INDONESIA INFRASTRUCTURE INITIATIVE

Indonesian Centre for Infrastructure Workshop 2 Hotel Borobudur 10 July 2014 2pm to 7 pm

2

Agenda 2:30pm: Welcome by Leith Doody (Consultant Team Member)

and introduction of Dr Luky Eko Wuryanto, Deputy Minister in Infrastructure and Regional Development of CMEA

2:45pm: Introduction of Dr Dedy Supriadi Priatna, Deputy Minister in Infrastructure Affairs of BAPPENAS

3:00pm: Keynote Dr Hermanto Dardak, Vice Minister of MPW 3:15pm: Session 1 – Status of Indonesian Infrastructure Centre - Prof Colin Duffield, Consultant Team Member 4:00pm: Session 2 – Establishment of Indonesian Centre for

Infrastructure ⁻ Ways forward: Operational issues; financial

model; Organization ⁻ Founding members

5:00pm: Discussion 5:30-5:40: close 5:45-6:45 Buka Puasa Bersama

INDONESIA INFRASTRUCTURE INITIATIVE

Dr. Luky Eko Wuryanto Deputi Bidang Koordinasi Infrastruktur dan Pengembangan,

Kemenko Perekonomian

INDONESIA INFRASTRUCTURE INITIATIVE

Dr. Dedy Supriadi Priatna Deputi Bidang Prasarana dan Sarana,

Kementerian PPN/BAPPENAS

INDONESIA INFRASTRUCTURE INITIATIVE

Dr. Hermanto Dardak Wakil Menteri, Kementerian Pekerjaan Umum

6

Session 1: Concept and status of Indonesian Centre for Infrastructure

Moderator: Prof Danang Parikesit

- Prof Colin Duffield (University of Melbourne)

Indonesian Centre for Infrastructure

Concept and work to date

Dr Colin Duffield

Progress and history

1. Concept of an infrastructure research centre proposed (Parikesit, Black, Lea and Strang 2012)

2. Indonesian Infrastructure Initiative engaged UoM to investigate the feasibility for the establishment of an Indonesian Centre for Infrastructure Policy (July 2013)

3. Stakeholder meetings and special interest group sessions (Sept 2013)

1. Water supply and sanitation 2. Energy supply 3. Integrated metropolitan infrastructure, Commercial Transport 4. Regional, rural and social infrastructure 5. Policy, planning and procurement

4. Stakeholder workshop (Oct 2013) 5. Industry discussions and phase one report (Apr 2014) 6. Continued industry and governmental discussions

leading up to workshop 2 (July 2014)

Early Recommendations

• Should be a vehicle for supporting broad-based infrastructure-led economic development

• “Separate but close” to government

• Core focus – “value adding” through enhanced sectoral skills and capabilities

• Membership base – strength in diversity

Findings from phase 1 of feasibility study [1]

• There is an urgent need for the establishment of a new multi-partner Indonesian infrastructure centre.

• That sufficient broad-based stakeholder interest has been mobilised, expressed and observed to support a solid recommendation that the concept of a new institute meets thresholds of need and relevance across the private sector, state-owned enterprises, government organisations and units, and international financial institutions.

• The role and function of the proposed centre is separate to that required for government purposes.

• The potential impacts and benefits of a potential institute are seemingly large, broad-ranging and important, given the centrality of infrastructure implementation to Indonesian economic and social progress. By contrast, conceivable funds and resourcing needs for a new multi-partner institute appear minimal, attainable and manageable. This balance between impact and resourcing specifics requires further investigation and clarity in the short term.

• There is strong support that such a centre has a broad based membership involving input from industry, government and academia.

Findings from phase 1 of feasibility study [2]

• The main activities of the centre include: project advocacy, research, training and capacity building, and the development of lessons learnt from past projects.

• There is a clear and consistent message that the centre should focus on getting projects moving and that the centre should outsource many of the tasks it has identified and prioritised (i.e. it has a role as a clearing house rather than that of a research institute).

• The centre would be best located in Jakarta, at least initially. • Infrastructure topics and themes to be covered by the new centre

would change over time and thus the centre needs to be flexible. The need for private finance and an understanding of how to stimulate this was consistently raised and social infrastructure was recognised as important.

• Subject to further information and specifics, strong interest has been expressed consistently across: the private sector; government ministries; state-owned enterprises; and International Financial Institutions.

Summary of findings from feasibility study

1. Overwhelmingly all stakeholders agreed that a well constituted centre focusing specifically on progressing Indonesia’s infrastructure development is needed. Some differences of opinion have been expressed as to the nature and focus of the centre but all agree that the centre should be independent (albeit with a powerful Patron) and not replicate the work being undertaken by other existing organizations.

2. There was little support for a research led institute but enormous support for an evidence led centre for discussion that led to infrastructure outcomes.

3. The infrastructure industry sought a united voice rather than division via sectorial interests.

Synthesis of core functions

New research & studies

Professional skills development

Knowledge exchange, communication &

dissemination

Independent analysis & peer review of plans, policies

Integrating & supporting diverse

stakeholders –

Jakarta & beyond

Concepts considered

Options considered

Multisector input, incl. Gov., industry and academic

Industry/ action focused

Independent Evidence based research

Flexible

Potential for resourcing

Infrastructure research units

Partial Partial Yes Partial Partial

Professional Institutes

Partial Yes Partial Partial Yes but many existing

professions

Industry Associations

Usually Yes Partial Yes Yes – member driven

NGOs and Not-for-profits

Yes Unlikely Yes Yes No – reliant on strong

sponsorship

Infrastructure in Government

No Partial Often best practice - policy

Partial Partial

Best option

Combined model that involves:

• A small secretariat

• Strong industry connections and engagement

• The ability to outsource to maintain independent research and add to flexibility

• Member driven but with close allegiances to existing industry bodies to avoid duplication

• An ability to drive the infrastructure agenda and where necessary establish best practice

It seems a “Clearing House Model” may be appropriate

The objective and focus of the centre would be that of a peak infrastructure body for industry and government to provide the necessary thought leadership and advocacy to progress and champion Indonesian infrastructure projects.

Government

Academia

Industry Independent Board

Chief Executive

Staff

Activities

Member

Activities

Commissioned

Activities

Existing Peak

Bodies

Confirmation of support

We seek to confirm in principle support for the establishment of a new Indonesian Centre for Infrastructure from the following organizations.

• Government

• State-Owned Enterprises

• Private sector participants in infrastructure

• The financial market

• Provincial and municipal representatives

• Other

Who else should be involved at this stage?

18

Session 2: Establishment of Indonesian Centre for Infrastructure

• Operational issues

• Financial model

• Organization Prof Colin Duffield (University of Melbourne)

Operational issues: Services

– A forum for networking

– Dissemination of best practice information

– Advocacy for infrastructure projects (based on application and needs driven robust, practical research and analysis)

– Independent investigation, research and development

– Up-skilling through professional development

Operational issues: Activities

Forum for networking

• Knowledge repository

• Dissemination of knowledge

• Communication

• Events – some closed for members only and some public

• Showcasing of ideas

Operational issues: Activities

Thought leadership

• Member taskforces

• Infrastructure agenda leadership

• Focused project promotion

Operational issues: Activities

Independent Commissioned

Research

Operational issues: Activities

Capacity Building &

Skill Development

Government

Academia

Industry Independent Board

Chief Executive

Staff

Activities

Member

Activities

Commissioned

Activities

Existing Peak

Bodies

Operational issues: Start up

Need to start with significant activities – demonstration of value added

Conceptual activities per annum during startup (years 1 to ~3):

Establishment of Board of governance and development of charter

Public event Monthly (at least 2 held in provinces year 1)

Member only event Monthly (at least 2 held in provinces year 1)

Convene first member taskforce

Commission two significant research reports

Facilitate at least three capacity building workshops

Undertake a major membership drive

Indicative estimate of start up annual budget US$1.2m

Revenue streams

• Initial start up budget – Aid and/or sponsorship

• Membership fees

• Functions and events

• Fee for service activities, e.g. training

• Research grants and sponsorship

• In-kind services provided by member organizations

Financial Projections

$US m

Per annum

1.0

2.0

Start up budget

Years

0 ~3

Proposed membership model (based on CEDA)

Membership category breakdown:

• National Members: Rp X , say 8 Trustees

• Provincial Corporate Members (incl Gov): Rp X/3, say 4 Trustees

• Provincial Business Members: Rp X/6, say 2 Trustees (SME & NGO)

• Individual Members: Rp X/10, say 1 Trustee

• Honorary Members: Individual

Benchmark budget to CEDA

CEDA

Indonesian Centre for

Infrastructure Annual budget $3.08m ~$1.2m

Events Public functions Trustee only events Conferences Training

309 30

Memberships National Provincial Corporate Provincial Business Individual Honorary

48

289 298 61 39

Target (range) 15-30

50-150 50-150

0-10 -

Membership fee $30k ~$12k-$30k

Appears as if there is strong potential to be self sustaining after startup

Membership fee arrangements

• Contributions for membership primarily cash but consideration given to in kind support

• Government may procure research and training directly on a fee for service basis and be granted equivalent membership

• For discussion

Organization

Government

Academia

Industry Independent Board

Chief Executive

Staff Trustees

representing

members

Guest and

invited

experts

Existing Peak

Bodies

CEO

PA/driver

Researcher

Staff

Charter concepts

• All decision makers are trustees who represent their membership organization

• Memberships to include private sector, public sector and academic sector

• Trustee only events may be hosted by members but venue hosts are not permitted to be speakers at their event

• Value for all members is sought in setting agenda for events and research

• Additional key items ………

Key discussion points

• Comments on the overall plan

• Importance of foundation members …… who should these organizations be?

• Is the proposed start up budget reasonable?

• Is the membership target achievable and is the structure of membership sensible?

• What should be added to the Charter?

Agenda 2:30pm: Welcome by Leith Doody and introduction of Dr Luky

Eko Wuryanto 2:45pm: Introduction of Dr Dedy Supriadi Priatno 3:00pm: Keynote Dr Hermanto Dardak 3:15pm: Session 1 – Status of Indonesian Infrastructure Centre

–Prof Colin Duffield

4:00pm: Session 2 – Establishment of Indonesian Centre for Infrastructure Ways forward: Operational issues; financial model; Organization – Founding members

5:00pm: Discussion 5:30-5:40: close 5:45-6:45 Buka Puasa Bersama