Erwin Aksa, deputy chairman for construction and infrastructure at the Indonesian Chamber of Commerce and Industry (Kadin), said many private companies were still reluctant to take advantage of the PPP scheme, because infrastructure projects, on many occasions, had turned out to be unprofitable.

“Often, the calculations made for feasibility studies on infrastructure projects such as toll roads were very different from the real results,” he said at a discussion forum in Jakarta recently, explaining that this had caused private companies to suffer losses.

In particular, he said, businesspeople complained about limited information from the Transportation Ministry surrounding the implementation of the PPP mechanism and the benefits firms could get if they participated in the projects.

Kadin advised the Transportation Ministry to create a centralized body inside itself that focuses on dealing with PPP projects. At present, projects under the PPP scheme are managed by different directorates under the ministry.

“We hope that the Transportation Ministry can create a centralized body that focuses on executing tender opportunities regarding PPP projects,” Erwin said.

The government still needs massive funds to develop planned infrastructure projects across the country. From 2015 to 2019, Indonesia needs Rp 4,769 trillion (US$336.4 billion) in infrastructure funding.

The state budget can only contribute 41.3 percent to the total amount needed, while 22.2 percent have to be funded by state-owned companies and 36.5 percent are supposed to come from private companies.

Despite the government depending on help from the private sector, it has so far failed to ensure a smooth execution of PPP projects in the field, according to businesspeople, resulting in many unfinished or delayed projects.

Examples of PPP projects with unsolved issues are the transit-oriented development (TOD) project in Poris Plawad in Tangerang, Banten, which has only reached 33 percent of completion, and the TOD Jatijajar in Depok, West Java, that also experienced problems.

Ramdani Basri, president director of diversified infrastructure company Nusantara Infrastructure, acknowledged that several PPP projects with private companies had failed.

“For example, the Kalibaru Port [in North Jakarta] was meant to be completed using the PPP scheme in collaboration with foreign companies. However, the project was canceled midway and the government decided to give the project to [state-owned port operator] Pelindo II,” he said.

Such uncertainty was deterring private companies from jumping into financing infrastructure projects, he explained.

Furthermore, he lamented, the government in many cases preferred to offer projects to certain big private companies while disregarding smaller players.

Responding to the criticism, Transportation Ministry Secretary-General Djoko Sasono said his ministry would continue to learn from other ministries that had successfully used the PPP scheme for infrastructure projects, such as the Public Works and Housing Ministry.

He added that the ministry would explore the possibility of creating a dedicated body to take care of PPP projects, as suggested by Kadin.

To make the PPP scheme successful, the government needed to ensure that the projects offered to private companies were profitable, said Mohammed Ali Berawi, executive director at the Center for Sustainable Infrastructure Development (CSID).

Another indicator that a PPP project was successful, he said, was that the public would use the facilities regularly, meaning that there would be recurring income for the investors.

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