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Regulation and Incentives for Foreign Investment in Maritime Sector Tamba P. Hutapea Deputy Chairman of Investment Planning Indonesia Investment Coordinating Board

Hamburg-Republic Federal of Germany June 1st 2015 © 2015 by Indonesian Investment Coordinating Board. All rights reserved

4

th World’s Most

Populous Country

255 17,508 islands

million population (in 2015, projected by BPS)

Biggest Archipelagic Nation

IND 16

th

1

NESIA

World’s Largest Economy

(World Bank, 2014)

trillion

USD GDP (PPP)

4,876

USD GDP

per capita (PPP)

Member State

G20

“Investment Grade” (Moody’s, Fitch and R&I) The Investment Coordinating Board of the Republic of Indonesia

2

Indonesia in ASEAN ASEAN is the third largest market in Asia, after China & India. Indonesia represents:

40% ofASEAN population 38% of ASEAN’s economy Source: IMF, 2014

The Investment Coordinating Board of the Republic of Indonesia

3

Investment Performance

Total Direct Investment Realization Based on Capex (USD Billion) in 2010-2014, not including financial, oil & gas sectors FDI

DDI

Target

32.7% 32.2%

Average 2010-2014

29.4%

Share of FDI: 69% Share of DDI: 31% Growth: 22.4%

30.2% 29.3% 70.7%

69.8%

70.6%

67.8%

67.3%

2010 2010

2011 2011

2012 2012

2013 2013

2014 2014

Total

Foreign DI

16.2

19.5

24.6

28.6

29.2

118.1

Domestic DI

6.7

8.4

10.2

13.6

14.9

53.9

FDI & DDI

22.9

27.9

34.8

42.2

44.1

172.0

Target

17.2

26.7

31.5

41.3

43.5

133.23%

104.71%

110.48%

102.13%

101.42%

160.2 107.00%

% Achieved

INVESTMENT REALIZATION IN Q1/2015 TOTAL: 10 Billion USD FDI: 6.6 Billion USD DDI: 3.4 Billion USD

• 2005-2012, Exchange Rate USD1 = Rp 9,000 • 2013 (Q I and Q II), Exchange Rate USD1 = Rp 9,300 (based on National Budget/APBN 2013) • 2013 (Q III and Q IV), Exchange Rate USD1 = Rp 9,600 (based on National Budget/APBN 2013) • 2014 (QI-QIII) Exchange Rate USD1 = Rp 10,500 (based on National Budget/APBN 2014) • 2014 (QIV) Exchange Rate USD1 = Rp 11,600 (based on National Budget/APBN-P 2014)

The Investment Coordinating Board of the Republic of Indonesia

Source: BKPM, 2015

4

Investment Realization Target for 2015 – 2019 (In USD Billion) 90

Investment Target

80

66.6

70 60 50 40 30 20

78.4

27.9

42.1

43.5

43.7

50.0

57.0

34.8

22.9

10 0 FDI DDI

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

16,2 6,7

19,5 8,4

24,6 10,2

28,6 13,5

28,3 15,2

28,9 14,8

32,5 17,5

36,3 20,7

41,6 25

47,9 30,5

Note: Kurs 2010-2012: 1 USD = Rp 9,000; Kurs 2013: 1 USD = Rp. 9,450; Kurs 2014: 1 USD = Rp 10.500 *) Asumption: 2014 target is achieved

Note: Kurs 2015-2019: 1 USD = Rp. 12.000 (RAPBN 2015)

2010-2014 2015-2019 Growth average: 28,3% Growth average: 15,1% Source of investment Source of investment FDI : 69,0%; DDI : 31,0% FDI : 63,6%; DDI : 36,4% Sector Sector Primary: 21,8%; Secondary : 41,8%; Tertiary: 36,4% Primer : 15,7%; Secondary : 53,5%; Tertiary: 30,8% Location Location Java : 59,4%; Outside Java : 40,6% The Investment Coordinating Board Java : 46,5%; Outside Java: 53,5% of the Republic of Indonesia 5

Investment Performance

German’s FDI Realization by Sector

Based on Capex (USD Million) in 2010 - (Q1) 2015, not including financial, oil & gas sectors 2% 14%

555

Investment Plan Investment Realization

Primary Secondary Tertiary

84% 158

Total 2010-(Q1) 2015 Realization: Plan: USD 1.1 Billion USD 0.51 Billion Investment Rate; 45.5%

188 103

Rank

BUSINESS FIELD (USD MILLION)

1

Transport Equipment and Other Transport Industry

2

2010

76 50

158

54 2010

140

53

76 2011

2011

2012

2012

2013

2013

2014

2014

Q12015

12 Q1 2015

TOTAL

PERCENT AGE

131.6

133.3

35.3

7.1

0.0

- 307.4

60.6%

Chemical and Pharmaceutical Industry

0.3

1.9

3.6

8.1

29.9

5.4 49.3

9.7%

3

Metal, Machinery and Electronic Industry

7.7

5.2

7.4

8.5

4.0

4.9 37.7

7.4%

4

Trade and Reparation

8.4

1.4

12.1

11.0

2.6

0.3 35.8

7.0%

5

Services

2.6

1.3

1.6

9.0

8.1

- 22.7

4.5%

6

Others

7.0

14.8

15.8

9.7

5.4

1.8 54.6

10.8%

157.6 158.1

75.8

53.3

50.2

Total

12.3 507.3 100.0%

The Investment Coordinating Board of the Republic of Indonesia

Source: BKPM, 2015.

6

Jakarta

Investment Performance

German’s FDI Realization by Location

Based on Capex (USD million) in 2010-2015, not including financial, oil & gas sectors Outside Java; 7,80%

Java; 92,20%

Rank

Economic Corridor

2010

2011

2012

2013

2014

Q1-2015

Total

151.2

149.2

62.4

47.1

45.7

12.0

467.5

1

Java

2

Bali and Nusa Tenggara

4.9

5.9

2.7

0.3

4.4

0.0

18.4

3

Sumatera

1.2

3.0

6.3

5.9

0.0

0.4

16.9

4

Kalimantan

0.0

0.0

4.3

0.0

0.0

0.0

4.3

5

Sulawesi

0.3

0.0

0.0

0.0

0.0

0.0

0.3

0

0

0

0

0

75.8

53.3

50.2

12.3

507.3

6

Papua and Maluku Total

0 157.6

158.1

The Investment Coordinating Board of the Republic of Indonesia

Source: BKPM, 2015.

7

Investment Strategic Plan 2015-2019

Investment Priority Sectors Power Generation

35 GW new projects

7 GW projects in the pipeline

Labor-intensive industry

Textile

Food & Beverages

Import-substitution industry

Chemical & Pharmaceutical

Iron & Steel

Furniture

Toys

Electronics

CPO & derivative products

Wood products, pulp & paper

Automotive

Machinery

Rubber products

Fish & derivative products

Shrimp

Downstream industry of natural resources

Cacao

Sugar

Smelter

MARITIME

SHIPPING

SHIP BUILDING

SEA PORT

Tourism

16 Strategic tourism areas

MICE

Export-oriented industry

COLD STORAGE

ICT FOR MARITIME

The Investment Coordinating Board of the Republic of Indonesia

8

Maritime Policy

National Transportation Plan

infrastructure supported by COOPERATION BETWEEN GOVERNMENT AND BUSINESS/PRIVATE

availability of infrastructure in accordance the spatial plan by the growth of TRANSPORTATION INFRASTRUCTURE NETWORK

2015-2019 Target Strengthening National Connectivity

1

• Increasing CAPACITY OF FACILITIES AND INFRASTRUCTURE transport and integration of multimodal and intermodal transport system

2

• Increasing SERVICE PERFORMANCE and national transport industry

3

• Increasing SAFETY AND SECURITY transport service

4 5

• Decreasing Green House Gas EMISSIONS in transport sector • Providing TRANSPORTATION services for all layers Source: Ministry of Transportation The Investment Coordinating Board of the Republic of Indonesia

9

Maritime Policy

Port Reformation in Indonesia (Based on the Shipping Law No. 17/ 2008)

The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation 10

Maritime Policy

National Port Policy

1

Secure Private Investment

2

Encourage Competition

3 4

Empowerment of Port Authority and Port Management Unit

Human Resources Development

5 6

Appropriate Legal and Regulation Framework

Ensure Safety and Secure Port Operations

7

Planning Integration

8

Environment Protection

The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation 11

Maritime Policy

Indonesia Port Structure

Total Ports & Terminals: 2459

111 Commercial Ports Operated by: - Indonesian Port Corporation I, II, III & IV - BP. Sabang - BP. Batam

1130 Non Commercial Ports Managed by Government

1218 Special Terminals / Dedicated Private Terminals (As of April 2015) For Mining, Oil&gas, Steam Power Plant, Forestry, CPO, Fishery, Industry, Tourism, & Shipyard

The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation 12

Maritime Policy

Indonesia Port Hierarchy

Sabang, Belawan, Dumai, Batam (3 terminal), Palembang, Panjang, Banten, Tanjung Priok, Cilamaya, Cilacap, Semarang, Tanjung Perak, Tanjung Bulu Pandan, Benoa, Socah, Teluk Lamong, Pontianak, Sampit, Banjarmasin, Tanah Ampo, Kupang, Balikpapan, Bitung, Makassar, Ternate, Pantoloan, Ambon, Sorong, Jayapura, Merauke

MAIN PORTS , among athers: Malahayati, Tanjung Balai Asahan, Selat Panjang, Bengkalis, Tanjung Buton, Pekanbaru, Tanjung Batu, Tanjung Pinang, Jambi, Pangkal Balam, Tanjung Pandan, Bojonegara, Sunda Kelapa, Kep. Seribu, Tegal. Batang, Gresik, Sampang, Bima, Kumai, Pelaihari, Garongkong, Luwuk, Tangkiang, Nunukan, Tarakan, Samarinda, Maloy, Manado, Banggai, Bau-bau, Waingapu, Ende, Manado, Pare-Pare, Kendari, Biak, Manokwari, Fak-Fak

COLLECTOR PORTS

, each of them : Susoh, Idi, Air Bangis, Serasan, Nipah Panjang, Malakoni, Bagan Siapi-Api, Toboali, Karang Agung, Teluk Betung, Brebes, Jepara, Tuban, Tuban, Buleleng, Sape, Reo, Lirung, Lawele, Jailolo, Sanana, Serui

TOTAL : 1241 PORTS

FEEDER PORTS

BASED ON THE MINISTER OF TRANSPORTATION DECREE NO. KP. 414 YEAR 2013 ABOUT DETERMINATION OF NATIONAL PORT MASTERPLAN AS AMEND BY THE MINISTER OF TRANSPORTATION DECREE NO. KP.725 YEAR 2014 The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation 13

Seven Business Priority for Investment

Priority Business Fields For Investment: Indonesia Sea Toll Programs (24 Seaport, consist of 5 hub ports and 19 feeder ports)

MARITIME LOGISTIC SECTOR REFORM TO SUPPORT “SEA TOLL” PROGRAM: 1. Port sector reform 4. Navigation Aid sector reform 2. Shipping sector reform 5. Logistic sector reform 3. Dock yard sector reform 6. Maritime education sector reform The Investment Coordinating Board of the Republic of Indonesia

Source: Bappenas, 2015 14

Invest in Indonesia

Three BKPM’s Priorities As assigned by the President of RI

Improvements of Licensing:

1

Faster, Simpler, Transparent & Integrated Delete, Combine, Simplify, and Delegate

2 3

Development of Investment Climate: Providing fiscal and no fiscal facilities as well as establishing Special Economic Zones and Industrial Estates as investment destination

Debottlenecking of Investment Realization

The Investment Coordinating Board of the Republic of Indonesia

15

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Integration of Licensing Service: One Stop Services Faster, Simpler, Transparent & Integrated Delete, Combine, Simplify, and Delegate

NATIONAL OSS CENTER Licenses issued by Ministries, Government Institutions & National Electricity Company

Investors

OSS PROVINCE

OSS MUNICIPALITY

Location permit from OSS Province if the location is across regencies/municipalities

Regional Licenses 1. IMB (Kab/Kota) 2. Environmental Permit 3. Location Permit (Kab/Kota) 4. Permit use of boiler 5. Permit use of lift

The Investment Coordinating Board of the Republic of Indonesia

6. Permit use of genset 7. Lighting protection permits 8. TDP 9. Occupational health and safety permit

16

Challenges in Maritime Sector

Integration of Maritime Sector Licensing Services in OSS Center 1. Industrial Operating License

1. Business License

Min of Industry Min of Trade

1. Principle License (IP) 2. APIP (Inatrade) 3. Import duty facility (DBC)* 4. NIK (DBC)* 5. Operating License

Min of Forestry and Environment

1. Borrow and Use Permit of Forest (IPPKH) 2. Indonesian Environmental Feasibility Assessment (AMDAL)

* Online by investor

OSS CENTER

BPN

1. Technical consideration 2. Land acquisition (implementation) 3. Certification

Min. of Transportation

Investor OSS PROVINCE*

1. License for Construction and Operation Terminal for Public Use 2. Special Terminal Location Determination License 3. Special Terminal Determination License 4. License for Construction and Operation Terminal for Public Use

* Location permit from OSS Province if the project location is located across regencies/municipalities Regional Licensing

OSS District/City Regional Licensing

1. Building and Construction Permit (IMB) 2. Environmental Permit 3. Location Permit 4. Company Registration Permit (TDP)

For example in Power Plant Business Licensing: Before reform investors must come to each ministries and end-to-end time of licensing process in 930 days, after reform investors only come to OSS Centre and the time is 256 days. The Investment Coordinating Board of the Republic of Indonesia

17

Flowchart for Special Terminal Licensing and Terminal for Company Purpose

Investor (Foreign/ Domestic)

Konsultan (LH, Kemenhub, Keuangan)

Borrow and Use Permit of Forest (52 days)

Operating License (7 days)

Location License (14 days)

Company legal entity and Legalization (1 day)

Tax number (1 day)

Land Technical Consideration (SKPT) (7 days)

Enviro Impact Study (150 days)

Environment License (10 days)

Operating License activity for: -Mining; -Fisheries; -Energy; -Industry; -Forestry; -Tourism; -Agriculture; -Ship building Industry

Utility (Telephone and Water) (14 days)

BPJS (1 day)

TDP (3 days)

Shahbandar Recommendation (....days)

Head of (14 days) Regency/Major Recommendation Import Duty (7 days)

District Bank Ref. Asset > Navigation Office Rp. 50 Trillion (....days) (1 day)

Special Terminal Master Plan (14 days)

Feasibility Study Land Rights (50 days)

Building Construction License (14 days)

Last year Financial Report (7 days)

Foreign Worker obligation to report (23 days)

(150 hari kerja)

Sea port/ Special Terminal Location Determination License (5 days)

*) Covers hydrooceanografy, topography, sea port Survey result * benchmark location on geographical coordinate (7 days)

Study for Safety of Shipping includes Shipping Channel Last two year Financial Report Result (30 days) (7 days)

Shahbandar Recommendation (....days)

Certificate 1) (...days)

License 2) (19 days)

1) Certificate of Availability for Qualified and Competent Workers in technical sea port operation 2) Special Terminal/ Sea Port Construction and Operation License

Sea Port/ Special Terminal License Matrix

Construction and Operation License

Construction

Sea port/ Special Terminal Location Determination Business License Entity

Type of License / Non Licensing Operating License Company Legal Entity Company Tax Number NPWP/NPPKP Company Registration Permit (TDP) Land Technical Consideration Site Location License Borrow and Use Permit of Forest (IPPKH) Environmental Impact Assessment (ANDAL) Environmental License Head of Regency/Major Recommendation District of Navigation Office Shahbandar Recommendation Special Terminal Master Plan Feasibility Study Last Year Financial Report Survey result covers hydrooceanografy, topography, sea port benchmark location with geographical coordinate National bank reference for companies with asset > Rp. 50 Trillion. Land right Sea port/ Special Terminal Location Determination License Building Construction Permit Foreign worker obligation to report Utility (water, telephone) BPJS Ketenagakerjaan dan BPJS Kesehatan Import Duty Exemption for Capital Goods Shahbandar Recommendation Last two years audited financial report Study for Safety of Shipping includes Shipping Channel Result Certificate of Availability of qualified and competent Workers in technical sea port operation Sea Port/Special Terminal Construction and Operation License Total: 20 licenses and 9 non licenses requirement

Institution

SLA (Day)

PTSP BKPM Ministry of Law &Human Right Tax Office, Ministry of Finance PTSP Regency/ Municipality Ministry of Agraria/BPN PTSP Regency/ Municipality PTSP BKPM Consultant Ministry of Environment and Forestry Regency/ Municipality Ministry of Transportation Ministry of Transportation Head of Regency/ Mayor Consultant Public Accountant

7 1 1 3 7 14 52 150

14 .................... .................... 14 150 7

Consultant

7

Bank Ministry of Agraria/BPN Ministry of Transportation PTSP Regency/ Municipality Man worker Service Water Supply Company/ Telephone Company BPJS PTSP BKPM Ministry of Transportation Public Accountant Consultant

1 50 5 14 23 14 1 7 .................... 7 30

Ministry of Transportation

.....................

Ministry of Transportation Total: 11 Organizations

19

10

The Investment Coordinating Board of the Republic of Indonesia

19

Challenges in Maritime Sector

List of Ministries/Agencies Involved In Maritime Sector Shipbuilding Industry

Sea Port

Ministry of Transportation

Ministry of Industry

Ministry of Finance

Ministry of Trade

Ministry of Environment and Forestry

Ministry of Finance Ministry of Agraria/BPN

Provincial Government City/Municipality Government

Provincial Government City/Municipality Government

The Investment Coordinating Board of the Republic of Indonesia

20

Challenges in Maritime Sector

Ministry of Transportation License Simplification

Special Terminal Location Determination License From 21 days, now 19 days

Special Terminal Determination License From 21 days, now 14 days

License for Construction and Operation Terminal for Public Use

Special Terminal Construction and Operation License

From 60 days, now 19 days

From 60 days, now 19 days

The Investment Coordinating Board of the Republic of Indonesia

21

Invest in Indonesia

Three BKPM’s Priorities As assigned by the President of RI

1

Improvements of Licensing: Faster, Simpler, Transparent & Integrated Delete, Combine, Simplify, and Delegate

2 3

Development of Investment Climate: Providing fiscal and no fiscal facilities as well as establishing Special Economic Zones and Industrial Estates as investment destination

Debottlenecking of Investment Realization

The Investment Coordinating Board of the Republic of Indonesia

22

Challenges in Maritime Sector

Incentives Provided for Maritime Sector

Ownership Relaxation

•49% foreign ownership for B to B •95% foreign ownership for PPP Project

100% foreign ownership

Investment Incentives

Import Duty Facilities

•Tax Allowance •Import Duty Facilities

Special Incentives for PPP Infrastructure Project

•Viability Gap Funding •Land Acquisition •Simplified Tender Procedure

(not available)

The Investment Coordinating Board of the Republic of Indonesia

23

Incentives TAX HOLIDAY

TAX ALLOWANCE

IMPORT DUTY FACILITY

(MoF Regulation No.130/PMK.011/2011)

(Government Regulation No.18/2015)

(MoF Regulation No.176/PMK.011/2009)

5-10 50

years

Tax relief facility, starting

from the commencement of commercial production.

% for a further 2 years Reduction of income tax after the expiration of the tax holiday and can be extended by MoF.

Pioneer industry 1. Basic metal industries; 2. Oil refinery industries and/or basic organic chemicals; 3. Machinery industries; 4. Industries of renewable resources; 5. Communication devices industries.

IDR

1

trillion

30

% of investmentvalue

Reduction of corporate

net income tax for 6 years, 5% each year.

143

business segments Eligible for tax

allowance, expanded from 129 segments in the previous regulation.

Under certain requirements among others: investment value or export orientation, menpower absorption, local content, and project location (especially outside Java island).

Minimum investment plan (USD100 million). The Investment Coordinating Board of the Republic of Indonesia

Import duty on Machineries and Equipments, goods, and raw materials for production • Exemption of import duty on machineries and equipments • 2 years exemption of import duty on raw materials • Additional 2 years import duty exemption for raw materials if company using locally-produced machineries and equipments (min 30%)

Industries

Which produces goods and/or services, including: 1. Tourism and culture 2. Public transportation 3. Public health services 4. Mining 5. Construction 6. Telecommunication 7. Port 24

PPP Infrastructure Project Offered to Private Sector

Government Guarantee and Support for Infrastructure Projects IMPROVEMENT ON INFRASTRUCTURE PROCUREMENT PROCESS To simplify the procurement procedures of PPP Infrastructure projects, The foreign companies or business entities are eligible to follow the tender without setting up a local company first in Indonesia. They may also enter into the tender in the form of consortium with local or international partner. However, once they are announced as the winning bidder, they have to set up an Indonesia business entity; Pre-qualifacilitation process now will only be repeated once. Procurement of land is also held by Contracting Agency prior to the inclusion of tender document.

GOVERNMENT GUARANTEE Provided by Minister of Finance through Indonesia Infrastructure Guarantee Fund (IIGF)/PT Penjaminan Infrastruktur Indonesia (PT PII) GOVERNMENT SUPPORT Viability Gap Fund (VGF), Land Fund, Geothermal Fund, Permits and Licensing, Land acquisition, Use of State Assets, Feed in Tariff for renewables energy PROJECT PREPARATION Through PT. Sarana Multi Infrastruktur (PT. SMI) for preparing of pre-feasibility study; peparing of tender documents; providing assistance during the tender process; and providing support towards realization of financial close FISCAL FACILITIES 1. Tax allowance are eligible to infrastructure and renewable energy; Tax Holiday are eligible to Oil Refinery project 2. Geothermal Fund 3. Feed in Tariff (Hydropower Energy, Solar Energy, and Solid Waste to Energy) The Investment Coordinating Board of the Republic of Indonesia

25

PPP Infrastructure Project Offered to Private Sector

Kuala Tanjung Economic Development Plan

Medan

Kebun Sei Mangkei

The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation 26

PPP Infrastructure Project Offered to Private Sector

Port of Kuala Tanjung in Relation with Industrial Zone PORT OF BELAWAN

PORT OF KUALA TANJUNG

BELAWAN KM. 21+607

RENC. KUALATANJUNG KM. 18+250

BESITANG MEDAN KM. 0+000

KUALA KM. 41+750

21 KM

LUBUK PAKAM KM. 29+366 TEBING TINGGI KM. 80+542 BANDARTINGGI KM. 98+291

BINJAI KM. 20+889

SIANTAR KM. 48+467

PERLANAAN KM. 114+053

RENC. SEI MANGKEI

5 KM

GUNUNG BAYU

TANJUNG BALAI KM. 174+442

KISARAN KM. 153+739

KETERANGAN : Existing Railway Route Railway Route Plan

SEI MANGKEI INDUSTRIAL ZONE

The Investment Coordinating Board of the Republic of Indonesia

RANTAU PRAPAT KM. 113+872

Source: Ministry of Transportation 27

PPP Infrastructure Project Offered to Private Sector

Port of Kuala Tanjung Development Project Total Area for Port Development : 1400,02 Ha  Container : 1078.00 Ha  Container Depot : 114.47 Ha  Liquid Bulk : 44.26 Ha  Dry Bulk : 143.00 Ha  Multipurpose : 15.40 Ha  Office Area : 4,99 Ha

CPO TERMINAL

MULTIPURPOSE TERMINAL

Depth : -17 meter Possibility to handle ULCC with capacity of 18.000 TEUs Maximum Capacity: 20 Million TEUs The Investment Coordinating Board of the Republic of Indonesia Source: Ministry of Transportation

28

PPP Infrastructure Project Offered to Private Sector

Port of Kuala Tanjung Development Project Total Area for Port Expansion: 1,400.02 Ha Container : 1,078 Ha Container Depot : 114,47 Ha Liquid Bulk : 44,26 Ha Dry Bulk : 143 Ha Multipurpose : 15,4 Ha Office Area : 4,99 Ha Has been starting for construction

Masterplan of Kuala Tanjung Port has been established by Minister of Transportation Decree No. PM 20 Year 2012

MULTIPURPOSE TERMINAL

Project Timeline : Review Port Masterplan & Market Sounding : year of 2015 - 2016 Tender for Concession : year of 2017 Estimated Cost : CT Phase I Container Yard : 360,000 m2 Reclamation : 4.5 Million m3 Wharf : 1000 m length Total estimated investment : ± USD 651 M Executing Agency : Director General of Sea Transportation

CPO TERMINAL

  

DESIGNATED AS INTERNATIONAL HUB PORT FOR WESTERN PART OF INDONESIA CLOSE TO MALACCA STRAIT AND EAST-WEST WORLD TRADE TheROUTE Investment Coordinating Board of the Republic of Indonesia NATURAL DEEP SEA PORT CAPABLE TO HANDLE ULTRA LAGE CONTAINER CARRIER (ULCC)

Source: Ministry of Transportation 29

PPP Infrastructure Project Offered to Private Sector

Makassar New Port: Extension of Makassar Port

PORT LOCATION

Project Rationale

MAKASSAR PORT

 Makassar Port as gateway and trade center (main port) for east and south Indonesia  Makassar port as one of domestic hub port for sea toll  Existing facilities are limited – need facility extension  Currently has low productivity The Investment Coordinating Board of the Republic of Indonesia

Source: Ministry of Transportation30

PPP Infrastructure Project Offered to Private Sector

Source: Ministry of Transportation

The Investment Coordinating Board of the Republic of Indonesia

31 31

PORT LOCATION

MAKASSAR PORT

Port Master plan hasCoordinating been established Minister of Transportation Decree No. PM 92 The Investment Board of the Republic ofby Indonesia 32 Year 2013 Source: Ministry of Transportation

PPP Infrastructure Project Offered to Private Sector

Makassar New Port: Phase I SECTION 1 SECTION 2 SECTION 3

Estimated Cost : CT Phase I Container Yard : 460,000 m2 Wharf : 1000 m length Total estimated investment : ± USD 431 M Project Timeline : CT Phase I Section 1 (320 m Wharf) – IPC IV as Concessionaires Land acquisition & Construction for Access Road : year of 2015 Construction for Wharf & Container Yard : year of 2017 CT Phase I Section 2 & 3 (680 m Wharf) – Open for Investment Market Sounding & Bidding for Investment : year of 2015-2016

Executing Agency : Director General of Sea Transportation

OPEN FOR INVESTMENT

The Investment Coordinating Board of the Republic of Indonesia

33

Source: Ministry of Transportation

Invest in Indonesia

Three BKPM’s Priorities As assigned by the President of RI

1

Improvements of Licensing: Faster, Simpler, Transparent & Integrated Delete, Combine, Simplify, and Delegate

2 3

Development of Investment Climate: Providing fiscal and no fiscal facilities as well as establishing Special Economic Zones and Industrial Estates as investment destination

Debottlenecking of Investment Realization

The Investment Coordinating Board of the Republic of Indonesia

34

Doing Business in the New Administration Era

Debottlenecking of Investment Realization (BKPM as a clearing house) Coordinating with related governmental institutions authorized in licensing process and mediation between companies and related stakeholders

Investment Obstacles

 land acquisition issues  Environmental issues  Technical ministries regulation issues  Central and regional government permits/licenses issues  Infrastructure issues  Electricity issues  Copyright issues

The Investment Coordinating Board of the Republic of Indonesia

Source: BKPM, Data Oct 2014-May 2015

35

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VIELEN DANK| TERIMA KASIH Badan Koordinasi Penanaman Modal (BKPM) Indonesia Investment Coordinating Board JalanJenderal Gatot Subroto No. 44, Jakarta 12190 P.O. Box 3186, Indonesia t : +62-21-5288-0456 |f: +62-21-5288-0389 |e : [email protected] © 2015 by Indonesian Investment Coordinating Board. All rights reserved