An adequate stock of infrastructure is vital in maintaining an efficient and competitive economy within a country. Indonesia’s competitive trend has been declining mainly due to inadequate infrastructure, ineffective bureaucracy and corruption.
Based on various motives, governments all over the world are looking increasingly to public-private partnerships (PPP) to bridge their infrastructure gaps. In general terms, a PPP is a contract between a government and a private party in which the private party assumes significant project risk in the design, financing, construction and operation of a project.
More succinctly, PPP projects are aimed at providing more efficient public services delivered by private sector actors through an optimal risk-sharing arrangement.
Before the 1997 Asian financial crisis, among developing countries, Indonesia was still a leader in PPPs...