JAKARTA METROPOLITAN INFRASTRUCTURE DEVELOPMENT

FauziBowo,GovernorofJakarta, Fauzi Bowo Governor of Jakarta APMC2010andIA2010,Jakarta,April15th,2010.

CITY OF JAKARTA
Multifunctional:
NationalCapital CenteroftheGovernment CenterofEconomicactivity y Diplomaticmissions

Geographical:
Locatedinalowlayingplain y gp 40%ofitsareabelowsealevel Traversedby13riversintoJakartaBay Areaof660km2

Population
9.2millionbynight,11millionduringtheday, Averagedensity:14.000persons/km2 Anumbersofethnicgroups(aportraitofIndonesia)

MAIN ISSUES
Flooding Trafficcongestion Traffic congestion Excessiveuseofland Provisionofinfrastructure Provision of infrastructure Urbanfacilitiesandutilities Environmentdegradation E i td d ti Theriseofpocketsofslumhousing

CHALLENGES IN DEVELOPING URBAN INFRASTRUCTURE

Currentbasicinfrastructure&servicesarenot C tb i i f t t & i t sufficient needimprovement&development. MorebudgetspendingfromCentralGovernment More budget spending from Central Government forinfrastructuredevelopmenttoEasternIndonesia Region lessforJakarta. Highexternalitycostbornebythecommunity. Hi h t lit tb b th it LimitedbudgetavailabilityfromLocalGovernment.

INFRASTRUCTURE PROJECT PRIORITIES IN JAKARTA

1.

Transportation
Publictransport ;Bus,Railway. Networkdevelopment RoadNetwork,TolRoad. kd l TransportDemandManagement PortManagement,Airport. g , p

2.

SanitationSystem
Wastewatermanagement SolidWastemanagement

3. 4. 4 5. 6. 6

WaterSupply Electricity&EnergySupply Electricity & Energy Supply Communication FloodControl Flood Control

SUBSTANTIAL BARRIER
Howtoarrangetherequired financing
Availablefunding;Local Foreign Type;Loan(Longterm) CapitalMarket Financial Fi i l Scheme

Arethereanyregulatoryconstraints forLocalGovernmenttoaccesssuch finance? fi ? Istheresufficientcapacity within Is there sufficient capacity within LocalGovernmenttohandlesuch venture?
Capacity Building

Infrastructure Development

Regulatory Framework

NEEDS OF JAKARTA (DATA YEAR 2010)

Projects JakartaUrbanTol Road,phase1 TolCikarang Tj.Priok. MRTeast westline MRT t t li MRTExtension NorthSouth Railway Loopline Busway Line11 15 AliSadikin Port, h 1 Ali Sadikin Port phase1 ITF 4location g Waste watermanagement GasPowerPlant Budget needed 2,5 billionUS$ 200 millionUS$ 1,2 billion 1 2 billi US$ 0,9 billionUS$ 250millionUS$ 100millionUS$ 500millionUS$ 500 million US$ 400millionUS$ 1,75billionUS$ 400millionUS$ Period in 5years 5years 5years 5 3years 3years 3years 3years 3 years 3years 5years y 5years

Ourlocalcapacitycanaffordonly500millionUS$/year.

FINANCING SCHEME:

NEW FINANCING SCHEME THATS MORE RESPONSIVE TO LOCAL GOVERNMENT NEEDS

PPPScheme? MunicipalBond? InfrastructureFund?

REGULATORY FRAME WORK : THE REGULATION FIT WITH THE LOCAL GOVERNMENTS NEED
RegulationmadebySectortoimproveurbaninfrastructure withinthecityandacrossadministrativeboundaries within the city and across administrative boundaries Busrapidtransit Urbanrailway Floodcontrol Water(cleanandtap) Sanitation

Harmonizationofregulation fromNational
Law,GovernmentRegulation,PresidentialDecree,Ministerial regulation,Localbylaws,GovernorRegulationtillMayororRegent Regulation Regulation

CAPACITY BUILDING: CAPACITY OF ALL STAKE HOLDER AT LOCAL GOVERNMENT LEVEL

ConsiderbothExecutive&LegislativeatLocalgovernment Capacitytomanageinfrastructureprojects: Capacity to manage infrastructure projects:
Projectinitiation Financialscheme Design&Layout Construction OperateandMaintain Operate and Maintain Loanadministration

Capacitytomanagelongtermdebt Capacitytosynchronizefinancialandaccounting mechanismbetweennationalandlocalsystem

LESSONS LEARNED FROM MRT

DEVELOPMENT
1
FINANCING SCHEME

SoftloanwithCentralGov&JakartaGov.participation. S f l i hC lG & k G i i i CentralGov42%(OngrantingtoLG) LocalGov58%(OnLendingfromCG) NationalRegulationnotinFavor ReformnewLawonRailways ;derivedGovregulation,etc. OnGrantingprocesstoLocalGovernment Requirenew regulation OnLendingprocesstoLocalGovernment Requirenew regulation LocalGovernmentFinancingmechanism Requiresnewby Local Government Financing mechanism Requires new by Laws Landuseplanalongthealignmentneedtobeadjusted RequiresnewbyLaws. DevelopFiscalCapacitytosecureloanpayback(+) DevelopMRTCooperationtobuild,operateandmaintain thesystem. DevelopAccountingmechanismtosupporttheFund channeling. DevelopcapacityforimplementingPPPscheme.

REGULATORY FRAMEWORK

INSTITUTIONAL CAPACITY

LESSONS LEARNED FROM EAST CANAL FLOOD CONTROL DEVELOPMENT

1
FINANCING SCHEME

CentralGovBudgetforConstruction&DKI Central Gov Budget for Construction & DKI JakartaBudgetforLandAcquisition. CentralGovernment50% LocalGovernment50% LawonLandOwnershiprequiresspecialnew Law on Land Ownership requires special new regulationforLandAcquisitionforPublic Facilities. FiscalCapacityforcostsharing. Legal capacity to execute Land Acquisition for LegalcapacitytoexecuteLandAcquisitionfor PublicFacilitiesneedtobeimproved. TransparencyonLanduseplanningandPublic consultationneedtobestrengthened Capacitytohandlesocialimpact.

REGULATORY FRAMEWORK

INSTITUTIONAL CAPACITY

CONCLUSION
Jakartaisexperiencingfastdevelopmentinthelast10years. Thereareneedsforfurtherdevelopment. Th d f f th d l t Infrastructureprojectsdevelopmentsconfrontedwithfinancing, regulatoryandinstitutionalcapacityconstrains. Severaloptionsareavailableforinfrastructuredevelopmentinclude MunicipalBond,PPP,InfrastructureFund. PPPschemeasoneofmodelthatsbeenrecognizedstillneedfurther improvement regulatoryframeworkshouldbestrengthenedto providestrongerbasisforprivateparticipation. FurtherexplorationtodevelopregulatoryframeworkforMunicipal bond,Infrastructurefundarestillneeded. b d I f f d ill d d Attentionshouldbegiventouniqueness ofeachprojectcharacteristics (incl.social/environmentalissues)todevisespecificfinancingstructure.. Sectorregulatoryframework needtobereorientedtowards Local/regionalurbanneeds. Whileweredoingallthehomework,DKIJakartagovernmentisstill workinginprogresspreparingseveralfutureinfrastructureproject.

ghank You

LOGIC
1. GAP between Need & Available 2. How we fill up the Gap
Local Government / Central Local / Foreign Loan

LESSON LEARNED FROM JEDI JEDI

1
FINANCING SCHEME

LoanfromtheWorldBanktoGov.ofIndonesia. CentralGov.OnLendingtoLocalGov.50% ForexRisk? PMU:Min.ofPublicWorks;PIU:JakartaAgencyofPublicWorks GovernmentRegulationNo.54/2005andNo.2/2006about FundChannelingtoLocalGov. Requireamendment. ResettlementPolicyFramework atLocalGovernmentlevel Resettlement Policy Framework at Local Government level unresolvedissuesduetodifferentparadigm. Differencesinmechanismtosolveaffectedassets(occupied illegalsettlers)forpublicinfrastructureproject;thecurrent g ) p p j ; LawandbyLawsmechanismarenotapplicable,WorldBank demanddifferentmechanism. ParisDeclarationonAidEffectivenessandWorldBankrequire q mechanismforIllegalSettlersassets,havedifferencesinthe implementation. D l i f d h Developingfundchannelingprocedure. li d Developingstrategytomanagesocialimpact.

REGULATORY FRAMEWORK

INSTITUTIONAL CAPACITY

LESSON LEARNED FROM SOLID WASTE MANAGEMENT

1 FINANCING SCHEME

JakartaLocalGovernmentannualbudget. RetributionfromJakartaresidence.

REGULATORY FRAMEWORK

ImplementingPresidentialDecreeno.80year2003about ProcurementGuidelines Procurement Guidelines HeadofCityCleaningDepartmentinstructionletter. Sharedworkingload;CityCleaningDepartmentisin chargeforwastecarryingtofinalwastedumpingsite;the ThirdPartyisinchargetomanagethewastemanagement throughlandfillmethod. through landfill method DevelopingTORforThirdparty Monitoringandsupervisionoftheprojectimplementation p g g g Developingmechanismtohavemorefinancingthrough CleanDevelopmentMechanismduetoMethane reduction.

INSTITUTIONAL CAPACITY

LESSON LEARNED FROM BUS RAPID TRANSIT BUSWAY

1 FINANCING FINANCING SCHEME

Governmentbudgetforinfrastructure(Roads,etc). Government budget for infrastructure (Roads etc) PrivatesectorisinvolvedforOMandBusProcurement LawonTrafficandTransport(LawNo.14) doesnot incorporateBusway requiresnewregulation,using LawNo.22/1999andGovRegulationNo.25/2000)we / g / ) developbyLawsno.12/2002aboutBusRapidTransit. FinallyLawNo.22/2009onRoadTrafficandTransportis issued. PricingPolicyforLowCarbonEnergy requiresnew i i li f b i initiatives Developingthecapacitytoprovidespecialbusservice Developing the capacity to provide special bus service NewOrganizationisestablishedrunthesystem. Developcapacitytoarrangeprocurementmethodto p purchaseservicesfromprivateoperators. p p Developprocedureforfundchannelingtoprovidesubsidy. Developthedevelopmentcapacityforserviceextension.

REGULATORY FRAMEWORK

INSTITUTIONAL CAPACITY

LIST OF PROJECT IN JAKARTA FOR FOREIGN /LOCAL FINANCING

1

Emergency Flood Mitigation

Development of Centralized Zone Sewerage System

US$169,100,000.00

US$192,800,000.00

ConstructionofMRT;3 phases.

Phase1 Phase2 Phase3

US$1,456,979,962.00 US$1,4140,300,000.00 US$3,380,500,000.00