Indonesian airport PPP draws foreign investors

10 October 2019 - 12:00 am UTC

The Indonesian government is inviting domestic and foreign bidders for an IDR 4.3trn (USD 300m) airport PPP project in West Kalimantan province.


More than 10 groups – including airport companies from Singapore, France, South Korea, Japan and China – have already shown interest, Transportation Minister Budi Karya Sumadi was cited as saying in an 8 October statement. “[There could be] even 20 consortia.”


The Singkawang International Airport will have an estimated capital expenditure of IDR 1.7trn for construction and IDR 2.6trn in operational costs. The private investor will DBFOM the airport under a 32-year concession, while the government will be responsible for the acquisition of 54 hectares of land.


It marks the first airport project in Indonesia that has been procured as a PPP at its initial stage of preparation. Last year, the Indonesian government launched a PPP tender for the rehabilitation and expansion of Komodo Airport in Labuan Bajo, East Nusa Tenggara.


“But the Singkawang Airport project starts from zero,” Sumadi said. “This can be used as an example for other regions.”


Prequalification will take place between June and September 2020. The formal auction process will be held in April 2021 after shortlisted bidders submit their proposals between October 2020 and March 2021. Contract signing is scheduled for May 2021.


Construction is planned to take place between 2021 and 2023 for the first phase. The airport will have a runway 2,250 metres in length and 45 metres in width, two taxiways covering 199.5 metres x 18 metres. It will also have a passenger terminal area of ​​12,500 sqm and a cargo terminal spanning 1,036 sqm.


Flight routes planned for the project include those bound for Jakarta, Medan, Surabaya, Singapore, Kuala Lumpur, Taiwan and Hong Kong.


The ASEAN country, with its vast territory and limited state budget, needs both domestic and foreign private investors to fund transport infrastructure development and boost connectivity, Sumadi said. The Singkawang airport is among 12 proposed in the 2020-2024 National Medium-Term Development Plan under President Joko Widodo’s administration.


Singkawang, also known as a City of a Thousand Temples, is the second-biggest city of West Kalimantan. Its economy is driven by tourism and trade. The city is located on the north coast of the province and is bordered by Sambas Regency to the north, Bengkayang Regency to the south and east, facing the South China Sea.


The city’s tourism industry has received a strong boost from a number of national and international events routinely held such as the Cap Go Meh and the Naik Dango festivals.


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