Reshaping Transport Institutional Framework
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1 2008/SOM3/EC/SEM/002 Agenda Item: 3 Reshaping Transport Institutional Framework Submitted by: Indonesia Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Infrastructure Facilities Lima, Peru August 2008
2 Reshaping Transport Institutional Framework - Indonesia Bambang Susantono, PhD Deputy Minister for Infrstructure and Regional Development Coordinating Ministry for Economic Affairs, Indonesia Presented in APEC Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Facilities Lima, Peru August 2008
3 Geographical Profile 7 8% 1,000 km of GDP (USD 22 billion) (USD 4.2 billion)2,500 km Population : 220 million, GDP/capita : USD 2,000 Western Region 80 % of population, 30 % of total region GDP/capita : USD 2,400 Eastern Region 20 % of population, 70 % of total area GDP/capita USD 1,500
4 Transport Networks Profile Land Transport Highway/Toll Road : 780 km Arterial Roads : 36,500 km Other Roads : 320,000 km Railway tracks : 4,675 km 7 8% of GDP Air Transport Sea Transport (USD 22 billion) Port : 560 units Domestic fleet : 7,300 unit (USD 4.2 billion) Airport : 187 unit runway > 3, 000 m : 7 unit 1,000m < runway < 3,000 m : 60 unit runway < 1,000 m : 119 unit Domestic fleet : 14 airlines (scheduled) 34 airlines (unscheduled)
5 Indonesia s Transport Infrastructure Challenges Fast Declining of Investment in Transport Sector Since 1997 Crisis 7 8% of Nominal Investment half reduced as compared to pre-crisis condition (USD 22 billion) GDP (USD 4.2 billion)
6 Infrastructure Investment Records National Government Sub-national Government SOEs Private 1 19 % of GDP 7
7 As a Result Low Countr y Competiti veness.. Global Competitiveness Report Competitiveness rank 54 out of Over all infrastructure rank 91 out of Quality of roads 113 out of Quality of port infrastructure 113 out Quality of railway infrastructure 62 out of Quality of air transport 62 out of 131
8 Indonesia : Macroeconomic Outlook Economic Growth % Change in GDP 6.8% 6.3 % 5.48 % 4-5% 3-4 %
9 Indonesia : Macroeconomic Outlook Public Debt Ratio 75% Domestic External % of GDP 60% 45% 30% 15% 0%
10 Infrastructure Road Map Increase Government Budget for Infrastructure Good Governance Infrastructure Pre Summit 22 Desember 2004 Infrastructure Summit 17 Januari 2005 Indonesia Infrastructure Conference & Exhibition November 2006 Strengthen Inter Sector Coordination Public Private Partnership Policy Framework Establishment Revision of Law and Government Regualtion Sector Blue Print PPP Model Project Preparation Sector Restructuring Implementation of Model Project
11 Infrastructure Investment Needs for the Growth to Sustained 7 8% of GDP (USD 22 billion) 4 5% Of GDP Annual Funding Gap Budgetary constraint (USD 17.8 billion) 3% Of GDP (USD 4.2 billion) Government Budget The need to resort to private sector participation
12 Transport Legal/Institutional Framework Reform Limited local government involvement Responsibility sharing with local government Dual function of SOE, regulator and operator Separation of regulator and operator function Monopoly on transports Sector operation No monopoly is allowed No clear policy on tariff adjustment Tariff adjustment is part of concession agreement Restricted private sector participation Private sector participation Is part of investment policy
13 Legal Framework Reform - Progress Road Law Revision Completed 2004 Toll Road Authority In operation Railway Law Revision Completed 2007 Restructuring of Railways SoE Is underway Sea Transport Law Completed 2008 Port Authority establishment is under preparation Land Transport Law and Air Transpor Law Under discussion with parliament Both Laws are expected to be in effect this year
14 Institutional Framework Reform Progress Establishment of National Committee for Acceleration of Infrastructure Provision (chaired by Coordinating Minister for Economic Affairs) Establishment of Project Development Facility to prepare PPP Project in Infrastructure Establishment Risk Management Unit Under Ministry of Finance Establishment Guarantee Fund Establishment Indonesia Infrastructure Fund
15
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