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The Indonesia Infrastructure Initiative (IndII) is an Australian Aid initiative managed by SMEC International on behalf of the Australian Government. Its goal is to promote economic growth by working with the Government of Indonesia to enhance infrastructure policy, planning and investment. IndII was originally established for a three-year period ending in June 2011. A follow-on project is now underway and will operate until June 2015. IndII focuses primarily on water and sanitation issues and on transport by road, rail and sea, as well as a number of cross-sectoral policy issues. All of IndII’s activities are designed to build local capacity at both national and sub-national levels. IndII coordinates its efforts with other donors participating in major infrastructure projects, and promotes partnerships between government and the private sector. A selection of its current work includes incentive grants for local governments to invest in their water utility companies, assisting with the development of national master plans for ports and railways, and formulating new guidelines and procedures for the management of transport sector public service obligations.



Discussing Strategies for the Development of an Infrastructure Institute
Indonesia’s continued economic growth depends its ability to close the infrastructure delivery gap. The Government of Indonesia aims to provide access to public housing, water, sanitation, and electricity to 100 percent of its citizens by 2019, and has a target GDP per capita of USD 14,500 by the year 2025. One strategy that can support these ambitious efforts over the long term is establishing the Indonesia Institute for Infrastructure Development Effectiveness (3IDE). This idea was examined by a team from the University of Melbourne in a study led by by Dr. Colin Duffield. The study reviewed the current status of the 3IDE concept, ways forward, operational issues, financial models, and proposed founding members. A meeting on 20 July to discuss the study attracted about 60 participants from various organisations, such as Bappenas, Coordinating Ministry of Economic Affairs (CMEA), Ministry of Public Works, Ministry of Finance, the Local Government for DKI Jakarta, and the private sector. The meeting was moderated by transport expert Prof. Danang Parikesit from the University of Gajah Mada. Keynote speeches were delivered by the Deputy of Infrastructure at Bappenas, Dr. Dedy S. Priatna; the Vice Minister of the Ministry of Public Works, Hermanto Dardak; and the Deputy Minister of for Infrastructure and Regional Development, CMEA, Dr. Luky Eko Wuryanto. In the meeting, attendees considered international best practice for infrastructure related institutes, potential organisational models and governance regimes, and opportunities for tripartite engagement by the public, private, and academic sectors.
Enhancing Indonesia’s Research Quality in Infrastructure
The Australia-Indonesia Infrastructure Research Awards (AIIRA) program is designed to address challenges faced by the Government of Indonesia in the planning and delivery of infrastructure services. Through AIIRA, Indonesian academic and civil society organisations can obtain grants when they partner with international institutions to conduct research. This is intended to enhance their skills and enable them to provide higher quality research when commissioned by Government of Indonesia agencies. As part of the second round of AIIRA funding, eight applicants received seed money of up to A$ 10,000, which they used to expand on their research proposals. An expert panel met to review the proposals on 30 June 2014 at Jakarta’s Mandarin Hotel. The meeting was chaired by T. Nirarta (Koni) Samadhi from UKP4, the Presidential Monitoring Unit. Participating experts included Professor Dr. Ir. Danang Parikesit from the University of Gadjah Mada, Dr. Wahyu Utomo of the Coordinating Ministry for Economic Affairs, Bernardus Djonoputro representing the Indonesian private sector, Professor John Black of the University of South Wales, and Dr. John Scott Younger, OBE, of PT Nusantara Infrastructure Indonesia. As a result of the meeting, six submissions were awarded further funding of up to A$ 150,000 to complete their research.
Capacity Building Workshop Prepares DGST to Make the Business Case for PPP Procurement
Makassar Port Authority has drafted a master plan that covers the development of Makassar port, including Makassar New Port in Garongkong and Takalar. The Directorate General of Sea Transportation (DGST) understands the importance of private sector participation for these projects. Therefore, with the support of IndII, DGST organised a series of capacity building workshops to strengthen the capacity of its staff and Makassar Port Authority (MPA) to prepare a sound business case for PPP procurement. The first two workshops were held in February and May of 2014. The latest one took place on 16-17 June 2014 and focused on environmental and social issues, as well as cost-benefit and value-for-money analysis. The event was opened by Maurits Sibarani, on behalf of Adolf Tambunan, Director of Ports and Dredging from DGST, and was attended by 40 people including representatives from DGST, Ports Authorities (Makassar, Surabaya and Medan), Indonesia Infrastructure Guaranteed Fund (PT PII), Indonesia Infrastructure Finance (PT SMI) and various universities (Unhas, IPB, UGM, and USU). After this workshop, IndII is planning to support both DGST and MPA for a market sounding and public consultation, taken into account the feedback from all the workshops and recommendations from local government of Makassar.