Indonesian Govt Eyes Private Help in Airport Upgrades

Bhimanto Suwastoyo

Indonesia is hoping that public-private partnership can help the country build  new airports to help accommodate increasing air traffic, Deputy Transportation Minister Bambang Susantono said on Tuesday.

“All of Indonesia’s major airports are experiencing overcapacity problems and the government is seeking the involvement of private investments, notably through the public private-partnership scheme,” Bambang said.

Speaking at the Global Airports Indonesia 2012 workshop in Jakarta on Tuesday, the deputy minister said that the PPP scheme, as the public-private partnership is known, was being applied in the building of three new airport facilities in Indonesia — in Yogayakarta, Jakarta and Bali.

He said that the government would rather focus its efforst on smaller airports across the country that were less commercially viable and leave the development of new airports to the private sector under the PPP scheme.

Bambang said that airports were important pillars of air transportation and, as vital infrastructure, held an important strategic role in helping develop the country’s economy.

He said that the country had 233 airports, with the state-controlled airport operating companies Angkasa Pura I and Angkasa Pura II managing 25 primary airports between them. Mining firm Freeport Indonesia operates one airport in Papua.

The rest, the non-commercially viable airports, are operated and managed by the Transportation Ministry.

Speaking at a news conference later in the day, Bambang said the government had identified the need of Rp 32 trillion ($3.4 billion) to build new airports between 2010 and 2025 under the government’s master plan for Indonesia’s economic growth (MP3EI).

“This does not yet include the Rp 4 trillion to Rp 5 trillion the government earmarks annually to maintain the non-commercially viable airports,” the deputy minister added.

However, he said the government was also reviewing the list of non-commercially viable airports to determine if they could be developed in cooperation with the private sector.

Meanwhile, Angksasa Pura I president Tommy Soetomo said airports were a vital entity to the country’s economic development.