPP Agreement, including
about the maximum amount of viability support (VGF).
Any changes on the concept of PPP Agreement must be reported by the Procurement Committee
to the GCA for approval. The Procurement Committee will deliver the revision on concept of PPP
Agreement to all prospective tender participants before submission deadline of Bid Documents.
The revision will be the final concept signed by the winning bidder, including the maximum
amount of viability support (VGF amount) that is used as the bidding parameter.
(5) Submission and Opening of Bid Document
Methods of bid document submission shall be specified in the Public Tender Documents.
According to the PPP regulation, the submission of bid document shall use two-envelope method.
Envelope 1 contains administration and technical documents; Envelope 2 contains financial
document. Then, these two envelopes are put into one cover envelope.
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.3 Two-Envelope Method of PPP Bid Submission
Envelope 1
Administrative
and technical
document
Envelope 2
Financial
document
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Bid document must be submitted on time as specified in the Tender Documents. The Procurement
Committee has right to reject any Bid Documents which is submitted after the deadline. Tender
participants are not allowed to resign if they have duly submitted Bid Document to the
Procurement Committee.
Methods of Bid Document opening shall be also specified in the Public Tender Document.
Procurement Committee asks at least one representative each from at least two tender participants
to attend the opening as witnesses. If there is no representative from tender participants or only
one representative as witness, then Procurement Committee will ask the approval from the tender
participants present to postpone the opening of Bid Documents. If tender participants do not agree
to postpone it, then the opening will be continued by appointing additional witness from outside
the Procurement Committee by writing. If tender participants agree to postpone the opening, then
Procurement Committee will postpone it for two hours. If after two hours still only one
representative or there is no representative from tender participants available, then the opening
will be continued by appointing additional witness from outside the Procurement Committee by
writing.
The Procurement Committee shall inspect the contents of box or place of the submitted Bid
Documents and verify the number of envelopes. The Procurement Committee shall inspect, show
and read in front of the tender participants pertaining to the completion of Bid Document from
each tender participant, covering:
Letter of bid specifying the bid validity period and does not specify the bid price;
The original bid bond; and
Technical documents and other supporting documents as required in the Public Tender
Document.
The Procurement Committee shall prepare the minutes of opening of the bid document (BAPP)
that will be signed by the Procurement Committee and the witnesses.
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Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.4 Bid Document Opening
(6) Bid Evaluation
Bid evaluation shall be conducted in accordance with the provisions already determined in the
Public Tender Document. Firstly, the technical proposal is opened and evaluated on a pass-or-fail
basis. The evaluation criteria applied for technical proposal is adjusted to the type of
infrastructure. Secondly, the financial bid is evaluated. Under the PPP regulation and the
government support framework, only parameter used to determine the winning bidder is amount
of VGF required by each bidder. Bidder with the lowest VGF requirement shall be awarded the
subject PPP contract.
(7) Preparation of Minutes of Tender Result (BAHP)
Procurement committee shall conclude the evaluation results articulated in the BAHP, containing:
1) Names of tender participants and bid price and/or corrected bid price of each tender
participant;
2) Method of evaluation used;
3) Formulas used;
4) Other information deemed necessary pertaining to the circumstances of
implementation of procurement;
5) Date of making the minutes and number of tender participants who passed and did
2 witnesses
Procurement Committee
Procurement Committee shall inspect
the contents of box/place of bid
documents submission and verify the
number of envelopes of bid document
submitted.
Procurement Committee shall inspect,
show and read in front of tender
participants pertaining to the
completion of bid document from each
tender participant, covering:
Letter of bid specifying the validity
period of bid but does not specify
the bid price;
The original bid bond; and
Technical documents and other
supporting documents required in
the public tender document.
Minutes of
opening of
the bid
document
(BAPP)
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not pass in each evaluation stage;
6) Decision of sequence of one prospective winner and two reserves;
7) A statement that the procurement is declared to fail and re-procurement shall be
conducted if there is not any bid eligible;
8) Decision of sequence of one prospective winner and one reserve, if there are only
two bidders eligible for the requirements;
9) A statement that the procurement declared to fail and re-procurement shall be made,
or the said bidder is determined as a single prospective bidder if there is only one
eligible tender participant
BAHP shall be signed by the Chairman and all members of Procurement Committee or at least by
two-thirds of total members of Procurement Committee.
(8) Determination of Winning Bidder
Process of winning bidder determination is described in the following figure:
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.5 Process of Winning Bidder Determination
Procurement committee shall declare a single bidder as the winner if there is only one tender
participant that follows prequalification and/or submitted bid documents as well as fulfills the
administrative and technical requirements. Following is the process of determination of single
Procurement committee shall declare the prospective winning bidder based on results of evaluation.
Procurement committee shall make and submit report to the GCA to determine the winning bidder. The report shall be accompanied by the proposal of prospective winning bidder as well as the reserve of prospective winning bidder including the elucidation or other information deemed necessary as the materials for considering the decision making.
GCA shall determine the winning bidder based on the proposal of the procurement committee.
Supporting data needed to determine the business entity of winning bidder are: Public tender document,
including the alteration (if any);
Minutes of opening of the bid document (BAPP);
Minutes of tender results (BAHP);
Summary of procurement process and procurement results;
Bid documents from prospective winning bidder and reserve prospective winning bidder.
GCA can decide to approve the proposal of procurement committee or conduct re-evaluation which results shall be final.
*in the event of delay on declaring the winning bidder and cause the bid/bid guarantee expired, confirmation to all tender participants to extend the bid letter and bid bond shall be made.
In the event the prospective winner refuses to extend the validity of bid letter and bid bond, it may withdraw without being imposed with any sanction.
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bidder:
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
Figure A.12.6 Process of Single Bidder Determination
(9) Announcement of Winning Bidder
Announcement of winning bidder shall announced or notified by the Procurement Committee to
the tender participants in two working days after receiving the determination letter of winning
bidder from GCA. In the event the tender participant is the only participant passing the
prequalification, the notification to the tender participant is not required. In case that the PPP
project requires the viability support (VGF), the GCA shall submit the result of announcement of
winner determination to the Minister of Finance along with a request of final determination
granting of viability support (VGF).
(10) Objection of Tender Participant
Tender participants who have objection to the determination of winning bidder are given the
opportunity to submit objections in writing in reasonable time up to seven working days since the
date of winning bidder announcement. The objection must be submitted to the GCA along with
evidence of deviation. Reliability of the subject matter of the objection shall be investigated by
the GCA based on the evidences submitted by the tender participant and other supporting
evidences. GCA shall announce the results of investigation on the objection and shall take
reasonable action within 9 working days after the expiration of the objection period.
Procurement committee shall make and submit a report to the Minister/Head of Institution/Head of Region pertaining to the single bidder
Minister/Head of Institution/Head of Region shall order the procurement committee to negotiate with the single bidder
Procurement committee shall negotiate with the single bidder by referring to the tender document and HPS (owner’s estimate)
If the negotiation with the single bidder causes the bid/bid bond expired, then the single bidder shall immediately extend the bid letter and bid bond prior to the expiration thereof
Procurement committee shall make and submit the BAHN (minutes of negotiation result) and other information to the Minister/Head of Institution/Head of Region
Minister/Head of Institution/Head of Region may reject or agree with the result of the negotiation based on reasonable and accountable grounds
procurement process shall be repeated
If rejected
procurement committee may determine the single bidder as the winner
If agreed
Supporting data needed to determine the negotiation are:
Public tender documents, including the alteration (if any);
Minutes of opening of the bid document (BAPP)
Minutes of tender results (BAHP); and
Summary of tender process and tender results.
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(11) Letter of Declaration of Winning Bidder
GCA shall publish the letter of declaration of winning bidder as the executing agency of the PPP
project, with provisions as follows:
1) There is no objection from the tender participants; or
2) Objections received by the GCA during objection period are not incorrect, or the
objections have surpassed the objection period.
This letter of declaration shall not be applicable in the event the single bidder is the only
prequalified participant. The winning bidder who has been declared as winning bidder shall
accept the said decision. Declaration letter of winning bidder shall be made within five working
days after the announcement of winning bidder and shall be immediately submitted to the
winning bidder. One of copies of winning bidder declaration letter shall be submitted (without
attachment of the PPP contract) at least to the working unit that shall monitor the execution of PPP
contract.
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1.4 Supporting Activities and Documents shall be Prepared Before and During
Procurement Process
No. Activity Detail Responsible Agency
1 Activities related to environment
- Complete all the preparation of the AMDAL documents or fill the UKL-UPL forms;
- Submit the completed AMDAL documents to the Minister, Governor, or Head of Region through Secretariat of the AMDAL Evaluation Commission;
- Submit the completed UKL-UPL forms to the Minister, Governor, or Head of Region to be further used as the basis for the issuance of the UKL-UPL recommendation;
- Ensure that Environmental Feasibility Certificate or the UKL-UPL recommendation has been obtained;
- Determine requirements that shall be carried out by the business entity as those specified in the Environmental Feasibility Certificate or UKL-UPL recommendation and Environmental Permit.
GCA
2 Activities related to land acquisition and resettlement
- Submit application of issuance of location determination to the Governor;
- Use the information in the RKL and RPL in order to complete the land acquisition and resettlement program;
- Ensure the availability of budget to carry out the land acquisition; - Ensure the process of land acquisition has started at the time the
process of business entity procurement is started; - Ensure the process of resettlement has been carried out at the time
the process of business entity procurement is started; - Ensure the land acquisition has been carried out at the end of the
process of business entity procurement.
GCA
3 Activities related to Government Support (VGF)
- Submit Pre-FS documents to the MoF to obtain the in-principle approval of the Government Support in the form of non-financial fiscal contribution at the time the Pre-FS is completed;
- File the request of granting the initial determination of feasibility support at the time of pre-qualification implementation;
- MoF issue an initial decision letter of viability support (VGF) at the time of bid implementation;
- Submit results of winning bidder determination to the MoF as the basis for MoF to issue the final decision letter of viability support (VGF).
GCA
4 Activities related to Government Guarantee
- Submit the guarantee application package to obtain government guarantee to the BUPI and BUPI shall issue a Letter of Intent for the project eligible for BUPI’s requirements by enclosing the Pre-FS report;
- BUPI shall conduct an evaluation after the guarantee application package received by BUPI;
- BUPI and GCA shall finalize the guarantee contract and the regress contract shall be done at the finalization of PPP contract, at the same time finalization of the loan agreement with the business entity;
- Ensure that BUPI has issued in-principle approval before the tender participants submit the bid documents, in the form of Letter of Intent based on BUPI’s evaluation results. Note: BUPI is Business Entity of Infrastructure Guarantee (PT. PII)
GCA
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
604
1.5 Document Generated Before and During Procurement Process
Timeline Document Responsible Agency
Before
procurement
process
Pre-feasibility study report
[Equivalent to the present JICA Preparatory
Survey (Feasibility Study)]
GCA
In-principle approval of Government Guarantee
and/or Government Support
GCA
Environmental Feasibility Certificate and
Environmental Permit
GCA
Location permit GCA
During
procurement
process
Pre-qualification document GCA
Public tender document GCA
PPP contract GCA – Private Business Entity
Guarantee agreement BUPI – Private Business Entity
Regress agreement GCA – BUPI
Note: BUPI is Business Entity of Infrastructure Guarantee (PT. PII)
Source: JICA Study Team based on PR67/2005 (as amended) and Regulation No.3/2012 of
BAPPENAS
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2. Procurement Procedure of Hybrid Scheme
2.1 Overview
The Hybrid Scheme requires a two-fold procurement process, i.e. the selection of the private
operator and the procurement of Support/Incubation Center construction. Design, supervision and
operation of the entire facilities will be under responsibility of the selected private operator, whilst
only the funding and construction works are separately undertaken by the public side for
Support/Incubation Center and by the private operator for Research Center and equipment,
respectively.
Following are steps to conduct the hybrid scheme:
Source: JICA Study Team
Figure A.12.7 Steps to Conduct Hybrid Scheme
(1) GCA must propose budget to MOF either through APBN or ODA Loan for constructing the
Incubation Centers on three locations and the Support Center.
(2) After the budget obtained, GCA will conduct tender to select and contract a private sector
partner (X) which will conduct (one package) of:
Design, Construction Supervision, Operation for Incubation Centers on the three
locations and Support Center
“Build, Operate and Transfer” (BOT) of Research Center on 3 locations
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(3) After that, GCA will conduct tender to select a private sector contractor (Y) for constructing
Incubation Centers on the three locations and Support Center.
(4) The selected contractor (Y) will construct Incubation Centers and Support Center based on
the design prepared by the selected private partner (X) and construction supervision will be
conducted by the private partner (X) and monitored by GCA.
(5) After Incubation Centers and Support Center are constructed, Private Sector (Y) will hand
them over to GCA.
(6) During the contract period, the private partner (X) will collect the tenant fee from Incubation
Center and Research Center tenants and pay the private contribution (fixed and variable profit
sharing technically for land and infrastructure lease fee) to GCA.
(7) At the end of contract, the private partner (X) will transfer all the assets to GCA.
The procurement of the Hybrid Scheme shall follow the Government Procurement Method as
regulated by following laws and Regulations:
Government Regulation No.6/ 2006 on State and Region Asset Management. (hereinafter
referred to as “GR6/2006”)
Presidential Regulation No.54/2010 on Government Procurement of Goods and Services
(amended by PR35/2010 and PR70/2010) (hereinafter referred to as “PR54/2010”)
Head of LKPP (Lembaga Kebijakan Pengadaan Barang/ Jasa Pemerintah: Agency of
Procurement Policies of State Goods and Services) Regulation No.14/ 2012 on Technical
Guidelines for PR70/2010 on Second Amendment on PR54/2010 on Government
Procurement of Goods and Services. (hereinafter referred to as “LKPP 14/2012”)
The general stipulation on government assets management is regulated in GR6/2006, while the
implementation including the procurement method will refer to PR54/2010 and the technical
procedure must follow LKPP 14/2012.
For Hybrid Scheme, since the facility of Package 1 (Incubation and Support Center) will be
constructed by using the national budget and the O&M will be conducted by the Private. Package
2 will be BOT (Build, Operate, and Transfer) by the Private, therefore the forms of asset
utilization applied are joint utilization for package 1 and BOT for package 2 as stated in Section 8,
Article 1 and Article 20 of GR6/2006.
2.2 Procurement Process
Based on the criteria mentioned in the PR54/2010, the Hybrid Scheme of NARC will use, among
others, the following procurement process for the private sector partner selection.
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(1) Procurement Type: Open Public Tender
Open Public Tender is applied to the selection of private partner in Hybrid Scheme. It is the
method of selecting providers for all works that can be participated by any providers that meet the
qualification.
(2) Prequalification
Prequalification is a qualification assessment process conducted prior to the bidding.
Prequalification is implemented for the following procurement:
Selection of consulting services provider;
Selection of goods, construction works and other services that are complex
Selection of a goods, construction works, and other services that uses the Direct
Appointment Method, except for emergency needs, or
Selection of providers through Direct Procurement.
The NARC project is considered as complex work and service provision, so that the
prequalification is required prior to the bidding.
Prequalification process generates:
List of prospective providers, or
Short list of candidates for consulting services providers.
(3) Bid Document Submission: Two-Envelope Method
Bid document submission for the Hybrid Scheme follows the Two-Envelope Method. It is used
for the procurement of goods and services where technical evaluation could be affected by price
evaluation. The method must be applied in the following types of procurement:
Procurement using evaluation through Scoring System and Economic Lifecycle Cost
System (See the section below).
Procurement of consulting services with following characteristics:
a. Separate assessment is necessary between technical requirements and bid price, so
that the price does not affect the technical assessment; or
b. a complex work that required more in-depth technical evaluation
(4) Bid Evaluation
1) Scoring System
Scoring System is the most probable and recommendable bid evaluation method for the Hybrid
Scheme. It is an evaluation method for the procurement where the technical excellence
commensurate with price, i.e. the price quotation is strongly influenced by the technical quality.
608
Under the Scoring System, the procedure and evaluation criteria must be clearly specified in the
Tender Documents according to the regulation, and the scoring weight for price must be from
70 % to 90 % of the total score.
Based on the Two-Envelope Method, the technical proposal is first evaluated on a pass-or-fail
basis. For the tender participants who have passed the first technical evaluation, both the technical
and financial proposals are comprehensively evaluated by the Scoring System to determine the
winning bidder.
2) Economic Lifecycle Cost System
An alternative to the Scoring System, the evaluation through Economic Lifecycle Cost System
might be applied to the Hybrid Scheme depending on the GCA’s consideration. The system is
applied to a goods and service provision whose evaluation needs to take into account the factors
such as construction cost, operating and maintenance costs during certain operating period. In this
system, bidder’s technical proposal is first evaluated on a pass-or-fail basis; then its financial bid
is opened and evaluated solely to determine the winning bidder. The difference from the Scoring
System is that this system only evaluates the financial bid to call the winning bidder. However, the
nature of the NARC project, such as its technical and managerial complexity of service provision,
indicates that the former Scoring System evaluation that involves technical assessment would be
best suitable as the bid evaluation method.
3) Bidding Parameter: Private Contribution Amount (Lease Payment Amount)
The bidding parameter used in the financial bid for the Hybrid Scheme is the annual
Private Contribution Amount to be paid by the Private to GCA which represents the
lease fee payment amount that partially covers the public funding for the construction
cost of Incubation and Support Centers.
The procurement process of Hybrid Scheme as regulated in Article 57, PR54/2010 is described in
the following figure.
609
Source: JICA Study Team based on Article 57, PR54/2010
Figure A.12.8 Procurement Process of Hybrid Scheme