1100 ministry of public works important
TRANSCRIPT
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Indonesia Construction Industry:Challenges, Outlooks and Regulations
Munich, Germany, April 17, 2013
IndonesiaConstruct ion Sector
Invest in remarkable Indonesia
Invest in remarkable Indonesia
Indonesia
Invest in
Indonesia
Indonesia
Indonesia
Invest in remarkable Indonesia Invest in
Invest in remarkable Indonesia
Invest in remarkable Indonesia Invest in
Invest in remarkable Indonesia
Invest in remarkable Indonesia Invest in
Invest in remarkable IndonesiaInvest in remarkable Indonesia Invest in
BAUMA 2013Indonesian Day Seminar
M I N I S T R Y O F P U B L I C W O R K S
R E P U B L I C O F I N D O N E S I AInvest in remarkable IndonesiaIndonesia
Invest in remarkable Indonesia
Invest in remarkable Indonesia
Indonesia
Invest in
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OUTLINE
I. Introduction
II. Construction Industry Overview in Indonesia
III. Construction Opportunities in Indonesia
IV. Demand for Materials and Equipments to Support Construction
Industry
V. Government Regulation for Constuction and infrastructure Sector
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I. Introduction
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COUNTRY SNAPSHOT: THE BIGGEST ARCHIPELAGO
I N D O N E S I A
Land Area 1,904,443 sq km
Sea Area 3,116,163 sq km
Total Area 5,020,606 sq km
Coastal Line 81,000 km
Population(Statistic Indonesia 2010 census)
240 Million people (4th biggest population)
GDP Size (2012) US$ 870 Bi
GDP percapita (2011) US$ 3,562
Source: World Bank
The rising population share of Indonesias middle class
(% of Population)
Source: Various
37.7%
2003
56.5%
2010
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II. Construction Industry Overview
in Indonesia
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GROWTH OF GDP BY INDUSTRIAL ORIGIN (2007-2012)
The growth of construction sector has
always been over the average economic
growth of the nine major sectors.
Source : Central Bureau of Statistics Indonesia
0,00
2,00
4,00
6,00
8,00
10,00
2007 2008 2009 2010 2011 2012
8.57.5 7.10 7.0 6.7
7.5
Growth of Construction Sector GDP
0,00
2,00
4,00
6,00
8,00
2007 2008 2009 2010 2011 2012
6.306.00
4.60
6.10 6.50 6.23
Economic Growth of GDP
Source : Central Bureau of Statistics Indonesia
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INDONESIA ECONOMY STRUCTURE
INDONESIA ECONOMY STRUCTURE: 2012Contribution of Sectors to National GDP
Agriculture
14.44%
Mining11.78%
Manufacture
23.94%Electricity
0.79%
Buildings(Construction)
10.45%
Trade
13.90%
Transportation
6.66%
Finance
7.26%
Services
10.78%
Source: Central Bureau of Statistic Indonesia
Value of GDP in 2012:
- Total = US$ 867.6 billion
- Construction = US$ 90.6 billion
Contribution of construction
Sectors to National GDP in Asian
Country 2011
Country GDP
(US$ Billion)
Contribution
(%)
India 1,729,0 7.9
Malaysia 237.8 1.6
Vietnam 103.6 9.3
Thailand 377.2 4.3
Philippine 227,6 6.0
Indonesia 842.7 10.16
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Profile of Construction Workforce
NO DESCRIPTION UNIT 2008 2009 2010 2011 20121 Total Number of
Workforce (all sectors)
Person
(million)102.5 104.9 108.2 109.7 110.8
2 Construction Sector
Workforce
Person
(million)5.44 5.49 5.59 6.34 6.79
Portion of total % 5.31 5.23 5.17 5.78 6.133 Education Level of Construction Workforce
Elementary School % 54 52 52 52 52
High School % 42 44 44 44 44
University/Diploma % 4 4 4 4 4
4 Certified Construction Workforce (% from the total workforce)
Certified Skilled
labour
% 2.68 3.82 6.47 6.31 9.17
Certified Experts % 1.14 1.83 2.20 2.03 1,91
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IMPORTANCE OF THE CONSTRUCTION SECTOR TO THE
INDONESIAN ECONOMYSource: Construction Satellite Account, 2012
Multiplier Number
Output
multiplier 1.8510
Income
multiplier0.2498
Employmentmultiplier
0.0073
Value added
multiplier0.7681
Linkage Analysis
Backward Linkage
(BL) 1.8510
BL Index 1.1494
Forward Linkage
(FL)2.8182
FL Index 1.7500
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MASTER PLAN FOR ACCELERETATION AND EXPANSION OF
INDONESIA ECONOMIC DEVELOPMENT (MP3EI) 2011-2025
0
50
100
150
200
Road Port Power &
Energy
Airport Railway Water Utility ICT Other
Infrastructure
Total
35.7
12.7
70.4
34.3
25.5 186.7
3.4
1.9
3.3
Indications of Infrastructure Investment
(US$ Billion)
Note: The investment will be funded by Goverment, State Owned Enterprises (SOE), and Privates.
Source : MP3EI
*Exchange rate (Rp/US$) = 9,500
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REQUIRED SUPPORTING INDUSTRY
FOR CONSTRUCTION
Pre-cast concrete Industry;
High strength steel wire, plate, and bar
industry;
Industry of additive material for concrete and
asphalt mixture;
Buton natural asphalt industry; and
Industry of heavy equipment for specific
purposes.
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DEVELOPMENT FOR PRE-CAST CONCRETE INDUSTRY
IN INDONESIA
Current supply about 25% of concrete works;
It is forecasted to increase to 50% or even more
of the construction market;
Indonesia needs technical assistance to develop
and to spread out the industry to all over the
regions of Indonesia.
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DEVELOPMENT FOR HIGH STRENGTH STEEL
WIRE STRAND, PLATE, AND BAR INDUSTRY
The existing demand is exceeding the local supply Demand tends to increase due to:
Increase in elevated road structure, fly over and long spanbridge, high rise building, mega stadium and mega conventionhall projects.
The growth of the Industry is slow due to: Lack of technology and human resources;
Depend on brand holder;
Direct import is more preferred by project owner.
Need capital investment, advance technology andhuman resources.
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DEVELOPMENT FOR BUTON NATURAL ASPHALT
INDUSTRY
Potential deposit is more than 600 million MT, itsasphalt content is about 15%-30%, and laying on adepth of 1.5m30m;
The quality is better than oil asphalt, and so called
as a premium asphalt; Demand for natural asphalt tends to increase due
to: Oil deposit tends to decrease;
Oil price tends to increase, and then oil asphalt productand its quality tend to decrease.
Need capital investment, advance technology forasphalt extraction, and global marketing.
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SUPPLY CHAIN OF MAJOR CONSTRUCTION
MATERIALS AND EQUIPMENTS
NO
ITEM
RAW
MATERIALPROVIDER
SUPPLIER PRODUCER FABRICA-TOR DISTRIBU-
TOR
SERVICE
PROVIDER
CONSUMER
1 Cement
2 Steel
3 Asphalt Oil
4 BN Asphalt
5 Heavy Equip
6 Glasses for
GB
7 Pre-cast
Concrete
BN Asphalt = Buton Natural Asphalt
GB = Green Building
= The main role
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V. Regulations on Market Access in
Construction and Infrastructure Sector
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REGULATIONS ON FOREIGN BUSINESS ENTITY . (2)
b. National Treatment (Mode 3)
License Fee Requirements
c. Business Requirements (Act No. 18/1999)
To conduct construction business in Indonesia, any constructioncompany, including Foreign construction Company who is willing
to form JO, shall be registered at NCSDB and obtain Business
License from the government;
JV Company shall be registered at NCSDB and obtain BusinessLicense from the Indonesia Investment Coordinating Board
(BKPM).
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PUBLIC WORKS INFRASTRUCTURE
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PUBLIC WORKS INFRASTRUCTURE
THE WAY TO INVEST
Investement PolicyConducive Investment Environment in
Indonesia supported by Law & PPP
Regulations
PPP RegulationPresidential Regulation No. 67/2005, and its
amendment No. 13/2010 &
No. 56/2011
(PPP in Infrastructure Development)
Minister of National Development Planning
Agency Regulation No. 4/2010
j.o. : No. 3/2012
(General Guidelines for the Implementation
of PPP in Infrastructure Provision)
Road Sector
Act No. 38/2004
(Road)
Government Regulation No. 15/2005
and Its Amendment No. 44/2009
(Toll Road)
Minister for Public Works Regulation
No. 295/2005 and Its Amendment
No. 27/2008
(Indonesia Toll Road Authority)
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Annexes
SOME PPP OPPORTUNITIES
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SOME PPP OPPORTUNITIES
IN THE PROVISION OF INFRASTRUCTURE
TENDER STATUS IN PPP PROJECTS
No Project Title Brief Descriptions Status in late 2012
1 Umbulan Water Supply,
East Java Province
PPP modality : BOT
Capacity planning: 4,000 Lps
Estimated project cost: US$ 204.2 Million
Estimated IRR: 14.54%
Beneficiary: The utilization for 1.6 million
inhabitants or 320,000 connection
The deal of capex values
2 Bandar Lampung Water
Supply, Lampung Province
PPP modality: BOT/concession
Estimated project cost: US$ 38 Million
Development of intake and WTP 2x250 L/sec
Development of distribution network and hose
connections
Clarification process on
Januari 2013
3 Maros Water Supply,
South Sulawesi Province
Construction of intake: 270 Lps
Installation raw water transmission: 8,5 km
WTP: 250 Lps
Reservoir: 4,500 m3
Main distribution network: 37 km
Estimated cost project: US$ 11.50 Million
Pre-Qualification
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OPPORTUNITIES IN PPP PROJECTS
No Project Title Brief Descriptions Status in late 2012
1 DKI Jakarta-Bekasi-
Karawang Water Supply
(Jatiluhur),
DKI Jakarta-West Java
Province
PPP modality : BOT
Capacity of WTP: 5,000 Lps
Estimated project cost: US$ 663 Million
Procurement of transmission pipe ND: 1,800 mm, length 58 km
Financial and
institutional review
2 Western Semarang Water
Supply,
West Semarang-Central
Java Province
PPP modality: BOT/concession
Estimated project cost: US$ 40-70 Million
Development of intake: 1,050 L/sec
WTP: 2x500 L/sec
Due dilligence to final
business case
3 South Pekanbaru Water
Supply,
Pekanbaru Municipal &
Kampar Regency
Development of WTP: 500 L/sec
Development of distribution pipe
Estimated cost project: US$ 41 Million
Preparation of Pre FS
4 Karian-Serpong Water
Conveyance,
Banten Province
PPP Modality: BOT
Estimated cost project: US$ 690 Million
Development of WTP: 10,000 Lps Procurement of transmission pipe length 90 km
Waiting for Dam
construction
5 Jatigede Water Supply,
West Java Province
PPP Modality: BOT
Estimated cost project: US$ 357.6 Million
Development of WTP: 6,000 Lps
Procurement of transmission pipe ND 1,600mm, length 7.15 Km
Waiting for Completion
of Dam Structure
6 Expansion of Padang Water
Supply, West Sumatera
Province
Estimated cost project: US$ 20.50 Million
Development of WTP: 2000 L/sec
Rehabilitation of distribution network
Preparation of pre FS
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(2) Western Semarang City Water Supply
PPP Modality : BOT/Concession
Estimated Project cost : US$ 40-
70 Million
Project Location : Western
Semarang City
Scope of Project: Development of intake : 1,050
L/sec
Transmission pipe of raw water
WTP : 2x500 L/sec
Distribution pipe system
Reservoir
Distribution and service unitStatus:
Due diligence to final business case
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(4) Karian-Serpong Water Conveyance
PPP Modality : BOT
Capacity Planning : 10,000 Lps
Estimated Project Cost : US$ 690 Million
Estimated IRR : 16 %
Beneficiary : The utilization for 4 million inhabitants
or 800,000 connection
Project Location : Banten Province Karian and Serpong
Project Scope :
Development of Water Treatment
Plant (WTP) 10,000 Lps Procurement of transmission pipe
length 90 km
Status : Waiting for Dam Construction
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(5) Jatigede Water Supply
PPP Modality : BOT
Capacity Planning : 6,000 Lps
Estimated Project Cost : US$ 357.6 Million
Estimated IRR : 20 %
Beneficiary : The utilization for 2,4 million inhabitants
or 480,00 connection
Project Location : West Java Province
Project Scope :
Development of Water Treatment Plant (WTP)
2x3,000 Lps Procurement of transmission pipe ND 1,600
mm; 7,150 m
Development of Reservoir 2x7,000 m3
Status : Waiting for Completion of Dam Structure
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