INTERNATIONAL CONFERENCE ADRI - 5 “Scientific Publications toward Global Competitive Higher Education”

PROSPECTS FOR PUBLIC PRIVATE PARTNERSHIP INFRASTRUCTURE IN THE PROVINCE OF SOUTH

Syamsuddin Maldun Bosowa University [email protected]

ABSTRACT

The infrastructure development is the duty of the government in an effort to meet community needs. However, in the implementation of the achievement of the objectives of the country, the government can not do it alone. So the need for cooperation with the private sector in realizing all the needs of the public. This paper aims to contribute significantly to the prospects of PPP infrastructure cooperation in , to provide the best service for the people of South Sulawesi. The method used is: (1) Type of research phenomenology and (2) descriptive qualitative research approach. (3) The primary data source is from informants consisting of; (a) Legislative; (b) Third Party (Entrepreneur); and (c) Chairman - the chairman of the NGO. (4) Secondary data sources are supported data sources to supplement primary data collected. (5) Data was collected through: (a) observation, (b) Interviews and (c) Documentation. (6) Technical Data validation is done by: (a) The collection of data, (b) data reduction, (c) Presentation of data, and (d) the withdrawal conclusions. Results of research on (1) Prospects of Cooperation PPP Infrastructure South Sulawesi province, where the South Sulawesi province oversees 21 districts and 3 Cities. (2) Procedures Cooperation PPP / Public Private Partnership, which the government set up the project PPP / PPP are adequately either at the planning stage, preparation of pre-feasibility study stage, the stage of the transaction, and management of the implementation phase of the cooperation agreement.

Keywords: Public Private Partnership infrastructure.

PRELIMINARY different countries, particularly developed countries (Secretariat A4DE, 2012: 1). In this globalization era, the Infrastructure development can development of infrastructure in the form of provide a very significant contribution in facilities and infrastructures as supporting accelerating economic growth and poverty the continuity of purpose of the state has a reduction. Infrastructure is an infrastructure very important role. Governments are that must be provided by the government to required to create a welfare society by meet the basic needs of social and economic fulfilling public needs are the responsibility human (Rostiyanti, 2012). Low levels of of the government. However, in the investment for infrastructure provision implementation of the achievement of the would have a negative impact on economic objectives of the country, the government growth of a region. One important element cannot do it alone, so the need for in economic development is when the cooperation with the private sector in private sector and government work together realizing all the needs of the public. to work together to achieve a common Public Private Partnership (PPP) or goal. The joint initiative is what is often commonly referred to as the Public Private referred to as PPP. Partnership (PPP) is an alternative financing The main challenge faced mechanisms in the provision of public was funding gap s between infrastructure services that have been used widely in investment needs with relatively limited

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financial capacity of the state to meet those infrastructure but also for the construction of needs. Therefore appears consideration the other facilities and social sectors in order to need to strengthen public-private improve the welfare of society. In cooperation is seen from three dimensions as cooperation PPP private sector providing follows: (1). Political reasons: creating a investment capital is important in the democratic government and encourage good management of large-scale infrastructure governance and good society, (2) provision (Susilo, 2000). The other side of Administrative reasons: their limited the aspects of private sector participation in government resources, both budgetary the provision of infrastructure is the resources, human resources, assets, and principle of private interest in running a management capabilities. and (3). Economic business, where large capital invested there reasons: to reduce the gap or inequality, spur must be an assurance of return with an growth and productivity, improve the quality adequate profit (Hindersah, 2003). While the and continuity, and reduce the risk (Setianto, strategy of attracting foreign investors to the 2009). region is a strategic step at a time is quite On the other hand it must be heavy because it requires readiness of all recognized that in any pattern or model of relevant agencies at both central and local cooperation will not be free from the levels (Yuliadi, 2009), even this has been possibility of conflict of interest, differences planned in the planning area of South in interpretation, or failure to meet the Sulawesi. obligations of the parties against the other But that should be considered by the party. To that end, the development of PPP South Sulawesi provincial government is all infrastructure cooperation must be followed the figures as well as success stories PPP by setting clear and firm on the position, cooperation The infrastructure in some rights and obligations of each party, as well places, leaving a dark side also include as a conflict resolution mechanism in the obstacles or problems is both small and event of any friction due to do a large. Constraints in the implementation of collaboration. That is why, clarity on the the Public Private Partnership agreement in handling and settlement of disputes in PPP in the field of drinking water is in infrastructure also needs to be a thorough the enjoyment of the rights and obligations examination in order not to interfere with of each party and coordination in efforts to the effectiveness of the government. resolve the existing problems. One reason is South Sulawesi Provincial the difference in our perception of the two Government in improving the services do elements that exists is the government side and use PPP cooperation scheme. and the private side. Accelerated development of infrastructure of In this study directs to focus and set public services to the people of South the formulation of the problem as follows: Sulawesi Province by leveraging private (1) How would you describe the funding sources. Without the participation of cooperation prospects of PPP infrastructure the private sector, infrastructure in southern Sulawesi province? and (2) development as well as the coverage of What is the procedure of PPP infrastructure public services in the province of South cooperation in South Sulawesi? While the Sulawesi will be slow, because the South purpose of this activity is expected to make Sulawesi Provincial development funds are a significant contribution to the cooperation not only necessary for the development of prospects of PPP infrastructure in the

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province of South Sulawesi, as has been the 3. Source of Data and Research destination of South Sulawesi province to Informant provide the best service for the people of Source of this research data South Sulawesi. captured from the source of primary data and secondary data in accordance RESEARCH METHODS with the proportion of the research objectives. The source data that became 1. Location and Time Research the qualitative and quantitative This research was conducted in resources, are: (1) The primary data the province of South Sulawesi with the source is from informants consisting object of research is Barru, Kabupaen of; (a) The Chairman and members of Pinrang, and Takalar. The third the South Sulawesi Provincial initiative of this region as the focus of Parliament; (b) Third Party the research, the Public Private Partnership (PPP) is based on the (Entrepreneur); and (k) Chairman - the following considerations: (1) In addition chairman of the NGO. (2) Secondary to being the capital of Eastern data sources are supported data sources Indonesia, South Sulawesi Province also required to complete the primary data a barometer of the delivery of that is collected, namely: UU RI; Regulation in Lieu of Law development in Eastern Indonesia. (2) The third area is that often give birth to RI; Government Regulation; Regulation a variety of problems. (3) concern the of the President; Presidential majority of people in South Sulawesi Decree; Ministerial province on aspects of regional regulation; Ministerial decree; Local development is quite high. regulation; Decision of the Governor of South Sulawesi; and South Sulawesi 2. Type and Research Approach Provincial Parliament Regulation. This research is classified as descriptive qualitative research 4. Description Focus and Indicators approach, whereas the type of research Research that is used is phenomenological. It is Focused on the research intended to provide a systematic problem, the research is directed at three description, factual and actual towards (3) a research focus with 9 (nine) the object under study. According indicators focus of research. that is: Sugiyono (2005: 1) the method of qualitative research is a research method a. Description prospects of used to examine the condition of natural cooperation Public Private objects, where researchers as a key Partnership (PPP) infrastructure in instrument. Data collected triangulation, South Sulawesi province, is a picture data analysis is inductive and qualitative of all development activities that research results further emphasize the have a value in the progress of the significance rather than generalization. PPP in the province of South Sulawesi. While the definition of PPP is the entire company private and public individuals who care

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about the development of South RESULTS AND DISCUSSION Sulawesi region through mutual 1. Cooperation prospects of PPP cooperation (symbiosis mutualism). Infrastructure in South b. PPP cooperation Sulawesi Province procedure infrastructure in South Sulawesi province, is a form of In the framework of good participation of the actors in a PPP in governance, the government passed South Sulawesi. legislation, respectively: (1) Five years after independence issued 5. Research Instruments Law No. 21 of 1950, which became Qualitative research tools the legal basis for the establishment focused on research on the analysis of the Provincial Administrative of the PPP in the province of South Sulawesi; (2) Ten years later, the Sulawesi described corresponding government passed Law No. 47 of empirical data using qualitative 1960, which endorsed the approach. Therefore, the research establishment of South and instrument is the researcher Southeast Sulawesi; (3) Four years himself. Researcher as research later, the government separates East instrument using multiple fittings Sulawesi of South Sulawesi through which include: (1) Guidelines for Law No. 13 of 1964; and (4) Forty the interview, (2) Guidelines for years later, then the government of observation, and (3) Notes South Sulawesi break into two, document. based on Law No. 26 of 2004. The district was once a district under the 6. Research Data Analysis Techniques government of South Sulawesi This study used a qualitative province, are: approach, so that the data analysis District ; Mamuju ; Mamuju technique that is suitable for use is Utara; Polewali Mandar; and the technique of interactive analysis Mamasa, then officially became a as proposed by Miles and county under the government of the Huberman (1992) with the data Province of West Sulawesi in line analysis process as follows: with the establishment of the (1) Data collection (data collection) province on October 5 2004 under (2) Data reduction (reduction data), Law No. 26 of 2004. (3) Data Display (presentation of Every province in charge of data) (4) conclusion / County and City, as well as the verification (verification and province of South Sulawesi are in conclusion). charge of 21 (twenty-one) and District 3 (three) City, according description contained table 4.4 on

page 158.

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In 2008, North Toraja researchers drew three samples scheduled formed, Regency / City proportionally, with following the publication of consideration of the inner regions of Commission President Susilo South-Eastern capital of South Bambang Yudhoyono, numbered: Sulawesi (Makassar), represented R.68 / Pres / 12/2007 on 10 by Takalar, and 2 (two ) regions of December 2007 on Redistricting 12 North-East of the capital of South regencies / cities. Sulawesi (Makassar), represented by Barru and Pinrang. Table 1: Classification of Districts and Municipalities in the Province of 1. Kabupaten Takalar South Sulawesi a. Geographical conditions and No. Regency / City Capital city Administration 1 Bantaeng Government administrative area 2 Barru KabupatenTakalar up in 2006, consists

3 Regency Bone Watampone of 7 (seven) districts, and in 2007 4 Bulukumba suffered the regional growth to 9 (nine) 5 Enrekang districts, namely District and District 6 Sungguminasa Sanrobone Galesong. District of the 7 Bontosunggu largest / widest District of North 8 Islands Selayar Regency Benteng Polombangkeng is 212.25 km2 or 9 Regency Belopa 37.55%, followed by the District

10 East Malili Mangarabombang namely 100.50 11 Luwu Utara Regency Masamba hectares or 17.78%. Moderate District 12 Turikale Area which has the smallest area is the 13 Pangkajene Islands Pangkajene District of North Galesong ie 15.61 Regency km2 or 2.76% of the total area Takalar. 14 Pinrang 15 Sidenreng Rappang Sidenreng Table 2: Division Administrative Region of Regency 2007 16 Sinjai 17 Watan Soppeng NO DISTRICTS LUAS (KM 2) 18 Takalar Regency Pattalassang 1. Mangarabombang 100.50 19 Makale 2. Mappakasunggu 45.27 3. Sanrobone 29.36

20 Rantepao 4. South Polombangkeng 88.07 21 Sengkang 5. Pattallassang 25.31 22 Makassar City - 6. North Polombangkeng 212.25 23 Pare Pare City - 7. South Galesong 24.71 24 City - 8. North Galesong 15.61 9. Galesong 24.21 Source: South Sulawesi Provincial Government document; 2014. AMOUNT 947.84 With regard to the province Source: Regency Takalar in Figures 2007 of South Sulawesi is very broad and range limitations of researchers, the

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b. Conditions Climatology and are not built on land use is a vacant lot Hydrology or other open space, most of the Based on observations in the agricultural land (paddy fields). Rain Station Regency Takalar shows minimum temperature average 22,2Â ° Table 4: Type of Land Use Regency Takalar (In Ha) C to 20,4Â ° C in February to August 2006 and 30,5Â ° C and a maximum of up Percentage to 33,9Â ° C in September - LAND USE Area (Ha) (%) January. The level of rainfall and rainy days in the last three years is not the Housing and 1929.90 3.41 courtyard 16436.22 29.01 same with the average of the largest Rice fields 8932.11 15.77 occurred in 2005 which is a rainy day Mixed garden 5333.45 9.41 8.92 and 555.42 mm rainfall. During Sugar cane plantation 4233.20 7.47 the same period the number of rainy Ponds / Pond 3639.90 6.43 Moor 8254.00 14.57 days the lowest occurred in 2004, Forest 7892.22 13.93 while the lowest rainfall in 2006. another use AMOUNT 56651.00 100 Table 3: Number of Days (Hh) and Rainfall (Ch) Source: RegencyTakalar in Figures 2007 In Regency Takalar Per Month At the

Meteorological Station Years 2004-2006 d. Developments Economy 2004 2005 2006 Regional gross domestic MONTH HH CH HH CH HH CH product (GDP) can give you an January 17 811 22 1,567 16 388 overview of the economic progress of February 21 509 15 711 16 449 a region to define as the total value- March 14 98 20 1,376 20 441 April 7 36 13 669 15 140 added goods and services in a given May 2 23 1 52 12 153 period (1 year). In 2006, nine June 2 5 1 13 12 277 July 1 - - 9 - - economic sectors driving Regency August ------Takalar contribute to the GDP of September - 5 - - - - October 2 56 4 82 - - Rp. 607,104.66 million with a per November 8 90 13 615 3 19 capita income of the population December 14 962 18 1571 17 437 amounted to Rp. 2.72817 million. Average 7:33 216.25 8.92 555.42 9:25 192.00

Source: Regency Takalar in Figures 2007

c. Potential Land Resources Land use in the area of Regency Takalar divided into eight (8) types of land use. In general the use of land in this region is dominated by rice

fields and orchards mixture respectively 16436.22 and 9932.11 Ha Ha. In the neighborhood awoke land use is dominated by residential and office other than general infrastructure

is 1929.90 hectares of extensive throughout the region. For regions that

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Table 5: GRDP Regency Takalar by Industrial Year vulnerability to natural disasters, the 2003-2005 Constant 2000 Prices (In Million) potential of natural resources, and economic potential of the region. a. Administration and Geographical DISTRIBUTION GRDP TAKALAR ECONOMIC SECTOR (%) Boundaries 2003 2005 2003 2005 Administratively, the district Agriculture 294,953.11 321,664.05 48.52 47.98 has an area of 1174.72 km2 (117 472 Mining and Quarrying 4657.70 5040.93 0.77 0.75 Industry 58287.55 61565.28 9.59 9.18 ha), while according to a map of the Electricity, Gas & Water 5833.55 6963.76 0.96 1.04 district administration and maps Building / Construction 32853.06 35885.84 5,40 5.35 Trading, Hotel & 62599.63 71675.56 10,30 10.69 Barru appearance of the earth in Restaurant 27327.55 31871.92 4.50 4.75 1999 covering an area of 1191.10 Transport and 36236.96 40161.26 5.96 5.99 2. Communications 85104.66 95648.35 14,00 14.24 km Barru divided into 7 Bank and Finance subdistricts namely Sub Tanete Services AMOUNT 607.10466 670,476.94 100 100 Riaja, District Tanete Rilau, District Barru (district capital), District Source: Regency Takalar in Figures 2007 Soppeng Riaja, District Mallusetasi, 2. Barru District and Sub-district Pujananting In general, the profile of the area Ballusu and consists of 14 village Barru discusses general overview of the and 40 villages. district, population and human resources, Table 6: Area of Regency Barru 2) Province Area (Km amount No. districts BPS analysis Village / Large % Large % Sub 1 Tanete Riaja 174.29 14.84 180.66 15.17 7 2 Tanete Rilau 79.17 6.74 82.68 6.94 10 3 Barru 199.32 16.97 196.70 16.51 10 4 Soppeng Riaja 78.90 6.72 79.68 6.69 7 5 Mallusetasi 216.58 18.44 221.33 18.58 8 6 Pujananting 314.26 26.75 315.54 26.49 6 7 Balusu 112.20 9.55 114.51 9.61 6 amount 1,174 100 1,191 100 54 Source: Central Bureau of Statistics b. Topography and Slope c. Geology Topography and coastal The geological structure of lowlands are in District Tanete Riaja rocks contained in Barru very with an area of approximately 2.38% varied. The geological structure has of the area of Barru and generally a an influence on the pattern and river and coastal sediments potential structure of rocks and minerals development of agriculture and deployment. As for the types of fisheries (aquaculture). Barru rocks that can be found in Barru, predominantly mountainous among others: (1) Alluvium young topography of a surface area of up to from the sediment of the sea, (2) 48.04% of the total Alluvium young from the sediment area. Mountainous topography in the of the river, (3) Alluvium young, District Pujananting. eustaria marin, alluvium young

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comes from the river peat, (4) source in Barru ie Bojo River, the alluvium, sediment alluvial fan, river Kupa, river Nepo, Mamba river, alluvium young from the sediment of river Ceppaga, Takkalasi river, river the volcano, (5) Andesite, basalt, (6) Ajakkang, Palakka River, Bungi river, limestone, (7) limestone, rock, marl, river Sikapa, Parempang river, river (8) rock, alluvium young coming of Jalanru. sediment sea, (9) Sandstone, stone e. Climatology silt, mudstone, shale, conglomerate, Type Zone Climate (10) sandstone, mudstone, shale, (11) Agroclimatology method which is Quartzite, skis, phyllite, (12) Marble, based in the wet 9 rainfall of over 200 limestone <13) peridotite, mm / month) and dry months (rainfall serpentinite, (14) serpentinite, less than 100 mm / month), in Barru peroditit, dunit <15) shale, are covering 71.79 per cent of mudstone, sandstone, conglomerate, Regions (84 340 ha) with Climate (16) Shale, sandstone, alluvium Type C which has a consecutive wet young from the sediment of the river, months â € "co-5 â €" 6 months and (17) tefra fine grained, alluvium (October to March) and dry months in young derived from volcanic a row less than two months (April to sediment. September). d. Hydrology f. Aspects of Human Resources Based on the results of a The population in Barru in location, the hydrological conditions 2010 by the Central Statistics Agency Barru can be divided into surface (BPS) in Barru is as much as 162 985 water (rivers, wetlands) and water people. Highest number of inhabitants from the subsurface in the District Barru as many as 35 (groundwater). The source of water 477 souls, while the number of sub- from the subsurface (groundwater) districts that have the lowest consists of a kind of fresh (<250 ppm population in Sub Pujananting as NaCl), brackist (250-4000 ppm many as 13 486 Life. NaCl), fresh / brackist, none or slight. The river is the largest water Table 7: Total Population by Districts in Regency. Barru Year No. districts 2005 2006 2007 2008 2009 1 Tanete Riaja 20 918 20 990 21 538 21 708 21 562 2 Pujananting 11 628 11 643 12 475 12 614 12 565 3 Tanete Rilau 32 451 32 468 32 542 32 798 33 108 4 Barru 35 024 35 264 34 137 34 405 35 477 5 Soppeng Riaja 17 445 17 478 17 197 17 333 17 885 6 Balusu 17 883 17 940 17 829 17 969 17 534 7 Mallusetasi 23 472 23 452 24 710 24 905 24 854 amount 158 821 159 235 160 428 161 732 162 985 Source: BPS Barru. Barru In Figures Year 2010

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3. Pinrang 150 meters, consisting of the top clay, silt, sand and gravel. (2) rocks volcano a. Geographical and Administration composed of breccia with components Pinrang is a region of South bersusuntrakht and andesite, tuff Sulawesi province pumice stone, sandstone terfaan, is geographically located at conglomerates and breki terfaan, the coordinates between 4º10â € ™ 30A thickness ranges from 500 meters, until 3º19â € € € ™ 13A South spread in the north City Pinrang latitude and 119º26â € ™ 30A € to Around Bulu Lemo, Fur Pakoro while 119º47â € ™ 20â € East in the south around Bulu Manarang, Longitude. This area is located at an Paleteang Fur, feathers Lasako altitude of 0-2600 meters above sea (bordering Pare Pare). (3) rock lava level. flows, rock lava flows tiered trakhit Pinrang is  ± 180 km from light gray to white, bekekar pole, the city of Makassar, by having a spreading towards the area Pinrang, (4) broad  ± 1961.77 km2, comprises rocks lava decker basol to andesite, three territorial dimension includes Unit these rocks shaped pillow lava, the lowland, sea and breccia andesites piroksin and andesite highlands. Pinrang administratively trakhit. Thickness of 50 to 100 meters consists of twelve (12) sub-district, 36 with a spread of about Bulu Tirasa and village and 68 villages covering 81 Pakoro. and (5) sandstones, these rocks 168 Environmental and Hamlet. Most are layered andesitic Unit, silt stone, of the districts of the coastal area conglomerates and breccias. Fault which has an area 1457.19 km2 or structure estimated that there are at 74.27% of the total area Pinrang rock lava flows and andesite tiered region with a long coastline of  ± sandstone, in the form of normal fault. 101 Km. d. Climatology condition b. Topography and Slope conditions Smith climate classification The topography of Pinrang according to Ferguson, Regional have a fairly wide range, ranging from climate types Pinrang including types plain to a height of 0 m above sea A and B with rainfall occurs in level to the plateau has an altitude December to June with the highest above 1000 m above sea level rainfall occurs in March. The dry (asl). Plateau at an altitude of 1000 m season occurs from June to above sea level lies mostly in the middle to northern Pinrang especially December. Criteria climate types in areas bordering the Toraja district. according Oldeman Syarifuddin wet c. Geological conditions month in Pinrang recorded 7-9 Pinrang geology of the area of months, humid months 1-2 months observation and compilation and dry months 2-4 months. Climate Geologic Map Pinrang, the types according to the classification arrangement of rock layers can be Oldeman Syarifuddin is climate B and described as follows: (1) Sediment and C. The annual rainfall ranges from river alluvium, alluvium Sediment and 1073 mm sampai2910 mm, the rivers, have a thickness between 100- average annual evaporation in Pinrang

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ranged from 5.5 mm / day and 8.7 plantations of 56 333 ha, or mm / day. The average temperature 28.71%. Area buildings and courtyard normal between 27A ° C with in Pinrang has an area of 6747 humidity 82% - 85%. hectares or 3.44%. e. Hydrology conditions 2. Cooperation procedure PPP / In Pinrang, there are two major PPP Infrastructure South Sulawesi rivers namely river Mamasa and Province Saddang River, where the river In order to develop a PPP or Mamasa is still a tributary Public Private Partnership (PPP), Saddang. Currently the river Mamasa governments need to ensure that the utilized for Hydroelectric Power Plant private sector will be the partners of the (HEPP) Bakaru located in Desa Ulu government must know the state of the Saddang, Lembang district. Existing project will be invested by them well so hydropower is in addition to meet the that they can make exact calculations to electricity demand in Pinrang, also to generate optimal benefits. Therefore, the meet the electricity demand in the government needs to prepare a project province of South Sulawesi. While PPP / PPP are adequately either at the Saddang River used for irrigation planning stage, preparation of pre- agriculture with service coverage in feasibility study stage, the stage of the addition Pinrang also serve Sidrap. transaction, and management of the f. Land Use implementation phase of the cooperation Pinrang land use is dominated by agreement. the State Forest land use types in the In the framework of cooperation amount of 66 787 hectares, PPP / PPP infrastructure of South accounting for 34.04%. Pinrang also Sulawesi province, both parties agree to has potential in agriculture is the procedure of cooperation with the indicated by the area persawanan and flow as follows: Table 8: Cooperation procedure PPP / PPP Infrastructure Execution time No. Description of activities Second Month III / I Month / Day Month / Day Day 1 Coordination meetings 1 2 Prequalification in national media 7 3 Registration and pre-qualification document retrieval 9 4 Entered the prequalification document 2 5 Evaluation of pre-qualification documents 1 6 Determination of the prequalification results 1 7 Objection period prequalification 5 8 Invite kpd participants passed the prequalification 1 9 Investment tender document retrieval 8 10 Anwijzing 1 11 submission of bids 7 12 Bid opening 1 13 evaluation of bids 3

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14 The proposal determination of auction 1 15 Determination of winners 1 16 Winner announcement 1 17 objection period 5 18 Negosiasiteknis and fees 1 19 The designation of a winner 1 20 Signing the contract 1 of private funds; (b) Improving the If reviewing work processes PPP quantity, quality and efficiency of / PPP as shown in table 10, the process is services through healthy similar to the process of procurement competition; (c) Improve the quality of impressed in Presidential Decree No. 80 management and maintenance of of 2003. Indeed, Article 51 of infrastructure provision and (d) Presidential Decree No. 80 of 2003 Encouraging wore principle of user states that a special provision of the pays services received, or in certain pattern of cooperation between cases consider the purchasing power of government and private sector will be users. regulated by Presidential own. The rules in question is Presidential Decree No. 67 of 2005. In cooperation regulation has the aim of implementing PPP / PPP for: (a) Adequate a funding needs on an ongoing basis through the mobilization

Potential Feasibility The Contract prioritization studies and Negotiation of projects auction management due diligence process

 Feasibility study • Preparation of • Check list of the  Financial closing  Need Analysis  Identify needs tender documents negotiations  Construction  Identification & government • Establishment of • Establishment of  Commissioning priority project support evaluation negotiating team  Analysis of value  Operation  Risk analysis method • Negotiation draft  Monitoring for money cooperation  Selection of • Establishment of  The transfer at the agreement forms of PPP committee end of the • Negotiation of  Due diligence • The auction concession period, risk allocation  Determination u / process if any can be auctioned • Evaluation • Determination auction the winning • Determination of auction the potential winner auction Figure 1: Public Private Partnership Process

Source: Miharjana, 2006.

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In connection with that, the PPP process provide recovery of costs ( cost analysis of cooperation can be observed as recovery ) and can be financed by a follows: bank ( bankable ) so as to attract private investors to 1. Identification and Selection invest. Regulations on procedures for Project PPP / PPP Infrastructure implementing public-private Center for PPP projects, the partnerships in Indones it does Minister of fixing the list of priority require preparation of feasibility or sector level Cooperation Project pre-feasibility study for the plans and submit a list of priorities to infrastructure projects in cooperation the Minister of Planning. As for the with the private sector before joining PPP project area, the Regional Head the bidding process. fixing the priority list of regional The draft provisions of the cooperation project plan and submit cooperation agreement contains a list of priorities to the Minister of various terms that will govern the Planning. The evaluation results on cooperation between government the priority list of planned and business entities in the cooperation projects and regional implementation of cooperation centers established by the Ministry projects. of Planning in the list of planned 3. Risks and Risk Mitigation cooperation projects national level. The allocation of risk is a In line with that, then do the risk-sharing partnership project with prioritization of infrastructure PPP the basic principle that the risk is projects as picture 4.4.berikut: shared and charged to the party best 2. Pre-Feasibility Study able to manage such risks. The Low interest of investors to allocation of risk include the sharing the project of Public Private of project risks between the Partnership (PPP / PPP), among government and private business others, due to the lack of information entities based on the principle of risk about the project both in terms of allocation. technical details and financial Risks associated with information and analysis on a variety construction and operation are of risks and government guarantees handed over to the private business for the management of these risks. entities, while the risks associated The most important thing to with the politics, policies and do in the development of PPP / PPP regulations submitted to the is preparing infrastructure projects government as the best party to that can be cooperated with the manage it. However, the market risk private sector based on the rules can be shared between the prevailing international rules so that government and the private sector information about the project can through the provision of government have high credibility in the eyes of guarantees. investors. Preparation of project Risk mitigation aims to documents mature and adequate, reduce the likelihood of risk to its especially for projects that can impacts. The Government or Private

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Companies must prepare risk b. Enterprise Infrastructure mitigation well since they are the Assurance (BUPI) responsibility of each - each project The main goal of PII is: (1) risks. Special mitigation of risks Provide a guarantee for the project PPP borne by private business entities, / PPP infrastructure in Indonesia. (2) PJPK should ensure that the private Increase creditworthiness ( credit business entities take mitigation worthiness ), especially bankability of measures appropriate to use the the project PPP / PPP in the eyes of lowest cost in implementing the investors / creditors. (3) Improving project. governance and transparent process in a. Indonesia Infrastructure the provision of guarantees, and (4) Guarantee Fund Regulatory minimize the possibility of a direct Framework shock ( sudden shock ) to the State As one of the efforts to Budget (APBN) and fence ( ring- enhance project viability PPP / PPP as fencing ) Government contingent well as efforts to encourage private liability exposures. sector participation in infrastructure In doing underwriting, PII may development in Indonesia, the involve one or more additional Government provide Government guarantor ( Co-Guarantee ). Based on Guarantees to infrastructure projects the Minister of Finance Regulation undertaken by the scheme PPP / No. 260 / PMK.011 / 2010 Government PPP. The legal basis of the provision represented by the Ministry of Finance of the Government Guarantee is can act as Co-Guarantor . However, the Presidential Decree No. 67/2005 government emphasized the importance Jo. Presidential Decree No. 13/2010 of optimizing the implementation Jo. Presidential Decree no. 56/2011 on guarantee PII, to keep the State fiscal Government Cooperation with risk. On the other hand, PT PII also can Business Entities in Infrastructure cooperate Co-Guarantee institutions - Provision. multilateral financial institutions (eg the Furthermore, the underwriting World Bank) for certain out projects process infrastructure through that have obtained the agreement of Infrastructure Guarantee Enterprises both parties. (Bupi) are further under Presidential 4. Transactions d an Project Decree No. 78/2010 regarding Cooperation Agreement PPP / PPP Infrastructure Guarantee Fund for Phase Transaction Cooperation Cooperation between the Government Project This usually requires a long Projects Undertaken Enterprises time. This is in addition because many Through Enterprise Infrastructure bureaucratic process in the government, also Assurance and Regulation of the due to the difficulty of finding common Minister of Finance No. 260 / ground between PJPK agreement with PMK.011 / 2010 Concerning the Investor. Transaction process begins with Implementation Guidelines the procurement of business entities, and is Infrastructure Guarantee in expected to end with the signing of Cooperation Project with the cooperation agreements. To execute this Government of Enterprises. transaction stage, it usually takes a

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considerable cost about 3 to 12% of the total financial, for projects with good and reliable value of investment projects. Generally, the so it's worth included in the tender weaker the policy framework and process. The key things that must be present institutional capacity of the government, in the Prequalification documents are: then the longer the transaction takes place. a. A brief explanation Partnership Project; a. Procurement Planning Enterprises b. The form and format of the document In Phase Planning Procurement expressions of interest ( expression Enterprises, PJPK forming Procurement c. of interest ); Committee who understand, understand, and d. Prospective bidder qualification control matters such as procurement requirements; and procedures, the scope of the cooperation e. Implementation schedule and project, legal agreements and the provisions procedures for how to vote of the relevant sectors of infrastructure, prequalification. technical aspects and financial aspects. The 2. Process Procurement / Auction committee then arrange the schedule of In the planning phase and procurement and procurement thereafter Market Sounding, the announcement concept. In this phase also Procurement Committee of compiling PJPK implementing the Scoping Interests Procurement. The contents of the Markets ( Market Sounding ). Interests procurement documents are: Scoping activity is done with the aim to a. Documents Pre Feasibility Study; obtain the input and determine the interest of b. Concept of Cooperation potential investors for the project Agreement; and cooperation offered. It is important for PJPK c. Guidelines for submission of bids. to package the project that will be offered in order to attract investors to invest. In this While the purpose of drafting a document stage of the Procurement Committee procurement / tender as a guideline: compiled Self-Estimated Price (HPS), the a. To get information about the Prequalification Document and Document cooperation project; Procurement. b. The procedure for submission of b. Procurement of Enterprises bids; 2. Prequalification c. Administrative requirements, Prequalification is one step that must technical and financial entities that be taken in the procurement phase of the passed the prequalification. project PPP / PPP for selecting potential 3. Procedures for Procurement of PPP investors who will enter the short list ( short / PPP list ) to participate in the auction process The provisions concerning the ( competitive bidding ). Prequalification is procurement procedures of entities regulated an activity after PJPK identify projects and in detail in Appendix Presidential Decree prepare pre-feasibility study that already No. 67/2005 Jo. Presidential Decree meet the requirements of the technical, No. 13/2010 Jo. Presidential Decree economic, financial, social, and No. 56/2011 about Government cooperation environmental predetermined. with Business Entities in Infrastructure The purpose of the prequalification is Provision. to get a number of business entities that have the ability of management, technical and

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4. Cooperation agreement PJPK joint business entity formed as One part of the contents of the mentioned above will sign a Cooperation procurement document is a Agreement. Cooperation Agreement will draft agreement. In accordance with the become effective once all the prerequisites provisions of Presidential Decree set out in the Cooperation Agreement have No. 67/2005 Jo. Presidential Decree obtained all parties. Preliminary No. 13/2010 Jo. Presidential Decree requirements include approval of the No. 56/2011 about Government cooperation issuance of Government Guarantees and with Business Entities in the Provision of obtaining all necessary permits enterprises Infrastructure, the Partnership Agreement at to implement its business. In the event that least contain provisions regarding: (a) scope all the prerequisites have been met, PJPK of work; (b) the period; (c) performance will publish an official report on the bond; (d) the rate and mechanism of effectiveness of the cooperation agreement. adjustment; (e) rights and obligations, including the allocation of risk; (f) the CONCLUSION service performance standards; (g) transfer 1. Description of the prospects of of shares before Project Cooperation cooperation Public Private commercial operations; (h) sanctions in case Partnership (PPP) infrastructure in the the parties do not comply with the province of South Sulawesi, is provisions of the agreement; (i) termination potentially quite large or termination; (j) the financial statements of 2. Procedure for PPP infrastructure business entities in the implementation of cooperation in South Sulawesi the agreement, (k) dispute settlement province, is very tight so there is little mechanism set up in stages, ie consensus, possibility of corruption. mediation, and arbitration / court; (l) the mechanism of monitoring the performance ACKNOWLEDGMENT of enterprises in the implementation of the agreement; (m) use and ownership of 1. South Sulawesi Provincial Government infrastructure assets; (n) return on has facilitated the development of infrastructure assets and / or its research on regional development. management, (o) force majeure; (p) the 2. The informant research infrastructure PPP representations and warranties of the parties, South Sulawesi province. (q) the use of the language in the agreement, and (r) the applicable law, the law of REFFERENCE Indonesia. Dwiyanto, Agus, 2012. Manajemen 5. Preparation of agreement signing Pelayanan Publik, Peduli, Inklusif, Having determined the winner of the dan Kolaborasi, Gadjah Mada procurement Enterprises, the winner must University, Pres. Yogyakarta. establish business entities will sign a Dwiyanto, A. dkk, 2007. Kinerja Tata Cooperation Agreement. Enterprises must Pemerintahan di Indonesia. have been founded later - later than within Yogyakarta. PSSK UGM. six months from the issuance of the Dwiyanto, A. dkk, 2003. Teladan dan determination or Determination Letter Pantangan dalam Penyelegggaraan Procurement award a single winner by PJPK.

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Pemerintahan dan Otonomi Daerah . Badan Usaha dalam Penyediaan Yogyakarta. PSSK UGM. Infrastruktur. Gazley , B. dan Brudney, J.L. 2007. The Rostiyanti, Susy F, Rizal Z Tamin, Purnomo Purpose (and perils) of Government- Soekirno, Senator Nur Nonprofit Partnership. Nonprofit and Bahagia.(2012). Kerangka Vpluntery Sector Quarterly.36 Pengukuran Kinerja Sistem (3).389-415. Penyelenggaraan Jalan Tol Melalui Hermanto,R.(2007). Rancangan Kerjasama Pemerintah Swasta di Kelembagaan Tani Dalam Indonesia. Jurnal Teknik Sipil Volume implementasi Prima Tani di Sumatera 11 No.2 April 2012: 117-127 Institut Selatan. Jurnal Analisis kebijakan Teknologi Bandung (ITB). Bandung. Pertanian Volume 5 No.2.Juni Sekretariat A4DE. 2012. Kerjasama 2007:110125.BPTP.Sumatera Pemerintah Swasta (KPS) Sealatan. “Pembiayaan KPS Infrastruktur dan Hindersah, Hilwati.(2003). “Prospek Kesesuainnya pada KPS Sosial”. Aid Kemitraan Pemerintah Swasta dalam for Development Effectiveness Penyelenggaraan Pelayanan Secretariat. Infrastruktur.” Jurnal Perencanaan Selsky J.W. & Parker, B. 2005. Cross- Wilayah dan Kota, Nomor 03/Tahun Sector Partnerships to Address Social ke-3. Issue: Challenges to Theory and Majalah Infrastruktur Vol.02 edisi 06, Practice. Journal of Management, Agustus 2006, KKPPI 31(6) 849-873. Masitoh, Hidayatul, 2014. Public Private Setianto, Eri Kurniawan, Bambang Partnership (PPP) Pengelolaan Aset Pudjianto, Y.I. Wicaksono.(2009). Daerah: Studi Deskriptif tentang Analisis Potensi Penerapan Kemitraan antara Perusahaan Daerah Kerjasama Pemerintah Swasta(PPP) Pasar Surya (PDPS) Surabaya dengan dalam pengembangan Infrastruktur PT Arwinto Intan Wijaya (AIW) dalam Transportasi di Perkotaan. Jurnal Pembangunan dan Pengembangan Teknik Volume 30 N0.3 Tahun 2009 Darmo Trade Centre (DTC) ISSN 0852-1697 Universitas Surabaya. Journal. Surabaya. Diponegoro. Semarang. Miharjana, Dodi, (2006), ”Feasibility Soesilo, Nining L.(2000). Reformasi Analysis and Risks in PPP Projects” Pembangunan dengan Langkah- dalam Workshop on “Fundamental langkah Manajemen Strategik. Principles and Techniques for Magister Perencanaan dan Kebijakan Effective Public Private Partnerships Publik, FE - UI. Jakarta. in Indonesia”, Jakarta. Yuliadi, Imamudin.(2009). Analisis Parente, William J. (2006), ”Public Private Kesenjangan Investasi Asing (PMA) di Partnerships” dalam Workshop on Provinsi Sulawesi Utara. Jurnal “Fundamental Principles and Ekonomi dan Studi Pembangunan Vol Techniques for Effective Public 10,No.1,April 2009. Private Partnerships in Indonesia”, Jakarta. Peraturan Presiden Nomor 67 Tahun 2005 tentang Kerjasama Pemerintah dan

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