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Infrastructure Investment in Indonesia
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List of Illustrations and Tables

Chapter 1

Fig. 1.1

Historical and projected populations of Indonesia, 1960–2050. Source: World Bank 2015a.

3

Fig. 1.2

Indonesian GDP per capita in USD, 1980–2013. Source: World Economic Forum 2015b.

5

Fig. 1.3

Investment realisation of FDI 2012–June 2017 in USD per quarter. Source: BKPM 2017b.

7

Chapter 2

Fig. 2.1

Indonesian Six Economic Corridors identified for the MP3EI. Source: Ministry of National Development Planning/National Development Planning Agency, 2011 (Bappenas 2011a), Masterplan Acceleration and Expansion of Indonesia Economic Development 2011–25. Coordinating Ministry for Economic Affairs.

18

Fig. 2.2

Relationships between various Indonesian project planning agencies and authorities (figure by the authors)

22

Fig. 2.3

KPPIP process for coordinating project outcomes. Source: KPPIP, 2016.

23

Fig. 2.4

Global Competitiveness Index* scores for East Asia and Pacific countries. Source: World Economic Forum 2017 The Global Competitiveness Report 2017–2018. The GCI measures all indicators on a 1–7 scale and aggregates the scores to find a final overall GCI score. The higher the score the better the measure being assessed.

29

Fig. 2.5

The most problematic factors for doing business in Indonesia 2016. Source: World Economic Forum 2016, Global Competitiveness Report 2016–2017.*

30

Fig. 2.6

The most problematic factors for doing business in Indonesia 2017. Source: World Economic Forum 2017, The Global Competitiveness Report 2017–2018.

31

Fig. 2.7

World Bank Rankings on Doing Business topics — Indonesia. Source: World Bank 2018. Doing Business 2018 — Indonesia. World Bank Group.

32

Fig. 2.8

Distance to Frontier (DFT) on Doing Business topics — Indonesia. Source: World Bank 2018. Doing Business 2018 — Indonesia.

33

Fig. 2.9.

Barriers to doing business in Indonesia and Australia (sorted by mean score — most problematic to least for Indonesia) (Figure by the authors)

46

Fig. 2.10

Barriers to doing business — a comparison of Indonesia and Australia* (Figure by the authors)

47

Chapter 3

Fig. 3.1

Increased opportunity for private sector finance (Figure by the authors)

56

Fig. 3.2

Private versus public engineering construction in Australia (Figure by the authors)

57

Fig. 3.3

Landlord Port Model (Figure by the authors based on the World Bank resource, https://ppp.worldbank.org/public-private-partnership/library/landlord-port-structure-graph-pdf)

66

Fig. 3.4

Proposed new Indonesian Special Economic Zones. Source: Indonesia Investments 2017, https://www.indonesia-investments.com/business/business-columns/indonesia-seeks-to-develop-more-special-economic-zones/item 7962?

66

Table 3.1

Major Australian Asset recycling transactions (Table compiled by authors from various publicly available websties and data sources relating to the facilities)

68

Fig. 3.5

Availability of finance (Figure by the authors)

71

Fig. 3.6

Port is attracting enough finance (Figure by the authors)

72

Fig. 3.7

The importance of making investment decisions in transport to improve ports (Figure by the authors)

73

Fig. 3.8

The importance of making investment decisions in water infrastructure to improve ports (Figure by the authors)

73

Fig. 3.9

The importance of making investment decisions in energy to improve ports (Figure by the authors)

73

Fig. 3.10

The importance of making investment decisions in materials handling to improve ports (Figure by the authors)

74

Fig. 3.11

Level of importance of developing areas listed where investment should be directed to improve operations of PORTS in general in Indonesia. (Figure by the authors)

74

Fig. 3.12

Level of importance of developing areas listed where investment should be directed to improve operations of PORTS in general in Australia. (Figure by the authors)

75

Table

3.2

Relative effectiveness of various funding mechanisms — Indonesia (Table by the authors)

76

Table

3.3

Relative effectiveness of various funding mechanisms — Australia (Table by the authors)

78

Chapter 4

Fig. 4.1

Project support system (Figure by the authors based on data. Source: Haryanto 2015).

88

Fig. 4.2

Legend used for project schedule charts (Figure by the authors)

90

Fig. 4.3

Case study locations (map source: Amin (2015))

91

Table 4.1

Jakarta Sewerage System

91

Table 4.2

West Semarang Drinking Water Supply

93

Fig. 4.4

Jakarta Sewerage System project implementation schedule (Figure by the authors)

92

Fig. 4.5

West Semarang SPAM (left), supply map (right) (image source: Amin (2015)).

93

Fig. 4.6

West Semarang Drinking Water Supply project implementation schedule (Figure by the authors)

94

Table 4.3

National Capital Integrated Coastal Development

95

Fig. 4.7

National Capital Integrated Coastal Development project implementation schedule (Figure by the authors)

96

Table 4.4

Bontang Oil Refinery

97

Fig. 4.8

Bontang Oil Refinery project implementation schedule (Figure by the authors)

97

Table 4.5

Umbulan Springs Drinking Water Supply Project

98

Fig. 4.9

Umbulan Springs project implementation schedule (Figure by the authors)

99

Table 4.6

Channel Deepening Project, Victoria

100

Table 4.7

M7 Motorway, New South Wales

102

Fig. 4.10

Channel Deepening Project implementation schedule (Figure by the authors)

101

Fig. 4.11

M7 Motorway project implementation schedule (Figure by the authors)

103

Fig. 4.12

Gateway Review Process (left) in comparison to Indonesian case studies (right)

105

Chapter 5

Table 5.1

Port Botany — Key Events 1969–2018 (Table by the authors)

122

Fig. 5.1

Port Botany Container Terminals. Source: https://www.nswports.com.au/assets/Uploads/PDFs-General/MAP-PB-New-for-website.pdf

124

Fig. 5.2

Heavy Commercial Vehicles Trips from Port Botany, Average Weekday, 2006. Source: Bureau of Transport Statistics 2010.

125

Fig. 5.3

Southern Sydney Freight Network and Port Botany Rail Line. Source: ARTC 2015, Fig. 1.2, p. 6.

130

Fig. 5.4

Motorway Connections Proposed Between Sydney Airport and Port Botany (Figure by the authors)

132

Table 5.2

Metropolitan Sydney intermodal terminals, 2008

134

Table 5.3

Sydney suburban intermodal terminals — TEU capacity

134

Fig. 5.5

Location of existing and proposed freight terminals for Port Botany Source: Sydney Ports Corporation 2008.

135

Table 5.4

Approximate construction costs of Port Botany and enabling infrastructure (Australian Dollars in 2016 prices)

146

Chapter 6

Fig. 6.1

Overall efficiency of ports in Asian region (incl. Australia) on country basis (Figure by the authors, based on World Bank 2016 data)

157

Fig. 6.2

Relationship between infrastructure and overall efficiency on country basis (Figure by the authors based on World Bank 2016 data)

157

Table 6.1

Input and output variables used in the port DEA analysis.

165

Fig. 6.3.

Computing efficiency frontier in VRS and CRS model (Figure by the authors)

167

Table 6.2

Sample ports for efficiency comparison (Table by the authors)

168

Table 6.3

Descriptive port statistics for input and output variables for DEA

168

Table 6.4

Sample of container terminals for efficiency comparison (Table by the authors)

169

Table 6.5

Descriptive container terminal statistics for inputs and outputs variables for DEA

170

Table 6.6

Port Efficiency score for functional inputs based on DEA models (Table by authors)

171

Table 6.7

Port Efficiency score for operational inputs based on DEA models (Table by authors)

171

Table 6.8

Container terminal Efficiency in terms of Crane Rate (Table by authors)

172

Table 6.9

Container terminal Efficiency in terms of Ship Rate (Table by authors)

173

Table

6.10

Container terminal Efficiency in terms of Container Throughput (Table by authors)

173

Table

6.11

Sources of efficiency gains (after Cheon, Dowall and Song (2010))

174

Fig. 6.4

Improvement percentage* of inefficient units based on constant crane rate, ship rate and throughput (Figure by authors)

175

Table

6.12

Summary of Container Terminal Efficiency scores (Table by authors)

176

Fig. 6.5

Port of Tanjung Priok (Jakarta) logistics flow chart (Figure by authors)

179

Fig. 6.6

Port of Surabaya logistics flow chart (Figure by authors)

179

Fig. 6.7

Port of Melbourne logistics flow chart (Figure by authors)

180

Chapter 7

Table 7.1

The determining factors of Port competitiveness.

190

Fig. 7.1

Maritime Cluster composition of services in major port cities. Source: Lam and Zhang, (2011).

191

Fig. 7.2

Enhancement of market power through joint venture. Source: Song (2001).

192

Fig. 7.3

TAMA’s aims and networks. Source: adapted from TAMA-Greater Tokyo Initiative (2017).

193

Fig. 7.4.

Main Functions of TAMA. Source: adapted from Wahyuni and Wahyuningsih (2018).

194

Fig. 7.5

TAMA-Greater Tokyo Initiative’s Five-year Action Plans. Source: adapted from TAMA-Greater Tokyo Initiative (2017).

196

Fig. 7.6.

TAMA strategy 1. Source: adapted from TAMA-Greater Tokyo Initiative (2017).

198

Fig. 7.7

Strategy 2: TAMA support measures. Source: adapted from Wahyuni and Wahyuningsih (2018).

199

Chapter 8

Table 8.1

Rank of ASEAN Logistics Performance Index

207

Fig. 8.1

Coverage of Pelindo I, II, III, and IV. Source: adapted from Sheng (2015).

209

Fig. 8.2

Most Problematic Factors of Doing Business in Indonesia. Source: Schwab (2017).

211

Fig. 8.3

Respondent Data: (Top) Respondent’s Specialisation and number of respondents, (Bottom) Respondents’ association/working for or with, in the ports and number of respondents (Figure by the authors)

214

Fig. 8.4

Summary of Indonesian port problem (Figure by authors)

215

Fig. 8.5

The Most Problematic Factors for Doing Port Business in Indonesia. (Figure by authors). Red (Government Related Variables), Blue (Business Related Variables) 1 (Most Problematic-Major Effect), 3 (Neutral), 5 (Least Problematic-Minimal/No Effect)

216

Fig. 8.6

Government Reform Package Usefulness Score (mean) (Figure by the authors). 1 (Very Unhelpful), 3 (Neither Unhelpful or Useful), 5 (Very Helpful)

217

Chapter 9

Table 9.1

Four Models of port administration

229

Table 9.2

The transaction details and investors in major city ports in Australia. (Table compiled by the authors)

231

Fig. 9.1

Port management — the balance between public and private (World Bank 2007)

234

Fig. 9.2

Landlord port management structure (AIC 2018)

234

Fig. 9.3

Themes observed from the thematic analysis of the FGD discussions (Figure by the authors)

236

Table 9.3

Factors Helping to Improve Governance/Policy in Ports (Table by the authors)

238

Table 9.4

Factors Acting as Obstacles to Governance/Policy of Ports (Table by the authors)

241

Table 9.5

Factors Which Help Improve Management Structures in Ports (Table by the authors)

242

Chapter 10

Table

10.1

Impact of project finance structure to the sponsor’s return (Yescombe 2007) private-sector financing through public-private partnerships (PPPs).

253

Fig. 10.1

Infrastructure financing options. (Figure by the authors from Hui, Duffield, Wilson, 2018)

254

Fig. 10.2

Research flowchart (Figure by the authors from Hui, Duffield and Wilson 2018)

256

Fig. 10.3

Respondents’ characteristics (n=34) (Figure by the authors)

258

Table

10.2

Financing vehicle/method effectiveness (Top-10 choices).

259

Fig. 10.4

Responses on the major barriers to gaining approval for infrastructure projects in Indonesia. (Figure by the authors)

260

Fig. 10.5

The respondents’ suggestions on ways to improve the decision-making process for infrastructure projects in Indonesia. (Figure by the authors)

261

Fig. 10.6

Responses to the question “Has your port either attempted to undertake major development (or achieved major development) using international providers — including finance?” (Figure by the authors)

261

Fig. 10.7

Responses to the question on the different kinds of facilitations by international providers. (Figure by the authors)

262

Fig. 10.8

The contractual relationship and project cash flows around the NPCT-1 project. (Figure by authors based on data from IPC)

265

Table

10.3

Loan facilities received by IPC from 2013 to 2015

267

Fig. 10.9

The effect of the different NPCT-1 financial leverage levels on the project value with a certain target of IRRequity/Permitted Equity Return (PER). (Figure by authors)

267

Fig. 10.10

The project value under different IRRequity thresholds. (Figure by authors)

268

Fig. 10.11

The NPCT-1 project under a PPP-based structure with availability payment. (Figure by authors)

270

Fig. 10.12

The NPCT-1 project value to IPC under different project company financial leverage level. (Figure by the authors)

271

Fig. 10.13

The NPCT-1 project value to IPC under different level of IRRequity to be covered by the availability payment. (Figure by the authors)

272

Fig. 10.14

The availability payment requirements that the government must pay at a certain level of target IRRequity under different project company capital structure. (Figure by the authors)

272

Fig. 10.15

Banking financing allocated to logistic infrastructure (road, railway, port, airport, information and communication technology, warehouse) in trillion Rupiah. Source: Nirwan (2017).

273

Chapter 11

Fig. 11.1

Global Port Network of IZP and China Merchant Group. Source: adapted from http://www.izptec.com 11 September 2019.

284

Fig. 11.2

Dubai Ports global network. Source: adapted from http://web.dpworld.com/ 11 September 2019.

285

Table

11.1

Comparisons of Advantages and Disadvantages of Road and Rail Modes

286

Fig. 11.3.

Functional integration and exploitation of scale economies of logistics operation. Source: adapted from Robinson (2002) and Rodrigue (2006).

291

Fig. 11.4

Hinterland Areas and Movement Corridors of Containers carrying Goods towards Tanjung Priok Port. Source: adapted from Tanjung Priok Port, 11 September 2019.

297

Fig. 11.5

Number of Vehicles through Toll Road by Toll Gate Branch, 2014–2016. Source: adapted from PT Jasa Marga/Indonesia Highway Corp 2018.

298

Fig. 11.6

Traffic Conditions around the Tanjung Priok Port (morning peak hour). Source: adapted from Google Maps 11 September 2019.

299

Fig. 11.7

Mix of through traffic and the movement of local traffic. Source: adapted from Google Maps, 11 September 2019.

299

Fig. 11.8

Toll Roads Network (include Access Toll Road to Tanjung Priok Port). Source: adapted from Toll Road Management Agency, 2018.

301

Fig. 11.9

Proposed Cikarang Bekasi Laut (CBL) Inland Waterway for container access to Tanjung Priok Port. Source: adapted from PT Pelindo II, 11 September 2019.

302

Fig. 11.10

Gates available at Tanjung Priok Port. Source: adapted from Masterplan of Tanjung Priok Port (2017).

303

Fig. 11.11

The Movement Pattern of Incoming and Outgoing Trucks at the Port of Tanjung Priok. Source: adapted from Herdian et al. 2017.

304

Fig. 11.12

Belawan Port and Its Hinterland. Source: adapted from Masterplan of Belawan Port, 11 September 2019.

306

Fig. 11.13

Export and Import Volumes from Belawan Port. Source: adapted from Central Bureau Statistics of Sumatera Utara Province, 2017.

306

Table

11.2

Projections of cargo loads and unloads at Belawan Port

307

Table

11.3

Forecast data of cargo flows at Belawan International Container Terminal (BICT)

307

Fig. 11.14

Main Road Networks Going from and To Belawan Port. Source: adapted from Google Map, 11 September 2019.

308

Fig. 11.15

Loading and Unloading Activities at the Industrial Area of Sei Mangkei. Photo courtesy: Danang Parikesit, 2017

309

Fig. 11.16

Existing and Planned Railway Lines in North Sumatra. Source: adapted from Masterplan of Kuala Tanjung Port, 11 September 2019.

310

Fig. 11.17

The Transportation Networks of Roads and Railways as well as Corridors of Belawan and Kuala Ports. Source: adapted from Google Maps, 11 September 2019.

311

Fig. 11.18

Teluk Lamong Port Terminal (no. 2) as one of the terminals in the Operational Area of Tanjung Perak Port. Source: adapted from Pelindo III, 11 September 2019.

312

Fig. 11.19

Container Flows at Tanjung Perak Port and Teluk Lamong Port Terminal, in TEU (2011–2015). Source: adapted from Pelindo III, 29 March 2018.

313

Table

11.4.

Projection of Ship Visit Flows to Teluk Lamong Port Terminal

313

Fig.

11.20

Current Movement of Container System in Tanjung Perak Port. Source: PT Pelindo III, 11 September 2019.

314

Fig.

11.21

The Application of Rail-based Container Trains as a form of transportation of goods at Teluk Lamong Port Terminal. Source: adapted from PT Terminal Teluk Lamong,11 September 2019.

315

Fig. 11.22

Automatic Container Transporter Development Plan. Source: adapted from PT Teluk Lamong, 11 September 2019.

316

Fig.

11.23

The proposed Integrated Toll Roads to Teluk Lamong Port Terminal. Source: adapted from PT. Teluk Lamong, 11 September 2019.

317

Appendix

Table A1

Focus Group Discussion Questions

348