Public-Private Partnerships: an International Development vis a vis Indonesia Experience



For more than two decades, Public Private Partnerships
(PPP) had developed worldwide as an instrument
to procure public infrastructure where government
funds are limited. This practice supports the
covergent theory of the public and private sector.
Indonesia experience with PPP follows most of what
had been done by countries overseas with some
deviations. The main reasons for going for PPP for
Indonesia government is to fill the gap in finance
and capability in procuring the infrastructure. Unofficial
reason such as for off-balance sheet and ideological
is not relevant. Up to now, the Government
only allow investment in hard economic infrastructure.
Instead of using pure private finance, Indonesia
Government facilitates public funds either from
Central Government or Local Governments to finance
PPP projects. In most cases, this involvement
is because of marginality of the project. This results
in the condition where the Government still has
dominant role in the existing PPP projects. Compared
to the PPP framework in other countries like
in the UK, Indonesia PPP lacks of attention on output
specification and risk transfer. This may be because
of lacking of experiences as well as due to
high degree of Government involvement. Rigorous
policy is needed in this area to ensure Government
to achieve better value for money.
Keywords: Public-Private Partnerships, Public Infrastructure
Procurement, International PPP, Indonesia
PPP, value for money mechanism

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