Rp5 trillion for first phase investment: Greater Bandung LRT to utilise PPP scheme
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Investasi Trase Awal Rp5 Triliun: LRT Bandung Raya akan Gunakan Skema KPBU
31 January 2019
Bandung — The construction project of Greater Bandung Light Rail Transit (LRT) will utilise a public-private partnership (PPP) scheme so the construction will be financed by investors and the government.
“So JMT (PT Jabar Moda Transportasi, a subsidiary of PT Jasa Marga) will be an investor,” said President Director of PT JMT, Endi Roswendi, after a meeting discussing the financing scheme for Greater Bandung LRT in Ciremai Room at Sate Building, Bandung, Wednesday (30/1).
Endi said the discussion on the budget portion for Greater Bandung LRT construction is starting to be finalised by his company as the representative of the consortium with West Java Provincial Government.
Even though there has not been any synchronisation with the Transportation Ministry, Endi said in the discussion with West Java Provincial Government, the cost for the first phase construction between Tegalluar and Leuwipanjang in Bandung City spanning for 16 kilometres is estimated at Rp4 – 5 trillion.
According to him, PT JMT is exploring the establishment of consortium with PT Wijaya Karya, PT Jasa Sarana as the parent company of regional state-owned enterprise PT JMT as well as with private foreign company. The portion will depend on the readiness of each company to build Greater Bandung LRT.
“So, we will calculate how much is appropriate, depending on the government as the stakeholder, whether regional state-owned enterprise should have a larger portion than state-owned enterprise or not,” he said.
As for the government’s portion, the financing portion is planned to utilise two schemes, namely viability gap fund and availability payment (AP). “Also through the AP scheme, the government will cover the shortfall suffered by the consortium in the acceptance period,” he said.
After finalising the appropriate PPP scheme, he said West Java Provincial Government will push to put the project out to tender immediately. “However, because Bappenas (National Development Planning Agency) and the Finance Ministry should be involved, the Transportation Ministry will initially establish a kind of Greater Bandung LRT joint office to help speed up the process,” he said.
After the paperwork is done, the investment tender can begin and the construction can start soon after. “Despite being involved in the budget discussion and acting as the core implementing entity, JMT consortium will still participate in the tender hosted by West Java Provincial Governor. The tender will be held by the Provincial Government assisted by Bappenas and the Finance Ministry,” he said.
Furthermore, he said the tender is scheduled to be completed in 2019 considering that West Java Provincial Government hopes to catch up with the construction process of Jakarta – Bandung high-speed train which is expected to be complete in 2021.
Synchronisation
Meanwhile, West Java Regional Secretary Iwa Karniwa said his agency will soon take four measures to synchronise the construction of Jakarta – Bandung high-speed train and the construction of eight Greater Bandung LRT routes.
“So in accordance with West Java Governor’s instructions, which are first, once the high-speed train construction is complete, how will the connectivity be? It should be connected to LRT in Greater Bandung, namely Bandung City, Cimahi City, West Bandung Regency, Bandung Regency, and Sumedang Regency, said Iwa Karniwa.
Visited after chairing a meeting on the construction of Jakarta – Bandung high-speed train at Gedung Sate in West Java, Iwa said the first thing highlighted for the synchronisation between Jakarta – Bandung high-speed train and Greater Bandung LRT is the connectivity between the routes of the two mass transportation modes.
According to him, the construction of Jakarta – Bandung high-speed train is handled by various parties under a consortium named Pilar Sinergi BUMN Indonesia (PSBI), in which PT Jabar Moda Transportasi (a subsidiary of PT Jasa Sarana, West Java Regional State-owned Enterprise) is incorporated. After a study by West Java Construction Acceleration Team, the developers of Jakarta – Bandung high-speed train and West Java Transportation Office learned that business to business (b to b) scheme is not appropriate for the construction of Greater Bandung LRT.
