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Seven airports offered up for private investment
The director general of air transportation at the Transportation Ministry, Herry Bakti S Gumay, said Wednesday the government had offered up seven airports across Indonesia to be managed by foreign investors
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he director general of air transportation at the Transportation Ministry, Herry Bakti S Gumay, said Wednesday the government had offered up seven airports across Indonesia to be managed by foreign investors.
“The airports are in South Banten, Bali, East Kalimantan, West Kalimantan and West Java. All require the construction of new terminals,” Herry told reporters.
He said it was also possible that Jakarta’s Soekarno-Hatta International Airport and Ngurah Rai International Airport in Bali would be offered up as both were in need of massive improvement.
According to Herry, an Indian investor had shown interest in investing in Indonesian airports and had met with the government to submit proposals.
It is believed the involvement of foreign investors is due to a limited state budget and provisions outlined in the aviation law.
“There is no regulation barring foreign investors from majority holdings in airports,” Herry said.
“The airports will stay in Indonesia and bring many benefits to Indonesians. We’ll just share the revenue with foreign investors.”
Previously, State-Owned Enterprises Minister Mustafa Abubakar said the government was looking for local and foreign investors to develop the airports, which have been operating for 25 years.
Herry said the public private partnership (PPP) mechanism would be used to partner state airport operators with foreign investors. “Foreign investors will invest their money in the airports, not invest their money through airport operators.”
Based on Indonesia National Carrier Association (INACA) data, currently Indonesia has 210 airports.
State airport operators PT Angkasa Pura I and PT Angkasa Pura II oversee 13 and 12 airports respectively.
The Transportation Ministry has eight airport projects under the PPP mechanism this year, all of which are expected to be done by 2014.
The projects include New Samarinda in East Kalimantan, South Banten, Kertajati in Cirebon, West Java and two cargo terminals at Sentani and Tarakan airports.
Ignatius Bambang Tjahjono, the airport director at the Transportation Ministry, said PPP mechanisms were being used because building airports required huge investments.
“Kertajati requires Rp 5 trillion and South Banten needs Rp 1 trillion. That’s why we need to encourage investment,” he said.
The Transportation Ministry aims to operate all those airports not only in the wake of the growth of the national airline industry, but also to accommodate ASEAN’s Open Sky policy in 2014.
The government is also increasing the capacities of major airports such as Juanda in Surabaya, Ngurah Rai in Denpasar, Polonia in Medan and Sultan Hasanuddin in Makassar.
The Indonesian airline industry has seen significant growth in the past five years.
INACA records show that national airlines carried 43.8 million passengers in 2009, an increase of 17 percent compared to 2008 figures of 37.4 million passengers.
