Financing Public Infrastructure Projects in Indonesia: Analysis of Most Applicable Scheme for Developing Transportation Infrastructure

Abstract

The beginnings of the economic growth Indonesia seeks in the next 15-30 years slowed down by the COVID-19 outbreak recently. This led to restructuring of state-budget funds (APBN) to focus on healthcare and the post-pandemic recovery. Creative financing solution is needed to replace dependency on the APBN. How will the Indonesian government save state budget funds during this post-pandemic era in developing public infrastructure in Indonesia, especially transportation infrastructure? What will be the most appropriate financing scheme to develop transportation Infrastructure in Indonesia? What are the factors in deciding a proper financing scheme for transportation infrastructure in Indonesia? The decision making process of applying different financing methods and schemes based on different factors. Given that Indonesian public transportation infrastructure development is largely in its early phases and does not currently provide any current revenue streams, in order to minimize the risk, considerations about future sustainable revenue generation are also essential. It has also been demonstrated that, in exchange for the greater risk involved in investing in the infrastructure sector, this approach has a lot to offer for private companies.

Keywords:Development, Financing, Infrastructure, Public-private Partnerships, Public-transportation