PUBLICPUBLIC--PRIVATE PARTNERSHIP (PPP) SCHEMEPRIVATE PARTNERSHIP (PPP) SCHEMEIN INDONESIAN TOLL ROAD DEVELOPMENT IN INDONESIAN TOLL ROAD DEVELOPMENT

Rudy Hermawan

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BACKGROUND OF TOLL ROAD BACKGROUND OF TOLL ROAD DEVELOPMENT IN INDONESIADEVELOPMENT IN INDONESIA

Congestion in highly growth regions resulting inefficient travel times and high vehicle operating costs.Policy to encourage road network development and its benefits, as well as balanced inter-regional development.Increase in infrastructure investment will accelerate economic growth and deliver prosperity Toll roads proposed in highly developed regions, where vehicle operating cost and time savings sufficiently cover the toll road construction and operation.Government budget priority is utilized in less developed regions to encourage regional development.

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PERIOD

First Period (1978 – 1983) Fully financed by Government funds (Government Equity)

Second Period (1983 – 1990)

Third Period (1990 – 1994) Cooperation with private sector using BOT scheme

SCHEME OF FINANCING

- Modified BOT scheme (i.e., revenue sharing concept, land acquisition cost is part of investment cost borned by the investor).

- Modified Turnkey Scheme (Contractor finance land acquisition and construction costs, JasaMarga repay the cost including accrued interest from its toll revenue).

Fourth Period (1994 – 2005)

STAGES OF TOLL ROAD FINANCINGSTAGES OF TOLL ROAD FINANCING

- Subsidiary Loan Agreement (SLA) to PTJasa Marga (two step loan), SOE for toll road development

- Jasa Marga’s Bonds

Fifth Period (1990 – 1994) BOT/ PPP Scheme

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Law and Regulation for Toll RoadLaw and Regulation for Toll Road

Law Republic Of Indonesia No 38/2004 about ROADS

Government Regulation of The Republic of Indonesia No 15/2005 about TOLL ROAD

Presidential Regulation No. 67/2005 about Cooperation between Government with Private Company in Infrastructure Provision

Regulation of Minister of Public Works No 295/PRT/M/2005 about TOLL ROAD REGULATORY BODY

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Regulatory ReformsRegulatory ReformsIn general a toll road is built as an alternative link, but under particular situation it may not serve as an alternative link;

Toll Road Link is decided by the minister;

Distinction on the rules of regulator and operator, the Badan Pengatur Jalan Tol(Indonesia Toll Road Authority) or BPJT as regulator, and the business entity as operator;

Tariff determined by the minister and adjusted biannually based on inflation

Open and transparent tender process

Land acquisition budget from the government and/or investor.

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BPJT Tasks and FunctionsBPJT Tasks and Functions

Recommend the initial tariff and tariff adjustment of toll to the Minister;Takeover toll road development rights following the expiry of the concession period, and recommend further operation to the Minister;Takeover of temporary toll road development right that has failed starting with the concession, for re-tendering of the development;Prepare the toll road development which include analysis of economics and financial feasibility, and environment impact assesment;Seek investment in toll roads through transparent and open tenders;Assist the land acquisition process if there is guarantee of availibility of fund from the Enterprise and to prepare the mechanism of the use thereof;Monitor the activities of planning and execution of construction works as well as the operation and maintenance of toll roads by the Enterprise; andSupervise the fulfillment of all the obligations under the toll road concession agreements and report the results periodically to the Minister.

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BPJT BPJT –– ORGANIZATION STRUCTUREORGANIZATION STRUCTURE

Technical Division

MEMBER (MPW)

Secretary

Sub Division Sub Division Sub Division

Investment Division Monitoring and Supervision Division

General Affair Division

Sub Division

MEMBER (MoF)

MEMBER (Professional Association)

MEMBER (Academic Rep)

Professionals

CHAIRMAN OF BPJT (MPW) BOARD

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TOLL ROAD INVESTMENT PROCEDURETOLL ROAD INVESTMENT PROCEDURE

PELAKSANAAN PERJANJIAN / AGREEMENT IMPLEMENTATIONPELAKSANAAN PERJANJIAN / AGREEMENT IMPLEMENTATION

(± 14 months)

(± 4-6 months)

PENYIAPAN DOKUMEN PQ/ PREPARE PQ DOCUMENT

PENYIAPAN DOKUMEN PQ/ PREPARE PQ DOCUMENT

PENYERAHAN DOKUMEN PQ/ SUBMIT PQ DOCUMENT

PENYERAHAN DOKUMEN PQ/ SUBMIT PQ DOCUMENT

PENYIAPAN USULAN PENAWARAN/PREPARE BID PROPOSAL

PENYIAPAN USULAN PENAWARAN/PREPARE BID PROPOSAL

PENYERAHAN USULAN PENAWARAN DAN JAMINAN

/SUBMIT BID PROPOSAL & BID BOND

PENYERAHAN USULAN PENAWARAN DAN JAMINAN

/SUBMIT BID PROPOSAL & BID BOND

PENERIMAAN PENETAPAN PEMENANG/ RECEIVE NOTICE AWARD

PENERIMAAN PENETAPAN PEMENANG/ RECEIVE NOTICE AWARD

BADAN USAHA/PRIVATE SECTOR

TANDA TANGAN PERJANJIAN/ SIGN CONTRACT

TANDA TANGAN PERJANJIAN/ SIGN CONTRACT

JAMINAN PELAKSANAAN,DANA PENGADAAN TANAH,

DUKUNGAN BANK/ BOND, LAND ACQUISITION COST, FINANCIAL

CLOSURE

JAMINAN PELAKSANAAN,DANA PENGADAAN TANAH,

DUKUNGAN BANK/ BOND, LAND ACQUISITION COST, FINANCIAL

CLOSURE

RAPAT PENJELASAN PRA-LELANGPERSIAPAN LELANG/ PRE BID

CONFERENCE-BID PREPARATION

RAPAT PENJELASAN PRA-LELANGPERSIAPAN LELANG/ PRE BID

CONFERENCE-BID PREPARATION

PENGUMUMAN/UNDANGAN PQ & LELANG/ PQ AND BID INVITATION

PENGUMUMAN/UNDANGAN PQ & LELANG/ PQ AND BID INVITATION

EVALUASI PRAKUALIFIKASI/ PREQUALIFICATION OF BIDDER

EVALUASI PRAKUALIFIKASI/ PREQUALIFICATION OF BIDDER

PEMASUKAN DAN PEMBUKAAN PENAWARAN

/ RECEIPT AND OPENING BID

PEMASUKAN DAN PEMBUKAAN PENAWARAN

/ RECEIPT AND OPENING BID

PERSIAPAN PEKERJAAN/ PROJECT PREPARATION

PERSIAPAN PEKERJAAN/ PROJECT PREPARATION

EVALUASI PENAWARAN/EVALUATION OF BID

EVALUASI PENAWARAN/EVALUATION OF BID

KEPUTUSAN/PENETAPAN PEMENANG/ APOINTMENT OF SUCCESFUL BIDDER

KEPUTUSAN/PENETAPAN PEMENANG/ APOINTMENT OF SUCCESFUL BIDDER

PERJANJIAN PENGUSAHAANJALAN TOL (PPJT)/ CONSESSION

AGREEMENT

PERJANJIAN PENGUSAHAANJALAN TOL (PPJT)/ CONSESSION

AGREEMENT

BPJT/GOVERMENT

PENYIAPAN PERUSAHAAN JALAN TOL/ PREPARE SPECIAL

PURPOSE VEHICLE

PENYIAPAN PERUSAHAAN JALAN TOL/ PREPARE SPECIAL

PURPOSE VEHICLE

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TOLL ROAD INVESTMENTTOLL ROAD INVESTMENT

GOVERNMENT

GOV & ENTER-PRISE ENTITY

ENTERPRISE ENTITY

ECONOMIC (+)FINANCIAL (-)

ECONOMIC (+)FINANCIAL (Marginal)

ECONOMIC (+)FINANCIAL (+)

TOLL ROAD INVESTOR APLICATION

GOV

EE

GOV EE

EE

EE

EE

Operation and Maintenance

Financing and/or Construction GovernmentEnterprise Entity

GOVEE

1

2

3

Example:Case 1: Tanjung Priok AccessCase 2: Solo - KertosonoCase 3: BOT on Toll Road in general

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Applied in all modelsGovernment can support Land Acquisition and construction cost (fully or partly)All built by investor

PPP APPLICATIONPPP APPLICATION

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Model/Case 1 : Tj. Priuk Access

Land and Construction cost funded by GovernmentOperation and Maintenance done by OperatorAssignment operator through bidding process (the lowest O & M cost)O & M cost can be fix or % of revenue

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Model/Case 2

Land and Part of Construction cost borne by Government (i.e Subsidize)Amount of subsidize is tender or negotiation subjectOne example : Government borne all land cost and 27% of toll road length after negotiation

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Model/Case 3

Applied to almost all toll roads that economically and financially visibleAll cost (including land acquisition, construction, operation and maintenance) is borne by investorBidding criteria is the lowest tariff offer by investor

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Special Case Renegotiation I

Applied to toll roads operated before 2005 due to the changing of the law and role of regulator13 roads operated by Jasa Marga were bundled and given concession5 roads operated by others still processed to renew the concession agreementRenegotiation is based on financial auditing

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Special Case Renegotiation II

Applied to several toll roads that just signed the agreement in 2006 due to unanticipated fuel price increase by governmentThe compensation were given in form of higher tariff and/or prolonge concession periode

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INVESTMENT OPPORTUNITYINVESTMENT OPPORTUNITY

Private Sector - Foreign Direct Investment:As a strategic partner for the investor that has been appointed to develop the toll road Financial Support New investment through the tender process

Government loan through bilateral G to G programLoan through multilateral agencyFinancing assistance for the Pre-FS, FS, EIA, DED and other documentsFinancing assistance for toll roads construction which are required for economic and/or regional development but less financially feasibleetc

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ROOM FOR IMPROVEMENT

Minimum Traffic Level GuaranteeTax BenefitsCredit Guarantee FundForeign Exchange Risk Mitigation

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Development Constraint

Land Acquisition ProcessFunding availabilityLand Use Development Policy and ConsistencyRisk allocationPolitics and Misperception

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Program of Toll Road Development in 2005 Program of Toll Road Development in 2005 --20092009

MAIN ROAD ACCESSA1 Jakarta-Bogor-Ciaw i 50.00 9.00 PT. Jasa Marga 1978 CA Signed 7 July 20062 Jakarta - Tangerang 27.00 6.00 PT. Jasa Marga 1983 - 1998 CA Signed 7 July 20063 Surabay a - Gempol 43.00 6.00 PT. Jasa Marga 1984 CA Signed 7 July 20064 Jakarta - Cikampek 72.00 11.00 PT. Jasa Marga 1985 CA Signed 7 July 20065 Padalarang - Cileuny i 35.63 28.77 PT. Jasa Marga 1986 CA Signed 7 July 20066 Prof. DR Soedy atmo 14.30 PT. Jasa Marga 1986 CA Signed 7 July 20067 Lingkar Dalam Kota Jakarta 23.55 PT. Jasa Marga 1988 CA Signed 7 July 20068 Belmera 33.70 9.00 PT. Jasa Marga 1989&1996 CA Signed 7 July 20069 Semarang Seksi A, B, C 24.75 PT. Jasa Marga 2003 CA Signed 7 July 2006

10 Ulujami-Pondok Aren 5.55 PT. Jasa Marga 2003 CA Signed 7 July 200611 Cirebon-Palimanan 26.30 PT. Jasa Marga 1990 CA Signed 7 July 200612 JORR W2 Selatan (Pondok Pinang - Veteran) PT. Jasa Marga 1991 CA Signed 7 July 2006

JORR E1 Selatan (Taman Mini - Hankam Ray a) PT. Jasa Marga 1998 CA Signed 7 July 2006JORR E2 (Cikunir - Cakung) PT. Jasa Marga 2001 - 2003 CA Signed 7 July 2006

13 Cikampek – Padalarang I 17.50 PT. Jasa Marga 2003 - 2004 CA Signed 7 July 2006Total 390.05 69.77

Sub Total A 459.82B1 Tangerang - Merak 73.00 PT. Marga Manggalasakti 1983 - 1996 Process to Renew CA2 Ir. Wiy oto Wiy ono, MSc. 15.50 PT. Citra Marga Nusaphala Persada 1990 Process to Renew CA3 Surabay a - Gresik 20.70 PT. Margabumi Matraray a 1993 - 1996 Process to Renew CA4 JORR Selatan (Pondok Pinang - Taman Mini) 14.25 PT. Jalan Tol Lingkar Luar Jakarta 1995 - 1996 Process to Renew CA5 Harbour Road 11.55 PT. Citra Marga Nusaphala Persada 1995 - 1996 Process to Renew CA6 Ujung Pandang Tahap I 6.05 Bosaw a marga Nusantara 1998 Process to Renew CA7 Serpong - Pondok Aren 7.25 PT. Bintaro Serpong Damai 1999 Process to Renew CA

Total 148.30Sub Total B 148.30

Total 608.12

No. TOLL ROAD LINKLENGTH

INVESTOR/ OPERATOR

DIKELOLA SEKTOR SWASTA LAIN

START OPERATION

REMARK

DIKELOLA PT JASA MARGA

16.77

Toll Road In Operation Before 2005

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TOLL ROAD DEVELOPMENT PROGRAMTOLL ROAD DEVELOPMENT PROGRAMAcceleration of 1,978.6 km toll road development program, total cost US$ 10.96 Billion(1 US$ = Rp. 9,300)

A. Implemented by GovernmentProject is economically feasible, but not financiallyfeasible(2 toll road links, 17,5 km)

B. Implemented by PT Jasa Marga(8 toll road links, 93.9 km)

C1. Implemented by On Going Investor(5 toll road links, 100 km)

C2. Evaluation of Investors (1997 Tender)(14 toll road links, 682.15 km)

C3. Tender Investment(23 toll road links, 1.085.6 km)

• Soft Loan

• Strategic Partner • Debt Financing

• Strategic Partner

• Strategic Partner • New Investors

• Strategic Partner • Debt Financing

Investment Opportunity

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Program of Toll Road Development Program of Toll Road Development in 2005 in 2005 -- 20092009

NUMBER OF LENGTH COST

LINKS (km) (Billion Rp.)

OPERATION 4 51.60 3,012.21CONSTRUCTION 7 114.55 11,230.35CA SIGNED 16 641.17 48,122.91CA FINALIZATION 3 104.72 12,203.70TENDER PROCESS BATCH II 4 61.94 9,159.00TENDER PROCESS BATCH III 2 177.12 8,096.61TOTAL 36 1,151.10 91,824.78

STATUS JUNE 2007

STATUS

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Thank YouThank You