National strategic projects: Presidential regulation revision to be issued soon
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.
Bisnis Indonesia: Proyek Strategis Nasional: Revisi Perpres Segera Terbit
5 July 2018
By Irene Agustine
Jakarta — The revision of Presidential Regulation regarding National Strategic Projects has been submitted to President Joko Widodo, and is expected to be approved this month.
Deputy for Coordinating the Acceleration of Infrastructure and Regional Development at the Coordinating Ministry for Economic Affairs, Wahyu Utomo, said the presidential regulation revision will be the legal basis for the continuation of national strategic project (PSN) construction, following the removal of 14 projects and the inclusion of one new project and one program headlined “economic equity”.
“[The presidential regulation revision] should be able to launch this month. We hope so. It’s (the revision) already with the President, only waiting to be inked,” he told Bisnis, Monday (2/7).
Besides the revision of Presidential Regulation on PSN, Wahyu explained that the Economic Affairs Coordinating Ministry is also awaiting the President’s approval over presidential regulation draft regarding limited concession scheme (LCS).
LCS is a scheme expected to encourage the private sector to invest in various government infrastructure projects. What is offered by this scheme is a concession of finished projects which have started operation, but are yet to run optimally (brownfield).
In detail, the private party pays a large sum of money up front as a revenue for the government or SOE before being granted a concession rights limited to 25 years.
After 25 years, the concession will be returned to the government. With the scheme, the money received up front can be rolled over by the government to build a greenfield project.
“The Presidential Regulation regarding LCS has also been received by the President. Hopefully, both of them (presidential regulations on PSN & LCS) can be approved soon,” he said.
The Committee for Acceleration of Priority Infrastructure Delivery previously announced that 14 projects had to be dropped out of the PSN list as they were deemed unable to meet the criteria to be eligible for PSN facilities. One of the criteria those projects failed to meet was they were unable to start construction or reach a financial close before the third quarter of 2019.
Of the 14 removed projects, 5 projects were under the supervision of Public Works and People’s Housing Ministry. Those five projects were Waru – Wonokromo – Tanjung Perak toll road, Sukabumi – Ciranjang – Padalarang toll road, Mebidang Regional Drinking Water Supply System, Telaga Waja Dam, and Pelosika Dam.
PT Waskita Toll Road President Director Herwidiakto said that the company is awaiting PSN revision as the legal basis to amend the contract on Bogor – Ciawi – Sukabumi toll road to include part of Sukabumi – Ciranjang – Padalarang toll segment, namely Sukabumi – Ciranjang spanning 30 km. The 61 km-long Sukabumi – Ciranjang – Padalarang toll segment was decided to be removed from PSN because, among other reasons, the contract for the toll construction would be split. Sukabumi – Ciranjang toll segment would be handled by PT Waskita Toll Road, and Ciranjang – Padalarang by PT Jasa Marga (Persero) Tbk. (JSMR).
The two toll road enterprises has previously assigned by the government directly through contract amendment in order to speed up the project construction work.
Later, PT Waskita Toll Road as the majority shareholder in PT Trans Jabar Toll will add Sukabumi – Ciranjang toll segment to Boicimi (Bogor – Ciawi – Sukabumi) Toll Road Concession Agreement (PPJT), while JSMR will add Ciranjang – Padalarang toll segment to Cikampek – Purwakarta – Padalarang (Cipularang) PPJT spanning 41 kilometres which has started operation since 2005.
“So, this project (Sukabumi – Ciranjang – Padalarang toll construction) should still be included as PSN because Bocimi toll [project] is a PSN. We’re still waiting for the presidential regulation revision in order to make the amendment,” he said to Bisnis recently.
