Regulations and realities coincided on Tuesday (11/05) at the operational launch of the Indonesian Infrastructure Guarantee Fund (PT Penjaminan Infrastruktur Indonesia, or PII), which will insure various risks taken on by private contractors involved in public-private infrastructure development partnerships.
The PII has wasted no time, already insuring the risks of private contractors in 3 large state-procured infrastructure projects: an airport railway project, 2 (two) 1000 Megawatt power plants in Central Java, and another Garbage Generated Power Plant in Bandung.
In the past, private contractors have been reticent to participate in partnerships with the Indonesian state due in part to the large, uninsured risks often taken on in such engagements. For example, the costs of the state’s delayed land acquisition for an infrastructure project were often borne by private investors.
The PII ensures that the risks of a contracting state agency are accountable to the state, not the private contractors involved in the partnership. The guarantee extended by that acts as an incentive for private investors to participate in much-needed infrastructure development throughout Indonesia.
The PII was formally established on 30 December 2009, following the 05 May 2009 issuance of Government Regulation No. 35 of 2009 on [Establishment of Infrastructure Guarantee Company]. The start-up capital was later injected through a multilateral agreement on 15 January 2010 between the Indonesian state and a series of international financial institutions.
The PII also implements “Government Support” - including insurance extended to private investors - provided by Presidential Regulation No. 67 of 2005 on Cooperation Between the Government and Business Entities in the Procurement of Infrastructure Projects, as recently amended by Presidential Regulation No. 13 of 2010.
This Indonesian Legal Brief is based upon research conducted by the hukumonline team.
For a brief review of the aforementioned regulations, see also:
Indonesian Legal Brief No. 1101 20/5/2009 on ‘Public-Private Partnerships in Infrastructure (Guarantee Fund)’
Indonesian Legal Brief No. 1322 18/2/2010 on ‘Amendment to Public-Private Partnership Regulation’
Indonesian Law Digest No. 146 5/3/2010 on ‘Infrastructure Development: Public-Private Partnerships’
Regulations and realities coincided on Tuesday (11/05) at the operational launch of the Indonesian Infrastructure Guarantee Fund (PT Penjaminan Infrastruktur Indonesia, or PII), which will insure various risks taken on by private contractors involved in public-private infrastructure development partnerships.
The PII has wasted no time, already insuring the risks of private contractors in 3 large state-procured infrastructure projects: an airport railway project, 2 (two) 1000 Megawatt power plants in Central Java, and another Garbage Generated Power Plant in Bandung.
In the past, private contractors have been reticent to participate in partnerships with the Indonesian state due in part to the large, uninsured risks often taken on in such engagements. For example, the costs of the state’s delayed land acquisition for an infrastructure project were often borne by private investors.
The PII ensures that the risks of a contracting state agency are accountable to the state, not the private contractors involved in the partnership. The guarantee extended by that acts as an incentive for private investors to participate in much-needed infrastructure development throughout Indonesia.
The PII was formally established on 30 December 2009, following the 05 May 2009 issuance of Government Regulation No. 35 of 2009 on [Establishment of Infrastructure Guarantee Company]. The start-up capital was later injected through a multilateral agreement on 15 January 2010 between the Indonesian state and a series of international financial institutions.
The PII also implements “Government Support” - including insurance extended to private investors - provided by Presidential Regulation No. 67 of 2005 on Cooperation Between the Government and Business Entities in the Procurement of Infrastructure Projects, as recently amended by Presidential Regulation No. 13 of 2010.
This Indonesian Legal Brief is based upon research conducted by the hukumonline team.
For a brief review of the aforementioned regulations, see also:
Indonesian Legal Brief No. 1101 20/5/2009 on ‘Public-Private Partnerships in Infrastructure (Guarantee Fund)’
Indonesian Legal Brief No. 1322 18/2/2010 on ‘Amendment to Public-Private Partnership Regulation’
Indonesian Law Digest No. 146 5/3/2010 on ‘Infrastructure Development: Public-Private Partnerships’
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