BKPM Offers Singkawang Airport Project

Indonesia Investment Coordinating Board (BKPM) in collaboration with the Ministry of Transportation and Government of Singkawang City, conducted a Market Sounding of PPP Project: Singkawang Airport, in Jakarta on Monday (7/10). The Singkawang Airport Project aims to encourage economic activity in various sectors and open Singkawang access to other cities in Indonesia and abroad. Besides, it is expected to have a multiplier effect on increasing regional development, especially in Singkawang and West Kalimantan in general.

BKPM Chairman, Thomas Lembong, said that the acceleration of infrastructure development in Indonesia is something that must be done to catch up with neighbor countries. Currently, Thailand is building the Eastern Economic Corridor through the construction of a fast train network that connects southern Thailand. This project involves private parties from other countries, including China, Japan, and European investors. It shows that infrastructure development is multilateral and increasingly involving international investors.

“Infrastructure development no longer has to depend on the government budget so the PPP scheme is expected to be a breakthrough in accelerating infrastructure development. In accordance with President Joko Widodo’s direction, the management must be focused and detailed to carry out the prioritized and selected infrastructure project so the project can be guarded and realized,” he explained in his speech at the Market Sounding event.

The Singkawang Airport project has a total investment value of Rp 4.3 trillion, which covers Rp 1.7 trillion for capital expenditure and Rp 2.6 trillion for operational costs. It uses the DBFOMT scheme (Design, Build, Finance, Operate, Maintenance, and Transfer). The scopes of projects are the construction of landside and airside area, as well as supporting facilities; the airport operations; and the maintenance of project assets. The mechanism for investment returns is from user charges during the 32-year concession period.

Minister of Transportation, Budi Karya Sumadi, said that the Ministry of Transportation continues to encourage the implementation of PPP in transportation projects. Acceleration of infrastructure development is not possible to rely solely on state budget funds. The use of the Government Budget is only a stimulus in building infrastructure. Specifically in the airport sector, this has begun in the Komodo Airport PPP project in Labuan Bajo, which received high interest from national and foreign investors.

“Different to the Komodo Airport PPP project, Singkawang Airport is the first greenfield airport PPP project offered by the Ministry of Transportation. This project is also a concrete action of the government that continues to push infrastructure outside of Java. Therefore, the Ministry of Transportation will continue to encourage the smooth process,” he explained.

Singkawang Major, Tjhai Cui Mie, convinced investors that Singkawang is the second-largest city in West Kalimantan and the most tolerant based on the 2018 Tolerant City Index published by the SETARA Institute. Besides, it has a lot of investment potentials, including tourism, trade, industry, and other sectors so adequate airport infrastructure is needed to support them. According to her, the tourism sector also showed a positive trend seen from the increasing number of tourists. In 2018 the number of tourists visiting Singkawang reached 721,967. Besides, Singkawang has an important role as a trade and service distribution center in the northern part of West Kalimantan, which includes the Bengkayang Regency, Sambas Regency, and Mempawah Regency.

“The development of Singkawang Airport will support the development of Singkawang City and increase connectivity and accessibility to centers of economic activity. Other infrastructure projects will also be developed, such as the development of the Kijing Port in Mempawah Regency, Bengkayang I Power Plant, Bengkayang II Power Plant, and Mempawah Power Plant. Through the opening of the Indonesia-Malaysia border in Aruk-Sambas, it has opened more direct access to Singkawang, Bengkayang and Sambas areas,” she said.

Present as speakers at this event were the Minister of Transportation, Chairman of BKPM, Major of Singkawang, Director of Public-Private Cooperation of the Ministry of PPN/Bappenas, Director of Airport from Ministry of Transportation, Acting Director of PT. Infrastructure Guarantee Indonesia (PT. PII), and Ernst and Young as investment consultants.

The event was attended by 220 participants from private and state-owned companies in the fields of airports, contractors, banks and financial institutions, consultants and related business associations, both from within and outside the country. Also present at the event were delegations from the British Embassy, Denmark, Spain, and the Czech Republic. Several companies were present, from within the country such as PT. Adhikarya, PT. Waskita Karya, PT. Wijaya Karya, PT. Hutama Karya, PT. Angkasa Pura I, and PT. Angkasa Pura II. While foreign companies included Incheon International Airport Corporation, Mitsui & Co. Ltd., Parsons, Marubeni Corporation, Ssangyong Engineering & Construction, China Construction Eight Engineering Division, China Civil Engineering Construction Corporation, China Shenhua Energy Company Limited, Kajima Corporation, Taisei Corporation, Obayashi Corporation, Itochu Corporation, and Shimizu Corporation. From financial institutions were the Asian Development Bank, Islamic Development Bank, Korea Overseas Infrastructure & Urban Development Corporation (KIND), Sinosure, BRI Bank, BTPN Bank, HSBC Indonesia Bank, Indonesia Infrastructure Finance, and PT. Danareksa Capital.