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The Costs of Lighting Up Indonesia

By Bonardo Wahono
NOV 23, 2014


Power plants are one of the many pieces of infrastructure the government plans to build with the money it will save by raising the price of subsidized fuel.
But estimated savings of between $8 billion and $10 billion won’t come close to what’s needed to boost power supplies
by the amount the government is aiming for during President Joko Widodo’s five-year term.

35,000

The number of additional megawatts the government aims to add to the electricity supply over the next five years to meet growing energy needs and support economic growth, especially on major islands.
“The reason to develop an additional 35,000 MW is to support economic growth of 6% or more and to increase the electrification ratio,” Nur Pamudji, president-director of state-owned power operator PT Perusahaan Listrik Negara (PLN),
said during a recent discussion on electricity development in Southeast Asia’s biggest economy.

77 billion

Meeting such an ambitious target would require a total of $77 billion in funding said Mr. Pamudji.
Independent power producers would contribute 48% of that amount, leaving the government to foot the rest of the bill, he explained.
Even if the money is available, however, building new power plants does not come without challenges, said Mr. Pamudji, referring to difficulty acquiring land for development and ensuring reliable contractors were available to do the work.

41

Better distribution and transmission networks have boosted power supplies in recent years—installed capacity has increased by 4%, transmission networks by 15%, and distribution networks by 30%.
At the same time, strong economic growth has driven up consumption.
The number of PLN customers rose by 41% between 2008 and 2013, according to Mr. Pamudji. Demand for electricity
in the world’s fourth-most populous country has long outpaced supply, leading to chronic blackouts in many provinces, particularly North Sumatra, West Kalimantan and North Sulawesi.

81

Currently 81% of Indonesia has access to electricity. To improve that ratio, particularly in the remote islands of eastern Indonesia,
Mr. Pamudji said PLN was planning to build mini power plants fueled by liquefied natural gas. Indonesia would also
consider developing triple-fueled power plants, which are powered by a combination of diesel fuel, biofuel (crude palm oil), and gas. To improve the country’s power supplies and anticipate more customers in the coming years,
Mr. Pamudji said Indonesia would also need to build more roads so more homes could be accessible and brought onto the grid.

 

 

 

 



Indonesia Needs $500b for Infrastructure in Coming Years


By Investor Daily
Oct 08, 2014

Indonesia needs Rp 6,000 trillion ($500 billion) to meet all its infrastructure needs over the next five years,
says Kuntoro Mangkusubroto, the head of the President’s Delivery Unit for Development, Monitoring and Oversight (UKP4).

Kuntoro said that the investment is needed to build roads, airports, seaports, power plants and bridges.
He explained that better infrastructure plays a crucial role in pushing economic growth. Indonesia’s economy could grow
over 7 percent per year if the government improved infrastructure in the country. The current growth rate is just over
5 percent per year.

Kuntoro said the government needs to enhance cooperation with the private sector to share the massive burden. But money is not the only problem.
“The obstacle that needs to be solved related to infrastructure is land clearance,” he said.

Kuntoro also called for better coordination between the central and regional governments, saying that regional governments have to get better at tackling land issues.
“Indonesia’s income per capita could match those of industrialized nations if its infrastructure condition is good,” he said.

 

 

 

 

 

Indonesia Looks East in Infrastructure Catch-Up: Southeast Asia
By Novrida Manurung & Yudith Ho - Dec 18, 2012 9:00 AM PT

Indonesia’s government will emphasize building infrastructure projects on its eastern islands in 2013 as it seeks to spread development across the archipelagic nation to boost economic growth.

“The government must balance infrastructure improvement in areas that haven’t been developed with those that have,”
Deputy Public Works Minister Achmad Hermanto Dardak said in an interview yesterday.
“We will finish roads in Sumatra, Kalimantan and Sulawesi to connect the provinces on those islands, and we will build roads
in Papua.”

Indonesia must shift the share of total spending from subsidies into social programs and infrastructure to sustain growth, attract investment and reduce poverty, according to the World Bank. Faster economic growth is stretching the capacity of roads and ports as goods flow through the world’s largest archipelago, which covers 5,300 kilometers (3,300 miles) across more than 17,000 islands along the equator.

Infrastructure spending has fallen to about 4 percent of gross domestic product from more than 8 percent in 1995 and 1996, the World Bank says. The government plans to invest about 3,000 trillion rupiah ($309 billion) by the end of 2014 on infrastructure, manufacturing facilities and projects such as dams as part of its 2011-2025 development plan, Coordinating Minister for the Economy Hatta Rajasa said at yesterday’s seminar.

 

 

 

 

Transport in Indonesia 

 

Roads and Highways

Urban Transport

Rural Transport

Railways

Inland Waterways

Ports and Shipping

Air Transport

 

 

 

All transport modes play a role in Indonesia's transport system and are generally complementary rather than competitive. Road transport is the predominant mode, accounting for about 70 percent of freight ton-km and 82 percent of passenger km.

There are four unconnected railway networks in Java and Sumatra dedicated primarily to transport bulk commodities and long-distance passenger traffic. Sea transport is extremely important for economic integration and for domestic and foreign trade. It is well developed, with each of the major islands having at least one significant port city.

The role of inland waterways is relatively minor and is limited to certain areas of Eastern Sumatra and Kalimantan. The function of air transport is significant, particularly where land or water transport is deficient or non-existent, and well established, based on an extensive domestic airline network where all major cities can be reached by passenger plane.

Projects

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Transport project brief

 

 

Not Listed: Marine Electronic Highway Project

 

 

Roads and Highways

The total length of roads in 2004 reached about 340,000 km; out of which, 34,628 km
were under the state responsibility; 649 km toll roads, 37,164 km under provincial responsibility; and the rest, 266,564 km under district responsibility.

Indonesia roads Of the total road length, 58 percent is paved. The national road network
is in good condition with 95 percent paved and 81 percent in good and fair condition.
The provincial road network is also predominantly in good or fair condition.
The district rural and urban roads are only 50 percent in reasonable condition.

Densely populated Java, with 7 percent of Indonesia’s land area and 62 percent of its population, accounts for 27 percent of the classified road network. At the other end of
the spectrum, Maluku and Papua, with 23 percent of the land area and only 2 percent
of population, account for 7 percent of the network.

 

 

Indonesia’s first toll road was opened in 1978 and placed under the management of the state-owned toll road company,
Jasa Marga which now has overall responsibility for some 515 km of toll roads.
Around 460 km of which are on the island of Java. Since 1987, all proposed toll road projects have been required to be offered
to private investors, and so far some 30 percent of the network in operation has been developed by private consortia.

The number of motor vehicles registered by the State Police was 19 million in 1999 (excluded Timor Timur) and 27 million in 2003. The motor vehicles in 2003 consisted of 71 percent motorcycles, 13 percent passenger cars, 8 percent trucks, and 3 percent buses. Of the total 3.1 million motor vehicles assembled domestically about 90 percent were motorcycles.

 

 

Urban Transport.

Before the 1997 crisis, major urban transport investments were undertaken. These included toll road developments involving public-private partnerships with significant local private investment. Many of these projects, which were implemented under Build, Operate, and Transfer (BOT) arrangements are located around the metropolitan cities in Java, such as Jakarta, Ciawi, Bogor, Cikampek, Karawang, Surabaya, and Malang.

 

 

Despite rapid infrastructure development in large urban areas, traffic congestion continues to hamper large cities like Jakarta, Bandung, Medan, Surabaya, and many satellite towns like Bogor, Bakasi, and Tangerang. Public transport, including buses, minibuses, and taxis, is commonly used despite poor public transport facilities. The city of Jakarta has implemented a
Bus Rapid Transit system on several kilometers on key city route to help ease traffic congestion, particularly at peak times.

Car ownership is increasing, following the liberalization of import motor vehicle rules. At least three million locally assembled motorcycles are added each year; transforming vehicular pollution in a serious problem for the largest cities, and a rapidly emerging one among the medium-size cities.

 

 

Rural Transport.

With more than 292,000 km, about 80 percent of the total length of the road network is presently under the responsibility of the local governments. Some 11 million people in remote communities remain without direct access to the all-season road network, and an additional 6 million people reported to lack any reliable connection to the motorized transport network.

The process for identifying road network links to villages (desa) which are still not connected has not been clearly established.

 

 

Railways

The total length of track in operation is 5,040 km of which Java is 3,700 km. The rail network is made of 1,067 mm gauge, and mostly singled tracked. Some sections in the Jakarta metropolitan region have been electrified to enable operation of suburban commuter services by electric railcars.

The total fleet consists of 468 locomotives that include diesel electric and diesel hydraulic locomotives. The average fleet age is approximately 30 years old. Due to inadequate maintenance and lack of spare parts, the availability and reliability is low.

Revenue contribution and traffic composition vary significantly among the four railway systems. The Java railway contributes about 75 percent of the Indonesian Railways revenues, with passenger transport accounting for 83 percent of the total. The South Sumatra Railway generates some 20 percent of total revenues, of which freight accounts for 90 percent.
The West Sumatra and North Sumatra contribute only 2 percent and 3 percent of total revenues, of which freight accounts for 100 percent and 60 percent respectively.

 

 

Inland Waterways


There are more than 10,000 km of navigable waterways among 50 river systems.
Over half of these rivers are in Kalimantan and the rest in Sumatra.
These were originally used mainly for long-haul transport.
Most of the vessels and terminals on the inland waterways system are
owned and operated by the private sector

Some infrastructure improvements have been carried out, like the construction of new wharves, dredging of river channels at several river ports, and installation of navigational aids. However, because of the high seasonal variation in the water level of many rivers, without further investment for improvement of crucial sections, the role of inland waterways is relatively minor, and limited to certain areas of Sumatra and Kalimantan.

 

 

Ports and Shipping

Indonesia has some 300 public ports scattered over the archipelago. Of these, 43 are international liner service ports; the rest are feeder, and special ports, serving inter-island, lokal (small motorized vessels up to 250 dwt operating in short inter-island or coastal routes) and sailing vessels (small wooden hulled vessels which mainly depend on a combination of wind power and motor propulsion).

The most important ports are Jakarta (Tanjung Priok), Surabaya, Semarang and Cirebon in Java; Belawan, Pandang, and Panjangon in Sumatra; Balikpapan, Banjarmasin, and Samarinda in Kalimantan; Ujung Pandang and Bitung in Sulawesi; Ambon in Maluku; and Sorong in Irian Jaya.

Jakarta, Surabaya, Belawan, and Ujung Pandang, the four largest ports, handle most of Indonesia’s export and import cargoes, except for special commodities such as crude oil, logs, timber, rubber, palm oil, and fertilizer which use specialized ports. Much of the domestic traffic originates or is destined to these four ports.

Inter-island shipping is the prevailing means for distributing goods through the ports in Indonesia.
The cargo volume carried by inter-island shipping services reaches over 300 million tons, far exceeding international trade volume.
It is estimated that inter-island shipping accounts for 60 percent of the total sea borne cargo movement in the country. Especially, for remote islands like Sulawesi and others, the percentages of cargoes carried by inter-island shipping are even higher.

About 14 million passengers a year are traveling by inter-island shipping. In remote islands a higher percentage of the total number of passengers is traveling by inter-island transport means.
There are two distinct types of inter-island shipping services: ferry, and shipping services. Ferries are generally point-to-point services offered over a relatively short distance, typically between adjacent islands, and use ro-ro vessels that carry a mix of passengers, cars, and trucks. Whereas, shipping services are offered on more complex routes, commonly use lift-on lift-off vessels, and are mostly dedicated cargo services.

 

 

Air Transport

Air transport is rapidly increasing; not only, driven by the insufficient water and land transport networks, but also because travel by air is the quickest way to get around the country's thousands of islands, and for some areas, the only option.

Indonesia has adopted the standards of the International Civil Aviation Organization with only minor variations, but the compliance with the standards is far from uniform.

Indonesia's sudden air transport development became possible by the collapse of the Suharto regime in 1998.
Before 1999, there were five scheduled carriers and a few charter operators.

In 2004, there were 23 scheduled airlines operating and 37 licenses had been issued. Air transport is growing rapidly, with air travelers doubling every three years primarily driven by the low fares. In 2003, 16 million trips were taken, compared with 6.6 million in 1999. Conservatively, the Directorate General of Air Communication estimated in 20 million the seats sold in 2004, which is 7 million more than in 1997.

 

 

 

 

2011 North Sulawesi public expenditure analysis :
sub-national public financial management and development in Bumi Nyiur Melambai (English)
Abstract

Full report (PDF)


North Sulawesi province is one of the most developed provinces in eastern Indonesia.
Far-reaching development has taken place over the past ten years.
Presently, North Sulawesi province has the second highest Human Development Index score in Indonesia ,
and its poverty rate is low in comparison with other provinces.
Over the past decade, per capita gross regional domestic product (GRDP) has doubled and sub-national government spending has increased significantly.

Nevertheless, there remain various development challenges to address as well as various potential resources and opportunities to pursue.
North Sulawesi's performance in regional financial management has been relatively good, but discrepancies remain in
the performance and capacity of different work units within each regional government and also between different regional governments in the province.

To address challenges, take opportunities, and increase development performance, sub-national governments in
North Sulawesi, particularly the provincial government, need to better utilize their fiscal resources.
Clearer vision, mission, indicators and development targets must be accompanied by greater efforts to prepare a more directed budget, and to formulate higher quality programs and activities more consistent with planning targets.

This report is an effort to assist North Sulawesi's sub-national governments to improve their regional financial management performance, to improve the quality of planning and budgeting, and finally to contribute to local development performance.

The report results from strong cooperation between sub-national governments in North Sulawesi province, the Economics Faculty of Sam Ratulangi University, which was supported by CIDA, the Australian Agency for International Development (AusAID) and the World Bank. North Sulawesi Province BAPPEDA (Head of the Regional Development Planning Agency) played an important role in facilitating the preparation of this report.

It is expected that this report will benefit North Sulawesi's sub-national governments, sub-national governments elsewhere
in Indonesia and the central government by serving as a reference for efforts to improve sub-national financial management performance and the regional development process. Finally, this report can contribute to better and more effective sub-national financial management and governance. Overall, North Sulawesi's strategic sectors (health, education, infrastructure and agriculture) are performing better than in other provinces in eastern Indonesia.

 

 

 

 

 

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This website has been created with intensive use of internet research, linking information as available
on the internet, and various publications and books. I have attempted to give due credit to the sources.
My apologies for the ones I may have missed. I will make corrections as required
.
Editor