Indonesia’s construction sector contributed approximately 9.9 percent to the national Gross Domestic Product (GDP) in 2023, ranking as the fifth-largest contributor to the economy. Despite this significant contribution, infrastructure investment needs remain high and cannot be fully met by the state budget alone. As such, Public-Private Partnerships (PPPs) play a vital role in bridging the infrastructure financing gap.
This topic was discussed in a webinar titled Public-Private Partnerships (PPP) for Transport Infrastructure: Challenges for Economic Growth and Public Service Provision, held on Wednesday (Apr. 23). The event was organized by the Center for Transportation and Logistics Studies (Pustral) UGM in collaboration with PT Hutama Karya (Persero).
The webinar featured several speakers, including Head of Pustral UGM Ikaputra, Ph.D., President Director of PT Hutama Karya (Persero) Budi Harto, President Director of PT Sarana Multi Infrastruktur (Persero) Reynaldi Hermansjah, Managing Director of Investment at Indonesia Investment Authority (INA) Andry Setiawan, Finance Director of PT Hutama Karya (Persero) Eka Setya Adrianto, and Pustral UGM Expert Team Member Professor Danang Parikesit.
Dr. Ikaputra highlighted PPP as a strategic approach to enhance collaboration between the government and the private sector. Through this scheme, responsibilities related to financing, design, construction, and infrastructure maintenance can be distributed more effectively and sustainably.
“Of course, its implementation presents challenges, such as land acquisition, risk allocation, and institutional capacity. To address these, we need innovative models, robust legal frameworks, and adaptive financing schemes,” he explained.
Reynaldi Hermansjah outlined the role of PT Sarana Multi Infrastruktur (SMI). This state-owned enterprise provides financing and consultancy services to support infrastructure development in Indonesia, particularly in the transport sector.
He noted that between 2011 and March 2025, PT SMI supported 30 PPP projects, including the Trans-Sumatra and Trans-Java toll roads, as well as urban transport initiatives like the Palembang LRT and Jabodebek LRT, with a combined project value of approximately IDR 125 trillion.
Despite challenges such as high operational costs and limited public transport networks, PT SMI has addressed these through innovative financing models and by encouraging greater private sector involvement. Hermansjah also emphasized the need for credible pre-feasibility study documents, optimal risk allocation, and strong stakeholder commitment to ensure the success of PPPs.
Meanwhile, Andry Setiawan discussed INA’s efforts to manage investment funds and foster international participation in infrastructure financing. To date, INA and its investment partners have disbursed over IDR 45 trillion to various state-owned enterprises, supporting capital recycling and funding new infrastructure projects.
These investments span several sectors, including renewable energy (IDR 7.3 trillion), digital infrastructure (IDR 12.1 trillion), healthcare (IDR 3.6 trillion), toll roads (IDR 21.8 trillion), and seaports (IDR 1.5 trillion). By leveraging mechanisms such as IPOs, direct investments, and infrastructure platforms, INA strengthens investor confidence—particularly among global partners such as the Abu Dhabi Investment Authority (ADIA)—and reinforces its role as a trusted and independent investment manager.
“This role highlights INA’s unique position in Indonesia’s investment ecosystem, driven by professionalism, independence, and a long-term commitment to public-private partnerships,” said Setiawan.
Eka Setya Adrianto, Finance Director of PT Hutama Karya (Persero), presented strategies for managing transport infrastructure funding and development. He noted that infrastructure serves as a critical driver for economic growth and public service delivery, aligning with the 2025–2029 National Medium-Term Development Plan (RPJMN), which targets up to 8 percent economic growth and significant poverty reduction.
He added that PT Hutama Karya has evolved from a construction services company into a national infrastructure developer. The company is currently involved in the development of the Trans-Sumatra Toll Road (JTTS), which spans approximately 2,854 kilometers and carries an investment value of IDR 624 trillion. As of March 2025, 1,064 kilometers had been completed, with 879 kilometers already operational.
Although economically viable, JTTS has not yet reached full financial viability. To address this, the project employs blended financing schemes, including State Capital Injection (PMN), asset recycling, bond issuances, bank and non-bank loans, and a service-based investment return model (PBBL).
“The success of this project not only enhances connectivity across Sumatra but also serves as a prime example of how infrastructure can be effectively developed through synergy between state-owned enterprises, national policy, and innovative financing,” he concluded.
Author: Agung Nugroho
Post-editor: Afifudin Baliya
Photograph: Hutama Karya