Govt wants to develop airports via PPP schemes

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A senior official says the Transportation Ministry is readying a new regulation (PP) to develop airports through public-private partnerships (PPP).

“The PP is now at the Law and Human Rights Ministry and will be issued in the next few weeks,” Deputy Transportation Minister Bambang Susantono said on Thursday.

He said that the regulation was important since using PPPs to develop airports in Indonesia was a new idea.

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“We are still learning how to find the best model to develop our airport facilities. The PP will give us a set of clear regulations on how to work this out.”

He said that the regulations would cover how state airport operators Angkasa Pura I and Angkasa Pura II can better develop existing airports, the construction of new airports to be managed by the government and the invitation of the private sector to run airports currently managed by ministry airport technical management units (UPT).

Funds currently allocated to airport UPTs could then redirected to finance pioneer airports in remote areas of the nation, especially in eastern Indonesia, he said.

Bambang said that a ministry team was studying the potential of using PPPs to allow commercially viable UPTs to be managed by the private sector, something which might be accomplished as early as next year.

“Most likely, we are going to offer airport UPTs in provincial capital cities to the private sector,”
he said.

The Transportation Ministry was coordinating with relevant ministries in its PPP push, including the Office of the Coordinating Economic Minister, the Finance Ministry, the National Development Planning Board (Bappenas) and the Investment Coordinating Board (BKPM), according to Bambang.

Under the PPP scheme, the government would issue concessions with 25- to 30-year periods and contribute 20 percent of total investment funds needed to develop airports, while the private sector or state-owned enterprises would contribute the remainder.

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“In the next 10 to 15 years, we need Rp 32 trillion [US$ 3.6 billion] to build new airports,” he said, adding that the ministry was planning to build airports in cities with airports operating at capacity, such as Jakarta and Bali.

Building new airports was a must, Bambang said, given the recent 9 percent increase in passenger traffic in Indonesia on the back of the nation’s healthy economy.

For instance, Greater Jakarta’s Soekarno-Hatta International Airport, which can currently accommodate 30 million passengers a year, is expected to handle about 70 million passengers a year by 2019, he said.

Separately, PT Angkasa Pura I managing director Tommy Soetomo said that he supported a government policy to allow the private sector to develop airport UPTs.

“However, as an enterprise, we are going to conduct a feasibility study,” Tommy told The Jakarta Post via text message.

Meanwhile, Angkasa Pura II corporate secretary Hari Cahyono said that the planned regulation would not limit the company’s business.

“We are supporting the government’s policy in developing airports,” he said over the telephone.

“The regulation will encourage us to compete with the private sector to manage airports.” (The Jakarta Post, 28 October 2011)

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