Indonesia doesn’t need to look far to see what a successful PPP program looks like

I wrote earlier this week about how a significant pipeline of PPP projects doesn’t follow until 4-5 years after the delivery of the first. There is a country, right on Indonesia’s doorstep that demonstrates this effect exactly: the Philippines.

The graph below shows the Philippines' astounding progress in just 4 years.

 Source:  Philippines PPP Center , presented by the author

Source: Philippines PPP Center, presented by the author

The Philippines signed the CA for their first project under their PPP framework in 2012: the Daang Hari-SLEX Link Road (Muntinlupa-Cavite Expressway) Project, worth just USD 45 million. Since then, the pipeline has grown such that they intend to sign 5 projects by the end of the year, worth over USD 3 billion. Beyond those signed this year, the PPP center has 43 projects in their pipeline and, given their track record, there is no reason to believe they will not deliver a good chunk of them over the coming years.

Outside of telecommunications (a bit of a special case), and PLN (which seems to have the model down), the only private investment in Indonesian public infrastructure in the past 5 years has been on toll roads whose concessions were signed in the 1990s! No credible pipeline of projects currently exists that can deliver the volume of infrastructure investment that Indonesia’s economy requires, and its citizens demand.

As I said on Monday, a really significant pipeline of PPP projects for Indonesia is probably 4-5 years away, much as it has been for the last 10 years! We need to take action now to deliver Indonesia’s first PPP project, or our significant pipeline of projects will stay 4-5 years away forever!