Sustainable Urban Development in Jabodetabek

Minister of National Development Planning/ Head of the National Development Planning Agency

The 6th International Conference of Jabodetabek Study Forum: “Urban-rural and Upland-Coastal Connectivity in Managing Sustainable Urbanizing World” Bogor, 29th August 2018 REPUBLIK

Urbanization in Indonesia

2 Indonesia’s Population Projection 2015-2045 REPUBLIK INDONESIA

2015 2045* 2045 Projection 2030 2045 80-84

255.1 million 318.9 million 70-74 Total Population 60-64 Labor Force 177.9 206.4 50-54 (15+ years) million million 2.28 2.1 Total Fertility Rate 40-44 30-34 Labor Force Participation 77% 80% 70.8 years 75.5 years 20-24 Life Expectancy Rate 10-14 Thousand people 0-4 65.76% 80% 170.4 199.2 15.000 10.000 5.000 0 5.000 10.000 15.000 Workers Labor Participation million million Laki-lakiMale PerempuanFemale BekerjaWorking SedangSchooling Sekolah LainnyaOther

49.2% 53.5% Dependency Ratio • In 2045, Indonesia will experience a substantial population growth- an increase of 63.4 million or

53,1% Urban Population 67,1% 24.7 percent. About 67.1 percent of population will live in urban areas. • Numbers of working age population will continue to increase, but the share of younger groups (aged 15-29) will decline. It is likely as the result of the extension of average years of schooling. Source: *Indonesia Population Projection Revision 2015-2045 (latest estimates) • The labor force is projected to grow over the next 30 years at an annual rate of 1.84 percent. By 2045, the labor force is projected to reach 206 million.

3 Advanced Urbanization in Java REPUBLIK INDONESIA

SUMATERA 1 51,697,225 PEOPLE 39.1% URBAN / 60.9%RURAL KALIMANTAN 2 14,105,730 PEOPLE 42.2% URBAN / 57.8% RURAL

3 JAVA 138,311,286 PEOPLE 4 58.6% URBAN / 41.1%RURAL 2 1 SULAWESI 4 17,663,879 PEOPLE 33.6% URBAN / 66.4%RURAL AND NUSATENGGARA 5 6 13,327,280 PEOPLE SURABAYA 39.2% URBAN / 60.8%RURAL MALUKU AND 6 3 11,972,106 PEOPLE 29.4% URBAN / 70.6% RURAL

5 Tier 1 – Metropolitan > 1,000,000 Tier 2 – LargeCity Population (000) Proportion to national (%) Population density (/km2) 500,000 – 1,000,000 Island Tier 3 – Medium City 2010 2045 2010 2045 2010 2045 100,000 – 500,000 Sumatera 50.860 72.407 21% 23% 106 151 Tier 4 – Small City Jawa – Bali 140.941 176.177 59% 55% 1.042 1.303 < 100,000 Nusa Tenggara 9.222 13.701 4% 4% 137 204 Kalimantan 13.851 22.159 6% 7% 25 41 Sulawesi 17.437 23.967 7% 8% 92 127 Maluku – Papua 6.207 10.277 3% 3% 13 21 Source: World Bank, 2015 4 Spreading Growth through Urban Development REPUBLIK INDONESIA

Mebidangro

Manado- Minahasa-Bitung Patungrayaagung Sorong

Jayapura

Banjarbakula Legend: Ambon = Main roads Kedungsepur = Rails Jabodetabekjur Mamminasata

= National Activity Centers

= Regional Activity Centers Bandung Basin = Port cities Sarbagita = Aerotropolis Jabodetabekjur = Jakarta-Bogor-Depok-Tangerang-Bekasi- Sarbagita = Denpasar-Badung-Gianyar-Tabanan = Dam Gerbangkertosusilo Cianjur Banjarbakula = Banjarmasin-Banjarbaru-Banjar- = PLTN Kedungsepur = Kendal-Demak---- Barito Kuala-Tanah Laut Mebidangro = Medan-Binjai-Deli Serdang-Karo Purwodadi = Airports = KSN Mamminasata = Makassar-Maros-Sungguminasa- Patungrayaagung = Palembang-Betung-Indralaya- = Palapa Ring Lane Gerbangkertosusilo = Gresik-Bangkalan-Mojokerto- Takalar = PKN Kayuagung Surabaya-Sidoarjo-Lamongan 5 Urbanization Without Growth REPUBLIK INDONESIA

12

11 • 1 % increased in Indonesia’s

10 urbanization contributes to 4% USD)

9 increased in GDP per capita Constant

8 (2010 (2010 7 Indonesia • The better leveraged is urbanization, Capita Capita 6

Per Per y = 0.0482x + 5.8855 R² = 0.5674 the more it will benefit national

GDP GDP 5 economic growth Log Log 4 0 20 40 60 80 100 Urban population share (%) • But if badly managed, there is a risk Log of GDP per capita –v– urbanization, 2015 of “urbanization without growth”

Source: World Bank, 2017 (based on WDI data 2016) 6 REPUBLIK INDONESIA

Urban Condition in Jabodetabek

7 Transportation REPUBLIK INDONESIA

Parameter 2015

• POPULATION 10.1 Million Jakarta 5% of national population Jabodetabek 12% of national population

• ECONOMIC 1,924 Trillion 14% of National GDP (GRDP) Jabodetabek of 20% National GDP

Car 38% The share of public transport continues to decrease • TRANSPORT Motorbike 49% (40% 2002, 21% 2011, 13% 2015) (MODE SHARE) Public 13%

3.4 M car An average of 450 thousand new cars and • MOTORIZATION 13.9 M motorbikes / year (DKI Jakarta, 2016) motorbike

• MOBILITY 5-10 km/hour 2013-2016 DKI's roads didn't increase: 6,995 km (SPEED)

Source: BPS DKI Jakarta , 2016, Kemenhub 2016, JICA, 2014 38 REPUBLIK Housing Condition INDONESIA

Sub-standard Housing (%) “Housing that does not fulfill one of the standard condition of physical, living area, access to drinking water, and access to sanitation indicator”

80 Indicator National Jakarta Province Province Province 75 2016 2017 2016 2017 2016 2017 2016 2017 70 1. Physical condition 21.57 25.64 57.60 50.76 24.79 31.91 30.70 40.71 65 (Inadequate Roof/wall/floor

condition) standard housing (%) housing standard - 60

Sub 2. Living area 9.30 8.45 29.43 24.67 9.43 9.67 9.27 6.49 55 (living area per capita < 7,2 m2) 2014 2015 2016 2017 National 60,47 65,72 61,43 62,23 3. Access to Drinking Water 38.88 40.93 34.49 39.13 48.44 51.49 55.34 58.56 Jakarta Province 67,90 75,35 76,28 74,33 West Java Province 64,65 73,97 72,12 73,97 Banten Province 59,53 75,48 73,63 74,55 4. Access to Sanitation 23.63 23.09 9.58 9.63 32.66 31.80 23.26 23.28

Source: Susenas Source: Susenas

• Nationally, the indicator that has the highest sub-standard condition is access to drinking water. • Percentage of sub-standard housing in 3 provinces higher than national percentage. • The indicator that has the highest sub-standard condition in Jakarta Province is physical condition. • In 2017, the highest percentage of sub-standard housing is 74.55% (Banten Province) • The indicator that has the highest sub-standard condition in West Java and Banten Province is access to drinking water.

9 Drinking Water Access and Wastewater Management REPUBLIK INDONESIA

Water Supply Sanitation Access Source: Susenas BPS (2017) Pipeline Network Access Jabodetabek 19.15% 79.15% Improved Access

Source : BPPSPAM(2017)

Practicing Open Defecation Access to Improved Drinking Pipeline Network Water Supply 3.57% Water (in %) 100 50000 90 45000 78,063 78,023 Unimproved Access 80 40000 8.92% 35000 70 30000 60 25000 50 20000 IDLE CAPACITY Safely Managed 40 15000 8.233 L/sec 12.9% (Part of Improved Access) 30 10000 20 5000 10 0 Installed Production Distribution Sold Water Idle Capacity 0 Capacity (L/s)capacity (L/s) capacity (L/s) Capacity (L/s) (L/s) 2016 2017 Source : SIMSPAM, PU (2017) Source : Susenas BPS (2017) 10 REPUBLIK Land and Water INDONESIA

02 Raw Water Limitation 01 Flood

 Raw water needs in 2017 reached 28 m3/sec,  Causes: Catchment Area degradation, Land Subsidence, but can only be fulfilled by 18 m3/sec. Sea Level Rises, poor conditions of urban drainage  The projection of Jakarta City's raw water  In 2050, it is predicted that 35.61% of Jakarta's land will supply needs in 2030 is 41.6 m3/sec. be submerged in sea water

Jakarta Coast Line in 03 River and Jakarta Bay Pollution 1740

 River water from upstream to downstream is in poor condition, both physical quality, chemical quality and biological quality  Non-optimal urban waste management system causes wastewater entering the river flow

04 Land Limitation  Jakarta needs new space or land for settlements, offices, industry, agriculture, The Jakarta Bay coastline has changed due to the reclamation process infrastructure and other business activities. Land Subsidence in residential areas is greater than the port area

Source : Diolah dari Heri Andreas (Geodesi ITB) dan Perpustakaan Nasional

11 Land Use Change in Jakarta REPUBLIK INDONESIA

1972 1983 1990 1995

Bulit-up area

Waterbody

Forest 2000 2005 2010 2012 Non-rice field vegetation Rice field

. Development of built-up area (besides happening in DKI Jakarta) occurs in the Bodetabekpunjur area, especially in areas bordering DKI Jakarta . These developments indicate the growth of urban areas in the Jabodetabekpunjur region which are functionally related to one another. 12 Source : Kementerian ATR, 2016 12 Land Subsidence in North Coast Java REPUBLIK INDONESIA

BLANAKAN-PONDOK BALI PEMALANG AREA AREA

Demak area Cikarang area

Cirebon, Brebes, Pekalongan, Pemalang area

JAKARTA AREA BANDUNG AREA SEMARANG AREA LUSI AREA

13 REPUBLIK INDONESIA

Sustainable Development Banten-DKI Jakarta-West Java

14 Issues in Capital City REPUBLIK INDONESIA

. Current bulk water supply is 18 m3/s while the demand is 28 m3/s (deficit 10 m3s) WATER . The demand is predicted to rise up to 38 m3/s in 2030 RESILIENCE . In bigger scale, bulk water demand of Megapolitan Banten-DKI Jakarta-West Java is predicted at 103 m3/s

. Low quality of existing on-site treatment system (septic tank) GARBAGE AND . Low progress of Waste Water Treatment Plant (WWTP) construction due to limited space and house connection problem. Hence, the progress is not able to catch up the escalation of SANITATION pollution at riverbank and also at Jakarta Bay . WWTP does not treat industrial and solid waste at riverbank, only domestic waste

. Obstructed drainage, river shallowing and flow blockage at the estuary cause Jakarta become FLOODS susceptible to urban flood . Land subsidence at the coast leads to rob flood. In addition, sea level rise magnifies the impact . Missing link which connects Tangerang and Bekasi burdens the capital particularly northern route Jabodetabek (over capacity of existing road) TRANSPORT . High dwelling time of Tj. Priok Port (3-4 days) INFRASTRUCTURE . Low space of Tj. Priok Port Container Terminal . Soekarno-Hatta Airport is the busiest airport in ASEAN with1,200 airplane/day (Singapore 1,000/day). High usage of runway decrease the aviation safety . Jabodetabekpunjur has been developing rapidly and surpassed prediction. Therefore, the demand of space is significant. LAND SCARCITY . Agricultural land has turned into commercial district, industrial district, housing and infrastructures without proper attention to food security

15 Regional Development Vision of Jakarta Bay REPUBLIK INDONESIA Belt Road Initiative Kra Canal Main Line of Sea Toll Road (Tol Laut) Indonesian Archilepelagic Sea Lanes/ Alur Laut Kepulauan Indonesia (ALKI) Proposed Route

Indian Ocean Member countries of TPP

INDONESIA is located between TPP (Trans-Pacific Partnership) and BRI (Belt Road Initiative) SUNDA STRAIT has Traffic Separation Scheme (TSS) to manage shipping line. The depth and width of the strait is 100 m and 24 km respectively

JAKARTA BECOME GLOBAL LOGISTIC HUB by JAKARTA BECOME WATER SELF-CONTAINED-CITY 1 developing Tj. Priok Port to depth of -20 m and by constructing offshore DAM which holds 3 3 utilizing Sunda Strait potential on ALKI 1 2.44 billion m of bulk water at the north of Jakarta 2

JAKARTA BECOME THE CENTER OF GROWTH JAKARTA BECOME GREEN CITY by using renewable energy OF NATIONAL ECONOMY by providing space (wind, solar and water). The renewable energy infrastructure of 8000 Ha at the north of Jakarta will be built on the offshore DAM and on offshore sea wall

16 Sustainable Development Megapolitan

REPUBLIK INDONESIA Banten-DKI Jakarta-West Java

 Indonesia has issued SUSTAINABLE DEVELOPMENT GOALS Presidential Decree No. 59/2017 regarding achieving Sustainable Development ISSUES : Goals (SDGs) 1 WATER RESILIENCE  169 SDGs Indicators have been integrated into GARBAGE AND 2 National Medium Term SANITATION Development Plan (RPJMN) 2020-2024 3 FLOODS The solution of problems in  TRANSPORT 4 Megapolitan Banten-DKI INFRASTRUCTURE Jakarta-West Java has to be harmonized with the 5 LAND SCARCITY implementation of SDGs  The issues are closely related to SDGs number 6, 9, 11, 13, 14 and 15

17 Offshore Dam Concept at Jakarta Bay REPUBLIK INDONESIA

FLOOD SOLUTION WITH PUBLIC INFRASTRUCTURE POLDER SYSTEM DEVELOPMENT

. Offshore Sea Wall . Utilize new land for runway construction (68,81 km) at or additional airport terminal depth of 0 to -20 m . Support Tj. Priok Port . Transversal Waterway development to become construction which acts as deep sea port (draft -20 m) long storage with capacity of without dredging to ±56.7 million m3 accommodate mother vessel . Retention lake with area of . Land transport development ±8,300 Ha and volume of (toll and rail road) on ±831.5 million m3 offshore sea wall . The required pump capacity is 190 m3/s` SOLUTION FOR WATER SELF-SUSTAINED ASSET SUPPLY AND WATER QUALITY (RENEWABLE ENERGY) . Offshore DAM provides . Installation of Solar cell on reservoir of bulk water up to the surface of retention lake 1.6 billion m3 . Installation of medium wind . Downstream waste water turbine along the offshore CONSERVATION AND EXTENSION FISHERMAN AND MARITIME Acquire new land (±8,000 ha) treatment by means of trash sea wall rack, sediment trap, artificial OF VEGETATION ECOSYSTEM INDUSTRY DEVELOPMENT as the result of lowering wetland, and WWTP . Micro-Hydro Power plant . Conservation of existing . Fisherman still has water surface construction on new land operation by means of mangrove (± 376 Ha) direct access to open elevation difference as the . New mangrove along offshore sea through the canal TOTAL COST OF ALL OFFSHORE . Provide space of 400 Ha for consequence of lowering sea wall and canal (± 352 Ha) DAM COMPONENT: final/temporary processing . National Fisheries water surface on offshore ± RP 170 TRILLION  ± RP 2.1 place to treat waste (cut Center (NFC) DAM MILLION/m2 tipping fee) development (200 Ha)

18 Concept Development REPUBLIK INDONESIA

UPDATED MASTERPLAN NCICD 2016 Updated Master Plan NCICD 2016 2016 1 Phase M (2019-2025) consists of several 2 Phase O (2030-2040) consists of O component: several component: a) Integration of 17 islands a) Construction of Offshore Sea M b) Extended Polder System Wall c) Integrated treatment at downstream, b) Integrated treatment at D midstream, and upstream downstream, midstream, d) Construction of Offshore Sea Wall and River and upstream Dike c) Construction of Offshore e) Build retention lake between 17 islands and DAM mainland d) Offshore pump installation f) Continuation of bulk water supply and clean e) Construction of toll road on water network distribution improvement offshore sea wall g) Construction of toll road on offshore sea wall f) Deep sea port development OFFSHORE DAM CONCEPT h) Continuation of water quality and sanitation 2018 program i) Mangrove extension j) Coastal revitalization with relocation of affected locals

Offshore DAM Concept . Combination of Phase M (extended folder) and Phase O (offshore sea dike) from Updated Master Plan 2016 . Regional development basis . Covers Megapolitan Banten – DKI Jakarta – Jawa Barat 19 Stages of Construction REPUBLIK INDONESIA

Transversal Offshore DAM Supporting Land Preparation 1 2 Waterway 3 Compartment 4 Facilities 5 Expansion

. Pre-Feasibility Study . Construction of . Construction of sea . Water gate installation as . Water surface lowering transversal waterway wall per segment by part of flood mitigation at offshore DAM up to . Feasibility Study by using non- considering: system -5m resulting to new conventional dike  Segment for clean land along the coast . Detail Engineering water . Utilization of canal for sorting out subsea Design (DED) by using . Transversal waterway  Fisherman’s access . Application of urban pipeline and cable at non-conventional dike acts as coastal dike to open sea and inspiring design on the Jakarta bay to reduce cost and the fishing port new land to attract technology is eco- . Increase the river dike  Tj. Priok Port . Implementation of investor friendly elevation to contain Development downstream waste water the maximum flood  Toll and rail road treatment . Public Private discharge alignment Partnership (PPP) . Installation of renewable preparation energy facilities (solar, wind and water)

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

20 Offshore Dam as Role Model for Development

REPUBLIK INDONESIA of Northern Coast of Java

Development of Northern Java Coast:

New land : ± 176,071 Ha Area of Offshore DAM : ± 652,686 Ha Water Volume Offshore DAM : ± 48.96 Billion m3

21 Discussion and Progress REPUBLIK INDONESIA

MEETING AND DISCUSSION WITH MINISTRIES MINISTERIAL DECREE : ESTABLISHMENT OF INTEGRATED PLANNING TEAM MINISTRY OF TRANSPORTATION MINISTRY OF PUBLIC WORKS OF NORTHERN COAST OF JAVA DEVELOPMENT AND HOUSING MINISTRY OF ENVIRONMENT 1. Team comprises of officials AND FORESTRY and experts related to coastal development PELINDO MINISTRY OF AGRARIAN AFFAIRS 2. Establishment of expert AND SPATIAL PLANNING panel which consists of experts, practitioner and COORDINATING MINISTRY OF academics from 5 MINISTRY OF MARINE ECONOMIC AFFAIRS universities AFFAIRS AND FISHERIES 3. Expert panel assess 7 aspect: MEETING AND DISCUSSION WITH UNIVERSITIES . Technical . Social INSTITUT TEKNOLOGI INSITUT PERTANIAN UNIVERSITAS . Environment BANDUNG BOGOR GAJAH MADA . Technology . Financial UNIVERSITAS UNIVERSITAS . Spatial planning INDONESIA HASANUDDIN . Law

22 REPUBLIK INDONESIA

Sustainable Urban Planning and Development

23 Integrating SDGs and NUA in Indonesia REPUBLIK INDONESIA

SDGs: Universal; Integration; No One Left Behind

NUA:

Equality – Leave No One Behind: Sustainable and Inclusive; Environmental Sustainability

24 Vision for Urban Development in Indonesia REPUBLIK INDONESIA

Liveable Competitive Green and Local urban Resilient identity

Instruments:  Long term vision for  Institutional  Transparent, accountable each city arrangement for and responsive  Integrated planning- multidistrict urban governance budgeting-financing areas  Information technology system for efficient urban management

25 Elements for Integrated Development REPUBLIK INDONESIA

Capital Development Urban Management Planning Investment & Financial Plan Facilitation & Financing Monev & Control

How will we improve statutory plans and their implementation for integrated planning?

What tangible benefits and impacts will we see?

Source: World Bank, 2017 26 Defining a Metropolitan Statistical Area

REPUBLIK INDONESIA ...Functional Urban Areas: a City and its Commuting Zone

Identification of a Definition of a city commuting zone

City Commuting area Commuting area after including enclaves and dropping exclaves Urban centre Commune High-density cell (duster of high- > 50% of its City Larger urban zone (>1,500 inhabitants density cells with Commune with > 15% of population in an per km²) population >50,000 its employed population Added enclave urban centre inhabitants per km²) Commune commuting to the city Removed exclave

Source: Eurostat, accessed 2018 27 REPUBLIK INDONESIA

THANK YOU

28 REPUBLIK INDONESIA

APPENDIX

29 Components of Sustainable Urban Development and

REPUBLIK INDONESIA Management

National Urban Social System (SPN) a. Sport facilities b. Education a. City’s Function c. Place of worship b. Interrelation between cities 06 01 d. Healthcare Infrastructure Environment Urban and a. Drinking water a. Open Public Spaces Urban Areas b. Sanitation b. Waste management strategies 05 Development 02 c. Housing c. Clean energy d. Electricity e. Telecommunication f. Roads Economy Governance 04 03 a. Trading a. Government b. Opportunities for investment b. Government control c. Funding resources c. Effective public policies d. Goods and people movement (logistics)

30 REPUBLIK Solutions for Infrastructure Development INDONESIA

1 . Dike or embankment construction on river and shore as short term solution . Pumping station construction and installation . Improvement on the upstream area . Completion of spatial document (DKI Jakarta) FLOOD . Offshore dike construction as long term solution 4 COUNTERMEASURE PROTECTION LAND SUBSIDENCE INCLUDING ROB 2 . Rain water harvesting and recycle water as alternative resources for clean water . Construction of raw/bulk water treatment installation . Provision of clean water and raw/bulk water transmission network and distribution 1 3 . Construction of centralized, communal, and community based sanitation system 3 CLEAN WATER AND 4 . Development of monitoring method on land subsidence data and data sharing RAW/BULK mechanism including installation of monitoring tools (extensometer) DOMESTIC 2 WATER . Formulation of mitigation actions against land subsidence accompanied with WASTEWATER SUPPLY application of those mitigation actions on the selected/prioritized location TREATMENT . Formulation of adaptation actions against land subsidence . Formulation of implementation and planning control framework on land subsidence including action plan

31 Elements for Integrated Development REPUBLIK INDONESIA Capital Development Urban Management Investment & Facilitation & Monev & Control Planning Financial Plan Financing How will we improve statutory plans and their implementation for integrated planning?

What tangible benefits and impacts will we see?

Source: World Bank, 2017 32 Avoid Shift Improve Strategy:

REPUBLIK INDONESIA Urban Transportation Development

“Development of urban transportation is needed to be integrated with the support of mass public transportation and Transit Oriented Development (TOD) facility as well as technology improvement.”

AVOID SHIFT IMPROVE Reducing the need to travel Promote Shifting to Public Increasing the energy efficiency and avoid unnecessary trip Transport with Inclusive of vehicles, fuels and transport Design operations

• Travel management with urban planning • Increase the use of Public Transport, • Energy-saving technologies (fuel) and mixed use concept Pedestrian, and Bicycles • Intelligent Transportation Systems • Development of Transit Oriented • Development of Public Transport (ITS) Development Development (TOD) • Benefit: congestion reduction and • Benefit: Increase the use of renewable equitable access, pollution and safety • Benefit: travel time reduction, air quality energy, productivity, and affordability. improvement, health, safety, and more reduction.

33 Transit Oriented Development (TOD) to Support Liveable Cities REPUBLIK INDONESIA

Transportation and spatial planning are interrelated with each other. Urban sprawling needs to be stopped with the development of integrated Transit Oriented Development (TOD) and mass urban transport infrastructure CURRENT CONDITION IDEAL CONDITION

Urban Sprawling Concept of Vertical Development with TOD

Disadvantage: Adjustment of Basic Inefficient travel; City Center City Center Negative impact on Building Coefficient (KDB) and Building environmental carrying Floor Coefficient (KLB) Public capacity (water recipe, energy) Tranportation

Stations /Public Transportation Terminals • Urban sprawling condition where the lower middle class is increasingly marginalized due to the inability to access the occupancy caused by the high • Vertical consolidation needs to be encouraged because it is very efficient in the price of land in the middle of the city. utilization of land that remains relatively fixed with the need for increasing • The lower middle classes are increasingly bear the burden of the cost of occupancy. transportation resulting from staying away from the center of activity in the • The development should be allocated to the locations that are well connected middle of the city. with public transport and economic activity centers.

Source : Kementerian Koordinator Bidang Ekonomi, 2017 34 Best Practice: Synergy of Planning and Funding of Transit

REPUBLIK Oriented Development and Mass Transportation in Hong Kong INDONESIA

HONGKONG MRT DEVELOPMENT SCHEME

• The business model used is the construction of Railway Plus Property (R + P) with revenue share from the property for the development of the rail network.

RAILWAY HONGKONG COMPANY REVENUES

13% 66% of Hong Kong Railway's revenues are 34% derived from the 15% development and rental of residential and commercial properties The Development of Share Revenue as part of TOD TOD + MRT Facilities 38% from MRT in Hong Kong Since Hongkong 1980 Source: World Bank, 2015 35 Local Governments with immediate needs for infrastructure investments,

REPUBLIK INDONESIA and have expressed their interest in issuing Regional Bonds (8/93)

Kalimantan Province

DKI Jakarta Balikpapan Semarang Surabaya Makassar

Bandung Yogyakarta Prov.

Source: World Bank, 2017 36 Investment needs exceeds financing capacity REPUBLIK INDONESIA

Investment need gap

Borrowing capacity

Revenue (excl. Salary, earmarked and contingency fund) Surabaya 2,954

Batam 825 Pontianak 361 Banjarmasin Balikpapan 651 339 Makasar Bangka 860 449

Semarang 1,262

Sidoarjo Bogor Gresik 875 521 642 Denpasar 606 Lombok Barat Surakarta 339 279

Investment needs, borrowing capacity, and total revenue for 14 qualified subnational governments, USD Millions

Source: World Bank, 2015; Directorate General Fiscal Balance Ministry of Finance, 2015 37 Urban Financing REPUBLIK INDONESIA

Transfer from Bank and Central institutional Government loans Zakat Capital investmentplanning

Non-government Local Long term investment (PPP, Government municipal bonds KPBU, PINA, Budget BUMN, etc) Projects for sustainable cities

38 Financing Urban Infrastructure REPUBLIK INDONESIA

Addressed by creative financing such as Different sources Regional Infrastructure of financing to Development Fund answer Local (RIDF), KPBU, PINA, etc Government’s different infrastructure investment needs

39 Why RIDF? REPUBLIK INDONESIA

Eligible sectors Eligible sub- projects (examples) Water & WTP, pumping RIDF sanitation stat Demand-based, increase access to financing, Environmental Sanitary landfill, rigorous appraisal, thorough monitoring including infrastructure waste safeguards standards to ensure low default & good processing fac quality infrastructures Low income Public housing, Before RIDF housing and integrated urban slum upgrading upgrading Top-down approach, limited LG access to financing, inadequate project preparation & appraisal, weak loan monitoring led to Productive and Road defaults & distressed projects logistic construction, infrastructure flyovers Social School rehab infrastructure

40 Issues in Urban Financing in Tackling Inadequate Urban Infrastructure REPUBLIK INDONESIA

Cities are not self reliant – Absence of financial revenue is not enough to investment plans cover expenses

Low recognition for private investment’s to support the Lack of financial viability – mission toward liveable weak creditworthiness cities’ – high recognition for competitiveness

41