DETERMINING THE OPTIMAL CONCESSION PERIOD IN CANCER HOSPITAL PROJECT USING PUBLIC-PRIVATE PARTNERSHIP (PPP) WITH AVAILABILITY PAYMENT SCHEME

• Main Author: Dzikri Huda, Nur
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/50356
• Institution: Institut Teknologi Bandung

World Health Organization stated cancer is the second leading cause of death globally. One in 5 men and 1 in 6 woman worldwide develops cancer during their lifetime. The case of Cancer in Indonesia estimated at 348,309 cases in 2018 and projected to increase to 575,814 cases in 2040. The development of Cancer Hospital in city of X, which require total Capital Expenditure of Rp 1,135,834,554,688, can answer the need of comprehensive cancer service in Indonesia. But due to limited local government budget, forcing local government to find alternative funding through Public Private Partnership (PPP) scheme. One of the newest PPP scheme at the moment is the Availability Payment (AP) scheme. Through this research, authors analyze the optimal concession period and the feasibility of this investment plan by calculating the required Capital Expenditures, Operating Cost, and other expense. The optimal concession period can be analyze by simulation of different concession period scheme ranging from 10-25 years and find the lowest required Availability Payment. The feasibility of the cancer hospital project can be analyzed by using Discounted Cash Flow parameter which are Net Present Value, Internal Rate of Return and Payback Period. From the result of Availability Payment calculation, the optimal concession period for this project is 22 years. The result of this project is financially feasible with positive Net Present Value of Rp 95,490,595,725, the Internal Rate of Return (IRR) of 12,66% which greater than Weighted Average Cost of Capital (WACC) of 11.92% , and Payback Period of 11,17 years.