FINANCING PUBLIC INFRASTRUCTURE PROJECTS IN INDONESIA: ANALYSIS OF MOST APPLICABLE SCHEME FOR DEVELOPING TRANSPORTATION INFRASTRUCTURE

• Main Author: Rasyiidyan Bovanantoo, Bryan
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/68105
• Institution: Institut Teknologi Bandung

Recent times have shown the rapid growth of Indonesia’s public infrastructure, the humble beginnings of the drastic economic growth the country seeks in the next 15-30 years. An ongoing growth plan that is being slowed down by the hit of the COVID-19 outbreak in early 2020, which led to the Indonesian Government delaying several projects and activities for almost a mere 2 years. This led to state budget funds (APBN) restructured to focus on healthcare and the nation's post-pandemic recovery. Creative financing solution is needed to replace dependency on the APBN. Hence it raises the question; How will the Indonesian government save state budget funds during this post-pandemic era in developing public infrastructure in Indonesia, especially transportation infrastructure? What will be the most appropriate financing scheme to develop transportation Infrastructure in Indonesia? What are the factors in deciding a proper financing scheme for transportation infrastructure in Indonesia? This research will help answer the following through a series of qualitative research based on primary and secondary research. The following findings found in this research has shown the decision making process of applying different financing methods and schemes based on different factors found in a project. The implementation of the Public-Private-Partnerships, Debt-to-Equity Financing, and Debt Instruments are preferable in development of public transportation infrastructure in Indonesia due to the project stages being mostly in the early stages and generating no current revenue streams. Factors related to future sustainable revenue generation are also crucial in deciding the appropriate financing method, as this helps reduce the risk possessed by the private investors. This implementation is also proven to have many incentives to offer for the private firms in return for the higher risk in investing in the infrastructure industry. This solution will be a suggestion for the Indonesian Government in finding other alternatives of the APBN to fund early stages of public transportation infrastructure development in Indonesia.