Table of Contents Table of Contents i Acknowledgement ii Chapter 1 Committee for Acceleration of Priority Infrastructure Delivery 1 Chapter 2 Progress of Infrastructure Development in Indonesia 7 Chapter 3 Achievement of KPPIP 19 Chapter 4 Latest Updates on KPPIP Priority Projects 30 Chapter 5 KPPIP’s Plan for the Future 101 Glossary 108 List of Figures 111 KPPIP’s Report of August 2015 – December 2015 KPPIP’s Report of August 2015 – December 2015 i FOREWORD As a country grows, the growth is inevitably reflected in its peoples’ changing needs, and such a change following the issuance of Presidential Regulation and Presidential Instruction on national strategic projects, correlates with demand for infrastructure, ranging from fundamental infrastructure such as the availability KPPIP was given additional responsibility to safeguard the delivery of 225 projects and construction of the of clean water to construction of hub ports that play a vital role in improving the country’s domestic and selected power plants of 35,000 MW, and conducted evaluation on the proposal for future national strategic international connectivity. projects. Aside from such a change, a nation’s economic growth is also closely related to the development of To ensure an effective project monitoring, KPPIP built a monitoring system using integrated information infrastructure. Building appropriate and effective infrastructure offers significant multiplier effects ranging technology for the use of KPPIP and other relevant parties in the second semester of 2015. The system from employment of manpower for construction process until operation, an increase in investment by both provides a dashboard for decision-making and may be used to monitor the progress of a project, reduce domestic and foreign investors to an improved competitiveness. All the above-mentioned matters are the potential obstacles, and formulate concrete and accountable action plans. KPPIP plans to introduce the contributing factors in economic growth. system to relevant stakeholders to ensure the maximum use of the facilities by related parties. Bearing the aforementioned issues in mind, the Government of indonesia places infrastructure as one of the In spite of KPPIP’s success in achieving a number of milestones in project acceleration during the second major work priorities. This decision is evidenced by establishing and strengthening Committee for Accelaration semester of 2015, we are fully aware of the fact that more improvement and strengthening are still needed to of Priority Infrastructure Delivery (KPPIP) as one form of the said strategies. improve the infrastructure. In the second semester of 2015, KPPIP conducted institutional strengthening for the purpose of carrying out By issuing KPPIP’s report at the end of 2015, we are hopeful that all parties become more familiar and the assigned duties. KPPIP’s Project Management Office (PMO), which has become one of the key stimulators supportive to KPPIP. In a spirit of acceleration, KPPIP calls for all relevant parties to put in joint efforts to to support the execution of KPPIP’s duties, was equipped with a program director and sector directors, each realize this dream. having professional experiences in the sector led. These directors have background knowledge in various infrastructural sectors and are experienced in the management of infrastructure project with high level of complexity. In order to enhance its legal standing, Regulation of the Minister of Economic Affairs No. 12 of 2015 on the Acceleration in Provision of Priority Infrastructure was issued in December 2015. This Regulation of the Minister of Economic Affairs provides operational foundation for KPPIP by officially deciding 30 priority projects of Luky Eko Wuryanto KPPIP’s as the first set of works on the list needed to be done in the future. In its implementation, KPPIP has Deputy for Coordination of Infrastructure and Regional Development / produced various facilities and budgeting support in order to maintain the quality of the project preparation as the Chairperson of KPPIP Implementation Team phase and the punctuality of the projects overall progress. This will lead to the projects increased acceptance by the market. In an attempt to perform its duties effectively, KPPIP also assembled a number of working teams with duties specific to each team, namely the Working Team for Acceleration in Electric Infrastructure Provision, Working Team for Acceleration in Bontang Refinery Construction, and Working Team for Acceleration in Land Procurement. In addition to the key mandate stipulated in Presidential Regulation No 75 of 2014, KPPIP plays an important role in formulating Presidential Regulation No. 3 of 2016 and Presidential Instruction No. 1 of 2016 in the second semester of 2015, where KPPIP selected projects to be included within the national strategic projects and was later contained in the amendment to Presidential Regulation No. 3 of 2016. As it develops, in particular ii KPPIP’s Report of August 2015 – December 2015 KPPIP’s Report of August 2015 – December 2015 iii KPPIP’s Report of August 2015 – December 2015 COMMITTEE FOR ACCELERATION OF PRIORITY INFRASTRUCTURE DELIVERY KPPIP’s Report for August 2015 – December 2015 1 COMMITTEE FOR ACCELERATION OF PRIORITY INFRASTRUCTURE DELIVERY Infrastructure provision in Indonesia often faces obstacles due to the lack of coordination between various stakeholders involved, namely the Government (ministries, institutions, regional governments, SOEs/ROEs) and the private sector. Such a large range of stakeholders, each having its own objectives and responsibilities, has the potential to cause delays to the implementation of infrastructure projects. Therefore, the establishment of a committee that can work across ministries and institutions will facilitate and assist the Project Owner in preparing and performing the development of the project. The Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) was established with the main objective of becoming a coordinating unit in decision-making processes to encourage settlement of issues arising from the lack of effective coordination between the various stakeholders. KPPIP acts as the point of contact to facilitate coordination in debottlenecking efforts for National Strategic Projects and Priority Projects. KPPIP was formed by revitalizing KKPPI (National Committee for the Acceleration of Infrastructure Provision), which was considered ineffective for several reasons such as lack of decision-making authority, limited roles at all stages of the projects starting from the design stage until the commencement of the construction, inability to provide incentives or disincentives in order to encourage projects acceleration, and an organizational structure that was too large that often caused ardous decision-making process. Taking such limitations into consideration, Presidential Regulation No. 75 of 2014 on Acceleration in Priority Infrastructure Delivery was issued for the purpose of establishing KPPIP. Led by the Coordinating Minister for Economic Affairs as the Chairperson, the Committee consists of the Minister of Finance, Minister of PPN (National Development Planning)/Head of Bappenas (National Development Planning Agency), and Minister of Agrarian Affairs and Spatial Planning. Due to the change of the structure of Kabinet Kerja (the currently ruling cabinet) in October 2014, a change in the organization structure to include the Coordinating Minister for Maritime Affairs and Minister of the Environment and Forestry in the membership is currently under consideration. According to the mandates as provided under Presidential Regulation No. 75 of 2014, KPPIP will provide support for the projects selected as priority projects in line with the criteria established by KPPIP. For such priority projects, KPPIP will ensure that the projects are prepared in accordance with quality standards it has established and will control the steps taken for problem resolution. Furthermore, KPPIP will apply incentive/disincentive schemes to follow-up project monitoring results so that all relevant parties are encouraged to accelerate the delivery of the priority projects. Besides that, KPPIP also has a duty to expand the capacity of the Government Contracting Agencies (GCAs) to ensure their capability for providing the projects as well as a duty to coordinate issuance of regulations and policies related to infrastructure. The chart below shows a brief description of the roles and functions of KPPIP derived from the objective of its establishment. KPPIP Report Agustus 2014 - Desember 2015 2 KPPIP’s Report for August 2015 – December 2015 3 6 MAIN DUTIES OF KPPIP AS ASSIGNED IN PRESIDENTIAL REGULATION In line with the development of economic policies, the roles of KPPIP are in adjustment to these developments. KPPIP NO. 75 OF 2014 has been entrusted with selecting National Strategic Projects (PSN), which have been given privileges and accelerating facilities as stipulated by Presidential Regulation No. 3 of 2016 on Acceleration of the Implementation of National 1 Strategic Projects. From the PSN list of projects, KPPIP selected some projects to be put on the list of priority projects. In 2015, KPPIP finalized various preparations for the operation, establishment and image building of the committee, which among others covered: Top Down Project Establishment and operation of various Working Teams (Tim Kerja1) dan Project Management Offices (PMO); Application of quality standard for Pre-Feasibility