Indonesia Ministry of Finance to issue guarantee on USD 300m airport PPP

05 November 2019 - 12:00 am UTC

Indonesia’s Ministry of Finance (MoF) will provide a financial guarantee for a IDR 4.3trn (USD 300m) airport PPP project that has attracted companies from China, Singapore, France and South Korea.

The government has also completed acquiring 71% of the land required for the Singkawang International Airport, according to a tender document seen by Inframation. The project – located in West Kalimantan province – is designed to handle 3.1 million passengers per year, with an annual cargo capacity of up to 7,124 tonnes.

The government plans to finish the final business case during the January-May period of next year, with prequalification to take place between June and September. The formal auction process will be held around April 2021 after shortlisted bidders submit their proposals between October 2020 and March 2021, according to the document.

The winning bidder will sign a PPP pact with the Ministry of Transportation as well as a guarantee agreement with the MoF-backed Indonesia Infrastructure Guarantee Fund, which will provide compensation should the economic and financial feasibility of the project be affected by any government failure to meet its obligations.

The project vehicle will make profits from airport service charges.

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