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© 2015 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved

Investing in Indonesia’s

Airport development sector

An overview of opportunities, capabilities and provisions

Version: December 2015

The Investment Coordinating Board of the Republic of Indonesia

2

Contents

An introduction 3

Why Indonesia? 4

Airport sector overview 5

Market opportunities 8

Existing and future capabilities 25

Government provisions and support 38

Good reasons to invest in Indonesia’s airport sector 46


3

Introduction

The Indonesian Government is actively boosting airport development as part of its

strategies and efforts to connect cities across the country, increasing economic

connectivity and improving the movement of people and goods across the

country. The current strategy runs until 2019.

The new Government has a 9 priority agenda in place. One of these priorities is to

increase productivity and competitiveness, with key programs to develop 15 new

airports and 24 seaports across Indonesia by 2019.

With a population of over 252 million, domestic passengers of 90 million and

international passengers of 11 million, Indonesia’s airport sector is set to see strong

growth over the next four years.

Source: Badan Kordinasi Penanaman Modal


4

Why Indonesia?

MARKET

OPPORTUNITIES

There is at least one airport in

every province in Indonesia.

However, there are cities with

no airport yet across the

country.

The growing demand of

domestic and international

passengers (average of 13.4%

and 19.3% respectively) from

2007-2014.

The air cargo and domestic

cargo to meet the demand of

increasing air travel passengers

and commerce activities in Indonesia.

EXISTING & FUTURE

CAPABILITIES

According to Airport Council

International Indonesia ranks

no. 10 in 2013 on Top 10

airport by passengers in the

world.

The Government also offers to

build 24 new non-commercial

airports across Indonesia with a

budget of USD 224 million.

The Government is to offer 10

airport to the private sector.

With 9 of the projects is

handled by KPPIP and

Bappenas will prepare the Pre-FS of Raden Inten airport..

GOVERNMENT

PROVISIONS & SUPPORT

Government has provided

support for the funding and

guarantee for the projects

from infrastructure agency

funds established by the

Ministry of Finance.

The Office of the President

takes airport development

and expansion seriously. Its

progress is monitored directly

under the supervision of

President Joko Widodo.

Government has improved the

land acquisition and PPP

regulation in infrastructure development in Indonesia.Source: Ministry of Transport, PT SMI

Sources: ACI, BKPM, CMEA and Bappenas Sources: Ministry of Finance, Bappenas


5

Airport Overview

According to the World

Bank, Indonesia ranks in

the middle among other

ASEAN countries with an

improvement from 2.94 to

3.08 respectively.

Indonesia currently has 39

international airports

across the country. Most

of its airports are located

in the provincial capitals.

The Government of

Indonesia is to establish 15

new airports across the

country by 2019.

The 15 new airports due to

be built by 2019 will support

the trade, investment and

tourism activities in

Indonesia in 2016 and

beyond.

Source : KPPIP Source: Ministry of Transportation Source: World Bank

ASEAN’s Logistics

Performance Index

2010-2014

Current number of

airports and future plans

Number of airports

compared to seaports

Singapore: 4.00

Malaysia: 3.59

Thailand: 3.43

Indonesia: 3.08

The Philippines: 3.00 Current intl airports (39) New airports (15) Current intl airports: 39 Current seaports: 44


6

The Government of

Indonesia introduced

infrastructure provision

through PPP as stated in

Presidential Regulation

No.67/2005..

GoI issued infrastructure

guarantee between the

Government and business

entitiy through infrastrcuture

guarantee fund. PT PPI and PT

SMI were operational in early

2010.

Issuance of MP3EI

(Master Plan for

Acceleration and

Expansion of

Economic

Development) as

stated in

Presidential

Regulation

No.32/2011.

Establishment of

KPPIP (Committee for

Acceleration of

Priority Infrastructure

Delivery) to

accelerate

infrastructure projects

in Indonesia.

Infrastructure development (including airports) is one

of the main focuses of the Indonesian Government

2011

2010

2005

2014


7

Airports are one of the key factors for economic success

Infrastructure establishment (including

airports) is one of the keys to increase

higher potential GDP growth. IMF predicts that Indonesia to grow by

5.2%-5.3% in 2015-16 , however

Indonesian GDP growth could be as

high as 7% if basic infrastructure is

significantly improved.

The Master Plan for the Acceleration

and Expansion of Indonesia's

Economic Development for 2011-2025 (MP3EI) targets investments of

up to US$ 250 bn in transport

infrastructure purely, of which US$

12.7 bn is marked for airport

infrastructure.

KPPIP shortlisted 22 priority projects

in 2015 with PPP with the

Government, potential cooperation

with SOE scheme. Three of them are

airport projects: Palu, lampung,

Labuan Bajo and Bitung with total

investment of more than US$ 5.3

billion.

Source: IMF, Indonesia investment.com.

Market Opportunities

© 2014 by Indonesian Investment Coordinating Board. All rights reserved

SECTION DIVIDER SLIDE

SECTOR-RELEVANT IMAGE TO BE INSERTED


9

Opportunities across the entire airport supply chain

and segments

PPP Finance Advisory & Procurement Advisory Apron & runway construction

Architecture & design consultancy Passenger & terminal construction

Safety & security advisory Interior-fit out

Airport operations advisory Security system

Organizational development advisory Cargo building construction

Staff training ATC equipment

Pilot training Airside operations

Ground handling equipment

Docking systemsCargo handling systems

Source: UKTI Report 2013


10

Access to other ASEAN markets

- Infrastructure development among ASEAN countries will be expanded to support the transport and logistics

services in the region. Between 2015-2020, the ASEAN logistics network will be fully integrated.

Fom 2020-2025, integrated global logistics networks and Indonesia will be connected to regional (ASEAN)

and global logistics systems via international hub ports.

- The projected average GDP growth of 6 ASEAN member countries is 5.90 % in 2016. Indonesia

is projected to achieve 6.90% in 2016, followed by Malaysia for 5.60%, the Phillipines for 4.50%, Singapore

for 4.80%, Thailand for 5.60% and Vietnam for 6.70%.

Source: ASEAN Secretariat & Frost & Sullivan


11

S-E Asia’s

most populous nation

252 million(Java is the world’s most

populated island)

Indonesian Airports : The Push Factors

Hot Domestic Spots

for Tourisms

The rising of domestic

tourism spots attract

domestic and foreign

tourists

Tanjung Lesung resort, Banten

Lombok, West Nusa Tenggara

Raja Ampat, Papua

The large Indonesian population,

growing urbanisation and density

make Indonesia a favourable

country for airport development.

In addition, increased mobility

and disposable income for travel

is pushing the demand for

domestic transport, including air

travel.

The Government of Indonesia

strongly promotes tourism spots

to both domestic and overseas

tourists. More domestic routes

have been added to existing

carriers to meet rising travel to

hot local tourist spots.

Over the past 5 years, Indonesia

has recorded the fastest economic

growth of the ASEAN-5 economies

(Indonesia, Malaysia, Philippines,

Thailand, Vietnam). IMF’s forecast is

strongly positive with a robust and

steady economic growth for the

coming years.

Source: IMFSources: World Bank, Princeton University

Source: Ministry of Tourism


12

The Centre for Asia Pacific Aviation

(CAPA) estimated that the South

Asian low-cost-carrier fleet

increased by around 20% by end

of 2014.

Lion Air and Air Asia are leading

the league table as the most

competitive airlines in the region,

Garuda Indonesia, the parent

company of low-cost carrier

Citilink, reported that between

2011 and 2014, domestic

passenger numbers increased by

10.5% year-on-year for the whole

group, with Citilink itself seeing a

passenger increase of more than

28%

Growing Middle Income Group Spurred on Low Cost

Carrier Capacity Within Southeast Asia

Source: CAPA (2014)


13

Sector Trends : Passengers for Airlines

Trend in passengers

6.4%Annual

Average

Growth

The number of passengers has

been robust over the 10 last years

(2004-2014).

The private sector has

participated in airport sector

development more actively in the

past decade.

The last 4 years still show an

increase in air travel passengers

for domestic and international

passengers.

The Government of Indonesia is

still upbeat for more growth in air

travel passengers in 2016 and

beyond.

Source: World Bank data and IATA


14

Trend in freight

7.1%Annual

Average

Growth

Industry Trends : Freight

The air freight industry increased

steadily between 2010 and

2014.

External trade is growing due to

China’s strong import demand

from Indonesia and ASEAN

markets.

Growing regional economies

and cities across Indonesia are

building a stronger and busier

domestic economy where the

role of air freight will be key in

the next 5 years.

Source: Badan Pusat Statistik (BPS), Frost & Sullivan

Airport Management Projects Offered to the Private Sector

The Government of Indonesia offers airport project management opportunities to the private sector

for existing airports in the following locations:

Fatmawati Soekarno - Bengkulu province. Sentani-Jayapura, Papua.

Raden Inten II- Lampung province. Komodo-Labuhan Bajo, East Nusa Tenggara.

Hananjoeddin- Tanjung Pandan,Bangka Belitung. Matahora-Wakatobi, Southeast Sulawesi.

Tjilik Riwut-Palangkaraya, Central Kalimantan. Mutiara-Palu, Central Sulawesi

Juwata-Tarakan, North Kalimantan. Sultan Babullah-Ternate, North Maluku.


16

Overview of Projects

Project Airport

Management

Rating Value of investment Latest Status

Sentani-Jayapura,

Papua

7.39 US$ 109.37 million Finalization of Pre-FS and PQ

Document preparation

Juwata-Tarakan 6.71 US$ 103.3 million Finalization of Pre-FS and PQ

document preparation

Fatmawati-Soekarno,

Bengkulu



Sultan Babullah,

Ternate



Raden Inten II,

Lampung



Rating is provided by Ministry of Transport


17

Overview of Projects

Project Airport

Management

Rating Revenue in 2012 Project Scheme is currently

being reviewed by IFC

Tjilik Riwut-

Palangkaraya



Mutiara-Palu6.71 US$ 103.3 Finalization of Pre-FS and PQ


H.A.S Hananjoeddin-

Tanjung Pandan

4.86 US$ 58.33 Finalization of Pre-FS and PQ


Matahora, WakatobiN/A US$ 48.61 Finalization of Pre-FS and PQ


Labuan Bajo,

Komodo

N/A US$ 48.61 Finalization of Pre-FS and PQ


Rating is provided by Ministry of Transport


18

Raden Inten II Airport at Lampung

The number of passengers at Raden Inten Airport at

Lampung reached 1,214,928 passengers in 2014 and

has been growing steadily since. Cargo traffic in

2014 reached 11,484,972 tons with continued growth

since then. This airport will be “promoted” to the

status of international airport due to growing tourists

visits and business activities in Lampung.

The runway is 2,500 m long and 45 m wide , with

elevation of 282 feet and stopway dimension of 60

m x 45 m. Raden Inten’s runway is a concrete

asphalt with apron dimension of A. 191.7 m x 80 m B.

80 m x 80 m with PCN strength of: 63 F/C/X/T


19

Mutiara Airport at Central Sulawesi

The number of passengers at Mutiara Airport in Central

Sulawesi reached 1,246,637 passengers in 2014, with the

number increasing steadily since then. The cargo traffic

in 2014 reached 17,652 tons. Mutiara airport is

strategically located in the eastern part of Indonesia and

has considerable potential to become a hub for eastern

Indonesia

The runway is 2,250 m long and 45 m wide , with

elevation of 284 feet and stopway dimension of 60 m x

45 m. Mutiara’s airport runway is a concrete asphalt with

apron dimension of 373 m x 78 m with PCN strength of:

45 F/C/X/T

Mutiara airport’s establishment started in 2010 with a

budget of Rp 350 billion commenced operations in 2014.

It also has started overrun construction (900 m2).


20

Komodo Airport

The number of passengers at Komodo airport reached

almost 183,887 passengersin 2013. The cargo traffic in

2013 reached 301,891 tons, with an ongoing upward

trend.

Komodo airport was built to accomodate tourists visiting

Komodo island, a popular tourism destination in the

eastern part of the country.

Currently construction is underway for a new passenger

terminal with a runway extension from 1,850 m x 30 m to

2,500 m x 30 m, apron expansion to 100 m x 80 m and a

completion of parking area that can accomodate 90

cars. The airport’s taxiway dimensions are 100 m x 18 m;

apron dimensions are120 m x 80 m, and the strip

dimensions are 1,700 m x 90 m.


21

Current Airports in Indonesia Currently there are 299 airports in Indonesia

- PT Angkasa Pura I manages 13 airports

- PT Angkasa Pura II manages 13 airports in

- UPT DGCA manages 273 airports in Indonesia

Out of 299 airports, 39 of them are international

airports and the rest are small to medium size

airports.

Right now there are four airport operators in

Indonesia, namely:

a. UPT DGCA under the Ministry of Transportation

b. PT Anagkasa Pura 1 manages 13 airports in

Central and Eastern Indonesia.

c. PT Angkasa Pura II manages 13 airports in the

western part of Indonesia.

d. PT Freeport Mcmoran which runs Timika Airport

in Papua.

Each province has at least one airport (34

provinces) and a special case is given for

Soekarno Hatta which Caters passengers for DKI

Jakarta, West Java and Banten.

The 10 busiest airports in Indonesia are:1. Soekarno Hatta, Jakarta, DKI Jakarta. 6. Sultan Aji Muhammad Sulaiman, Balikpapan,East Kalimantan.

2. Juanda, Surabaya, East Java. 7. Hang Nadim, Banten.

3. I Gusti Ngurah Rai, Bali. 8. Adisucipto, Yogyakarta.

4. Sultan Hasanuddin, Makassar,South Sulawesi. 9. Syamsuddin Noor, Banjarmasin, South Kalimantan.

5. Kualanamu, Medan,North Sumatera. 10. Achmad Yani, Semarang, Central Java.

Source: Angkasa Pura, 2014


22

New Potential Airport: Kulon Progo Airport, Jogjakarta

. Projected Value of Investment: US$ 500 million.

Government Contracting Agency: PT Angkasa Pura 1

Status: Preparation of Pre FS and PQ document preparation.

Website: www.angkasapura1.co.id

General & Project Overview: Kulon Progo is an airport development project located near Yogyakarta, Indonesia. PT Angkasa Pura 1 plans to construct the proposed airport to replace

the existing Yogyakarta airport. The airport will reside on 6,800 Ha of land. The construction will

commence in May 2016. Total passengers of the existing Adisucipto airport in 2013: 5,419,816

people, with 14,819,926 tons of cargo and 64,519 aircraft. Total passenger growth is 16.7% p.a


23

New Potential Airport: Bali Baru Airport

.

General & Project Overview: The new airport will be built above sea level, on 600 ha of land with a targeted new toll road to Buleleng where the airport will be located. The

new airport will add to Bali’s existing capacity provided by I Gusti Ngurah Rai

international airport, which has now reached full capacity. Total passenger growth in

Balis is 12%-15% p.a, with an average of 7,000 passengers per day at the airport.

Projected value of investment: US$ 510 million.

Government Contracting Agency: PT Angkasa Pura 1.

Status: Preparation of Pre FS and PQ document preparation.



24

New Potential Airport: Juanda Airport City, Surabaya

.

General & Project Overview: In February 2015, Indonesia’s President agreed to develop JuandaAirport City with additional 2 runways and integrated connection between Gubeng railway station

with the airport using an elevated railway. The projects will be built soon, with coordination

between the Central, Provincial and City Governments. The development is scheduled for

completion in 2019, addressing the current capacity issue – there were 17.2 million passengers in

2014, while the current official capacity is only 12.5 million passengers. The new airport will reside on

4,000 ha land. Currently the annual passenger growth in Surabaya is 13% p.a.

Projected value of Investment: TBC

Government Contracting Agency: PT Angkasa Pura 1

Status: East Java Provincial Government identified Lamongan as the strongest candidate for the new Juanda Airport in East Java. This was announced by the Local Planning Agency on February

2015.


Existing and Future Capabilities





26

Bandung Institute of Technology (ITB) - //www.itb.ac.id/directory/146

Founded in 1959, the University has been ranked 30th in the world by

4icu. The University includes among others:

- College of Aerospace Engineering.

- College of Industrial engineering.

- College of Civil and Environmental Engineering.

Key universities and institutes

Universitas Dirgantara Marsekal Suryadarma–

www.universitassuryadarma.ac.id/

The first Indonesian air force college that offers aeropsace

engineering, electrical engineering and industrial engineering to high

school graduates in Indonesia who want to pursue a career in the

aerospace industry. This university has its own aeroplanes for flight

training.

Trisakti College of Transportation -//www.stmt-trisakti.ac.id/The Trisakti College of Transportation started in 1970 and it offers

diplonm, bachelor and master’s degree in air transportation, sea

transportation, land transportation and logistics.


27

Garuda Indonesian Airways is the flag carrier of Indonesia and serves as afull service airline. Garuda Indonesia currently operates 82 aircraft and

serves 33 domestic and 18 international destinations in Asia (Regional

Southeast Asia, Middle East, China, Japan and South Korea), Australia, and

Europe (The Netherlands and the UK). As a result of its concern to safety,

Garuda Indonesia received IOSA (IATA Operational Safety Audit) as proves

that the airline has fulfilled global best practice in safety and security

procedures. This state-owned company was established in 1949 and was

publicly listed in 2011 on the Indonesia Stock Exchange. Garuda’s company

website is: www.garuda-indonesia.com.

Established in 1984, PT Angkasa Pura 2 is the second state-owned airport management company in Indonesia which oversaw Halim Perdana

Kusuma airport and Soekarno Hatta in Cengkareng. PT Angkasa Pura 2 is

now overseeing 13 airports namely: Halim PK, Soekarno Hatta, Pekanbaru,

Palembang, Kualanamu, Supadio, Padang, Bandung, Aceh, Tanjung

Pinang, Jambi, Pangkal Pinang and Tapanuli Utara. The company’s website

is: www.angkasapura2.co.id

Created in 1962, PT Angkasa Pura 1 is the first state-owned airport management company in Indonesia. It currently oversees 13 airports in

Indonesia. It aims to provide world class services to its passengers in

Indonesia. The company now manages airports in Denpasar, Surabaya,

Makassar, Balikpapan, Biak, Banjarmasin, Semarang, Yogyakarta,

Surakarta, Surabaya, Lombok Tengah, Ambon and Kupang. Its official

website is www.angkasapura1.co.id

Key State-Owned Enterprises (SOEs)


28

Existing key foreign companies (1)

Website : www.gvk.com

Incheon International Airport

Corporation (IIAC) has signed a

three-year, 4 million USD contract

with Indonesian Airport

Corporation (Angkasa Pura) 1 to

provide consulting services for

airport commercial facilities’

development and service

improvements.

It is expected that IIAC’s success

in winning the contract will help

Surabaya’s Juanda Airport to

become a world-class airport,

and the most profitable of all the

airports managed by Indonesia’s

Airport Corporations.

Website : www.airport.kr

GVK has signed a MoU with the

Government of Indonesia to develop

an international greenfield airport in

Yogyakarta in central Java.

GVK has also signed an operations

and management contract with The

Airports Authority of Indonesia

(Angkasa Pura Airports (AP1)), to

manage non-aeronautical

commercial operations at Bali

(Denpasar) International Airport under

a five-year operations and

management contract.

This project includes the existing

terminals and the new international

terminal.


29

Existing key foreign companies (2)

Website : www.vinci-construction.com

The Ministry of Economic

Trade and Industry of Japan

(METI) conducted a

comprehensive study in 2012

for the expansion and

upgrading project of

Soekarno Hatta International

Airport. It was done by

Itochu Corporation, Shimizu,

Japan International Airport

and Nikken.

The Government of Japan

also provided a soft loan of 8

million Yen in 1998 to

increase traffic movement

and secure operational air

traffic safety for Palembang

Airport.

Website : www.meti.go.jp

Menard Asia, a Soletanche

Freyssinet subsidiary (VINCI

Construction), was awarded the

soil improvement contract for the

new phase of works at Terminal 3

at Jakarta International Airport.

The operation has consolidated

a total surface area of 346,075

sq. metres using the controlled

modulus column (CMC)

technique.

Contract value: €23m. The

company had already

participated in the first phase of

works, in 2011, using the same

technique to treat a surface

area of 65,000 sq. Meters.


30

Indonesia National Air Carriers Association (INACA). The Indonesian National Air Carriers Association (INACA) was established on 15-Oct-1970

in order to ensure the effectiveness and continual development of

Indonesia’s airline industry. INACA has a strategic role to promote

national economic growth and strengthen relationships in the nation to

achieve national goals. INACA members include Garuda Indonesia, Lion

Air and Indonesia AirAsia.

International Air Transport Association (IATA) The International Air Transport Association (IATA) is the trade association for the world’s airlines,

representing some 250 airlines or 84% of total air traffic. It supports many

areas of aviation activity and helps formulate industry policy on critical

aviation issues.

Key Associations

Masyarakat Transportasi Indonesia – MTI (Indonesia Transport Society). Established in Jakarta on December 12, 1995, MTI is a professional

organization that brings together experts, academics, practitioners and

bureaucrats for the development of sustainable national transport in

Indonesia.

Website: www.mti-its.org.

Website : www.iata.org

Website : www.inaca.org

http://www.ali.web.id/

http://www.ilfa.or.id/


31

“We are very excited by the opportunity to provide passengers at the Denpasar

Airport in Bali a truly world-class shopping experience, across brands, product variety

and price points. This is also in line with our stated endeavour to take this airport to

international standards and help Indonesia in realizing its growing potential as a key

destination in the region,”

G.V. Sanjay Reddy, Vice Chairman of GVK Power and Infrastructure

Positive Remarks & News from Investors on

Indonesia’s Airport Industry

Incheon International Airport Corporation has signed a three-year contract with Indonesian Airport Corporation 1 which estimated to bring about 4 million UD to

consult about airport’s commercial facilities’ development and the improvement of service. The local corporation was also established to provide counseling regarding

the airport management. It is expected that by succeeding in winning the contract in the future Surabaya Airport will be the most profitable in terms of earnings for

leasing among all the airports managed by Indonesian Airport Corporation. This became the opportunity for Incheon Airport to prove its capability to consult.


32

Japan has proposed to develop a new seaport and airport for Greater Jakarta, in addition to the planned mass rapid transit (MRT) system and other infrastructure projects, as part of its estimated 4 trillion yen (US$39 billion) Metropolitan Priority Area (MPA) master plan to ease infrastructure bottlenecks in the nation’s capital.

“We are heading toward a firm agreement to build a new airport and seaport, in addition to the existing Soekarno-Hatta International Airport and Tanjung Priok port,” Japanese Trade and Industry Minister Yukio Edano told a news conference in Jakarta on Thursday, after the second MPA steering committee meeting with Indonesian official.

Positive Remarks & News from Investors on

Indonesia’s Airport Industry

Government Provisions and Support





34

Investment Climate Improved in 2015

Law No.2/2012 and

Presidential Regulation No.

71/2012 will ease land

acquisition bottlenecks and

disputes for infrastructure

projects such as road,

railway, station, por,

airport,etc. The Law and

Regulation stipulate clear

timeframe for land

acquisition, clarity over land

appraisal, funding and

amount and types of

compensations, objections

and dispute settlements.

The land for PLTU Batang,

Central Java has been

cleared due to the the new

Land Acquisition Law No.2/2012.

Land Acquisition Improved One Stop Shop at BKPM PPP Regulation Revised

Indonesia Investment Coordinating

Board (BKPM) has integrated

Numbers of licenses previously

handled by various Ministries and

Agencies in The field of electricity,

maritime, Tourism, education and

agriculture.

22 line Ministries and Government

Agencies have placed their staffs

Permanently at BKPM’s office to

Assist the investors in applying for

licenses.

Now the investors need only to

come To BKPM’s office to apply for

business licenses.

The new Presidential Regulation No.

38/2015 Regarding the cooperation

of Government with Enterprises in

infrastrcuture has just been revised

and issued on 20 March 2015.

There are some improvements in this

Revised regulation, namely:

a. The involvement of the head of

local government in this

infrastructure project.

b. The fund for land acquisition can

originate from State Budget/

Local Budget.

c. The fund from land acquisition can

originate from State Owned

Enterprise or Local Govt

Enterprises.

d. The Central Government can issue

government guarantee on this

infrastrcuture project.


35

Regulations in Indonesia Regarding Airport Investment

1. Law No 1/2009 regarding Aviation.

2. Government Regulation No.40/2012 regarding airport construction

and environment preservation

3. Presidential Regulation No.67/2005, revised to Presidential Regulation No. 38/2015 regarding

Public Private Partnership.

4. Presidential Regulation No.39/2014 regarding Negative Investment List where it is stated that:

a. Airport services, air transport supporting services and services related to air transportation is

limited to a maximum of 49% of foreign ownership.

b. Construction of airport project or electrical installation is subject to a minimum project

value of IDR 1 billion and a maximum of 67% of foreign shareholder ownership.

c. There is no incentives yet for airport and related services.

d. Depending on the business field, investors can have import duty exemption for imported

goods and machinery.


36

Options to Invest in Airport Industry in Indonesia

InvestorOptions

Establish a strategic

partnership where investors

can establish a joint venture or

strategic partnership with PT

Angkasa Pura I and 2 to

manage the existing aiports

in Indonesia.

Investors can enter the

business as a supplier for

technology contractor or as

consultant through an

announced tender.

The investor should

establish a business entity

before taking part in the

tender process.

Form a consortium for

PPP with a local or foreign

entity before submitting a

proposal. After they win the

tender they must form a

legal entity to design,

construct, maintain

airport facilities until the

concession period ends.

Investors can propose

unsolicited projects by creating

a consortium with local

companies and propose a new

airport project

to the Ministry of Transport.


37

To assist in the acceleration of infrastructure development and

provision of infrastructure financing, the Government has created

two key institutions:

PT Indonesian Infrastructure Guarantee Fund

PT SMI (Sarana Multi Infrastruktur)

IIGF was established at the end of 2009 as a Single Window in

providing guarantees for infrastructure projects Mandate: to

provide guarantees for Government Contracting Agencies’

(Ministry, Regional Government, SOE) financial obligations under

PPP Agreement for infrastructure projects with Private Company.

IIGF is a 100% Ministry of Finance-owned SOE.

www.iigf.co.id

Financial support

PT SMI (Sarana Multi Infrastruktur), which is also 100% owned by the

Ministry of Finance, provides mezzanine and equity financing,

guarantees and funding for infrastructure projects in rupiah.

www.ptsmi.co.id

http://www.iigf.co.id/

http://www.ptsmi.co.id/


38

Key Public Institutions

Directorate General of Civil

Aviation, Ministry of

Transportation

This Ministry is responsible for

the governance and

regulation of airports in

Indonesia. The Ministry is

located in Jakarta.

www.dephub.go.id

KPPIP-Committee for acceleration

Of Priority infrastructure delivery

At the Coordinating Ministry of

Economic Affairs.

This newly established committee

is tasked by President Joko Widodo

to accelerate priority infrastructure

projects in Indonesia. It is chaired by

the Coordinating Minister of Economic

Affairs, with members such as

Minister of Finance, Head of

Bappenas, and Minister of Agrarian

and Spatial Planning.

www.ekon.go.id

Indonesia Investment

Coordinating Board

BKPM is tasked with the

Coordination and facilitation

of investment related aspects

in Indonesia. The agency

launched

an online one-stop-shop on

26 January 2015.

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39

6 good reasons to invest in Indonesia’s airport

sector

A Government

committed to

supporting airports

One of the priorities of the

Government of Indonesia

through Ministry of

transportation is airport

development

Large opportunities

across the entire

airport supply chain

Ongoing and upcoming

projects covering feasibility

studies and construction to

improve airport facilities

and services.

Large and various

sources of funding

(public and private)

Indonesian Government,

International development

banks, and fully private

funds are involved in airport

projects (passenger and

freight)

Growing pool of

qualified labour in SE

Asia

Beyond having the largest

pool of workers, Indonesia

has the 2nd lowest labour

costs for engineering

services in the ASEAN-5

An ambitious airport

development/revitali

zation program

worth more than US$

5 Billion

A highly profitable

sector

PT Angkasa Pura I booked

profit of Rp 819 billion in

2013, Rp 1.3 T in 2014. PT

Angkasa Pura II booked

profit of Rp 1.03 T in 2013

and Rp 1.04 T in 2014.

Source: fDi Benchmark (Financial Times)

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© 2015 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved

This presentation has been developed with the

support of:

The European Union (EU) Desk at BKPM, part

of EU-Indonesia Trade Cooperation Facility

(TCF) projects.

Kantor Representatif EU DESK di

BADAN KOORDINASI PENANAMAN MODAL (BKPM)

REPUBLIK INDONESIA

Jl. Jend. Gatot Subroto No. 44, Jakarta 12190, Indonesia

P : +62 21 5274 803

E : [email protected]

[email protected]

W : www.bkpm.go.id

www.euind-tcf.com/eudesk/

BKPM international representative offices

(Investment Promotion Centre):

Investing in Indonesia’s - EUIND - TCF · Investing in Indonesia’s ... 2025 (MP3EI) targets...

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