Firms invited to manage airports, seaports

In an effort to enhance efficiency, the government plans to invite the private sector to manage and develop transportation facilities throughout Indonesia that are currently managed by the ministry’s technical management units (UPTs).
Taking off:: An Express Air plane (left) and a Merpati Nusantara plane are parked on the tarmac at Betoambari Airport in Baubau, Southeast Sulawesi, in this photo from March 28. The government plans to invite the private sector to manage transportation facilities currently managed by technical management units under a public-private partnership scheme to make operations more efficient. Antara/Zabur Karuru

Transportation Ministry deputy Bambang Susantono said Sunday that the government was correct in listing all units now, including airports and seaports, which would be commercially viable if managed under the public-private partnership (PPP) plan, before conducting a market survey to explore the responses of potential investors.

“We expect that next year we can offer the projects to interested investors, with airports being the first on offer,” Bambang told The Jakarta Post.

He added that under the plan the private sector could not only operate, but also expand facilities, such as airport terminals. The government would issue concessions ranging from 10 to 25 years for the partnership and determine the amount that the investors, which would cover both private and state-owned enterprises, would pay to the government.

“The UPTs are at present funded by the State Budget. By doing this, we can cut maintenance costs and shift the funds to finance the development of transportation facilities in other areas that are not presently commercially viable,” he said.

Currently, there are 199 airports, 281 general seaports and 34 harbors and ferry piers managed by UPTs under the Transportation Ministry.

Bambang further said that the government would focus on developing transportation facilities in areas with limited accessibility, especially in eastern Indonesia, including East Nusa Tenggara, Maluku and Papua.

According to Bambang, the government will include the planned offers in the ministry’s PPP book.

“We will add the projects to the Transportation Ministry’s existing PPP book once they [the projects] are approved by the National Development Planning Agency [Bappenas],” he said.

Several years ago the ministry offered 32 transportation infrastructure projects worth US$15.5 billion, which, however, very little investor response.

The government re-offered the projects to investors through the recently launched Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI) from 2011 to 2025 worth Rp 4 quadrillion (US$468 billion), of which the country’s infrastructure development in the transportation sector is estimated to cost $57.88 billion.

The re-offered projects include 10 railway projects totaling $9.78 billion, such as a railway linking Soekarno-Hatta International Airport with Manggarai in South Jakarta and a Padang monorail in West Sumatra; 13 seaport projects worth $2.6 billion, such as Tanah Ampo tourism port in Bali and Kuala Enok bulk terminal in Riau.

Also included are seven airport projects totaling $2.8 billion, such as Kertajati airport in Majalengka, West Java, a new airport in Bali, two land transportation projects valued at $274 million, the Pekanbaru cargo terminal in Riau and the Karya Jaya multi-mode terminal in Palembang, South Sumatra.