THE VIABILITY GAP FUND (VGF) IN PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEME BY CONSTRUCTION STATE OWNED ENTERPRISES, A CAPITAL BUDGETING ANALYSIS ON THE SERANG – PANIMBANG TOLL ROAD

• Main Author: Anggara Rachman, Dimas
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35743
• Institution: Institut Teknologi Bandung

Infrastructure development was one of the key to increase Indonesia competitiveness in the world market. Among ASEAN countries, Indonesia Competitive Index are in fourth rank after Singapore, Malaysia and Thailand based on World Competitive Index. Therefore Government of Indonesia (GOI) try to increasing Public Entity and State Owned Enterprise (SOE) to help increasing Infrastructure growth one of the way are from Public Private Partnership (PPP) scheme. These schemes hopefully can reduce GOI load so they can focus on Infrastructure Project that are viable from financing side. This research focuses on Viabilty Gap Fund (VGF) as a GOI effort to reduce the Construction Cost, in order to improve a project’s financial feasibility, with case study Serang – Panimbang Toll Road Investment Project. The Feasibilty will be analyzed based on : • Without VGF the Consortium invests in capital expenditures for the full 83.91 km of toll road without receiving a Viability Gap Fund from the GOI. Toll fees generated from the operation of the 83.91 km toll road will be received by the Consortium. • With VGF, the Consortium will only construct 50.68 km of toll road but will operate 83.91 km of toll road, toll fees generated from the operation of the 83.91 km Serang – Rangkasbitung - Bojong - Panimbang toll road will be received by the Consortium. • If Government fails to fulfil its obligation, the Consostium will have to add their Obligation of 8.6 km to reach a distance of construction of 59.28 km so the Interchange Serang – Rangkasbitung – Bojong can be completed, toll fees generated from the operation of the 83.91 km Serang – Rangkasbitung - Bojong - Panimbang toll road will be received by the Consortium. With a concession period of 40 years, between those three alternatives, we can give conclusion that alternative with VGF providing more return from others. With Payback Period 11.91 years and NPV 1.98 (in trillion IDR) also IRR 15.49% At a weighted average cost of capital (WACC) of 12.51% .