STUDY ON SOEKARNO HATTA INTERNATIONAL AIRPORT

Transcription

STUDY ON PRIVATE-INITIATIVE INFRASTRUCTURE PROJECTS IN
DEVELOPING COUNTRIES IN FY2011
STUDY ON SOEKARNO HATTA INTERNATIONAL AIRPORT
EXPANSION AND UPGRADING PROJECT IN JAKARTA
IN THE REPUBLIC OF INDONESIA
FINAL REPORT
February 2012
Prepared for:
The Ministry of Economy, Trade and Industry
Prepared by:
ITOCHU Corporation
SHIMIZU CORPORATION
Japan Airport Terminal Co., Ltd.
Nikken Sekkei Ltd
Nikken Sekkei Research Institute
Japan Economic Research Institute Inc.
Reproduction Prohibited
Preface
This report is a summary of the results of a Study on Private Sector Initiative Infrastructure Projects
commissioned as a project in fiscal year 2011 by the Ministry of Economy, Trade and Industry to
ITOCHU Corporation, SHIMIZU Corporation, Japan Airport Terminal Co., Ltd., Nikken Sekkei Ltd.,
Nikken Sekkei Research Institute, and Japan Economic Research Institute Inc.
This Study on Soekarno Hatta International Airport Expansion and Upgrading Project in Jakarta in
the Republic of Indonesia was an investigative study of the feasibility of a project for expanding and
upgrading the airport’s airside facilities, upgrading utility facilities, constructing new terminal
building, renovating and upgrading existing terminal buildings and constructing new commercial
buildings at a budget of approximately 104.5 billion yen. In recent years the number of passengers
using Soekarno Hatta Airport in the Jakarta Metropolitan Area of the Republic of Indonesia has been
increasing dramatically. Realization of a project to expand and upgrade the airport will contribute to
resolving problems resulting from aviation demand surpassing anticipated capacity.
We sincerely hope that this report will be of assistance in the realization of the above project and will
also serve as a useful reference for interested parties in Japan.
February 2012
ITOCHU Corporation
SHIMIZU CORPORATION
Japan Airport Terminal Co., Ltd.
Nikken Sekkei Ltd
Nikken Sekkei Research Institute
Japan Economic Research Institute Inc.
Map of the Project Site
Map of Indonesia
Source: Prepared by the Study Team from Google Earth photos
Location of Soekarno Hatta Airport
List of Abbreviations
Abbreviations
Long Forms
ACI
Airport Council International
APM
Automated People Mover
AP-I
PT. Perum Angkasa Pura 1
AP-II
PT. Perum Angkasa Pura 2
ASEAN
Association of South‐East Asian Nations
BAPPENAS
Badan Perencanaan Pembanguan Nasional
(National Development Planning Agency)
BCP
Business Continuity Plan
BHS
Baggage Handling System
CH/IN
Check-in
CPI
Consumer Price Index
DGCA
Directorate General Civil Aviation
EIRR
Economic Internal Rate of Return
EV
Elevator
FIRR
Financial Internal Rate of Return
IDR
Indonesia Rupiah
IIGF
Indonesian Infrastructure Guarantee Fund
JABODETABEK
Jakarta, Bogor, Depok, Tangerang and Bekasi
JCR
Japan Credit Rating Agency Ltd.
JETRO
Japan External Trade Organization
JICA
Japan International Cooperation Agency
JIS
JapanTerminalBuilding, Itochu, Shimizu
JPY
Japanese Yen
LCC
Low Cost Carrier
METI
Ministry of Economy, Trade and Industry (Japan)
MOSOE
Ministry of State-Owned Entrprises (Indonesia)
MOT
Ministry of Transportation (Indonesia)
MPA
Master Plan for Establishing Metropolitan Priority Area for Investment and
Industry in Jabodetabek Area
PMC
Project Management Consultant
PTB
Passenger Terminal Building
PPP
Public Private Partnership
R&I
Rating & Information Investment Inc.
ROE
Return On Equity
SBI
Central Bank of the Republic of Indonesia
Table of Contents
Executive Summary
(1) Background and necessity of the project
S-1
(2) Basic policy concerning decisions on project content
S-3
(3) Project overview
S-7
(4) Implementation schedule
S-14
(5) Feasibility of implementation
S-15
(6) Superior Technology of Japanese companies
S-17
(7) Concrete schedule for realizing the project and risks inhibiting its realization
S-19
(8) Maps indicating the project implementation site
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Chapter 1: Overview of the Host Country and Sector
(1) Economy of the Country & Financial Conditions of the Government
1-1
(2) Description of the Targeted Sector
1-8
(3) Description of Project Area
1-13
Chapter 2: Study Methodology
(1) Contents of the Study
2-1
(2) Method and Organization of the Study
2-3
(3) Schedule of the Study
2-4
Chapter 3: Justification, Objectives and Technical Feasibility of the Project
(1) Project Background and Necessity, etc.
3-1
(2) Necessary considerations for determining project details, etc.
3-17
(3) Project Plan Overview
3-42
Chapter 4: Evaluation of Environmental and Social Impacts
(1) Analysis of current environmental and social conditions
4-2
(2) Improvement effect of the environment accompanying the implementation of the
project
4-4
(3) Environmental and social impacts accompanying the implementation of the project
4-4
(4) Summary of laws and regulations relating to environmental and social considerations
of the partner country
4-14
(5) Procedures the implementing country (implementing or other relevant organization)
must follow for realizing a project
4-20
Chapter 5: Financial and Economic Evaluation
(1) Project Cost Estimate
5-1
(2) Overview of the Results of Preliminary Financial/Economic Analysis
5-4
Chapter 6: Planned Project Schedule
(1) Planned Project Schedule
6-1
(2) Issues Pertaining to the Project Schedule
6-2
Chapter 7: Implementing Organization
7-1
Chapter 8: Technical Advantages of Japanese Companies
(1) Expected Form of Japanese Involvement
management, and operation & management)
(Investment, engineering, procurement &
8-1
(2) The Competitive Advantage that Japanese Companies have in the Implementation of
this Project (Technology , Economic Aspects)
8-19
(3) Measures Necessary to Promote the Issuance of Orders with Japanese Companies
8-22
Chapter 9: Outlook for Fund Procurement
(1) Review of Sources of Funds and Financing Plans
9-1
(2) Possibility of Funding
9-2
(3) Cash Flow Analysis
9-13
Chapter 10: Action Plan and Issues
(1) Status of Activities for the Implementation of the Project
10-1
(2) Status of Activities of Relevant Government Agencies and Implementers in Indonesia
for the Implementation of the Project
10-2
(3) Legal and Financial Restrictions of Indonesia
10-3
(4) Necessity of Additional Detailed Analysis
10-18
Executive Summary
(1) Background and necessity of the project
1) Background of the project
Aviation demand in Indonesia is growing at a remarkable pace and the Soekarno Hatta International
Airport (hereafter referred to as Soekarno Hatta Airport) plays a central role in aviation transport for
the Jakarta Metropolitan Area (Jabodetabek). In addition to being the major gateway of Jabodetabek,
the airport also serves as a domestic air transport hub. Since it commenced operation in 1985, the
number of users of Soekarno Hatta Airport has grown steadily and in 2010 the number of passengers
reached a record 44 million, surpassing the airport’s capacity.
In December 2010 a memorandum of cooperation was signed between the governments of Japan and
Indonesia for “the concept of Metropolitan Priority Area for Investment and Industry (MPA) in
Jabodetabek Area” for the development of infrastructure in Jabodetabek, and JICA commenced a
master plan study for this purpose in May 2011. JICA’s master plan focuses on the development of
infrastructure essential for promoting further growth in Jabodetabek, which plays a key role in
Indonesia’s rapidly growing economy, and targets nine priority sectors. One of the priority sectors is
airport facilities and the master plan proposes a plan for the expansion of Soekarno Hatta Airport.
The Project for the Master Plan Study on Multi-Airport Development for Greater Jakarta
Metropolitan Area in the Republic Indonesia (hereafter, JICA Master Plan), which JICA is currently
in the process of preparing, also presents plans for the development of new airport in the future. The
plan presented here also aims at accommodating Indonesia’s increasing airport demand through the
expansion and upgrading of Soekarno Hatta Airport in the interim period before any new airports are
S-1
ready to commence operation.
At the same time, Angkasa Pura II (hereafter, AP-II), the state-owned enterprise currently operating
Soekarno Hatta Airport, has already prepared its own plan for the expansion of the airport, which it
announced in 2011. However, progress in the implementation of this project has fallen behind the
schedule of the initial plan.
2) Issues in Soekarno Hatta Airport and the need for expansion and upgrading
In 2010 passenger numbers at Soekarno Hatta Airport increased about four-fold in comparison with
passenger numbers recorded in 2000. Reaching 44 million in 2010, passenger numbers far exceed
the terminal’s capacity of 22 million. As a consequence, the airport must contend with the following
issues:
 Congestion in the terminal building
 Congestion on the apron
 Congestion in airport parking lots
During the Study Team’s site survey, the following problems also came to light:
 Loss of business opportunities
 Inadequate security measures
 Aging of facilities
In view of the current state of the airport’s overextended capacity and congestion both landside and
airside, it can be said that the expansion and upgrading of Soekarno Hatta Airport is an issue that
needs to be addressed urgently. In addition to responding to the need for tighter airport security
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reflecting the 9.11 terrorist attacks, environmental considerations in facilities used, and the
introduction of energy-saving equipment, this airport must fulfill its role as the gateway to Indonesia
by providing a range of services for airport users and endeavoring to enhance their level of
satisfaction.
In the context of various requirements mentioned above, a Japanese private sector group to
participate in an expansion and upgrade project for this airport first needs to determine the feasibility
of the project by engaging in consultation with AP-II and relevant government organizations. The
purpose of this study is to investigate and examine the feasibility of the expansion and upgrading of
Soekarno Hatta Airport by drafting a plan from the viewpoint of the airport management and from
the viewpoint of private sector companies intending to participate in the project.
(2) Basic policy concerning decisions on project content
1) Basic policy of the study
As mentioned above, the expansion and upgrade of this airport is a pressing issue. However,
respective master plans drawn up by AP-II and the Directorate General Civil Aviation (hereafter,
DGCA) have not been coordinated; rather, the two master plans stand as independent, parallel
documents.
After having assessed the respective master plans for the expansion of Soekarno Hatta Airport,
conducted the Study Team’s own airport site surveys and interviews with AP-II and other related
organizations and consulted with JICA Master Plan Team, the Study Team will examine in this study
a project menu of options for the airport expansion, methods of financing, and a project schedule.
Then, the Study Team will present proposals to AP-II to further explore the feasibility of the project
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through dialogues.
2) Forecast for demand and airport capacity
We established 60 million passengers in 2017 (domestic passengers: 47 million, international
passengers: 13 million) as a forecast figure for demand of air travel to and from Jakarta area, and this
figure was agreed on in consultation with the DGCA, AP-II and the JICA Master Plan Team.
Plans for a new airport are being considered for 2017 onwards when the demand for air travel can be
expected to exceed 60 million passengers annually but at this stage the plans are still in a state of
flux. Therefore, this study will remain within the parameters of annual passenger numbers to a
maximum of 60 million with the use of two runways (excluding preliminary investigations described
in Chapter 4).
The current capacity of the terminals including Terminals 1 through 3 is 22 million, which falls far
short of the actual number of passengers at 44 million. On the other hand, the annual takeoff and
landing capacity for the current two runways is 370,000, and therefore it is estimated that there is
available capacity until about 2015. It is believed that the airport can accommodate 60 million
passengers annually with current capacity for take offs and landings.
3) Analysis of revenue structure and identification of management issues
A look at the revenue structure of Soekarno Hatta Airport shows that a little less than 80 % of the
airport’s revenues are related to aviation business while a little over 20% are derived from
non-aviation business and just under 2% of revenues are related to cargo business. The ratio of
revenues related to non-aviation business is low compared to international standards (2010 Airport
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Council International Study: 46.5 %) as well as standards for major Asian airports (a little over 40 %
for Narita, Hong Kong, Thailand and Malaysia, and about 50% for Singapore). Therefore, it is
believed that there is significant room for improvement. In specific terms, there is a need for increase
in space available for leasing following the expansion of the terminal buildings, improvement in the
quality of shops and inclusion, as customers, of those visitors to the airport who at present are unable
to enter the terminal buildings when they send off or meet passengers. To increase unit sales per
customer, the establishment of attractive commercial facilities is also necessary. The airport will
have to continue its management efforts by replacing and upgrading shops on the premises to meet
the ever-changing preferences of customers, as well as promoting the development of shops to meet
the various needs of departing customers, customers in transit, and customers sending off
passengers.
4) Goal setting and basic policy for the expansion project
a) Goal setting for the expansion project
Taking into account the current status of the airport facilities and management issues regarding
revenue, the Study Team set the following goals for the Soekarno Hatta Airport expansion project.
(i)
To resolve the problem of insufficient capacity by appropriately providing facilities on the
airside (taxiways and aprons) and on the landside (terminals etc.), so that Soekarno Hatta
Airport can contribute to the further development of Indonesia’s economy
(ii) To promote improvement in customer satisfaction level and airport security by adjusting the
airport to the present world-wide needs through expansion and modification for solution of
existing issues, so that Soekarno Hatta Airport can be transformed into a world-class airport
(iii) To promote infrastructure development with a view to making Soekarno Hatta Airport an urban
hub in the long term
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b) Basic policy for the expansion project
Based on the targets we set for the expansion project, we established the following basic policy for
the development of facilities.
(i) To promptly resolve the lack of capacity on both the airside and the landside; to consecutively
make a series of expansion, replacement and modification of facilities so as to ensure the
development with the airport in operation
(ii) To enhance satisfaction of customers and focus investment in higher profitable project areas, by
specifying customer-based grades, such as international, domestic or LCC passengers
(iii) To improve security by upgrading the system to the present needs, so as to secure safety of
passengers and concerned persons and inaugurate unserviced air routes, such as ones for North
America.
(iv) To deepen the attractiveness of the current airport terminal by positively taking advantage of the
local cultural climate, so as to provide an airport terminal appropriate to the gateway to
Indonesia.
(v) To provide a new moving system so as to improve the inconvenient movement between
terminals
c) Basic policy for commercialization of the project
The project will not be a new development project but a project whose objective is to expand the
existing facilities of Soekarno Hatta Airport, currently owned and operated by AP-II. Therefore,
giving careful consideration to the coordination of the roles of the Study Team and AP-II is essential.
The project is currently being examined on the basis of the following approaches but these may
change in the future upon consultation with AP-II.
S-6
(i) Implement a joint project with AP-II, taking into consideration the attendant characteristics and
risk
(ii) Implement a project with AP-II as the main organization in key areas of the management of
operations at Soekarno Hatta Airport, and Japanese companies having intention to provide
know-how and some administration
(iii) Allow the private sector (mainly Japanese companies) as risk takers to participate in numerous
project areas where there are many uncertain elements, such as the concession and cargo
business, etc.
(3) Project overview
1) Overview of the project
After undertaking a review based on the AP-II’s Grand Design, the JICA Master Plan, interviews and
site surveys, the Study Team drew up an overview of the project and determined its scale as shown
in the table below. Although future airport expansion policies for the surrounding area of Jakarta can
be expected to affect the position of Soekarno Hatta Airport and fluctuations in user numbers, the
Study Team based its estimate of the scale of the facility on figures forecast for demand adopted for
this study, that is, annual passenger numbers of 60 million in 2017 (47 million for domestic and 13
million for international passengers).
The Grand Design, which is AP-II’s airport expansion plan, assumes the construction of Runway 3
and Terminal 4 at the northern perimeter outside the current airport area to accommodate demand
exceeding 60 million passengers. As mentioned earlier, however, this study narrowed the scope of
the project to two runways and 60 million passengers per annum.
This study also did not include a railway station due to uncertainty regarding the commencement of
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the operation of the railway itself and because of the long-term concept for the eastern commercial
area within the airport grounds.
S-8
Table S-1: Project Elements in the Grand Design and Scope of the Project Anticipated for This
Project
Project elements in the AP-II Grand Design
30,000 ㎡ (extended
area)
＋upgrade of existing
area
30,000 ㎡ (extended
area)
area
200,000 ㎡
(extended area)
Cargo
New construction
150,000 ㎡
Integrated buildings
Connecting buildings
Interchange terminals
Parking building
New construction
185,000 ㎡
Airside
Taxiway
Terminal 1
Terminal 2
Terminal 3
Commercial Area
Terminal
ancillary
construction
New construction of
connecting terminals (or
development of dedicated
bus roads)
Upgrade of utilities and
roads
People mover
Utilities, etc.
Railway Station
Future Expansion
Assumed Scale of
Facilities in the
Project
New development +
Partial upgrade of existing
aprons
New construction of
runway on the eastern side
Partial upgrade of existing
runway
Addition to existing
facilities
facilities
facilities
facilities
facilities
Apron
Terminal
Assumed Scope of Facility
Development in the Project
Development area
360,000 ㎡
Total length: 3.5km
(4 stations)
Railway station
Not included
―
Runway 3
Not included
―
Terminal 4
Not included
―
Commercial area, East
side
Not included
―
Source: Prepared by the Study Team
S-9
Figure S-1: Difference between project elements in AP-II’s Grand Design and those in our plan
Source: Prepared by the Study Team based on JICA, “Master Plan Study on Multiple-Airport Development for
Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report” (March 2011)
From the viewpoint of the main implementing organizations and assumed sources of funding for the
scope of the project plans, we divided the project into five package options as shown below. While
there are differences in views between AP-II and the Study Team regarding the main project areas
and funding sources, as shown in the table below, financial and economic analyses from hereon will
be implemented on the basis of our plan, which established a joint venture project with a wider scope
and we will conduct analyses of two scenarios, one based on package (3) with the inclusion of
package (2) and another without the inclusion of package (2).
Project costs for packages (1), (2) and (3) were calculated as shown in Table S-3..
S-10
Table S- 2: Five Package Options
Project item
Package (1)
Airside (new construction of
taxiway, and upgrade of
taxiway and apron)
Capital sources AP-II is assumed
to utilize
Implemented as public works
utilizing government funds
 After implementation, assets
are transferred to AP-II as equity
or grants?
Package (2)
Terminal ancillary work
(people mover, utilities, etc.)
Package (3)
Upgrade and expansion of
terminal buildings
Package (4)
New construction of cargo
village
Package (5)
Commercial area
(commercial, hotel, office,
parking facilities)
AP-II internal reserve or funds
procured from the domestic
market with AP-II as the main
borrower.
Joint venture including third
party participation
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Capital sources the Study Team
is assumed to utilize
utilizing yen loans
as in Package (1), utilizing yen
loans. However, if not treated
as public works, develop on the
basis of a JV as in Package (3)
Separate Soekarno Hatta
Airport operating company
from AP-II, and undertake
development of the terminal
building after receiving third
party participation, and operate
the business for a certain
period of time
Construction based on the
concession system with third
party participation
Table S-3 : Calculation of Project Costs
Unit: Million
IDR Equivalent
Local
Foreign
Portion
Portion
Yen
Equivalent
USD
Equivalent
6,000
78
705,900
564,720
141,180
Terminal Ancillary Work
19,000
246
2,235,350
1,788,280
447,070
Extension for Terminal 3
50,000
647
5,882,500
4,411,875
1,470,625
Upgrade for Terminal 2
10,000
129
1,176,500
882,375
294,125
Upgrade for Terminal 1
10,000
129
1,176,500
882,375
294,125
95,000
1,229
11,176,750
8,529,625
2,647,125
Design Expenses (5% of Construction Costs)
4,750
61
558,838
426,481
132,356
Reserved Fund (5% of Construction Costs)
4,750
61
558,838
426,481
132,356
104,500
1,352
12,294,425
9,382,588
2,911,838
(1)
Construction
Costs
(2)
(3)
Basic Facility
Development
Subtotal of Construction Costs
Total Project Costs
Total
2) Summary of results of preliminary financial and economic analyses
In AP-II’s financial results for fiscal 2010, Soekarno Hatta Airport earned 134% of AP-II’s overall
operating profit, and is therefore a profitable airport that supplements the AP-II’s head office
expenses and offsets the deficits of other local airports that AP-II owns. According to the demand
forecast adopted for this study, the total number of both domestic and international passengers using
this airport will continue to grow and can be expected to reach 60 million by 2017, which is the
upper capacity limit for the airport upon completion of this project. According to the outlook for
income and expenditure resulting from this project scheme calculated on the basis of total passenger
numbers of 60 million and other assumptions (see Chapter 5 of this report), by 2020, or the fifth year
after commencement of the new airport services, the increase in revenue will overtake the increase in
costs from the expansion of the terminal, and operating profit exceeding that of 2010 by 52% can be
expected. On the premise that Indonesia continues effective economic growth of around 6% in the
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future, an increase in the number of passengers using Soekarno Hatta Airport and an increase in the
airport’s revenue can be expected to continuously grow in the future. Based on passenger growth
forecasted by AP-II and increase in consumption per passenger assumed by the study team, financial
internal rate of return, FIRR, for Package (3) was 19% and economic internal rate of return, EIRR,
was 17%.
3) Environmental and social impacts
The consideration of environmental and social aspects of the schemes or plans proposed by this
study is basically cited from the study results of the JICA Master Plan, an antecedent study related to
this study.
The improvement of the terminal functions and connection functions between terminals examined in
this study will improve the usability of facilities for both passenger and cargo flights, and provide
high-quality space for the use of both passengers and the general public. The introduction of service
facilities including commercial areas will also create employment opportunities and will enable the
revitalization of retail and distribution businesses. In addition, underutilized land, such as the golf
course that at present is partially located between the two runways, will be converted to land for
airport purposes, making possible the integrated and orderly use of land.
A preliminary investigation of environmental and social impacts following the development of
Runway 3 and Terminal 4 in the future was conducted in the JICA Master Plan. As a result,
involuntary relocations on a scale of 2,000 households will be unavoidable due to the expansion of
Soekarno Hatta Airport, and formulation of a relocation plan is necessary. Furthermore, the
conversion of agricultural land into land for airport use will require the rerouting of irrigation
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channels and the shifting of roads used by residents in their everyday activities. The conversion of
agricultural land to land for other purposes will also necessitate a review of industrial policies in
regional planning.
Due to the scale and content of the airport, an environmental impact assessment (EIA) including a
Strategic Environmental Assessment (SEA) must be undertaken prior to the expansion of the airport.
The JICA Master Plan study project is proceeding with preparations for a joint study in cooperation
with the DGCA, the agency in charge of the plan, and the University of Indonesia to enable the
required environmental assessments to proceed.
The expansion of the terminal facilities will increase the floor areas of buildings and, therefore,
unavoidably increase the impact on the environment. However, This problem can be mitigated to
some extent by adopting building designs that conform to building standards in the guidelines of the
the Ministry of Environment Decree No.8/2010 that provides the standards for environmentally
friendly buildings.
(4)
Implementation schedule
The schedule for the implementation of this project that can be assumed at this stage is shown below.
It has already been confirmed that the assignment of the respective terminal functions in the project
have not yet been finalized even within AP-II. If Terminal 3 is to be developed as a terminal for the
dedicated use of domestic flights, the plan for upgrading Terminals 1 and 2 will differ significantly
from the plan this study has anticipated. Therefore, it must be noted that this factor will have a
significant impact on the implementation schedule of the project.
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Table S-4 : Implementation Schedule
2011
2012
2013
2014
2015
2016
2017
Year
Quorter Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
Overall plan
Terminal 3
Pre F/S
Selection of consultant
Basic plan
Bid for project rights
Detailed design
Bid for construction works
Construction works
Project management
Terminal 2
Detailed design
Construction works
Project management
Terminal 1
Detailed design
Construction works
Project management
Taxiways, etc.
Detailed design
Construction works
Project management
Cargo terminal
Detailed design
Construction works
Project management
Connected Building Detailed design
Construction works
Project management
(5) Feasibility of implementation
1) Status of the implementation organization of the partner country
AP-II, the implementing organization on the Indonesian side, is a state-owned enterprise wholly
owned by the Indonesian government and has an established track record in managing a total of 12
airports including Soekarno Hatta Airport, the subject of this study, as well as other airports in
western Indonesia. The scope of AP-II’s operations encompasses all airport facilities including basic
airport facilities as well as terminal facilities. AP-II also engages in air traffic control operations in
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western Indonesia.
In 2011 AP-II formulated the Grand Design, a comprehensive plan for Soekarno Hatta Airport, and
received the approval of the government to proceed with this plan in July.
As the implementing organization of this project, AP-II possesses sufficient capabilities in terms of
management, organizational structure, financial base, experience and know-how.
2) Results of financial analyses of the project
The feasibility of the project was confirmed through cash flow analysis on the soundness of the
balance of investment and earnings if the upgrade and expansion project proceed following the
acquisition of business rights to operate Soekarno Hatta Airport for 20 years at the cost of 600 billion
rupiah (about 5.1 billion yen 1 ) per annum. This assumption differs from AP-II’s policy to
“singlehandedly undertake the development and management of the terminals.” This review was
undertaken solely as one option for the implementation of the project.
As a result of the Team’s analysis assuming that the project be financed by 40% equity and 60% debt
with 12% interest and 23-year tenor, we were able to confirm that the return on equity, ROE, at over
15% was satisfactory if the project did not assume investment costs for ancillary facilities such as
taxiways or people mover, etc. and that the feasibility of the project remained high even after taking
into account Indonesia’s recent economic conditions and interest rate level.
However, the two points noted below will have significant impact on financial analyses and
1
As of November 30th, 1 rupiah was worth 0.0085 yen (Bloomberg.com)
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therefore further investigation is necessary for implementing the project.
a) Application of yen loans or other low interest financing provided by Japanese Government
A financial analysis of the scenario where the project assumed investment costs for ancillary
facilities yielded ROE of 11%, a result that make investment decision difficult under the current
Indonesia’s recent economic conditions and interest rate levels.
b) Continuous contact with AP-II
One factor that will significantly affect the return on investment is the payment of concession costs
to AP-II. Whether or not the project becomes an attractive proposition for the Japanese companies
involved depends on negotiations with AP-II.
Three Japanese companies wish to participate in this project as joint partners and all of these have
proven track records in promoting a wide range of projects to date. Undertaking additional detailed
analyses of a passenger terminal project in particular and presenting proposals to AP-II from the
viewpoint of business operators will be effective in proceeding with this project.
(6) Superior Technology of Japanese companies
1) Consideration of technology
Japanese companies are known to excel in technology in the following areas.
a) Environmental technology
At every stage including development, construction, and operation, an airport has significant impacts
on the environment. At airports in Japan, consideration of the surrounding environment and the
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fastidious introduction of environmentally friendly technologies for buildings during development
are already quite advanced. Utilizing the know-how in design and construction of Japanese
companies, this project too will be able to realize the construction of a highly environmentally
friendly model that incorporates a wide range of environmental technologies.
b) Construction technology
Japanese construction companies are also considered to have superior technical know-how in
construction technology for reducing environmental impacts. When it comes to countermeasures for
the surrounding environment during construction, these companies have a reputation for
implementing various mitigation measures as well as ongoing monitoring.
c) Disaster response measures and business continuity plan (BCP)
Earthquake resistance performance of Japanese buildings is unsurpassed at the top international level,
and the design of buildings utilizing Japanese earthquake resistance technology can be considered
very effective in protecting human life and establishing emergency bases during disasters in a
country like Indonesia, which in recent years has experienced a number of large-scale earthquakes.
From the perspective of other types of casualties as well, Japanese companies also have a
competitive edge in their ability to draft plans for facilities that incorporate technical know-how and
BCP response capabilities developed in Japan over many years.
d) Operation management systems
Japanese security systems, baggage handling systems, and energy control systems in buildings,
among others, are known for their high reliability.
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2) Economic considerations
The yen has been trending at historically high values, raising some concern regarding the cost
competitiveness of Japanese companies. However, Japanese companies can be considered to be in an
advantageous position compared to other countries due to the provision of capital through ODA and
export credit agencies.
(7) Concrete schedule for realizing the project and risks
inhibiting its realization
1) Concrete schedule for realizing the project
ITOCHU Corporation, Japan Airport Terminal, and SHIMIZU Corporation are the three Japanese
companies that wish to participate in this project. In this study, the three companies based their
participation in the passenger terminal project on a joint venture with AP-II, the operator of the
present Soekarno Hatta Airport. The three companies also make the assumption that they will pursue
other profitable, independent projects such as hotels in cooperation with business groups led by these
three Japanese firms.
On the other hand, AP-II has already announced at a press conference its intentions at present to
undertake the terminal project as a single entity but will approve investment of foreign capital in
concession businesses such as hotels. Therefore, AP-II’s intentions differ somewhat from the project
the three Japanese companies envision.
Therefore, promoting consultation with AP-II at an early stage for the implementation of the project
will continue to be important. As part of this process, the Japan Airport Terminal in tandem with this
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study has been putting forward proposals for business cooperation in airport management business
with AP-II. Japan Airport Terminal has managed the terminal building at Haneda Airport for about
50 years. Soekarno Hatta Airport shares many similarities with Haneda Airport in terms of its
location in a metropolitan area and the characteristics of passengers who use the airport. Therefore, it
is believed that cooperation in this project will be extremely effective in the future management of
Soekarno Hatta Airport.
2) Risks inhibiting the realization of the project
The following risks exist as legal restrictions in the realization of this project.
a) Restrictions on foreign capital participation
The only restriction on foreign capital participation in this project is as a “provider of air traffic
control operations;” therefore, there are no business restrictions applicable to the project.
On the other hand, an upper limit of 49% has been set for foreign capital investment in business
areas indicated in the table below. Therefore, careful attention must be paid to the fact that
investment by Japanese companies in the project will be restricted to no more than 49%.
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Table S-5: Restrictions on Foreign Investment in Indonesia (relevant to Airports)
Business Field
Condition
10. Transportation Sector (Airport-Related)
Terminal supporting business
Max 49% foreign investment
Airport service
Air transportation supporting service (reservation system via
computer, ground handling for passenger and cargo, and aircraft
leasing)
Air transportation non-commercial
Services related to airport
Freight forwarder service
Airplane cargo service
General Selling Agent (GSA) of foreign air transport company
Source: Presidential Decree No. 36, 2010, Attachments I and II (May 25th, 2010)
b) Risks relating to various procedures
This study proposes a method of establishing a joint venture company. To establish a joint venture
company in Indonesia and to commence construction and business operations, however, are required
the registration of investment plans, registration of the establishment of the new company,
acquisition of ownership rights and licenses (including construction rights, etc.), and the acquisition
of business and construction permits, and there is a likelihood that finalizing these will have an
impact on the project schedule.
In recent years, however, procedures have been simplified, and integrated “one-stop services” where
most applications can be lodged at the Investment Coordinating Board are now provided. In the
future it will be necessary to take advantage of these services.
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c) Funding risk
The recent European financial crisis does not allow for optimism at present and if its impact extends
to ASEAN countries including Indonesia, it can be assumed that it will have a significant impact on
funding of this project. In that case, however, the Study Team, which expects Indonesia to utilize
low-interest, long-term public loans from the Japanese government, may be able to demonstrate its
strengths to even greater advantage.
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(8) Maps indicating the project implementation site
Figure S-2: Map of Indonesia
Figure S-3: Location of Soekarno Hatta Airport
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Chapter 1
Overview of the Host Country and
Sector
(1) Economy of the Country & Financial Conditions of the
Government
The Indonesian economy has maintained favorable growth for a little over the past ten years led by
domestic demand, while the impact on the country from the global recession that followed in the
wake of the collapse of Lehman Brothers was mild compared to that in its neighboring countries (it
maintained a 4-5% positive growth rate over the period from the second quarter of 2008 to the
second quarter of 2009; see Table 1-1).
As a result of the decline in external demand and monetary tightening policies designed to curb
domestic inflation, the other countries in ASEAN-4 (Thailand, Malaysia, and the Philippines) are
forecasted to see a deceleration of economic growth due to a contraction of production from
domestic industry and declining exports. On the other hand, since prices are stable in Indonesia, the
expectation is that companies will expand capital investments backed by robust domestic demand,
and that rapid growth (6.2-6.4%) exceeding the 2010 level will continue.2 The rate of increase in the
Consumer Price Index (CPI) has been kept within the government’s target range for inflation of 5.0
+/-1.0% and is on a downward trend. (See Table 1-2)
2
The Indonesian government predicts that its 2011 GDP growth rate will be 6.4% (October), the IMF predicts it will
be 6.2% (April), and the Asia Economic Monitor predicts it will be 6.4% in 2011 (and 6.7% in 2012; “Asia Economic
Monitor: Economic Outlook, Risks and Policy Issues” (July 2011)).
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Table 1-1: Trends for Growth Rates of Real GDP by Component of Expenditures (Unit: %)
GDP Growth Rate (Year-on-Year)*1
Real GDP
Private
consumption
Government
consumption
Gross fixed
capital formation
Exports
Imports
GDP Growth Rate
(Corresponding Period of the
Previous Year)
2011Q1 2011Q2 2011Q3
6.5
6.5
6.5
Composition
Ratio*2
2006
5.5
2007
6.3
2008
6.0
2009
4.6
2010
6.1
2010
100.0
3.2
5.0
5.3
4.9
4.6
4.5
4.6
4.8
56.7
9.6
3.9
10.4
15.7
0.3
3.0
4.5
2.5
9.1
2.6
9.3
11.9
3.3
8.5
7.3
9.2
7.1
32.2
9.4
8.6
8.5
9.1
9.5
10.0
-9.7
-15.0
14.9
17.3
12.3
15.6
17.4
16.0
18.5
14.2
24.6
-23.0
*1: Real values (based on the year 2000) *2: Target values
Source: Statistics Indonesia (BPS), “Monthly Report on Socio-economic Data” from July through November. Mainly
Table 2.9, “Laju Pertumbuhan dan Distribusi PDB Menurut Penggunaan Tahun 2006-2010 (persen)” in the November
edition.
Table 1-2: Trends in the Rate of Rise of the Consumer Price Index (CPI; Corresponding Period of
the Previous Year; Unit: %)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2009
9.2
8.6
7.9
7.3
6.0
3.7
2.7
2.8
2.8
2.6
2.4
2.8
2010
3.7
3.8
3.4
3.9
4.2
5.0
6.2
6.4
5.8
5.7
6.3
7.0
2011
7.0
6.8
6.7
6.2
6.0
5.5
4.6
4.8
4.6
4.4
Source: Statistics Indonesia (BPS), “Monthly Report on Socio-economic Data” (November 2011; and Monthly
Reports on Socio-economic Data from July through November) Table 1.5, “Inflasi Nasional Year-on-Year”
Next, looking at the central government’s debt situation reveals that its public debt outstanding as of
the end of 2010 was at the low level of 27.43% as a share of GDP (IMF Statistics). In addition, the
deficits from its fiscal balance viewed from its initial budget from FY2011 is 1.7% as a share of GDP,
which has been kept within the 3.0% as a share of GDP stipulated in the State Finance Act. Thus,
there are no major concerns with its fiscal balance for the immediate future. The government is
aiming to achieve equilibrium in its fiscal balance through the year 2014, and plans to reduce public
debt as a proportion of GDP down to at least 22% (with 20% being ideal).
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Table 1-3: The Central Government’s FY2011 Initial Budget and Revised Budget, and its Draft
Budget for FY2012
FY2011
initial
budget
1,104.90
850.3
250.9
3.7
FY2011
revised
budget
1,169.90
878.7
286.6
4.7
FY2012
draft
budget
1,311.40
1,032.60
278
0.8
1,229.60
1,320.80
1,435.40
Central government expenditures
836.6
908.2
965
Local government expenditures
Fiscal balance
Share of GDP
Fundraising
Raised domestically
Raised overseas
393
-124.7
-1.7%
124.7
125.3
-0.6
412.5
-150.9
-2.1%
150.8
153.6
-2.8
470.4
-124.0
-1.5%
124
125.9
-1.9
GDP (trillion rupiah)
GDP growth rate (%)
Rate of inflation (%)
Exchange rate ($/rupiah)
FY2011
initial
budget
7,226.90
6.5
5.65
8,700
FY2011
revised
budget
7,019.90
6.4
5.3
9,250
FY2012
draft
budget
8,119.80
6.7
5.3
8,800
Policy interest rate (SBI rate) (%)
5.6
6.5
6.0
Crude oil price (US$/brl)
95
80
90
(Unit: Trillion rupiah)
Annual revenue
Tax revenue
Other revenue
Subsidies
Annual expenditures
Macroeconomic conditions
(Unit: Rupiah)
Source: Ministry of Finance of the Republic of Indonesia (http://www.depkeu.go.id/)
Fiscal Policy Office (BKF) (www.fiskal.depkeu.go.id)
Future grounds for concern include: (1) the impact from sudden oil price rises in terms of worsening
domestic inflation and the fiscal balance, and (2) the impact on external demand and international
financial flows from the aftermath of the debt crisis in European countries and a protracted economic
slump in the United States, which is Indonesia’s major export partner.
Of these, sudden rises in crude oil prices are grounds for concern. The Indonesian government has a
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policy in place of providing subsidies for gasoline and other fuels in order to mitigate the impact of
sudden oil price rises
on domestic prices. But due to the recent oil price hikes (the Indonesia Crude
Price (ICP) forecasted in the initial budget of US$40 per barrel had risen to US$80 per barrel as of
the time of the revised budget), the outlays for oil subsidies exceeded the initial budget from FY2011
(expanding from the 95.9 trillion rupiah estimated in the initial budget to 120.8 trillion rupiah
(US$14.1 billion)3). The fiscal balance deficit from the revised budget grew to 2.1% as a share of
GDP (whereas it was 1.7% in the initial budget). Though this has been kept within the 3.0% as a
share of GDP stipulated by the State Finance Act, attention must be paid to trends in the international
oil prices in the future.
Attention must also be paid to trends in international financial flows. Financing for Indonesia’s
budget deficit is raised mainly through the sale of government bonds in the market. As a result of the
ongoing monetary easing that has been taking place primarily in developed countries in recent years,
the proportion of government debt held by overseas investors has rapidly ballooned from 19% (108
trillion rupiah) at the end of 2009 to 31% (196 trillion rupiah) at the end of 2010, and on to 36% (249
trillion rupiah) at the end of July 2011.4 However, since August, the proportion of such debt retained
by overseas investors has been on a downward trend, as it appears that funds from overseas investors
have started to flow out of bond markets due to uncertainties over the future course of the Western
economies. This has been accompanied by a weakening of the rupiah from US$1 = 8,533 rupiah at
the end of August to US$1 = 8,852 rupiah at the end of October, and proceeding on apace to US$1 =
9,025 rupiah as of November 21st. However, preventative monetary easing steps have been taken by
the Central Bank of the Republic of Indonesia (SBI) (it lowered its policy interest rate from 6.75% to
3
Reuters News Agency (JAKARTA, July 4, 2011)
4
MOF: Ownership of IDR Tradable Government Securities (SBN) as of 31 October 2011
1-4
6.50% in October), domestic prices are stable, and there exists robust domestic demand. When these
and other factors are taken into consideration, Indonesia’s economic growth is forecast to continue
through 2012 and beyond.
In addition, the Indonesian government is planning to improve and expand infrastructure in its draft
budget for FY2012 (167 trillion rupiah, a 19.4% increase from the revised budget from the previous
fiscal year), with it expected to achieve a GDP growth rate of 6.7% in 2012 (see Table 1-3). In order
to achieve equilibrium in its fiscal balance through the year 2014, the government plans to use a PPP
in order to perform infrastructure improvements without placing a burden on public finances.
According to the Five-Year Development Plan from 2010-2014, of the net total for infrastructure
improvements of 1,429 trillion rupiah that will be needed over this five year period, 511 trillion
rupiah (36% of the total) will be covered by national taxes, with the plan being to raise 407 trillion of
the remaining 918 trillion rupiah (28% of the total) through the PPP method.5
Given the abovementioned circumstances, major ratings agencies have raised their long-term
sovereign ratings for Indonesia across the board. S&P raised it from BB to BB+ in August 2011,
Moody’s raised it from Ba2 to Ba1 in January 2011, the Japan Credit Rating Agency (JCR) raised it
from BB+ to BBB- in August 2010 (giving it the same rating again in August 2011), and the outlook
by the Rating & Information Investment Inc. (R&I) remained at the BB+ level in October 2010 but
was upgraded from “Stable” to “Strengthening,” with each of these raising Indonesia’s long-term
foreign currency sovereign credit ratings. JCR pointed to a number of factors when it came to its
reasons for raising its rating. These include the fact that Indonesia’s economy has achieved robust
growth led by domestic demand for more than the past ten years, as well as the expectation of
5
Ministry of Industry, “Facts & Figures” (2011)
1-5
continued economic growth backed by brisk domestic demand coming mainly from private
consumption (since purchasing power is expected to rise in the future), and that the state of its
national finances is in good condition. It is conjectured that Indonesia will be able to further improve
its rating by boosting its tolerance against external fluctuations in the future and accelerating its
economic growth by promoting investments in infrastructure.
Table 1-4: Indonesia’s Long-term Foreign Currency Sovereign Credit Ratings (October 2011)
Rating agency
Rating
Outlook
Moody's
Ba1
Stable
S&P
BB+
Strengthening
Fitch Ratings
BB+
Strengthening
JCR
BBB-
Stable
R&I
BB+
Strengthening
Source: SBI “Historical Indonesia Sovereign Rating November 2011”
Despite the various problems the country still has to contend with, Indonesia can be considered
politically and socially stable overall. The 32-year autocratic regime of President Suharto finally
collapsed in May 1998 in the wake of growing social unrest exacerbated by the Asian financial crisis,
and efforts in the ensuing six years to promote democracy6 by three successive presidents – Habibie,
Wahid, and Megawati – culminated in the first direct presidential election in the country’s history in
October 2004. The incumbent President Yudhoyono has maintained a high public approval rating
since his election in the direct election in 2004 and is currently serving his second term after being
6
Measures to democratize the country included amendment of the 1945 constitution four times (October 1999,
August 2000, November 2001, and August 2002), the abolition of the People’s Consultative Assembly’s right to
appoint the president, introduction of direct elections, limiting the terms of both president and vice president,
strengthening of the power of the legislative branch of government, and the creation of the Regional Representative
Council.
1-6
sworn into office in October 2009 following his re-election in the general election in July. The
Democratic Party, the support base of President Yudhoyono, holds only 27% of the parliament’s 150
seats and to secure a majority in parliament, his government formed a coalition of six political
parties. Although the centripetal force of the Democratic Party as the leading ruling party has
dwindled since the beginning of the second term of government, due largely to the uncovering of
corruption within the Democratic Party, the major parties within the coalition seem to have a tacit
agreement not demand Yudhoyono’s resignation despite leveling open criticism at the president and
his party. Therefore, there is a strong likelihood that President Yudhoyono will see out his second
term, which continues until October 20147.
While some political parties still insist that activities of
foreign companies and organizations should be more regulated, analysts and authorities on Indonesia
consider this insistence as a tradition of the country’s orientation toward autonomy since the country
won its independence and that there is no need for concern8.
There are over 300 tribes in Indonesia with ethnic Malays (native Indonesians, known as Pribumi)
comprising 97% of the total population and Chinese who immigrated to Indonesia during the Dutch
colonial period comprising the remaining 3%. Although about 90% of Indonesia’s population is
Islam, it is not the sole religion of Indonesia but one of six religions including Christianity and
Hinduism officially recognized by the government. Islam extremists in Indonesia remain a minority.
The majority of Islam belongs to the Sunni sect, which is a moderate sect and has only a mild view
regarding world control, and therefore have little inclination to restrict a free market economy.
Although terrorist activities by Islamic extremists occur from time to time and make the future
situation unpredictable, the Yudhoyono government’s policy to eradicate terrorism is already having
7
“Heads of four major political parties cut a deal” October 22 & 25, 2011, The Daily Jakarta Shimbun
8
“Domestic politics and Indonesia’s international position,” Rizal Sukma, October 18, 2011 (www.eastasiaforum.org).
1-7
an impact and it is believed that there is little likelihood of terrorist activities having a devastating
effect on the country’s economic activities. In regional areas riots do occur sporadically, such as in
the case of independence movements in Aceh or Papua, but efforts are being made to resolve these
problems including the signing of a peace treaty with Aceh and the designation of Papua and West
Papua as special autonomous regions. Because of efforts like these, local problems have not reached
the stage where they have had an impact on the country as a whole.
According to the Political Instability Index9 compiled by the Economist, Indonesia ranked 52nd out
of 165 countries in order of political instability for the 2009/2010 period, and was included in the
group of “high-risk countries.” Nevertheless, it is considered to be of lower risk than Thailand,
which ranked 39th in the same index. In addition, results of a 2011 survey10 of executive directors
of U.S. companies belonging to the U.S. Chamber of Commerce in ASEAN countries indicated that
although approximately 90% of respondents considered corruption in Indonesia to be a problem,
about 30% of respondents replied that they would choose Indonesia as a destination for expanding
their business.
(2) Description of the Targeted Sector
Essentially, airplanes have been the most efficient means of travelling long distances for Indonesia,
as it is an island country. Its national territory comprises roughly 18,000 islands of varying sizes that
are dotted throughout a vast area that runs 5,110km east to west and 1,800km north to south. At
present, no transportation infrastructure of any kind connecting these islands together has been set in
9
10
Economist Intelligence Unit, The Economist.
AmCham Singapore, “The ASEAN Business Outlook Survey 2011,” a questionnaire survey targeting 327
executive officers of U.S. companies active in ASEAN countries (Cambodia, Indonesia, Malaysia, Singapore, the
Philippines, Thailand, and Vietnam).
1-8
place, and so aviation infrastructure is a useful means of getting around within the country. What is
more, as a result of the remarkable economic development of recent years, per-capita income has
increased and the use of airplanes as a means of transportation has been rising year by year. By now
189 airports have already been installed within the country, 29 of which provide flights along
international routes, with the demand for airplanes rising on the whole.
Regulations on entering the market for domestic air transport were relaxed in Indonesia from the
latter half of the 1990s until about 2001, and so low cost carriers (LCCs) began to appear on the
scene in Indonesia.11 The appearance of these LCCs contributed to making airplanes a more
accessible means of transportation for people across a broad spectrum of incomes, with demand for
domestic routes showing particular growth since 2000. Airplane passengers in Indonesia are
characterized by their overwhelmingly strong demand for domestic routes, which account for 80% of
the total.
11
Shinya Hanaoka, “Aviation in ASEAN: Liberalization and Low Cost Carriers,” Tokyo Institute of Technology
homepage: http://www.ide.titech.ac.jp/~hanaoka/take-off.pdf (November 10, 2011)
1-9
Figure 1-1: Number of Airplane Passengers in Indonesia
Source: JICA, “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the
Republic of Indonesia, Progress Report” (March 2011)
This growth in the demand for air travel has brought about a remarkable rise in the number of
passengers using Soekarno Hatta Airport, which serves the Jakarta metropolitan region, which is the
capital of Indonesia, with this already exceeding the airport’s capacity. Soekarno Hatta Airport was
opened in 1985, and functions both as a major gateway for Jakarta and as a hub within the country. It
is found in the Chengkareng area, which is located about 20km to the west of Jakarta, and can be
accessed from central Jakarta by car in about thirty minutes by using toll road, assuming the road is
not congested. At present, the only form of public transportation connecting the city of Jakarta with
the airport are buses, and so users of the airport are forced to travel there by vehicle. The actual
results from 2010 showed that the number of passengers at Soekarno Hatta Airport exceeded roughly
44 million people, making it the 16th most congested airport in the world.12
12
Airports Council International (ACI) homepage, “Passenger Traffic 2010 Final”, www.airports.org (November 10,
2011)
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Soekarno Hatta Airport mainly consists of Terminal 1, which is exclusively used for domestic routes,
Terminal 2, which is used for international routes and the state-run carrier Garuda Indonesia Airlines,
and two open parallel runways. In 2009 Terminal 3 was newly opened as a terminal exclusively for
LCCs.
But it is forecasted that Soekarno Hatta Airport will reach its saturation point when it reaches 60
million passengers per year in 2017, with the facilities undergoing marked deterioration and growing
obsolete. For this reason, in terms of national policies there are calls for the formulation of an airport
policy for the Jakarta metropolitan region that places emphasis on enlarging Soekarno Hatta Airport
and building a new airport within the metropolitan region.
In light of this background, the Japanese government has decided to implement the Master Plan
Study on Multiple Airport Development for Greater Jakarta Metropolitan in the Republic of
Indonesia based upon a request from Indonesia. Presently, it has been decided that the study
operations under JICA’s supervision will be completed by March 2012. JICA is coordinating with
the Directorate General of Civil Aviation (DGCA) of Indonesia to formulate a master plan for
expanding Soekarno Hatta Airport and to select planned sites for new airports.
In addition, in December 2010 the governments of Japan and Indonesia signed a memorandum of
cooperation for “the concept of Metropolitan Priority Area for Investment and Industry (MPA) in
Jabodtabek Area”. For about one year starting from May 2011, 11 private companies (Nippon Koei
Co., Ltd., Oriental Consultants, Co., Ltd., Mitsubishi Research Institute, Inc., Mitsubishi Corporation,
Chiyoda Corporation, JGC Corporation, Taisei Corporation, Tokyo Metro Co., Ltd., Hitachi, Ltd.,
Metropolitan Intercity Railway Company, and NYK Line) led by JICA have formed a study team
1-11
and been working out this concept. This master plan emphasizes the infrastructural improvements
that are crucial for encouraging greater growth in the Jakarta metropolitan region, which is the
engine driving the remarkable growth in Indonesia’s economy, and lists nine priority sectors for this.
Aviation was taken up as one of these priority sectors, and serves as an element that constitutes one
of the pillars of this concept.
Conversely, Angkasa Pura II (hereafter written as AP-II), which is the state-owned company that is
running Soekarno Hatta Airport, has also prepared its own airport expansion plan, which it unveiled
in July 2011. This expansion plan, which was named the “Grand Design,” was prepared with
Indonesia’s Institute of Technology Bandung hired to serve as a consultant. This plan is primarily
characterized by the new installation of a third runway, the construction of Terminal 4, the new
installation of an automated people mover (APM), the expansion of the apron, and the construction
of a commercial building called a connecting building. The target date for the improvements was
initially announced for around 2014. But according to information obtained from the meetings
between the higher-ups at AP-II, such as the president, and the Study Team, as of September 2011,
Basic Design is currently being prepared on the basis of consulting by the Institute of Technology
Bandung. Its completion has been delayed since the beginning, and so as things stand it seems to be
difficult to achieve the target for the improvements of 2014.
What is more, according to information from AP-II from the time of the interviews, offers other than
those from this team to take part in the airport expansion project have been coming in from other
countries as well. According to AP-II, other companies from Japan have been in contact, and they
have also been approached from overseas entities in France (Aeroports de Paris (ADP)), South
Korea (Incheon International Airport Corporation), Airport Authority of Hong Kong, Airport
1-12
Authority of India, the Netherlands (Schipol Airport Authority), and others.
(3) Description of Project Area
1) Description of Soekarno Hatta Airport
Jakarta initially had two airports: Kemayoran Airport, which was an airport exclusively for domestic
routes in the northern part of the city, and Halim Airport, which was an airport for international
routes. By the 1970s the number of passengers of these two airports exceeded their capacity, and so
the Indonesian government conducted a study on constructing a new airport that would be shared by
international and domestic routes. Initially the Ralph M. Parsons Company, the engineering
company from the United States, was consigned to carry out a primary study in 1969. Out of several
candidate sites, the Tangerang region was selected as the most suitable candidate site. In 1974, a
Canadian consulting consortium formulated a preliminary master plan. Afterwards, Aeroports de
Paris (ADP) from France formulated a master plan for a new airport based upon these previous
studies, which it submitted to the Indonesian government in 1979. The Indonesian government
purchased about 1,800ha of land in the paddy field zone of Chengkareng, which is situated to the
west of Jakarta. It then built the new airport on the basis of the master plan by ADP and opened
Soekarno Hatta Airport in June 1985. At first, it was outfitted with Terminal 1 and two open parallel
runways. Terminal 2 was completed in 1992, after which Terminal 1 was used for domestic routes
and Terminal 2 was mainly used as the international route terminal (and for some domestic routes).
This airport was constructed through a loan from France, with a rough estimate for the construction
costs coming to about 30 billion yen for Phase I and 70 billion yen for Phase II.13 The construction
was carried out under the direct control of the national government (DGCA), after which the
facilities were handed over to AP-II, a state-owned airport management company, which was tasked
13
Yoshiyuki Hoshiyama, “Jakarta’s Soekarno Hatta International Airport,” Airport Review (1997) p.306
1-13
with managing and operating them.
The design of Terminals 1 and 2 was overseen by Paul Andreu of ADP in France. Using red as the
keynote color, he went with a type of architecture that brims with local color by incorporating the
traditional architectural style of the island of Java, Indonesia. In 1995 the Landscaping of Soekarno
Hatta Airport was awarded the Aga Khan Award for Architecture, which recognizes exceptional
architecture throughout the Islamic world.
Terminal 1 consists of an architectural style that makes use of natural draughts. For the construction
of Terminal 2, per a request from the Indonesian side it was required to have a double curbside in
order to shorten the curbside distance and walking distance, as well as being fully outfitted with air
conditioning, including both its airside and landside areas.14 For this reason its basic design is the
same as that for Terminal 1, but it differed in aspects such as its arrangement and building size.
Since the addition of Terminal 2, no major capital investments have been carried out within the
airport for a while. But given its insufficient capacity, Terminal 3 was built on the east side of the
premises as a terminal exclusively for LCCs in 2009.
The initial demand forecasts for Soekarno Hatta Airport envisioned that there would be 9.2 million
passengers by the year 1995 and 31 million by the year 2000, but it had already surpassed the 13
million mark by 1995.15
14
Aga Khan Award for Architecture homepage: http://www.akdn.org/architecture/pdf/1560_Ind.pdf (November 14,
2010)
15
Yoshiyuki Hoshiyama, “Jakarta’s Soekarno Hatta International Airport,” Airport Review (1997) p.306-309
1-14
2) About AP-II
AP-II, which manages and runs Soekarno Hatta Airport, is a 100% state-owned company. It manages
and operates 12 airports located on the west side of the country, as Indonesia was subdivided
geographically into an east and west side (AP-I is in charge of the east side). From information
during the interviews between the Study Team and AP-II, it was found that Soekarno Hatta Airport is
the only airport out of the 12 that it manages and runs that has managed to turn a profit. According to
claims by the higher-ups at AP-II who took part in the interviews, as things currently stand the
profits from Soekarno Hatta Airport are used to cover the deficits run by its other airports.
3) Soekarno Hatta Airport’s Existing Facilities
a) Airside Facilities
An overview of the airside and landside facilities was listed within this report by reflecting the
content from the on-site study by the Study Team, principally the “Master Plan Study on Multiple－
Airport Development for Greater Jakarta Metropolitan in the Republic of Indonesia: Progress
Report” (March 2011) prepared by JICA.
The airside facilities include the north-south runway; Aprons A, B, and C at Terminal 1; and the
cargo area that were built in 1984, as well as Aprons D, E, and F at Terminal 2 that were built in
1990. The particulars for the airside facilities are listed in the following table.
1-15
Table 1-5: History of the Construction of the Civil Engineering Facilities at Soekarno Hatta Airport
Facility
Construction Year
Remarks
North Runway(07R-25L)
1984
3,600mｘ60m
Parallel Taxiway A
1984
3,760mx23m
Parallel Taxiway B
1984
3,760mx23m
Apron A(Terminal１）
1984
84,071 m2
Apron B(Terminal１）
1984
84,071 m2
Apron C(Terminal１）
1984
88,275 m2
Apron Cargo
1984
33,278 m2
Remote Apron B/C
1984
9,309 m2
South Runway (07R-25L)
1984
3,660mx60m
Parallel Taxiway C
1984
1,306mx 23m
Parallel Taxiway D
1984
3,505mx 24m
Apron D(Terminal 2）
1990
12,564 m2
Apron E(Terminal 2）
1990
95,271 m2
Apron F(Terminal 2）
1990
131,353 m2
Remote Apron D
1990
54,315 m2
Remote Apron F
1990
59,850 m2
Connection Taxiway E
1984
1,800mx 23m
Connection Taxiway F
1984
1,800mx 23m
Apron G (Terminal 3)
1996
62,505 m2
Source: “Table 6.1.1 Construction History of SH Airport Civil Facilities” in JICA, “Master Plan Study on
Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”
(March 2011), translated into English by the Study Team
1-16
Figure 1-2: Image of the Current Arrangement of Soekarno Hatta Airport
Golf course
Terminal 3
Cargo area
Terminal １
Terminal 2
Utility area
Source: Prepared by the Study Team based upon the JICA, “Master Plan Study on Multiple-Airport Development for
1-17
b) Terminal Facilities
(i) Terminal 1
Terminal 1 was completed in 1985, and is currently used as a terminal exclusively for domestic
routes. It is frequently used by LCCs such as Citilink, which is a subsidiary of Garuda Indonesia
Airlines, Lion Air, and Batavia Air in particular. The building is a two-story structure constructed of
steel reinforced concrete, with a total floor space of approximately 143,000m2. Its envisioned
capacity from when it was initially built was 9 million people per annum. The terminal forms a
semicircular shape, and has three units (Terminals A, B, and C) that are each independent. There are
seven boarding areas in the front of each unit, which are connected by a corridor. There is a surface
parking lot in front of the curbside area at Terminal 1 that is constantly packed.
The concept for Terminal 1 is for one and a half stories, with check-in and arrival handled on the
first floor, and passenger boarding of the airplanes carried out on the floor above this. The facilities
comprising Terminal 1 are listed below.
<Curbside Area / Departure and Arrival Lobby> (First floor)
The curbside area at Terminal 1 is a semi-enclosed space that is covered with a roof, and which has a
semicircular corridor that continues from Terminals A through C. This area is constantly packed with
passengers prior to check-in and the people there to see them off. There is a small amount of seating
there, but the sight of people who could not get a seat sitting on the ground can be seen. The curbside
area also contains an LCC sales window for LCC tickets, with people in this area purchasing plane
tickets.
There are restaurants and eating establishments for the general public facing the curbside area.
1-18
Additionally, as one of its recent initiatives AP-II has installed a shopping mall that can also be used
by general customers in the second floor area, but customers using this mall are rarely seen.
Photo 1-1: The packed curbside area
Photo 1-2: Restaurants in the curbside area
Source: Taken by the Study Team (September 2011)
<Viewing Platform> (Second floor)
Visitors can get to the viewing platform which looks out over the runways and aprons from the
external staircases on either end of the curbside area. However, a fine-mesh fence has been spread
around the viewing platform, and so the view from there is not all that good. There are few people
actually watching the airplanes arrive and depart, and no chairs or other furniture have been installed
there. Scenes of passengers who seemed to be waiting for delayed flights sitting or laying down in
the passageway are conspicuous.
1-19
Photo 1-3: Viewing platform
Photo 1-4: View of the airside area
from the viewing platform
<Entrances> (First floor)
There are three entrances facing the curbside area. But according to those in charge at AP-II, in order
to alleviate the congestion these are operated so that only people with a ticket can enter the check-in
lobby. Security checks have been set up at these entrances, with passengers undergoing inspection
via a metal detector, and their baggage subject to an X-ray scan.
<Check-in Lobby> (First floor)
In Terminal A 25 check-in counters have been set up in a linear arrangement, with 27 such counters
in Terminal B and 24 in Terminal C arranged in a similar fashion.16 In general, there are two lines
lined up at each counter dealing with passengers.
<Airport Service Fee Counter> (First floor)
At the end of the check-in lobby there is a counter where customers who have completed check-in
16
JICA, “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic
of Indonesia: Progress Report”, (March 2011), p.6-9
1-20
pay the airport service fee.
Photo 1-5: Check-in counters
Photo 1-6: Airport service fee payment counter
<Departure Lounge> (Second floor)
After paying their airport service fee at the counter, passengers take the escalator up to the second
floor. In the departure lounge, restaurants and souvenir shops are lined up on either side of the
passageway. This area is called the “Shopping Arcade.” It was recently installed by AP-II, which
also enlarged the concession area. This area can also be used by the general public by passing into it
from the stairs and deck on the side of the curbside area.
<Security Check> (Second floor)
A ticket and security checkpoint has been installed right in the middle of the main passageway which
general visitors are restricted from passing through. Four sets of metal detectors and X-ray scanners
have been installed at the security checkpoint.
1-21
Photo 1-7: Shopping Arcade
Photo 1-8: Security checkpoint
<Departure Gate Lounges> (Second floor)
There are seven independent departure lounges in each terminal, with each lounge connected to the
main departure lounge via a corridor. Each lounge has about 100 seats.17 The departure gate lounges
are generally equipped with air conditioning, but part of the corridor linking the main departure
lounges for Terminals A and B are open-air space despite having a roof. Conversely, air conditioning
is controlled throughout all of Terminal C.
The area surrounding the departure lounges has been festooned with various species of tropical
plants that are a delight for the passengers to look at.
Passengers move from the departure gate lounges to a passenger boarding bridge (PBB) by passing
through the corridor, while in some cases, they travel from the first floor to the apron by bus.
Arriving passengers descend to the first floor via the stairs within the gate lounges and pass through
17
JICA, ”Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic
1-22
the corridor to arrive at the baggage claim area.
Photo 1-9: Passageway to the departure gate lounges
Photo 1-10: A departure gate lounge
<Baggage Claim Area> (First floor)
Five rotating conveyor belts have been installed here. Three of these are used for mid-sized aircraft
such as B737s, with the remaining two used for small-sized aircraft.18
<VIP Terminal>
There is a two-story terminal exclusively for VIP passengers located between Terminals A and B.
Since it lacks a PBB, the passengers are transported to their airplanes by bus.
18
1-23
Photo 1-11: Baggage claim area
Photo 1-12: Exterior view of the VIP terminal
1-24
Figure 1-3: First Floor Layout, Terminal 1
Source: Prepared by the Study Team based on the JICA, “Master Plan Study on Multiple-Airport Development for
1-25
Figure 1-4: Second Floor Layout, Terminal 1
1-26
(ii) Terminal 2
Terminal 2 was completed in 1992, and is currently used as a terminal for international routes and
some domestic routes by Garuda Indonesia Airlines and others. The Terminal 2 building is a
three-storey structure constructed of steel reinforced concrete, with a total floor space of
approximately 135,500m2. Terminal 2 is located to the north of Terminal 1, with the plan for the
terminal essentially emulating the plan for Terminal 1, but inverting it. Like Terminal 1, Terminal 2
has three units (Terminals D, E, and F) that are each independent. Terminal 2 has a surface level
parking lot facing its curbside area, which is similar to that for Terminal 1 in that it gets congested.
It differs from Terminal 1 in that it adopts a two-storey concept. It separates out the arrival and
departure functions to different floors, with the first floor serving as the arrival lobby and the second
floor as the departure lobby. The second-floor departure lobby is connected to the curbside area via
an elevated roadway, which makes it possible to access it by car.
What is more, the concept of a “garden airport” was set forth for the Terminal 2 architecture, and so
a garden-like space was created for the curbside area and it has been festooned with planted tropical
plants.
<Curbside Area> (First and second floor)
The curbside area on the second floor of Terminal 2 has the same design as that of Terminal 1. It
consists of an semi-open air space that is covered by a consecutive gabled roof that emulates the
traditional style in Indonesia, which is connected to the elevated access road. On the other side, the
floor of the second floor area forms the ceiling for the first floor curbside area, which gives one a
somewhat gloomy impression.
1-27
There are cafeterias, retail stores, and so on facing both the first and second floor curbside areas.
Photo 1-13: Curbside area (second floor)
Photo 1-14: Curbside area (first floor)
<Departure Lobby> (Second floor)
Terminal 2 differs from Terminal 1 in that there is a departure lobby found between the check-in
lobby and the curbside area that the general public can enter. The departure lobby is an indoor space
outfitted with an air conditioner. There is a small amount of seating there, but it is not enough to
accommodate most of the waiting passengers and lot of them are found sitting on the floor.
On either side of the passageway there are concessions such as cafeterias, retail stores, and exchange
counters.
<Entrances> (Second floor)
Six entrances leading into the check-in lobby have been set up,19 with only passengers that have a
ticket permitted to enter. Metal detectors and X-ray scanners have been installed at each entrance,
19
1-28
where inspections of the boarding passengers and their luggage are carried out.
Photo 1-15: Departure lobby
Photo 1-16: Entrance
<Check-in Lobby> (Second floor)
Check-in counters have been set up in a row side by side along the lobby wall. There are 106
check-in counters for Terminals D, E, and F all together, with counter numbers 1 through 72
allocated to Terminal D and numbers 99 through 106 allocated to Terminal E, with these being used
for check-in for international routes.20 Counter numbers 73 through 98 have been allocated to
Terminal F, and these are used for domestic routes.
<Embarkation Inspection Area> (Second floor)
There are two embarkation inspection areas connected to the check-in counters. Each inspection area
consists of seven units, with each unit made up of two booths.
20
ibid.
1-29
Photo 1-17: Check-in lobby
Photo 1-18: Embarkation inspection area
Upon passing through the embarkation inspection areas there is a shared departure lounge joining
Terminals D, E, and F. This departure lounge primarily consists of a passageway and the concessions
and business lounges lined up on either side of this passageway. It lacks brand shops when compared
against the new international airports in Asian countries like Japan and neighboring Singapore,
Malaysia, and South Korea, as it consists mainly of shops selling Indonesian handicrafts and
souvenirs, as well as restaurants.
A moving sidewalk has been installed right in the center of the central passageway.
<Security Checkpoints> (Second floor)
Security checkpoints have been set up before the number 1 and number 7 gate lounges in each
terminal. Passengers and hand luggage are inspected via two metal detectors and X-ray scanners.
1-30
Photo 1-19: Departure lounge
Photo 1-20: Security checkpoint
<Departure Gate Lounges> (Second floor)
There are seven independent gate lounges in each terminal, each of which is connected to the central
passageway via their own passageways. They essentially have the same design as the gate lounges in
Terminal 1.
Photo 1-21: Exterior view of the gate lounges Photo 1-22: Passageway to the gate lounges
1-31
<Passport Control Areas> (First floor)
Passengers arriving in Soekarno Hatta Airport take the stairs in each gate lounge down to the first
floor and pass through the passageway to reach the central passageway. Passport control areas have
been set up beyond the central passageways for Terminals D and E. There are eight units in the
inspection areas, with two booths in each unit.
Five conveyor belts for long-distance flights have been installed between Terminals D and E, and
three long conveyor belts for international flights have been installed between Terminals E and F.21
A baggage claim area has been separated out between Terminals E and F via a glass partition, and
two long conveyor belts have been installed in Terminal F for the passengers from domestic routes.
<Security Checkpoints and Customs> (First floor)
There is a single metal detector and X-ray inspection machine in front of the exit where the final
security checks are carried out.
<Arrival Lobby> (First floor)
The arrival lobby contains restaurants, cafes, exchange counters, and other concessions. The area for
the people who will pick up passengers is separated by the fences, where a great many people can be
seen waiting while seated on the floor, as there is virtually no seating.
21
1-32
Photo 1-23: Baggage claim area
Photo 1-24: Arrival lobby
<Transit Hotel> (Third floor)
There is a transit hotel on the third floor of Terminal 2. The entrance is on the second floor of
Terminal E, with guests passing through a metal detector and X-ray scanner in order to enter the
hotel. Common spaces such as the front desk, lounge, and restaurant have been arranged in the
center of the hotel, with the guest rooms set up on one side of a semicircular corridor. The guest
rooms are arrayed along the airside, and there are 82 rooms in total.
Photo 1-25: Entrance to the transit hotel
Photo 1-26: Corridor within the hotel
(the right-hand airside contains the guestrooms)
1-33
1-34
1-35
(iii) Terminal 3
Terminal 3 was completed in 2009 in the area on the east side of Terminal 1. Transport between the
terminals is provided via a free shuttle bus service. The design for Terminal 3 was designed by the
Schiphol Airport Authority from the Netherlands. Terminal 3 is a two-storey structure of steel
reinforced concrete, with a total floor space of approximately 29,000m2. The terminal was built for
LCCs, and is currently served by domestic and international LCC routes. A 1.5 storey concept was
adopted for Terminal 3. No PBB was constructed in the interest of cutting costs, and so passengers
are transported to the apron by bus. There is an exclusive parking lot in front of Terminal 3, which is
not that crowded compared to Terminals 1 and 2.
Whereas Terminals 1 and 2 emulate a traditional Indonesian architectural style, Terminal 3 adopts a
contemporary architectural design.
<Curbside Area> (First floor)
The curbside area is a semi-enclosed space that is covered by a large roof. Stores such as fast food
restaurants and airline offices have been set up facing this curbside area. In addition, meeting spaces
have been established for general customers in the vicinity of the entrances and exits.
1-36
Photo 1-27: Exterior view of Terminal 3
Photo 1-28: Curbside area
<Entrances> (First floor)
There are entrances to Terminal 3 in two locations. One is for passengers checking in, and the other
is an entrance for general public. Metal detectors and X-ray scanners have been set up at both
entrances.
<Check-in Lobby> (First floor)
There are 30 check-in counters lined up side by side along the wall in the check-in lobby.22
22
1-37
Photo 1-29: Entrance for general passengers
Photo 1-30 Check-in lobby
<Departure and Arrival Lobbies> (First floor)
The departure lobby and arrival lobby share the same space. The departure and arrival lobbies have
facilities like cafes, kiosks, exchange counters, and information desks. This area can also be accessed
by the general customers as well.
<Shopping Arcade> (Second floor)
Upon passing through the departure and arrival lobbies and taking the escalator up to the second
floor visitors come to the shopping arcade. There are eight shops, such as souvenir shops, restaurants.
Since natural light enters in from the arch-shaped roof, no lighting is needed during the daytime.
<Security Checkpoint> (Second floor)
There is a security checkpoint between the shopping arcade and the departure lounges, in which two
metal detectors and X-ray scanners have been installed.23
23
1-38
The departure lounge is essentially a shared space in which about 1,100 chairs have been provided.24
Boarding passengers descend from here to the first floor, where they are guided to the apron via
buses.
Passengers getting off the buses immediately enter the baggage claim area, where there are six
conveyor belts.
Photo 1-31: Shopping arcade
Photo 1-32: Departure lounge
24
Ibid.
1-39
1-40
1-41
(iv) Transport between the Terminals
At present, transport between the terminals is provided by running free buses between them.
c) Cargo Terminals
(i) Terminal 1
There is a cargo terminal on the east side of Terminal 1. This cargo terminal is composed of a cargo
terminal for domestic routes, an international route cargo terminal for imported cargo, and an
international cargo terminal for exported cargo. The cargo terminal for international routes is more
spacious than that for domestic routes, with the one for international routes being about 36,000m2
and that for domestic routes being about 12,000m2. This cargo terminal handles the cargo for
Terminals 1 and 2.
Figure 1-9: Cargo terminal
Source: JICA, Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the
Republic of Indonesia: Progress Report (March 2011)
(ii) Terminal 3
Six cargo buildings were constructed on the east side of Terminal 3, half of which have already been
demolished as the expansion work for the apron is carried out.
1-42
4) Other Facilities
A control tower, utility-related facilities and the AP-II head office building are located in the area
between Terminals 1 and 2.
 AP-II head office building
 Control tower
 Extra high voltage substation
 Water receiving and purification facility
 Mosque
Photo 1-33: Interior of the extra high voltage substation
Photo 1-34: Water purification facility
In addition, the grounds on the southeast side within the airport are used as a business park (offices
and warehouses of the logistics companies), golf course, and a hotel (Sheraton).
5) Planned Site for the Construction of the Runway 3 and Terminal 4
The planned site for the third runway that is currently being planned as part of the Grand Design by
AP-II will be situated on the northern side of the airport grounds, but progress has yet to be made on
purchasing the land. According to the onsite study by the Study Team, residences are lined up along
1-43
the planned site, and so the expectation is that land acquisitions for the construction of the third
runway will be difficult.
Photo 1-35: Planned site for the construction of
the Runway3 and Terminal 4 (distant view)
Photo 1-36: Planned site for the construction of
the Runway 3 and Terminal 4 (foreground view)
Proposed sites for construction of the Runway 3
and Terminal 4
Photo 1-37: Planned sites for the construction of theRunway 3 and Terminal 4 (aerial photograph)
Source: Created by the Study Team based on a Google Earth image
1-44
6) In-service Flights
The in-service international routes mainly run to Japan, Australia, China, Singapore, and other
countries in the Asian region, as well as some flights to Europe (France, the Netherlands, Germany,
etc.). However, there are no routes running to North America, where the security requirements are
stringent.
7) Development Plans of the Transportation Network around Soekarno Hatta Airport
a) Current State of the Road between Downtown Jakarta and Soekarno Hatta Airport
The current state of the transportation infrastructure running from the center of downtown Jakarta to
Soekarno Hatta Airport could not be described as being adequate. Since there is no access by railway
at present, users of the airport are forced to access it either by car or by bus. However, as the road
tends to be congested, this diminishes the convenience for airport users. This road is called the
Airport Toll Road and it forks off from the beltway running around the area of central Jakarta and
heads towards the airport. Depending on the parts of the road, it has six or eight traffic lanes.
Due to the fact that the embankment for this toll road is on a site with poor soil it gets flooded during
the rainy season, which poses obstacles for vehicle passage.
Moreover, because the development of the vicinity surrounding the Tangerang district in which
Soekarno Hatta Airport is located is making progress and the demand for commuting into downtown
Jakarta has increased, this is also worsening the congestion.25
25
1-45
b) Development Plan of the Road Network around Soekarno Hatta Airport
A plan exists to construct infrastructure such as a second beltway and another toll road in order to
relieve the chronic traffic congestion in the Jakarta metropolitan region. However, even if these
roads were to be built the current road to the airport would still be the shortest route to Soekarno
Hatta Airport from downtown Jakarta. For this reason, it is assumed that no dramatic changes will
occur unless a railroad or other such means of public transportation is developed.
8) Status of Access Railway Development
Presently there is no railroad linking downtown Jakarta with the airport, but there is a plan to
construct the Airport Access Link which was approved by the Directorate General of Railways of the
Ministry of Transportation in 2004. It is expected to commence its service in 2014. An
environmental assessment was carried out by Raillink (joint venture between AP-II and PT.KAI),
and approval was given by the Ministry of Environment in March 2009.26 There are two routes from
the direction of Jakarta envisioned; a northern route and a southern route. Since the southern route is
the existing railroad route going to Tangerang station near the airport, it is viewed as being more
highly feasible. From a hearing with AP-II it was learned that progress has not been made in
purchasing the land that will be needed for the construction of the railroad along the northern route,
and so it is believed that it will be difficult to implement construction quickly.
26
1-46
Figure 1-10: Planned Route Map of the Airport Access Link
Source: JICA, “Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the
Republic of Indonesia: Progress Report”, (March 2011)
1-47
Chapter 2
Study Methodology
(1) Contents of the Study
As stated in Chapter 1, the expansion of Soekarno Hatta Airport requires urgent measures. AP-II has
made its own expansion plan called Grand Design, while DGCA which oversees all the airports in
Indonesia has commissioned JICA to make the master plan to deal with the same matter. However,
as there has not been enough coordination between AP-II and DGCA, the content of these two
master plans has some differences. Therefore, two master plans stand as independent, parallel
documents.
This study will evaluate these existing master plans for the expansion of Soekarno Hatta Airport.
Based on this assessment, the Study Team will conduct its own study of the airport, hearings of
AP-II, and hearings of relevant organizations, including the JICA Master Plan (M/P) Team. The
Study Team will draw on this information to design and propose to AP-II a project outline, financing
method, and project schedule for the expansion of Soekarno Hatta Airport, and the feasibility will be
explored through consultation. In principle, the study was carried out in coordination with the JICA
MP Team as much as possible through exchanges of views and other relevant information.
The relationship between the Study Team and relevant organizations is shown in the following
figure.
2-1
Figure 2-1 Relevant Indonesian and Japanese Organizations and their Relationship
Government of Indonesia
EKUIN
Office of
President
Government of Japan
Ministry of Finance
BAPPENAS
President
MOT
METI
Embassy of Japan
in Indonesia
MOFA
JICA / JKT
MLIT
DGLT
DGST
Itochu Corp.
Group Study
Team
DGCA
MOSOE
JETRO / JKT
JICA Airport
M/P Team
JICA
MPA Team
AP-II
AP-I
A more detailed list of the study contents is as follows:
 Review existing studies
 Analyze current airport demand and capacity, and review future demand projection
 Recommend realistic investment plan in line with demand projection
 Review profit structure of airport business and modality of public-private partnership
(role-sharing with AP-II)
 Make recommendations for increasing/diversifying profits of private initiative PTB
development project
 Recommend airport specifications/evaluate environmental impact
 Forecast financing demand
 Review Indonesia’s legal system and regulations on foreign capital participation regarding
PPP and restrictions on granting of business rights
2-2
 Review Indonesia’s investment and loan environment/country risk
 Identify anticipated risks of private initiative PTB development project and explore risk
mitigation measures
 Identify envisioned PPP project scheme and requirements for its implementation
(2) Method and Organization of the Study
1) Method of the study
 Carry out preliminary survey by reviewing relevant materials and conducting hearings of
stakeholders in Japan, etc.
 Collect information through meetings and hearings from relevant organizations in Indonesia
 Site survey
 Analyze information collected and prepare proposal
 Present proposal to relevant organizations and exchange views

2) Organization of the study
◎Bu ilding Technology
Nikken Sekk ei Ltd
Kazutaka Horii
◎Economic and Financial Analysi s
ITOCHU Corporati on
Masatake Tashi ro, Hirokazu Naka, Norihi sa Takahashi
◎Managing Company
Project Devel opment & Trade
Coordination Group
Plant Project & Machi ne Division
ICT & Machin ery Company
ITOCHU Corporat ion
◎ Legal Scheme
Japan Economic Research Ins titute Inc.
Hiromasa Kon do
◎Project M anagement
ITOCHU Corporation
Hi rokazu Naka
◎Airport Demand and Operation Anal ys is
Japan Ai rport Termi nal Co., Ltd.
Yasuhid e Yonem ot o and Naohiro Kusu
◎Cost Estimate
SHIMIZU Corporation
Sadayasu Asano and Yoshihi ro Sato
◎ En vironment and Social Analysis
Nikken Sekkei Research Insti tute
Shigehisa Mat sumura
2-3
3) Counterpart in Indonesia
AP-II, the company responsible for the operation of Soekarno Hatta Airport, is anticipated to be the
implementation unit in Indonesia. As of November 2011, no definite agreements have been made in
particular regarding activities conducted in partnership by AP-II and the Study Team.
(3) Schedule of the Study
1) Overview of the schedule
The study period is from August 31st, 2011 to February 16th, 2012. During this period, the Study
Team will carry out one site survey, three series of meetings, and a briefing session in Indonesia. The
schedule of the study is as shown in Table 2-1.
Table 2-1: Schedule of the Study
2011
July
Indonesia
August
September
October
Field study and meetings
1Week
Japan
November
1st meeting 2nd meeting
1 Week
▼
Interim report
Info gathering Analysis
December
1 Week
2012
January
February
March
3rd meeting Briefing session
1 Week
1Week
▼
Submission of draft report
▼
Submission of report
Analysis
Compilation of draft report Final reporting
Compilation of report
2) Contents of the site survey and meetings in Indonesia
The site survey and meetings were carried out on the following dates and contents.
2-4
a) Site survey (September 12th-17th, 2011)
September 12th, 2011 Travel (Japan→Jakarta, Indonesia)
September 13th, 2011
 Meeting with a concerned party
 Tour of Soekarno Hatta Airport
 Site survey of the airport (by Study Team)
 Meeting with the concerned party
 Tour of Terminal
 Meeting with JICA Master Plan Team
Mr. Uehara (Team Leader)
3 others
 Visit to JICA Indonesia Office
Mr. Matsunaga (Senior Representative)
Mr. Higuchi
 Visit to Japanese Embassy
Mr. Maeda and 2 others
2-5
b) 1st series of meetings (October 30th-November 4th, 2011)
November 1st, 2011
 Meeting with DGCA
Director of Airports
 Hearing of JAL Jakarta OfficeHH
November 2nd, 2011
 Meeting with DGCA
Secretary General
2 Others
 Exchange of views with the concerned party
November 3rd, 2011
 Meeting with JICA Master Plan Team
Mr. Uehara (Team Leader)
First Secretary Kamite
 Visit to JICA Indonesia Office
Senior Representative Matsunaga
Mr. Higuchi
 ANA Jakarta Office
2-6
c) 2nd series of meetings (November 21st-23rd, 2011)
November 21st, 2011
November 24th, 2011
Minister Ushio
Counsellor Yoshizawa
November 25th, 2011
 Meeting with JICA Jakarta Office
Senior Representative Matsunaga
d) 3rd series of meetings (December 18th-20th, 2011)
December 19th, 2011
Counselor Yoshizawa
Mr. Higuchi
December 20th, 2011 Meeting with the concerned party
e) Debriefing Session in Jakarta (January 25th-28th, 2012)
January 26th, 2012
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January 27th, 2012
Minister Ushio
Mr. Higuchi
2-8
Chapter 3
Justification, Objectives and Technical
Feasibility of the Project
(1) Project Background and Necessity, etc.
1) Positioning of Soekarno Hatta Airport in upper-level plans and related plans
A Memorandum of Cooperation was signed between the Governments of Japan and Indonesia for
the concept of Metropolitan Priority Area for Investment and Industry (MPA) in Jakarta in December
2010. A steering committee composed of cabinet members and others of both countries has been
established along with a technical committee composed of working-level staff. And, close exchanges
of opinion have been taking place concerning the development of the area with the aim of resolving
Jakarta’s infrastructure problems. At the first MPA Steering Committee meeting held in March 2011,
the Governments of Japan and Indonesia agreed on the content of the master plan study and the Fast
Track Projects, the construction phases of which are to start by the end of 2013. Accordingly, the
Master Plan for Establishing Metropolitan Priority Area for Investment and Industry in Jabodetabek
Area (MPA) in the Republic of Indonesia was launched by JICA in May 2011.
The MPA Study is scheduled to last approximately one year, beginning May 2011 in order to carry
out the following: 1) formulation of a city vision for greater Jakarta for the year 2020 by taking into
account predictions of the socioeconomic conditions of Indonesia in 2030; 2) based on this vision,
formulation of a comprehensive infrastructure plan to be achieved in Jakarta by 2020 and
identification of priority projects; and 3) acceleration of realizing the Fast Track Projects for which
construction is scheduled to start by the end of 2013 at the latest. This MPA Study is being carried
out on nine areas: public transportation networks, roads, railways, airports and related infrastructure,
ports, electric power, water and sewage, waste, and flood countermeasures.
3-1
Of these, with regard to airports and related infrastructure, the construction of an access railway to
Soekarno Hatta Airport, expansion of Soekarno Hatta Airport, and the construction of a new airport
have been raised as issues of particular pressing importance.
Table 3-1: List of priority MPA projects
Source: MPA Master Plan Study Team, “Master Plan For Establishing Metropolitan Priority Area For Investment And
Industry In JABODETABEK Area: PPT Slide” (June 2011)
The process of drafting an airport development policy within Jakarta was even reported in the JICA
Master Plan. The Indonesian Government drafted a mid-term development plan (RPJM 2010-2014)
focusing on national and local economic development until the middle of the 21st century, and based
on this plan the Indonesian Ministry of Transportation (MOT) and DGCA drafted a mid-term
strategic plan (RENSTRA 2010-2014).
The greater Jakarta metropolitan area is currently undergoing rapid urbanization, and it is expected
3-2
that the capacity of runways at Soekarno Hatta Airport will not be able to handle a long-term rise in
air flight demand. It is believed that this will seriously restrict private sector air travel in the future.
In light of these circumstances, acknowledging the importance and urgency of formulating policy for
an airport in the greater Jakarta area, the DGCA has applied for a subsidy using foreign technical aid
in order to draft a master plan for constructing an airport in Jakarta. At present, however, the Badan
Perencanaan Pembanguan Nasional (National Development Planning Agency; BAPPENAS) has not
approved this application list (Blue Book).
Meanwhile, however, AP-II, which oversees the operations of Soekarno Hatta Airport, supports the
expansion of the airport and has released a “Grand Design” as a concept document for the airport’s
expansion.
Figure 3-1: Grand Design by AP-II
Source: AP-II “Grand Design” pamphlet
3-3
According to the Grand Design, Runway 3 and Terminal 4 will be newly constructed on the northern
side of the premises. An expansion is planned for the existing facilities of Terminals 1, 2, and 3,
where Terminals 1 and 2 would be linked using an integrated building which would contain boarding
gates, immigration, and other areas, as well as commercial facilities.
2) Trends of increase in number of passengers at Soekarno Hatta Airport
Soekarno Hatta Airport opened its south runway and Terminal 1 in 1985, and in 1993 constructed its
north runway and Terminal 2. The airport has experienced extremely high growth in passenger
numbers, surpassing 20% on average between 2001 and 2006. The graph below shows that the
number of passengers grew from 10 million in 2000 to 42 million by 2010. This is an increase of
approximately four-fold over the 10-year period. The current terminal capacity amounts to a total of
22 million people when combining the nine million for Terminals 1 and 2, respectively, with the four
million for Terminal 3. However, the number of passengers currently amounts to two-times this
capacity, making it safe to say that the number of passengers has already reached a point of
saturation compared to terminal capacity.
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Figure 3-2: Changes in passenger numbers at Soekarno Hatta Airport
Source: JICA, “Master Plan Study On Multiple–Airport Development For Greater Jakarta Metropolitan Area In The
Republic Of Indonesia: Progress Report” (March 2011)
Meanwhile, as can be seen in the graph below, the number of arrivals and departures possible per
annum is 370,000, and it is forecasted that this will suffice until around 2015. It is believed that this
number of arrivals and departures can accommodate up to 60 million passengers.
3-5
Figure 3-3: Forecasted number of arrivals/departures at Soekarno Hatta Airport (2000-2040)
Source: MPA Master Plan Study Team, “Master Plan For Establishing Metropolitan Priority Area For Investment And
Industry In JABODETABEK Area: PPT Slide” (June 2011)
3) Extracting the issues from the site survey
a) Extracting issues from discussion with AP-II
The main issues that should be resolved at Soekarno Hatta Airport that AP-II identifies as being
problematic, which were made clear in the first round of discussions with AP-II, are: 1) terminal
congestion; 2) parking lot congestion; and 3) aircraft parking apron congestion.
(i) Terminal congestion
As mentioned earlier, the airport currently receives 44 million passengers despite its terminal
capacity of 22 million. This creates congestion in various areas, including inside the terminal,
departure lobby, arrival lobby, and departure lounge. There is also a marked accumulation of
passengers in the visa application and immigration areas of the international arrival lobby.
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Photo 3-1: Congested arrival lobby
Photo 3-2: People resting at the observatory tower
(ii) Parking lot congestion
The existing parking lots at Terminals 1, 2, and 3 are able to accommodate 5,400 vehicles, but
considering that actual passenger numbers reach 44 million (120,000 per day), it is clear that the
number of passengers have already exceed parking lot capacity. Throughout the parking lots there
are cars parking on the shoulder of the road and cars that disrupt the order of the lot. For reference,
Haneda Airport offers a domestic airline parking lot for approximately 9,500 cars (57 million
passengers annually) and an international terminal parking lot that accommodates approximately
2,250 cars (6 million passengers annually).
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Photo 3-3: Congested curbside
Photo 3-4: Congested parking lot
(iii) Aircraft parking apron congestion
As passenger numbers continue to rise, there is a lack of fixed spots and there is an increase in the
number of airplanes using open spots to wait, which is a response to the increasing number of LCCs
in service. The aircraft parking apron as a whole appears to be congested. Furthermore, while the
number of passengers is increasing, many of the aircraft are smaller in size, making for a larger
number of aircraft that use the parking apron and further boosting the necessity for an expansion of
the parking apron.
Photo 3-5: An aircraft parked in an open spot
Photo 3-6: LCC equipment
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b) Issues extracted via the Study Team’s site survey
On the first visit to Soekarno Hatta Airport, the Study Team conducted a site survey of their airport
over a three-day period. The Study Team discovered the following three issues with the airport: 1)
loss of business opportunity; 2) inadequate security structure; and 3) aging and obsolete systems.
(i) Loss of business opportunity
Currently, while the terminal buildings are overflowing with passengers and well-wishers, as far as
can be observed, there is not very much use of concessions at the curbsides and other places. Most of
the stores in the departure lobby are either souvenir shops or cafeteria-style restaurants catering
chiefly to local residents, making it difficult to say that the existing facilities respond to the
widespread customer needs of foreign businesspersons and resort tourists. Furthermore, the product
lineups at duty free shops within the security area lack visual appeal, and compared to other airports
there is a lack of brand name shops and other stores that handle luxury goods. There is also a lack of
restaurants and lounges within the security area where passengers can rest and relax.
By properly providing the necessary services from the viewpoint of airport users it will be possible
to expand business significantly. In actuality, at famous airports throughout the world there are
facilities to provide users with the services that they need, including concessions inside and outside
of the security gates, a rich food and beverage selection, diverse services for waiting passengers such
as lounges, play spaces for children, smoking areas, Internet services, and more. In this way, airports
are boosting their non-aeronautical revenues. However, as mentioned earlier, despite the large
number of airport users at Soekarno Hatta Airport, few services are provided for improving the
convenience and comfort of users, thus sacrificing great business opportunity.
3-9
Photo 3-7: Unattractive concessions
Photo 3-8: Passengers waiting with nothing to do
(ii) Inadequate security structure
In general, the attitude towards security at Soekarno Hatta Airport can hardly be considered as strict.
The airport utilizes outdated security systems and there are apparent flaws in security operations and
facilities.
The X-ray scanners used to check the checked luggage and carry-on baggage of customers are
outdated. Moreover, the baggage handling system that was installed when the airport first opened is
still being used, where a single employee visually confirms the X-ray scanned images of baggage.
Compared to the baggage handling system at Haneda Airport, which makes use of the latest
computer control technology, it is hard to say that a thorough system of safety control is being
implemented.
Moreover, the results of an interview survey conducted on Japanese airlines that use Soekarno Hatta
Airport indicated that it was possible to move from the arrival area inside the security area to the
departure area via elevator. Even the team’s survey revealed that there was no glass or other barrier
along the arrival passage within the security area, allowing people to freely pass over to the airside.
3-10
As one example of an operational problem, a person was confirmed to be smoking in a location after
the final security check on the other side of the departure gates, meaning that people are permitted to
bring in lighters.
Photo 3-9: Security system
Photo 3-10: Passageway near the airside
(iii) Aging facilities
Terminals 1 and 2, which opened in 1985, have never undergone major upgrading and renovation
since opening, and after more than 25 years the facilities clearly show signs of aging and
obsolescence. Consideration must be paid to restoring the building’s structure (waterproofing and
sealing), machinery (air conditioning and sanitation), electrical facilities (lighting, etc.), EV facilities,
BHS facilities, CH/IN facilities, etc. It is anticipated that upgrading to the latest energy-saving
facilities will allow for reducing the overall burden.
Furthermore, with regard to the power supply facilities, there is not a proper effort of BCP. As there
are no preparations in place to respond to power outages, which occur frequently in Indonesia, a
country with a shortage of power, the stable operation of flight control systems, which ensures the
smooth and safe flight of aircraft, cannot be guaranteed.
3-11
Photo 3-11: Outdated baggage handling
Photo 3-12: Later installed air conditioning system
system
4) Necessity for expansion and upgrading of Soekarno Hatta Airport
As can be seen, there is a clear necessity for rapidly carrying out expansion and upgrading of
facilities at Soekarno Hatta Airport. In order to make this airport a suitable gateway to Indonesia, a
country undergoing marked economic growth, it will be necessary to introduce and manage
advanced security systems, install and upgrade to facilities that take into consideration the
environment, and provide various new customer services.
In addition, it is expected that the expansion and upgrading of the facilities will bring forth
prevention of the loss of opportunities for outside economic activities due to insufficient capacities,
enhancement of favorable impression on Indonesia through appropriate spatial arrangement of the
gateway, extension of air routes through increase in security, improvement of profitability through
introduction of passenger-oriented functions leading to satisfaction of customers, and so on.
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5) Scope of project
a) Project elements
The envisioned scope of this project is outlined in the table below. The difference from the Grand
Design of AP-II is that our team does not incorporate the construction of Runway 3 and Terminal 4.
Moreover, as the period for the launch of operations for the railway is uncertain, the railway station
has also been left out from our project scope. Even the MP produced by the JICA MP Team, which
conducted a survey ahead of others, does not incorporate plans to construct Runway 3 due to
difficulties in appropriating the land where the runway was planned for construction, amongst other
reasons. Furthermore, with regard to Terminal 4, which AP-II envisions to construct in the north area
of the airport site, the JICA team drafted the MP under the premise that Terminal 4 would be
constructed in the area which is currently occupied by the golf course in the airport site; however,
the Study Team believes that the capacity of the airport depends more on the runway capacity, not on
the terminal capacity. In addition,, considering the recent tendency of increase in LCCs which prefer
open spot operation, the Study Team has decided not to include the Terminal 4 in our scope.
3-13
Table 3-2: Project elements in the Grand Design and project scope envisioned in this project
AP-II Grand Design project elements
Envisioned scope of
construction in this project
Apron
New construction + repair of
existing areas
Envisioned scale of
facilities in this project
New construction of taxiway
on eastern side;
partial repair of existing
runway
Extension to existing facilities
+ repair of existing areas
+ repair of existing areas
30,000 ㎡ (extension) +
repair of existing facilities
30,000 ㎡ (extension) +
repair of existing facilities
200,000 ㎡ (extension)
Cargo
New construction
150,000 ㎡
Commercial area
Integrated Building
(Connecting building,
inter change terminal)
(Parking building)
New construction
185,000 ㎡
Additional terminal
construction
People mover
Airside
Taxiway
Terminal 1
Terminals
Terminal 2
Terminal 3
Railway station
Future expansion
New construction for
connecting to new terminal
(or construction of bus route)
Utilities, road improvement
Not applicable
Utilities, etc.
Railway station
Area developed:
360,000 ㎡
Total length: 3.5 km
(4 stations)
―
Runway 3
Not applicable
―
Terminal 4
Not applicable
―
Commercial Area, East Side
Not applicable
―
6) Consideration and comparison of alternative plans
According to the Interim Report drafted by the JICA MP Team, the new airport in the greater Jakarta
area is proposed for construction on the southern side of Karawang as an airport that provides both
domestic and international services. Moreover, there are plans to develop two runways, a terminal,
access road, and related facilities in order to be able to accommodate the yearly amount of 34 million
passengers by the year 2019. The new airport will tentatively include four runways in order to
3-14
ultimately accommodate for an annual amount of 100 million passengers. In other words, it was
believed necessary to accommodate the growing demand for air transportation by expanding
Soekarno Hatta Airport until the new airport is constructed in 2019.
As an alternative option until the new airport is constructed, the airports currently located in the
great Jakarta metropolitan area can be utilized. As of present, this area hosts three operating airports:
Halim Airport, Pondoc Cabe Airport, and Curug Airport. Furthermore, there are plans to construct
Majalengka Airport and Panimbang Airport. The following is an evaluation of these airports as a
substitute airport for Soekarno Hatta Airport.
Figure 3-4: Location of major airports in greater Jakarta
Soekarno Hatta Airport
Karawang Airport
Curug Airport
Pondoc Cabe Airport
Halim Airport
Bandung Airport
Majalengka Airport
Source: JICA, “Master Plan Study On Multiple–Airport Development For Greater Jakarta Metropolitan Area in the
Republic of Indonesia: Interim Report” (June 2011)
3-15

Halim Airport
Halim Airport is about 11 km from the center of Jakarta, offering easy access, at about 30 minutes by
car. Currently, the airport is often used for noncommercial flights, such as military persons and VIPs ,
and there are restrictions on the number of regular flights. It will be difficult to greatly increase the
number of departures and arrivals.

Pondoc Cabe Airport
Pondoc Cabe Airport is 25 km southwest of Soekarno Hatta Airport and is about 20 km from the
center of Jakarta. It takes about 30 minutes by car to get to the airport from the center of Jakarta. The
airport’s runway is not long enough to accommodate a Boeing 737 and is not suited for regular
flights. Moreover, the access road to the airport passes through a residential area, making it an
unfavorable option considering access time.

Curug Airport
Curug Airport is located 30 km from the center of Jakarta, and it takes about 60 minutes by car to
reach. This airport’s runway is also not long enough to accommodate a Boeing 737 and is not suited
for regular flights. The access road to the airport passes through a residential area, and as it is
somewhat far from inner Jakarta, access is a problem.

Bandung Airport
Bandung Airport is the airport that provides services for Indonesia’s second largest city, Bandung,
and is located about 180 km southwest of Jakarta. Currently, the airport provides six domestic and 5
international flights everyday, but the terminal building is believed incapable of accommodating a
further increase in passengers. Moreover, since the airport is 130 km away from Jakarta’s main
3-16
shopping district, it is a problem with access to use this airport as a substitute for Soekarno Hatta
Airport.

Majalengka Airport
Majalengka Airport is a new airport planned for constructed in West Java. It will be located 200 km
from central Jakarta, making access a problem in using this airport as a substitute for Soekarno Hatta
Airport.

Panimbang Airport
According to the master plan for Panimbang Airport, the new airport will be located 130 km west of
Jakarta. Construction is planned to commence in 2012 and the airport is scheduled to begin operating
in 2014. However, it is located 130 km from the center of Jakarta, making access a problem in using
this airport as a substitute for Soekarno Hatta Airport.
As can be seen from the explanation above, expanding Soekarno Hatta Airport is the only viable
option for covering the increase in flight demand in greater Jakarta.
(2) Necessary considerations for determining project details, etc.
1) Demand forecasts
a) Demand forecasts in AP-II’s Grand Design
Demand forecasts in the AP-II Grand Design indicate that passenger numbers are to reach 54 million
by 2015. In order to respond to this increase, there are plans to boost the airport’s capacity to 62
million by 2013. In terms of capacity by terminal, it is envisioned that Terminal 1 will be increased
3-17
from 9 million to 18 million, Terminal 2 from 9 million to 19 million, and Terminal 3 from 4 million
to 25 million.
Figure 3-5: Passenger number statistics and demand forecasts
Source: AP-II Grand Design pamphlet.
Figure 3-6: Expansion plan for terminal capacity
Source: AP-II Grand Design pamphlet.
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b) Demand predictions used in this plan
Table 3-3: Demand predictions in this plan
Intermediate Target (2014)
Airport capacity
Target Demand (2017)
53 map
Airport capacity
60 map
Domestic
42 map
Domestic
47 map
International
11 map
International
13 map
In a meeting in October 2011 between the DGCA, AP-II, and the JICA Master Plan team, the
decision was made to set the demand forecasts in their master plan study at 60 million people (47
million for domestic and 13 million for international travel). The Study Team has also adopted this
forecast for the feasibility study.
2) Responding to airport capacity and demand
The JICA Master Plan team presented a response to airport capacity and demand illustrated in the
graph below in a meeting held in October 2011 with the DGCA and AP-II.
The response specifies the intermediate target of responding to passenger demand by raising
passenger capacity to 53 million by 2014. Furthermore, it also indicates the final target of raising
passenger capacity to 60 million by 2017.
The following is the envisioned demand targets for both the intermediate target and final target.
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Figure 3-7: Phased terminal development
Source: JICA Study Team, “Development Plan of Soekarno - Hatta Airport”: PPT Slide (October 2011)
The following development situation is envisioned for the intermediate target phase.
3-20
Figure 3-8: Phased Area Development Plan (2014)
Source: JICA Study Team, Study On Development Plan of Soekarno - Hatta Airport: PPT Slide (October 2011)
The following development situation is envisioned for 2017.
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Figure 3-9: Phased Area Development Plan (2017)
Source: JICA Study Team, Study On Development Plan of Soekarno - Hatta Airport: PPT Slide (October 2011)
a) Profit structure analysis and extracting administrative issues
AP-II’s profit structure and that of Soekarno Hatta Airport are similar; a little less than 80% of all
profits come from aeronautical business, while non-aeronautical business accounts for just over 20%,
and cargo services for less than 2%.
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Table 3-4: AP-II revenue breakdown
(Unit: Million IDR)
2008
Aeronautical Revenues
Non-Aeronautical Revenues
Cargo Services
Total
2009
2010
1,714,367
2,109,615
2,375,757
524,907
596,771
682,247
37,250
39,093
48,365
2,276,524
2,745,479
3,106,369
Source: AP-II Annual Report (2009, 2010).
Table 3-5: Soekarno Hatta Airport revenue breakdown
(Unit: Million IDR)
2008
Non-Aeronautical Revenues
Cargo Services
Total
2009
2010
1,373,262
1,709,374
1,918,467
433,582
496,413
560,619
22,853
24,850
30,657
1,829,697
2,230,638
2,509,743
Source: AP-II Annual Report (2009, 2010)
Figure 3-10: AP-II profit structure
Figure 3-11: Soekarno Hatta Airport profit structure
Source: AP-II Annual Report (2009, 2010).
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According to the 2010 Airport Economics Survey released by the Airports Council International,27
non-aeronautical revenue accounted for 46.5% of all business earnings by the 646 airports that
responded to the questionnaire (2009, 2010).
In terms of non-aeronautical earnings by Asia’s major airport management companies, at Narita,
Hong Kong, Thailand (Airports of Thailand, AOT), and Malaysia (Malaysia Airports Holding
Berhad) non- aeronautical earnings account for more than 40%, while in Singapore (Changi Airport
Group, CAG) they account for approximately 50%.
Table 3-6: Revenue breakdown of Narita Airport
FY2008
FY2009
FY2010
Aeronautical revenue
56%
56%
57%
Non- aeronautical revenue
44%
44%
43%
Other
0%
0%
1%
Total (million yen)
196,897
187,359
195,483
Source: Narita International Airport Corporation “Financial Report” (FY2009, FY2010)
Table 3-7: Revenue breakdown of Hong Kong International Airport
FY2008
FY2009
FY2010
60%
56%
56%
39%
44%
43%
Other
1%
1%
1%
Total (M, HKD)
8,886
9,015
10,583
Source: Hong Kong International Airport Annual Report (2010, 2011)
27
http://www.airports.org/aci/aci/file/Annual%20Report/ACI_Annual_Report_2010_online.pdf
3-24
Table 3-8: Revenue breakdown of Airports Of Thailand
FY2008
FY2009
FY2010
56%
57%
58%
44%
43%
42%
Total (M, THB)
26,740
21,502
24,033
Source: Airports of Thailand Annual Report (2009, 2010)
Table 3-9: Revenue breakdown of Malaysia Airports Holding Berhad
FY2008
FY2009
FY2010
51%
52%
52%
Non-aeronautical revenue
49%
48%
48%
Total (M, MYR)
1,279
1,469
1,675
Source: Malaysia Airports Holding Berhad Annual Report (2009, 2010)
Table 3-10: Revenue breakdown of Changi Airport Group
2009/2010
36%
Non-aeronautical revenue
51%
Other
13%
Total (M, SGD)
961
Note: The Changi Airport Group (CAG) was founded in June 2009 and the fiscal year begins in April. As such,
financial information is only available for the founding year of June 15, 2009 to March 2010 (business period of
about eight months).
Source: Changi Airport Group Annual Report (2009/2010)
From the above revenue structure analysis, it is believed important from an administrative
perspective for Soekarno Hatta Airport to implement measures for boosting non-aeronautical
revenues, as the airport’s ratio of non-aeronautical revenues on overall revenues is much lower
compared to the rest of Asia and the world.
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b) Analysis of detailed revenue breakdown
With regard to a detailed breakdown of revenues (breakdown of aeronautical revenue and
non-aeronautical revenues), due to data restrictions it was only possible to assess figures for AP-II
(there was no breakdown of revenues for aeronautical /non-aeronautical by airport in the annual
reports).
Aeronautical revenues
 The largest factor of AP-II’s aeronautical revenues was passenger service. This was followed
by flight services and then landing services (the air traffic control services operated by AP-I
and AP-II in Indonesia are now state-owned, and while the decision has been made to separate
the services from the airport management company, there have been no specific developments
as of yet).
Table 3-11: AP-II airport revenue breakdown
2008
2009
2010
Landing Services
17.9%
15.8%
14.8%
Flight Services
26.3%
20.6%
17.8%
Passenger Service
49.6%
58.1%
62.2%
Aviobridge usage
2.9%
2.6%
2.3%
Counter usage
3.2%
2.9%
2.9%
100.0%
100.0%
100.0%
Total
 Passenger service fees (formerly known as ‘airport taxes’) at Soekarno Hatta Airport are set at
150,000 rupiah for international flights and 40,000 rupiah for domestic flights. According to
JICA’s Master Plan survey, there were a total of approximately 42 million passengers in 2010
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(of which 32 million were domestic travelers and 9.5 million were international travelers).
Estimating that half of the airport users are travelers that pay airport usage fees, airport usage
fees at Soekarno Hatta Airport in 2010 can be assumed to be around 1.3715 trillion rupiah.
This is 71.5% of the airport’s aeronautical revenues (1.9185 trillion rupiah), or 54.6% of
overall revenues.
Table 3-12: Airport usage fees at Soekarno Hatta Airport (estimate)
Domestic
International
Total
Passenger
Departing Passenger
Fee
Revenue
(JICA MP)
（Estimated）
per passenger
(Estimated)
(people)
(people)
(IDR)
(M, IDR)
32,396,066
16,198,033
40,000
647,921
9,647,576
4,823,788
150,000
723,568
42,043,642
21,021,821
1,371,490
Source: AP-II Annual Report (2009, 2010), JICA Master Plan
 Compared to the international flight fees of surrounding airports in Asia, airport service fees at
Soekarno Hatta Airport are not very high. On the other hand, however, domestic flight fees are
rather high compared to other airports in Asia.
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Table 3-13: Airport service fees (international flights)
Local currency
Indonesia Soekarno Hatta Airport
Yen
Dollar
equivalent equivalent
150,000 IDR
1,266
16.5
Narita Airport
2,540 JPY
2,540
33.1
Haneda Airport
2,000 JPY
2,000
26.1
Hong Kong International Airport
120 HKD
1,183
15.4
Suvarnabhumi International Airport (Thailand)
700 THB
1,729
22.6
Kuala Lumpur International Airport (Malaysia)
51 MYR
1,233
16.1
Kuala Lumpur International Airport (Malaysia; LCC)
25 MYR
604
7.9
Changi Airport (Singapore)
28 SGD
1,654
21.5
Changi Airport (Singapore; LCC)
18 SGD
1,063
13.9
Note: Narita, Haneda, and Hong Kong also have separate fees for children.
Source: Websites for each respective airport. Currency equivalents were taken at the time the report was drafted
(November 21, 2011).
Table 3-14: Airport service fees (domestic flights)
Local currency
Indonesia Soekarno Hatta Airport
Yen
Dollar
equivalent equivalent
40,000 IDR
338
4.4
0 JPY
0
0.0
170 JPY
170
2.2
Narita Airport
Haneda Airport
Hong Kong International Airport
N/A
N/A
N/A
Suvarnabhumi International Airport (Thailand)
100 THB
247
3.2
Kuala Lumpur International Airport (Malaysia)
9 MYR
218
2.8
Kuala Lumpur International Airport (Malaysia; LCC)
6 MYR
145
1.9
Changi Airport (Singapore)
N/A
N/A
N/A
Changi Airport (Singapore; LCC)
N/A
N/A
N/A
Note: Narita, Haneda, and Hong Kong also have separate fees for children. Figures for Narita Airport are for
domestic flights that originate at Narita Airport. The transit charge for international flights is 1,520 yen per adult.
Source: Websites for each respective airport. Currency equivalents were taken at the time the report was drafted
(November 21, 2011).
3-28
Non-aeronautical revenues
 Non-aeronautical revenues account for a little more than 20% of all AP-II revenues.
 Of those revenues, the main non-aeronautical revenues are concessions and space rentals.
Table 3-15: AP-II non-aeronautical revenue breakdown
Non-Aeronautical Services
2008
2009
2010
Space Rental
25.9%
24.2%
24.5%
Concession
32.9%
30.4%
31.8%
Airport Pass
2.4%
1.3%
1.1%
10.3%
10.0%
10.0%
5.1%
5.3%
4.9%
12.1%
10.6%
9.9%
Advertising
8.8%
9.2%
9.9%
AMACS
0.2%
0.2%
0.1%
Others
2.3%
8.8%
7.8%
100.0%
100.0%
100.0%
Parking Services
Land Rental
Utilities
Subtotal
 At Singapore’s Changi Airport, non-aeronautical revenues accounted for 51% of all business
revenues in fiscal 2010.28 Moreover, the total floor area of the four terminals that makes up
the airport amounts to 1,046,220 m2. Of that floor area, more than 70,000 m2 is used for
commercial space (6.7% of total floor area), with 290 retail shops and 130 restaurants and
eating establishments.29
 Currently, total floor area of terminals at Soekarno Hatta Airport amounts to 307,147 m2,
making the rentable area of the airport likely around 8,000 m2 (of which, 2,000 m2 is for
28
Source: Changi Airport Group Annual Report 2009/2010
(http://www.changiairportgroup.com/export/sites/caas/assets/changi_connection/Changi_Airport_Group_AR_0910_F
ull.pdf).
29
Source: Changi Airport website (http://www.changiairport.com/our-business/about-changi-airport/facts-statistics).
3-29
Terminal 1, 4,000 m2 for Terminal 2, and 2,000 m2 for Terminal 3). Thus, rentable area
accounts for approximately 2.6% of the airport’s total floor space.
The following is an overview of the administrative issues as taken from the above detailed revenue
analysis.
 Possible methods for increasing non-aeronautical revenues are boosting the amount of
commercial space or raising the average spending per customer. In order to do this, in addition
to the new construction of Terminal 3, it is important to work to expand the amount of rentable
space in accordance with the upgrading of Terminals 1 and 2, while also making efforts to
increase sales by targeting well-wishers by constructing Terminal 3 and a connecting building
(place where only passengers with tickets can currently go).
 In order to raise the average spending per customer it is necessary to establish attractive
commercial facilities. In order to promote more spending by departing passengers, passengers
in transit, and well-wishers, it will likely be necessary to upgrade the quality of commercial
facility management and make administrative efforts such as opening stores that meet the
customers’ needs.
3) Target setting and the basic policy for expansion
a) Target setting for the expansion project
In light of current issues with the facilities and administrative issues related to revenues, the
following targets have been set for the expansion project of Soekarno Hatta Airport.
(i) Resolve the capacity problem and contribute to the further development of the Indonesian
economy
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Indonesia is currently experiencing an ongoing trend of healthy economic growth, and the number of
air travel passengers is dramatically increasing in response. Indonesia is a nation comprising a large
number of islands, making air travel a very significant mode of medium to long-distance domestic
travel. The lack of air travel capacity should be resolved quickly and a foundation for further
economic growth, constructed.
(ii) Improve customer satisfaction and security to make the airport a world-class airport
As described earlier, the current airport terminal lacks convenience and appeal as a gateway to the
growing market of Indonesia, including holdups at immigration for international flights and an
unattractive concessions area for departing passengers.
Moreover, the airport has a large number of security problems, including with baggage handling, and
these issues are the reason that flights have yet to be established with North America.
One target of the expansion project will be to increase customer satisfaction and security, working to
make the airport a world-class airport.
In increasing customer satisfaction it is important to assess the situation of customers, establish
customer segments, and consider a finely-tuned response.
First, an overview of flight passengers will be provided from the JICA MP Team’s Progress Report.
As can be seen in the figure below, the purpose of travel differs between domestic and international
passengers. For domestic flights, the majority, approximately 30%, is accounted for by passengers
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returning home or visiting family, while nearly 25% are traveling for sightseeing purposes.
Meanwhile, the majority of international air travelers, at approximately 40%, travel for business,
while nearly 30% travel for sightseeing.
Figure 3-12: Travel purpose of airport users taken from a questionnaire
Source: JICA, Master Plan Study On Multiple –Airport Development For Greater Jakarta Metropolitan Area In The
Republic Of Indonesia: Progress Report (March 2011)
Let us use the survey above to look at the situation of airport users that are well-wishers. For
domestic flights, these users account for 16.5%, where the average reflected on air travel passengers
is 0.298 people.
Meanwhile, for international flights, the percentage of airport users that are well-wishers is 24.4%,
where the average reflected on air travel passengers is 0.431 people.
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Figure 3-13: Ratio of well-wishers
Source: JICA, Master Plan Study On Multiple –Airport Development For Greater Jakarta Metropolitan Area In The
Republic Of Indonesia: Progress Report (March 2011)
Moreover, in addition to the flight passenger-related businesses described above, the following
groups can be assumed as customers for other airport businesses.
Carriers are the customers that should be emphasized the most, by maintaining airways and bringing
in their customers. Tenants of restaurants, shops, and lounge operators are also important customers
that provide rent money and influence the satisfaction level of airport customers. Furthermore, while
this may not apply at present, it will be necessary sooner or later to pay a certain degree of
consideration to passengers traveling to visit the airport itself.
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Figure 3-14: Customer segmentation of Soekarno Hatta Airport
(iii) Infrastructure development advanced in view of forming a city core with Soekarno Hatta
Airport at its center in the long term
As described in the Grand Design of AP-II, the Soekarno Hatta Airport expansion project aims not
only to expand the airport’s terminals, but in the long term to introduce business, lodging, and
convention functions, and to form a city core that is centered on Soekarno Hatta Airport.
While promoting the early introduction of railway transport, people movers and other shuttle
facilities will be developed on the airport grounds in order to construct the infrastructure necessary
for forming a new city core.
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4) Basic policy for facility development
The following is the basic policy for facility development in light of the current challenges faced and
the targets laid out for the expansion project above.
a) Prompt rectification of the lack of capacity
As mentioned above, rectifying the lack of capacity is an urgent issue, and developments will be
made at the earliest timing possible. The following categories have been set in order to overcome
this issue.
 Terminals
 Apron, aircraft parking spots
 Parking lots
(i) Setting grades in accordance with the customer
As airport service fee of an international passenger is 3.75 times that of domestic passenger, it is
plausible to assume that the revenue increase per person contributed by an international passenger
who spends money at commercial facilities will be larger than that by a domestic passenger, as
discussed in Chapter 5 Overview of the Results of Preliminary Financial/ Economic Analysis.
While maintaining the necessary comfort for domestic passengers, further investments will be
focused on the international terminal in efforts to achieve the status of a world-class airport and
increase customer satisfaction.
(ii) Improving security
The airport’s security gates and baggage handling systems are aging and growing obsolete, meaning
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that sufficient security is not being ensured. In addition, security flaws were observed at transport
areas to the terminals, and these factors have prevented the airport from commencing flights with
North America. The number of flights will be increased while enhancing security and providing a
safe and secure environment.
(iii) Boosting the appeal of the current airport terminal by exploiting regional character
Terminals 1 and 2 of Soekarno Hatta Airport are rich with an original design that makes use of the
regional architectural features. That appeal will be expanded upon in aim of constructing a new
world-class airport that exploits the local characteristics.
(iv) Increasing the convenience of inter-terminal travel
Currently, most travel between terminals is conducted on shuttle buses; however, these buses are not
easily accessible, thus keeping usage levels low.
The convenience of traveling between terminals will be improved, including for the purpose of
forming a city core in a long run. Specifically, the people mover will be constructed between
terminals.
b) Basic business policy
This project is not a development project, starting from a scratch, but rather a project to expand and
upgrade existing Soekarno Hatta Airport, which is currently owned and operated by AP-II. As such,
when considering business aspects it is necessary to pay heed to the division of roles with AP-II.
This section will pay consideration to a basic direction for such aspects.
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The table below is a comparison of the expertise and administrative resources needed for the
expansion project between AP-II and our team.
Table 3-16: The expertise and administrative resources needed by AP-II and the Study Team for the
expansion project
Fund procurement
AP-II
Study Team
○
○
Including public fund
procurement
○
◎
△
◎
Tenant leasing
△
◎
Tenant management
△
◎
Promotions
△
◎
Cargo terminal operations
△
◎
Facility maintenance and management
○
○
Security operations (including baggage
handling)
Concession area
Tenant composition
operations
MD
Energy conservation in
particular
Air traffic control
○
－
With regard to the business aspects, as clarified in the table above, utilizing the Study Team’s
expertise in the operations of concessions areas and cargo terminals would particularly contribute to
overall business. Moreover, by utilizing the Study Team’s expertise on security and other issues,
while also taking into account the importance of the Soekarno Hatta Airport within AP-II’s overall
business, consideration should be paid to areas where further added value can be created. Thus,
business should be considered under the following policy.
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(i) Implement joint businesses under this project with AP-II in consideration of the respective
attributes and risk
As clarified in Table 3-16, the expansion project of Soekarno Hatta Airport includes the introduction
of new functions. This means that, instead of implementing the overall project using AP-II alone, the
conventional business and operating entity, implementing a joint project with private sector
businesses with airport administration expertise would be an effective way to utilize a wider range of
know-how, divide the risk, and add diversity to funding procurement. The Study team includes Japan
Airport Terminal Co., Ltd., a private sector company that has for many years handled the
management and operations of Haneda Airport, and it is assumed that we will be able to utilize
business expertise that will lead to efficient airport administration and boosting non-aeronautical
revenues to the maximum extent possible.
(ii) Core airport operations at Soekarno Hatta Airport are administered by AP-II while Japanese
corporations provide expertise and implement partial operations
As mentioned above, projects related to Soekarno Hatta Airport play a major role in overall AP-II
businesses, and it is safe to say that this project greatly supports AP-II operations, particularly in
terms of employment and profits. Full consideration should be given to this point, and AP-II should
continue to be mainly in charge of the operation of Soekarno Hatta Airport.
In addition, cooperation will be carried out to promote the mutual utilization of expertise and
administrative assistance via operational partnerships with Japanese companies, working to improve
services and enrich businesses at the Soekarno Hatta Airport..
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(iii) The private sector takes risk for businesses with many uncertain elements, such as concessions
and cargo business
AP-II has not yet pursued the business opportunities on a large scale that generally contribute to the
creation of a city core such as shopping malls, cargo terminal, offices, lodging, and convention
functions. Therefore, AP-II has not accumulated administrative expertise and business risk
management in these business lines. Hence, the Study Team which comprises private sector
businesses and have knowledge and experience in the these businesses, will bear the risk and
implement these functions.
5) Assumed risk in privately-owned airport management business and ways to mitigate them
a) Decrease in passenger numbers
An increase in air passenger demand will be conditional on political stability and stable economic
growth in Indonesia, and demand could decrease due to various short-term and long-term factors.
Short-term factors include 1) the spread of contagious diseases such as avian flu both in Indonesia
and overseas and 2) the avoidance of travel by the public due to incidents such as large-scale terrorist
attacks. However, there are no effective countermeasures for dealing with such factors.
Previous declines in passenger demand due to short-term factors such as those described above
ended in six months to one year, and passenger numbers subsequently returned to normal conditions.
The kind of political and economic chaos that occurred in Indonesia in the latter half of the 1990s as
a result of the Asian crisis could reduce passenger demand over the long term. However, there are no
effective measures to reduce risk of this nature either.
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b) Reduction in passenger numbers due to the construction of a new airport in metropolitan
Jakarta
Soekarno Hatta Airport currently has a monopolistic position on air transport and travel in the
Jakarta metropolitan area. In future, however, it could expect to lose some of its passengers due to
the completion of a new airport facility. In this case, if highly profitable international passengers,
who account for the majority of the revenue from the airport passenger service charges and
commercial sales, migrate in large numbers to the new airport, this will result in a significant
reduction in revenue and become a factor for a decline in profits. Therefore, attention must be paid to
policy developments in the construction of new airports.
c) Contraction of sales in commercial areas
Sales of goods and services within the airport facilities are areas that are significantly affected by the
management of business operators even when the number of passengers remains at a consistent level.
Therefore, accurately identifying customer needs and implementing ongoing improvements in
commercial areas are essential.
d) Increase in operating expenses including personnel and utilities, etc.
In Indonesia, where economic growth is set to continue in the future, increases in all operating
expenses including personnel expenses can be expected. Paying attention to efficient, energy-saving
management in the use of utilities such as electricity and water, etc. will also become necessary.
Likewise, it will be important to approach the Indonesian government about raising airport taxes as
required.
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e) Terrorism
Airports are often the target of terrorist attacks, and when damages caused by terrorist bomb attacks
occur, it can be assumed that both human and physical damages will be caused. Therefore, it is
necessary to cooperate with security authorities in formulating adequate countermeasures against
terrorist risk.
f) Natural disasters
Indonesia is a country formed from volcanoes, and the possibility of natural disaster events such as
earthquakes or tsunamis cannot be overlooked. Floods also regularly occur in the capital of Jakarta
and, therefore, measures to cope with typhoons and heavy rains are essential. In addition to taking
appropriate countermeasures against these various events within budget constraints, consideration of
insurance coverage as required is vital.
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(3) Project Plan Overview
1) Issues with the existing terminals
a) Terminal 1
Table 3-17: Area list of domestic passenger terminal (Terminal 1)
Source: JICA, “Master Plan Study on Multiple–Airport Development For Greater Jakarta Metropolitan Area in
the Republic of Indonesia: Progress Report” (March 2011)
Terminal 1 is a semi-circular building reserved for domestic airlines. As mentioned earlier, this
terminal hosts most passengers in the airport. Nevertheless, there is only one curbside pickup, and
the check-in lobby and arrival lobby are positioned together, making it difficult to handle the
over-capacity of passengers and well-wishers. Furthermore, as each unit (A, B, and C) is
independent of each other, passengers making a domestic transit are forced to undergo an
inconvenient processes of picking up their baggage upon arrival, leaving the arrival unit, moving
along the curbside pickup, and traveling to another unit.
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Moreover, when the airport initially started operations each unit was allotted for one carrier, but
currently over 50 low-cost carriers are operating in a single small space. This format is very difficult
for passengers to understand.
As can be seen in Table 3-15 on area, each unit is approximately 48,000 m2 in size, while the overall
size of Terminal 1 is 143,000 m2. Moreover, as can be seen from Figure 3-18 below on the
relationship between terminal building area and annual passenger numbers, it is clear that the
facilities are insufficient in size to accommodate the approximately 34.5 million domestic air
passengers.
b) Terminal 2
Table 3-18: Area list of domestic/international passenger terminal (Terminal 2)
Source: JICA, “Master Plan Study on Multiple–Airport Development for Greater Jakarta Metropolitan Area in
3-43
Terminal 2 is also shaped in a semicircle form like Terminal 1, and is mainly used as the
international flight terminal (one portion is used for domestic flights for Garuda Indonesia, etc.).
Also, just as with Terminal 1, Terminal 2 is divided into three independent units: D, E, and F. The
biggest difference with Terminal 1 is clearly that it adopts a two-floor terminal plan, with separate
departure and arrival levels. Also, as each unit is connected to one another, moving between units is
extremely more convenient compared to Terminal 1.
Furthermore, when Terminal 2 was being constructed its concept was a “garden airport,” and various
tropical plants are placed in and around the terminal, on the curbside pick-up, and other locations,
making for an appealing entrance to the international terminal.
The airlines used at each unit have remained the same since services first started, where unit D is all
international carriers other than Garuda Indonesia, unit E is Garuda Indonesia’s international line,
and unit F if Garuda Indonesia’s domestic line. Therefore, transiting is easy for customers using
Garuda Indonesia (from international to domestic, or vice-versa). However, as the domestic lines are
concentrated in Terminals 1 and 3, for the passengers of other airlines it is inconvenient to transfer
between terminals. Transfer between terminals is handled using a free shuttle bus, but it appears as if
the bus does not make frequent rounds.
In terms of size, each unit is allotted about 45,000 m2, and the total area of Terminal 2 is 135,000 m2.
The terminal’s size is appropriate to accommodate the annual number of international passengers,
9.7 million, even when looking at Figure 3-15, which looks at the relationship between annual
passenger numbers and passenger terminal size.
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c) Terminal 3
Table 3-19: Area list of domestic passenger terminal (Terminal 3)
Terminal 3 is a terminal specially constructed for low-cost carriers that was an urgent measure to
respond to the increase in low-cost carriers. It is economically constructed and contains no PBB.
The curbside pick-up is on the first floor and the departure and arrival lobby are conjoined.
Moreover, compared with Terminals 1 and 2, which offer a strong sense of local architectural
features, Terminal 3 has a modern design, showing no association between the old and new. The path
of travel for passengers is complicated, where passengers that have completed checking in are
guided to a second floor departure lobby, but as there is no PBB, passengers are forced to again
travel to the bus departure gate on the first floor. In terms of size, it is a small terminal of less than
30,000 m2 that accommodates a nominal annual passenger scale of 4 million passengers.
d) Cargo terminals
Currently, each regular terminal is equipped with a cargo terminal, and as they are decentralized,
efficiency is poor. Moreover, it is envisioned difficult to respond to the future increase in cargo
demand using the current cargo terminal size.
3-45
Table 3-20: Size of existing cargo terminals
Facility
Area
Cargo handled
(10,000t)
2
T1 cargo facility
36,417m
(international)
12,421 m2
T1 cargo facility
(domestic)
T3 cargo facility
19,800 m2
Total
68,638 m2
50
2) Basic policy for terminal construction
In light of the aforementioned profit structure analysis, business scheme considerations, and issues
with existing terminals, the following policy has been set for terminal construction.
Terminal 1
 Construction of an integrated check-in lobby
Develop an integrated check-in lobby located at the center of the curbside zone in order to
consolidate the check-in areas.
 Expand the gate lounges and seating space
The gate lounge of each unit will be expanded and connected to create a unified gate lounge.
This will simplify changing gates and searching for passengers. In accordance with this,
current boarding check operations conducted in front of gates will be revised.
 Upgrade to a two-floor curbside pick-up
The current single-floor curbside pick-up will be revamped into a two-floor curbside zone in
efforts to ameliorate the issue of congestion. The check-in space will be relocated to the
3-46
second floor and the space expanded.
 Placement of bus lounge and maximum use of open spots
A bus lounge of a maximum size possible will be placed under the newly added gate lounge
area in aim to enrich response to LCCs using open spots, which is expanding for domestic
lines. Furthermore, efforts will be made to ensure effective use of the terminal by operating
these separately from the upper PBB usage spot.
Terminal 2
 Construction of an integrated check-in lobby
Develop an integrated check-in lobby located at the center of the curbside zone in order to
consolidate the check-in areas.
 Expand the gate lounges and seating space
The gate lounge of each unit will be expanded and connected to create a unified gate lounge.
This will simplify changing gates and searching for passengers. In accordance with this,
current boarding check operations conducted in front of gates will be revised.
 Expanding the departure and arrival lobbies and enhancing the variety of concessions
The outdoor space located between the curbside zone and the departure and arrival lobbies
will be utilized to expand each lobby. Furthermore, floor space will be added on the airside of
the second floor only between units in order to expand concessions. Also, in terms of
operational aspects, tenant leasing will be implemented with a focus on store diversity in order
to respond to a broad range of customers.
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Terminal 3
 Expansion into a world-class terminal with focus on international airlines
As Terminals 1 and 2 has some special and technical difficulties in enriching security system
or installing advanced baggage system, Terminal 3 will be expanded with a focus on
international flights so as to make it into a world-class terminal. The design of the terminal
will utilize the regional character used in the design of Terminals 1 and 2, giving Terminal 3 a
look that is befitting to Indonesia.
Moreover, as the passenger volume of Terminal 3 is too large for international passengers
alone, the terminal will be developed to host both international and domestic flights.
The two functions described above will be constructed into a unified terminal while taking
into account security aspects in order to flexibly respond to future changes in the ratio of
international and domestic flights.
 Establishment of a PBB in the existing terminal
The existing Terminal 3 is only host to LCCs and thus does not have a PBB. However, a PBB
will be constructed, as the terminal is to be expanded to host a wide range of international and
domestic carrier flights.
Cargo terminals
 Form a consolidated cargo zone using the latest equipment
The existing cargo terminals are aging and growing obsolete. A cargo terminal and exclusive
space will be constructed on the west side of the airport grounds in order to respond to cargo
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demand, which is forecasted to grow in the future.
3) Aspects of terminal development
The details of terminal development for this plan were decided in light of the basic policy for
terminal construction. These details are presented in Table 3-21.
Table 3-21: Details of terminal development under this plan
Project
Terminal 1
Terminal 2
Terminal 3
Cargo terminals
Details
Two-story curbside zone
Integrated check-in construction
Guest lounge expansion
Bus lounge expansion
Concessions expansion
Update systems
Integrated check-in construction
Guest lounge expansion
Concessions expansion
Update systems
Development of world-class terminal
Establishment of PBB at existing
facilities
Construction of integrated cargo zone
in west part of site
Concentrated facilities that realize a
compact logistics line
Notes
Domestic lines (mainly LCCs)
Domestic line terminal
Joint international/domestic lines
terminal
Domestic and international air
logistics
4) Size of planned new terminals
a) Analyzing cases of terminal plan units
When determining a size for the terminals, a correlation analysis between annual passenger numbers
and terminal size conducted by the Service Center of Port Engineering was referenced. According to
this analysis, terminal sizes are dispersed within the average range of ± approximately 15% of about
10,000 m2 per million annual passengers.
3-49
Figure 3-15: Relationship between annual passenger numbers and passenger terminal building size
Tota
l
floo
r
area
(m2)
Annual number of passengers (10,000s)
Source: 2007 directory of all airport terminal buildings, etc.
*The grey area in the graph indicates the ±15% range.
Source: Figure 13.1.5 “Relationship between annual passenger numbers and passenger terminal size” taken from
Service Center of Port Engineering, “Kuko Kogaku,” p.241 (2010; Nikkan Kensetsu Kogyo Shimbun) and partially
altered by the Study Team.
b) Setting the terminal plan unit
The basic policy of this plan is to develop facilities and provide services in accordance with the
passenger demographics. The following plan units have been set by user grouping for the scope
described above.
Table 3-22: The terminal plan unit
2
Classification
International
Domestic
LCC
Area (m ) per million passengers
per annum
11,500
9,000
8,500
3-50
c) Setting a size for the terminal plan
The following list of terminal plan sizes has been established in light of the above plan units.
Table 3-23: A size for the terminal plan
Terminal
T1
T2
T3
Main target
passengers
LCC
Domestic
Domestic
International
Subtotal
Total
Current Size
(m2)
Expansion (m2)
142,730
135,459
28,958
0
28,958
307,147
Annual number of
passengers
Total (m2)
30,000
30,000
50,500
149,500
200,000
260,000
172,730
165,459
79,458
149,500
228,958
567,147
20,321,176
18,384,333
8,828,667
13,000,000
21,828,667
60,534,176
Approximate number
of passengers per
annum (millions)
20
18
9
13
22
60
Each of the terminals is taken to be composed as follows:
Table 3-24: Area list of expanded terminal
T1 (Expanded)
T2 (Expanded)
T3 (Expanded)
Item
Integrated check-in
Concessions
Gate lounge / bus lounge
Subtotal
Integrated check-in
Concessions
Gate lounge
Subtotal
Terminal
Concessions
Offices
Subtotal
Area
10,000 m2
15,000 m2
5,000 m2
30,000 m2
10,000 m2
15,000 m2
5,000 m2
30,000 m2
145,000 m2
40,000 m2
15,000 m2
200,000 m2
Remarks
5,000 m2 added after check-in relocated
5,000 m2 added after check-in relocated
5) Setting an area size for this plan
In determining area for this plan, project elements have been classified into the following five
packages in view of business activities.
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Table 3-25: Five Project Packages
Package (1)
Airside (New construction or
modification of taxiways and
aprons)
Source of funds anticipated
by AP-II
Implemented as public works using
government fund (Assets after
completion may be transferred as
equity or grant to AP-II.)
Source of funds anticipated
by the Study Team
Implemented as public works using
yen loans.
Package (2)
Ancillary works for terminals
(People mover, utilities, etc.)
Use of internal reserve of AP-IIand
AP-II’s collection of funds from
domestic market
Like Package (1), implemented as
public works using yen loans.
However, in the event that it is not
carried out as a public work,
development will be carried out
through JV as per Package (3).
Packaged project elements
The managing company for Soekarno
Hatta Airport will be separated from
AP-II, carry out development of the
terminal buildings using third party
funds, and operate for a fixed period
of time.
Package (3)
Renovation and extension of
terminal buildings
Package (4)
New construction of cargo
village
Joint venture including third party
fund
Construction is carried out in a
concession style using third party
funds.
Package (5)
Commercial area
(Commercial space, hotels,
offices, car parks)
The set size of facilities is summarized as follows by project package.
3-52
Table 3-26: Size of facilities by project package
Package (1)
Project elements
Airside
Apron
Taxiway
Package (2)
Ancillary
woks for
terminals
Package (4)
Package (5)
Terminal
Cargo village
Commercial
area
Anticipated Size
Area developed:
360,000 m2
New construction for connecting to
new terminal (or construction of bus
route)
Utilities, road improvement
Total length: 3.5 km (4
stations)
Terminal 2
Extension of existing facilities +
modification of existing areas
Terminal 3
Cargo
Integrated
building,
Connecting
building,
Interchange
terminal,
Parking
building
Extension of existing facilities
New construction
New construction
+ modification of
existing facilities
150,000 ㎡
185,000 ㎡
People mover
Utilities etc.
Package (3)
Anticipated scope of facilities
New construction + modification of
existing areas
New construction of taxiway on
eastern side; partial modification of
existing areas
6) Model plan for this plan
A model plan has been created as follows based on the above considerations.
 A specific plan for the location of the commercial, connecting building, and parking space will
be crafted once detailed planning is conducted.
 Exact route of APM will be determined once detailed location of Airport Link Railway station
within the airport premise is provided.
3-53
Figure 3-16: Model plan (tentative)
Alternative proposals have been provided below as a reference.
3-54
Alternative Plan 1
In this plan, a design of Terminal 3 that exploits the regional character achieved in Terminals 1 and 2
is developed even further. As the additional part of the Terminal 3 looks totally different from the
existing part, it will be difficult to consider two different buildings together as one terminal building,
leaving the problem of having to remove the existing.
Figure 3-17: Alternative Plan 1
3-55
Alternative Plan 2
In this alternative plan, Terminal 3 is designed to accommodate more open spots. This design will
allow for developing a certain degree of open area at the north and east sides of Terminal 3. At the
same time, however, this will reduce the number of fixed spots. Thus, in the event that a terminal is
constructed that emphasizes fixed spots, it will be difficult to accommodate those spots.
Figure 3-18: Alternative Plan 2
3-56
7) Issues and solutions for realization of the project
Technical issues and solutions for realizing the plans stated above are enumerated as follows:
(i) Detailed investigation of existing terminals
Existing conditions including utility line routes and building structures will have to be
investigated in detail in planning extension and modification of the present terminals.
(ii) Elaborate study on staged development plan
Since this project for extension and improvement must be implemented while maintaining the
airport operation, it is necessary to draw up a detailed development plan with due
consideration for staged relocation. Therefore, it is preferable to start meetings with airline
companies, tenants, etc. at the earliest stage.
(iii) Coordination about connection with railway station
In preparing cross-sections of modified or ameliorated terminal buildings, plans of connecting
buildings and plans of people mover, it is necessary to ensure coordination with the planned
railway station in view of horizontal and vertical development. Therefore, it is preferable to
continuously hold meetings with the railway unit and, where it takes much time to complete a
railway, impose the railway unit planning conditions reviewing the master project schedule.
(iv) Relocation of existing facilities
Essentially, the proposed plan has been prepared so as to minimize relocation of existing
facilities accompanying extension of terminal buildings and construction of connecting
buildings; however, part of the facilities has to be relocated or demolished. Therefore, it is
necessary to confirm intention of present building users at the early stage and know who
would be moved to where (including new connecting buildings).
In constructing taxiways, part of the golf course has to be demolished and flattened. It is
3-57
necessary to start a meeting with the concerned persons at the early stage to commence site
preparation as scheduled.
(v) Rearrangement of business area related to Cargo Terminal
The business area which comprises offices of distribution companies etc. in relation to the
present cargo area is formed on the eastern side of Terminal 1. In providing the Cargo
Terminal, it is necessary to verify intention of these companies etc. concerning relocation to
the Cargo Terminal and its vicinity and reflect it in the plan of Cargo Terminal. Therefore, it is
needed to conduct inquiries to the concerned companies etc. at the early stage and ascertain to
what extent open spot area will be placed in the business area site.
3-58
Chapter 4
Evaluation of Environmental and Social
Impacts
The purpose of this study is to consider the feasibility of a facility project for the construction of a
new airport terminal, the upgrading of existing terminals, and the linking of terminals in an
expansion project for Soekarno Hatta Airport in Indonesia’s Jabodetabek Area. A separate
comparative study on the validity and content of extension projects in plans for new construction and
upgrading of several airports including Soekarno Hatta Airport in Indonesia’s Jabodetabek Area has
already been undertaken by JICA in the Project for the Master Plan Study on Multiple-Airport
Development for Greater Jakarta Metropolitan Area in the Republic of Indonesia (JICA Master Plan)
and is antecedent to this study.
The environmental and social impacts covered in this chapter have also been examined in detail by
the JICA Master Plan and this study, which is not at variance with the findings of the JICA Master
Plan in regard to environmental and social impacts, relates details of results of this study while
introducing the main points of the JICA Master Plan. Although the construction of Runway 3 and
Terminal 4 which requires additional land of precincts on the north of the present site is not within
the scope of this study, results of the preliminary study made in the JICA Master Plan are outlined in
this chapter.
As discussed later in (4) of this chapter, an environmental impact assessment (EIA) including a
strategic environmental assessment (SEA) established by the government of Indonesia must be
implemented in proceeding with the expansion plan for Soekarno Hatta Airport. As stated in the
JICA Master Plan, JICA will provide technical cooperation to Indonesia to enable the
4-1
implementation of the SEA for the realization of the Soekarno-Hatta Airport extension plan.30
(1) Analysis of current environmental and social conditions
1)
Analysis of the current state
Soekarno Hatta Airport is located in the northeast corner of the city of Tangerang in the eastern
corner of Banten Province. The northern perimeter of the airport is on the border of the city of
Tangerang and the Tangerang District and the expansion plan (Runway 3 and Terminal 4) of the
airport will have an impact on six villages (Desa) in the area.
The land earmarked for expansion of the airport is flat terrain less than 5m above sea level. The area
is dotted with small ponds and marshy areas so it can be presumed that the land naturally formed
into an alluvial fan at the estuary of Chi-Sadane River.
The majority of the land for the planned project consists of rice fields and residential areas, with
dwellings occupying one-fourth of the total area. The total number of buildings is approximately less
than 2,000 and irrigation channels stretch for about 2km across the land planned for the project.
Because the plan for expansion has not yet reached the implementation stage, acquisition of the land
planned for the expansion has not started yet. The University of Indonesia is currently undertaking a
survey of the number of households, population for involuntary resettlement and the current use of
the target land.31
30
http://www.jica.go.jp/english/operations/social_environmental/archive/pro_asia/pdf/ind12_03.pdf
31
Indonesia” (Progress Report), ( 2011) pp.10-1, 10-2
4-2
According to interviews with Indonesia’s Ministry of Environment, the ministry has not identified
conspicuous environmental problems such as noise, except chronic traffic congestion around the
airport.
2)
Future outlook (if the project does not proceed)
The purpose of the Soekarno Hatta Airport expansion project is to expand and develop the existing
airport facility to accommodate the airport’s ever-increasing aviation passenger and cargo demand.
This study specifically focuses on the expansion and upgrading of terminal functions and the
improvement in connection functions between the terminals.
The issue as to whether to proceed with the expansion of Soekarno Hatta Airport or to accommodate
future demand through the upgrading and development of other airport infrastructure without
expanding the Soekarno Hatta Airport is already being studied in the JICA Master Plan. Therefore,
the future prognosis regarding environmental and social changes if the expansion of Soekarno Hatta
Airport does not proceed will be left to the findings of the JICA Master Plan.
Infrastructure development and redevelopment of the terminal functions proposed in this study will
inevitably be concomitant with the expansion of functions of Soekarno Hatta Airport. Therefore,
failure to proceed with expansion of the airport facilities is likely to lead to a decline in the user
services of the airport itself, making the regeneration of an attractive Soekarno-Hatta Airport
difficult. In such case, a decline in economic activities can also be expected.
4-3
(2) Improvement effect of the environment accompanying the
implementation of the project
The expansion of Soekarno Hatta Airport will make it possible not only to accommodate increased
aviation demand but also to stimulate latent aviation demand. Improved functions of the terminal
buildings will enhance the convenience of passenger and cargo flights and provide high-quality
spaces for the enjoyment and entertainment of passengers. The establishment of service and
commercial facilities within the terminal buildings will also create employment opportunities and
lead to the revitalization of the retail and distribution business. If the general population as well as
travelers visit the terminal and use it as a place for shopping and sightseeing, the terminal building
may come to be utilized as a high-quality urban space.
In terms of land use, the redevelopment of terminal functions will enable the use of underutilized
land, which at present includes a golf course situated in a pocket between Runway 1 and Runway 2,
purely for the purposes of the airport, making possible integrated and orderly use of the land.
(3) Environmental and social impacts accompanying the
implementation of the project
1) Impacts on environmental and social areas already indicated in existing studies
Analyses conducted by JICA in the JICA Master Plan, which is related to this study, indicate that the
following environmental constraints will occur as a result of the site expansion of Soekarno Hatta
Airport.32
32
Indonesia”(Progress Report), ( 2011) p.10-2
4-4
a) Involuntary resettlement
There are about 2,000 residential buildings occupying the land proposed for the expansion, and
involuntary resettlement will be unavoidable. A resettlement plan for the residents will be formulated
by the project proponent (AP-II), the Tangerang District and the city of Tangerang. To sufficiently
grasp the views of the local residents and to provide them with adequate information, there are plans
to hold a stakeholders meeting during Phase 2 of the JICA Master Plan.
b) Conversion of agricultural land
Agriculture is the main industry throughout the surrounding area of the land planned for the project,
and the use of the existing land for rice fields will change from agricultural use to use as airport land.
The expansion of the airport will also require the reconstruction of trunk irrigation channels. To
accommodate the rerouting of irrigation channels, the involuntary resettlement outside the planned
land can also be expected.
c) Roads
A main road used by residents in the course of their daily lives run parallel to the irrigation channel,
and this road will also have to be diverted.
d) Impact on the Regional Spatial Plan
The change of the land use of existing rice fields is a factor that will have an impact on the Regional
Spatial Plan and will require coordination with the stakeholders. The JICA Master Plan with the
cooperation of the University of Indonesia and the Strategic Environment Assessment Department,
Ministry of Environment intends to engage in discussions with the District Coordinative Body of
Spatial Plan (BKPRD) regarding changes in the Regional Spatial Plan for Banten Province and
4-5
Tangerang District (RTRW), and with the Regional Body for Planning and Development (Bappeda)
regarding the Regional Medium Term Development Plans (RPJM).
In this connection, the Study Team was informed by the JICA Master Plan study team that no rare
species to be conserved are found in the expansion area.
2) Screening according to JICA guidelines
As a matter of course, work and procedures in the JICA study project introduced in the previous
section are performed according to the Environment and Social Consideration Guidelines established
by JICA in April 2010, and results of JICA’s screening at the preliminary examination stage are
announced together with provisional scoping on the JICA Website (Table 4-1).33
There is some concern regarding environmental and social impacts as explained in the previous
section. In addition, information published on the JICA Master Plan website also states that an
agreement has been reached between JICA and the DGCA to undertake a review equivalent to a
Strategic Environmental Assessment (SEA) of the Jakarta Metropolitan Area according to laws and
regulations of Indonesia and a review equivalent to an Initial Environmental Examination (IEE) for
drafting an expansion plan for Soekarno Hatta Airport in the JICA Master Plan (see (4) 2) a) of this
chapter for details).
The provisional scoping in Table 4-1 targets several locations suitable for the construction of new
airport facilities including the expansion of Soekarno Hatta Airport in the Jakarta Metropolitan Area,
and all items noted including the social environment, natural environment, and pollution will also
apply to the Soekarno Hatta Airport expansion plan, which is the subject of this study.
33
http://www.jica.go.jp/english/operations/social_environmental/archive/pro_asia/indonesia_12.html
4-6
This study focuses mainly on the examination of support measures for the improvement of the
terminal building and connecting functions of the expansion plan of Soekarno Hatta Airport. Insofar
as the re-development of the terminal alone is concerned, the following may be considered as
anticipated environmental and social impacts.
 Increase in parking demand and volume of traffic within the airport premises
 Greater impact on the environment due to facility expansion (increase in energy and water
consumption and generation of waste water, waste heat and other waste matter)
 Temporary environmental and psychological impact and general inconvenience accompanying
the partial removal of existing building structures
 Settlement of arrangements with existing tenants in the terminal
Measures to address each will be examined closer to the implementation stage of the project when a
spatial plan is concretized.
To address the second point stated above, that is, greater impact on the environment due to facility
expansion, certain measures can be implemented such as the adoption of specific building designs
that conform to the Ministry of Environment Decree No. 8 of 2010, which provides for standards for
environmentally friendly buildings (see (4) 2) b) of this chapter for details of the standards).
3) Comparative study of environmental and social considerations of a plan different from the
proposed plan
In line with the JICA Master Plan, which aims to explore appropriate measures for the expansion or
new construction of an airport in the Jakarta Metropolitan Area, this study examines methods for the
4-7
smooth realization of infrastructure development and improvement in terminal functions and
terminal connection functions at Soekarno Hatta Airport. Therefore, a comparative study of airport
development plans with lower environmental and social impacts will be undertaken in the same
JICA Master Plan including examination of means of access to the airport.34
Furthermore, a quantitative comparative study of environmental and social impacts will be
conducted in a more specific spatial plan in the future in regard to plans for the terminal and terminal
connection facilities proposed in this study.
34
“Master Plan Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic
Indonesia”(Progress Report), JICA, 2011, pp. 12-1 to 12-9, 9-11 to 9-13.
4-8
Table 4-1: Results of Environmental and Social Considerations
4-9
4-10
4-11
Attached Table:
4-12
4-13
Source: Results of Preliminary Examination of the Master Plan Study on Multiple-Airport Development for Greater
Jakarta Metropolitan Area in the Republic Indonesia
http://www.jica.go.jp/english/operations/social_environmental/archive/pro_asia/pdf/ind12_01.pdf
(4) Summary of laws and regulations relating to environmental
and social considerations of the partner country
1) Summary of laws and regulations relating to environmental and social considerations
Following the establishment in 1978 of a government agency dedicated to dealing with
environmental issues, the Ministry of Environment and Development Supervision (PPLH, Pusat
Pendidikan Lingkungan Hidup), environmental issues rose to prominence as an area of priority in
initiatives of the Indonesian government.35 Since then the government has continued to frame and
implement legislation relating to the environment on an ongoing basis.
The Environmental Basic Law (Law No. 04 of 1982) is Indonesia’s first environmental law. This law
established the basis for all initiatives for controlling and managing the use of the environment in
35
PPLH was reorganized into the Ministry of Population and Environment (KLH, Kantor Menteri Negra
Lingkungan Hidup) in 1983 and further into the present Ministry of Environment (LH, Kementerian Lingkungan
Hidup) in 1993.
http://erb.umich.edu/News-and-Events/news-events-docs/11-12/eco-labels2011/JorgeGarciaLopez.pdf
4-14
order to protect and preserve environmental resources for future generations by preventing their
depletion and deterioration. On September 19th, 1997, this law was superseded by the Environmental
Management Act (Law No. 23 of 1997). Taking into consideration issues such as the discharge of
waste matter, environmental impact assessments, and the management of harmful and poisonous
substances, this law focused on the sustainability of the environment. The law provides that every
business and/or activity which gives rise to a large and important impact on the environment shall
possess an environmental impact analysis to obtain the license to conduct a business and/or activity.
On October 3rd, 2009, the Environmental Management Act was replaced by the Environmental
Protection and Management Act (Law No. 32 of 2009), which brought regulations concerning the
environment in line with world standards. This new legislation strengthened both regulations and the
jurisdiction of the government and at present forms the legal basis for the protection and
conservation of Indonesia’s environment. This law also stipulates that all Indonesians have an
obligation to make efforts to protect the environment and to control environmental pollution and
destruction.
The Ministry of the Environment is the head of environmental administration in Indonesia and
engages about 1,200 ministry staff in operations promoting environmental management, measures to
control pollution and other tasks. The organizational chart of the Ministry of Environment is shown
in Figure 4-1.
4-15
Figure 4-1: Organizational Chart of the Ministry of Environment
Minister
Secretary to the
Minister
Assistant Minister
for Global
Environmental
Affairs
Assistant Minister
for Economy and
Poverty
Assistant Minister
for Cultural,
Social Partner
Assistant Minister
for Law and
Interrelation
between
Instructions
Assistant Minister
for Sustainable
Development
Technology
Bureau for
General
Affairs
Bureau for
Planning
International
Cooperation
Inspectorate
Deputy for Spatial
Environment
Management
Assistant Deputy
for Environment
Impact Assessment
Deputy for
Pollution Control
Deputy for Nature
Conservation,
Enhancement &
Environmental
Destruction
Assistant Deputy
for Manufacture
Pollution Control
Assistant Deputy
for Gas, Oil,
Energy, Pollution
Control
Assistant Deputy
for Environmental
Planning
Regional Center
for Environmental
Management in
Kalimantan
Assistant Deputy
for Environmental
Evaluation and
Monitoring
Regional Center
for Environmental
Management in
Java
Deputy for
Capacity Building
and Technical
Infrastructure
Deputy for
Hazardous and
Toxic Waste
Management
Deputy for
Environmental
Compliance
Assistant Deputy
for Agro Industry
Pollution Control
Assistant Deputy
Assistant Deputy
for Enterprises and for Mobile Source
Domestic Pollution Emission Pollution
Control
Control
Deputy for
Community
Empowerment
and
Environmental
Communication
Assistant Deputy
for Environmental
Institution
Regional Center
for Environmental
Management in
Bali, NTB, NTT
Regional Center
for Environmental
Management in
Sulawesi, Maluku
and Papua
Regional Center
for Environmental
Management in
Sumatra
Source: JICA, “Master Plan Study on Multiple-Airport Development For Greater Jakarta Metropolitan Area in the
Republic Indonesia: Progress Report” (March 2011)
In Indonesia, local governments and assemblies (regional lower houses) are allowed to engage in
autonomous legislative activities in matters that are not of national interest. All of the country’s 33
states are divided into provinces (Kabupaten) and cities (Kota). While the central government and
agencies like the Ministry of Environment are responsible for establishing national policies,
regulations and standards, local governments are responsible for enforcing and overseeing these.
4-16
In 2007 the Indonesian government established the Investment Act, No. 25 of 2007 regarding
investment projects and made all investors responsible for environmental protection. Under this law,
all investors must bear the burden of costs for the restoration of the natural environment at every
stage of development in areas utilized by their projects, particularly in investments resulting in the
destruction of nature such as, for example, the development of natural resources.
2) Summary of Indonesia’s EIA
a) Environmental assessments
Indonesia’s environmental assessment system (AMDAL) was first introduced in 1986 in accordance
with the Environmental Basic Law, No. 04 of 1982, and later became established in 1997 under the
Environmental Management Act, No. 23 of 1997. Then, in 2009, the Strategic Environmental
Assessment was introduced as an environmental assessment system under the Environmental
Protection and Management Act, No. 32 of 2009, which aims for environmental conservation from
the initial stage of a project and also from a wide range of environmental views. A strategic
environmental assessment (SEA) is required at the master plan stage of a project. The assessment
and approval of the environmental impact report (ANDAL) are the domain of the Ministry of
Environment for large scale or cross-sectoral projects that cover plural areas under local government
jurisdiction. Environmental assessments (AMDAL) for projects in Jakarta, the provinces or cities are
implemented by the local governments of respective areas. Jakarta has its own AMDAL system, but
cities such as Tangerang apply the national system. The respective local governments also appoint
committee members to serve on the Environmental Assessment Committee.
Government Regulation No. 27 of 1999 requires an environmental impact assessment (EIA) of any
activity that is likely to have an impact on the environment. According to this regulation, assessment
4-17
results are to be used in making decisions on whether or not to approve a project. Those activities
that require an EIA are stated in the Ministry of Environment Decree No. 11 of 2006. According to
this decree, an EIA is required for an airport with a runway of longer than 200m and a terminal more
than 2,000m2 (see Table 4-2).
Table 4-2: Related Activities that require an Environmental Impact Assessment (EIA)
Activities
Airport
Area
Anywhere
Scale
Environmental Items
Runway
> 200m
Terminal
> 2,000 m2
Noise, emissions,
biology, social
impacts
Greater Jakarta Metropolitan Area in the Republic Indonesia” (Progress Report) (2011), p.6-65
Procedures for an EIA begin when a project proponent submits a project plan to the relevant agency
and seeks its opinion as to whether an EIA is needed or not. After determining whether activities
listed in the appended table of the Ministry of Environment Decree No. 11 of 2006 apply to the
submitted plan or whether the plan will have a significant impact on the environment, the agency
decides whether or not the process of EIA is required.
b) Environmentally friendly building standards
To encourage the participation of building owners in initiatives for promoting a sustainable
environment, the Ministry of Environment Decree No. 8 of 2010 establishes building standards that
recognize environmentally friendly buildings. The standards of that decree are summarized below.
 Use of environmentally friendly building materials bearing eco-labels or other proof of
guarantee of eco-friendliness, and use of locally produced building materials
 Conservation of water resources, and the development of procedures, equipment, and
4-18
infrastructure for conserving water quality including systems for utilizing rainwater
 Development of procedures, equipment, and infrastructure for conserving energy and
diversifying energy use including the use of renewable energy, low-energy consumption
lighting, and air recirculation systems
 No use of ozone-depleting materials in equipment such as air-conditioning and fire
extinguishers
 Development of procedures, equipment, and infrastructure for wastewater treatment and
recycling of treated water
 Development of methods for separating types of water
 Establishment of building management procedures in line with spatial plans, taking into
consideration microclimate and climate changes to secure dedicated areas for sustainable
growing of plants using purified water circulation equipment, utilization of natural light,
outdoor spaces with healthy plants, and rainwater collection equipment
 Outfitted with disaster-response systems including early warning systems for natural disasters
and use of building materials with superior resistance to extreme weather conditions
(torrential rains or drought)
Buildings that satisfy all of the above conditions are certified as environmentally friendly buildings
and certification is valid for a period of two years. At present the construction of environmentally
friendly buildings is optional but it is possible that in the future obtaining environmentally friendly
certification for buildings will become a requirement.36
36
JETRO, “Citizen Awareness of the Environment and Environmental Policies in Indonesia,” (2011), p. 9 (Text in
Japanese)
4-19
(5) Procedures the implementing country (implementing or other
relevant organization) must follow for realizing a project
To realize construction of a new terminal, upgrading of the existing terminal, and improvement in
terminal connection facilities through the Soekarno Hatta Airport expansion and upgrading project,
which is the purpose of this study, the relevant Indonesian organizations must approve the actual
implementation of the expansion project itself. Therefore, after environmental assessments described
in (4) of this chapter are carried out, the government agency uses the results of assessments to decide
whether to approve a project plan. It must also determine whether the land ownership or the use of
the planned land is appropriate and decide whether to give its approval. Approval for land
development requires the following permits:
a. Principal permit (If it meets the Spatial Plan, the local government will grant approval),
b. Location permit (If the plan is appropriate for the land management purposes, the land
agency will grant approval),
c. Planning permit (Approval is required for drawing up a development plan),
d. Building permit (Approval is required prior to the start of construction).37
Moreover, while Article 5 of the Presidential Regulation No. 56 of 2006 establishes procedures for
land acquisition for public use including airports, a review is currently underway for more practical
procedures.
38
As indicated above in a. Principal permit and in (3) 1) of this chapter, the Soekarno Hatta Airport
37
Indonesia”(Progress Report) ( 2011), p.6-67
38
Ibid. p.6-67
4-20
expansion and upgrading project will require a change in land use for agricultural land, and the
relevant government agency is required to change the Regional Spatial Plan for the relevant district.
The local government is also obliged to cooperate in the examination of the resettlement of residents
by the project proponent.
Proceeding with the construction of a new terminal, upgrading the existing terminals, and improving
terminal connection facilities will require a detailed plan underpinned by the administrative
procedures.
4-21
Chapter 5
Financial and Economic Evaluation
(1) Project Cost Estimate
1) Project Costs for the Soekarno Hatta Airport Expansion and Upgrading Project
The following estimate was drawn up for the abovementioned project. Below (1) , (2) and (3) show
Package(1) , (2) and (3).
Table 5-1: Results of Project Cost Estimate
Unit; Million IDR
USD
Yen
Equivalent Equivalent
Basic Facility
Development
Terminal Ancillary
(2)
Work
Constructi
Extension for
on
Terminal 3
Costs
Upgrade for
(3)
Terminal 2
Upgrade for
Terminal 1
Subtotal of Construction Costs
Design Expenses (5% of Construction Costs)
Reserved Fund (5% of Construction Costs)
Total Project Costs
(1)
Total
IDR Equivalent
Local
Portion
Foreign
Portion
6,000
78
705,900
564,720
141,180
19,000
246
2,235,350
1,788,280
447,070
50,000
647
5,882,500
4,411,875
1,470,625
10,000
129
1,176,500
882,375
294,125
10,000
129
1,176,500
882,375
294,125
95,000
4,750
4,750
104,500
1,229
61
61
1,352
11,176,750
558,838
558,838
12,294,425
8,529,625
426,481
426,481
9,382,588
2,647,125
132,356
132,356
2,911,838
2) Stance for Cost Estimate
For this study, as it had not been possible to proceed with a review of the detailed specifications for
each facility that would undergo maintenance work as a result of the expansion and upgrading
project, the cost estimate was drawn up based on the following stance, taking reference from AP-II
press releases and the results of prior reviews conducted.
5-1
Hence, in the event that specifications for each facility are revised based on the progress of future
reviews, there is a need to pay attention to the possibility of accompanying changes to the project
cost.
Table 5-2: Stance for Cost Estimate
Target facility
Terminal 3
Stance for cost estimate

Estimated for a 200,000m2 extension, based on the plan laid out in
Chapter 3.

The per-unit construction cost, as set by the JICA study team, is
200,000 yen/m2.

With regard to passenger facilities such as baggage handling systems
and boarding bridges, an amount equivalent to 10 billon yen has been
allocated as a one-off estimate.
Terminal 1

Estimated for a 30,000m2 extension and renovation of the existing
terminal, based on the plan laid out in Chapter 3.

The per-unit construction cost is set as 150,000 yen/m2, equivalent to
75% of the cost for the extension for Terminal 3. The renovation cost
is set as 37,500 yen/m2, equivalent to 25% of the cost for the
extension.
Terminal 2

Estimated based on the same stance as for Terminal 1.
Basic facilities

Estimated for a total of 400,000 m2 additional construction of
taxiways (360,000 m2) and the accompanying renovation of runways
(40,000 m2), as laid out in Chapter 3.

The per-unit construction cost is set as 15,000 yen/ m2 by the JICA
study team.

The apron in Terminal 3 is excluded from the plan as work had
already commenced when the study was launched
5-2
Target facility
Ancillary works for
Stance for cost estimate

terminals
Estimated based on the assumption of all maintenance costs for traffic
improvements within the premises laid out in Chapter 3, including
people mover tracks (3.5 km), car parks, tracks, and piers.

The construction cost is set as 4 million yen/ km.

A total of 5 billon yen has been allocated for the renovation and
construction works of access roads at all passenger terminals, utility
supply facilities, and supply conduits.
Cargo terminal

Although a review of the facility scale was carried out in Chapter 3, it
has been set as a project implemented under an independent
accounting system, and was excluded from the estimate.
Concession facilities

With regard to concession facilities such as Integrated Building and
hotels, although a review of the facility scale was carried out in
Chapter 3, it has been set as a project implemented under an
independent accounting system, and was excluded from the estimate.
Reserve fund

An amount equivalent to 5% of the direct construction costs has been
allocated.
Design expenses,

etc.
An amount equivalent to 5% of the direct construction costs has been
allocated.
Proportion of local

Set by the JICA study team.
and foreign costs

With regard to construction costs, 75% has been set as the local cost.

With regard to civil engineering works, 80% has been set as the local
cost.
5-3
(2) Overview of the Results of Preliminary Financial/Economic
Analysis
1) Financial condition of Soekarno Hatta Airport
According to AP-II’s Statement of Accounts for 2010, Soekarno Hatta Airport generated 134% of
AP-II’s overall operating profits, offsetting losses from regional airports and head office expenditure.
Table 5-3: 2010 Ordinary Income for Soekarno Hatta Airport and AP-II
(Million IDR)
Soekarno Hatta
Aeronautical
1,918,467
revenues
Non-aeronautical revenues
Cargo revenues
Total operating revenues
Head office
Subtotal for
Total for
expenditure
other airports
AP-II
1,140
456,150
2,375,757
560,619
121,629
682,248
30,656
17,709
48,365
2,509,742
1,140
595,488
3,106,370
Employee expense
271,492
281,750
223,489
776,731
Maintenance and inventory
127,026
8,356
67,286
202,668
198,027
2,517
44,816
245,360
132,469
121,176
73,167
326,812
2,600
10,287
Rental expenses (electricity,
water, telecom)
General expenses
Bad debt losses
7,687
Depreciation and
110,878
9,634
185,662
306,174
Total operating expenses
847,579
423,433
597,018
1,868,030
Operating income (Loss)
1,662,163
(422,293)
(1,530)
1,238,340
16,862
229,500
8,369
254,731
26,492
78,175
8,814
113,481
1,652,533
(270,968)
(1,975)
1,379,590
amortization
Other revenues (interest, etc.)
Other expenses (exchange
loss, etc.)
Ordinary income
As of November 30th, 1 IDR = 0.0085 yen (Bloomberg.com).
Source: Prepared by the Study Team based on AP-II’s annual reports
5-4
2) Overview of the Results of the Preliminary Financial Analysis
As described in Chapter 1, based on the premise that Indonesia sustains real economic growth of
approximately 6%, the number of passengers using the airport facilities will then be expected to
continue increasing, resulting in forecasts for growth in revenue for Soekarno Hatta Airport.
Furthermore, it is also important to put in effort to increase non-aeronautical revenue, which can be
gained from the increasing passenger numbers, by strengthening the commercial sector.
The main premises for the review of the projected income for this project scheme are as follows.
Premises for income
 Based on the estimates in the interim report drawn up by the JICA Master Plan Team, the total
number of passengers on domestic and international routes are expected to continue increasing
in the future, reaching the maximum permissible number of 60 million people by 2017, and
flattening out thereafter.
 Air traffic control operations, which are under review to be transferred to the government, are
not included in the income forecast. (The air traffic control revenue for 2010 for this airport is
assumed to be 82% of AP-II.)

There are no changes to landing and aircraft parking fees, and the revenue from these fees is
predicted to increase at the same rate as that of passenger increase.
 Airport tax is assumed to stay at current levels—40,000 IDR for domestic routes and 150,000
IDR for international routes.
 With the enhancement of commercial facilities, the unit sales for each passenger has been
raised to approximately 220,000 IDR (in line with other international airports) by the year
2020 for international route passengers, and to approximately half of that at 120,000 IDR for
5-5
domestic route passengers. The airport receives 15% of the amount as concession revenue.
 Floor rent is taken to be same amount as it currently is, and vacancy rate—including the
increased floor space—remains at 80%.
Premises for expenses
 No significant cost reductions are predicted. Operating expenses for Soekarno Hatta Airport
for 2010 are expected to increase at the same ratio as the terminal floor area. (Operating
expenses for 2010 for the airport is assumed to be 82% of AP-II.)
 The establishment of the new company is taken to be the year 2012, and construction
investment takes place in the four-year period from 2013 to 2016. From 2016, it is predicted
that the total building floor area (307,147 m2 as of 2010) will double to 682, 147 m2, and the
floor area that can be leased will increase 6.25 times from the current 8,000 m2 to 50,000 m2.
 Ancillary works, including airside projects and unmanned people mover, are assumed to come
under the national budget for public works and be transferred to Soekarno Hatta Airport at no
charge. However, a second scenario, in which ancillary works are self-funded, is also under
consideration.
 The operating cost of the unmanned people mover is predicted to be 50 billion IDR/y
(approximately 425 million Yen39).
Based on the above premises, the projected income for 2020, the fifth year after its full opening to
the public, is as follows. As the growth in income exceeds the increase in expenses accompanying
the expansion of the terminals, operating income is projected to increase by 52% over operating
income for 2010.
39
As of November 30th, 1 IDR = 0.0085 yen（Bloomberg.com）
5-6
Table 5-4 : Operating Income for Soekarno Hatta Airport—Actual Income for 2010 and Projected
Income for 2020, Five Years after Completion of the New Facilities
2010
2020
STATEMENT OF INCOME
1,570,919
2,230,165
- Passenger Service (International）
723,568
1,201,036
- Passenger Service (Domestic）
647,921
879,724
199,430
284,604
560,619
1,562,645
55,484
189,201
129,228
440,666
48,635
69,407
137,164
519,508
55,159
208,914
134,949
134,949
2,131,538
3,792,810
- Employee expense
271,492
501,310
- Maintenance & Inventory
127,026
234,554
- Rental expense (electricity, water, telecom)
198,027
365,657
- General expenses
132,469
244,604
26,492
48,917
110,878
110,878
-
Landing, locating, parking, counter,
Aviobridge
Non-Aeronautical
Revenues
- Advertisement Space
- Consession Retail （10% of retail sales)
-
Consession Others (golf course, fuel
charging, etc.)
- Rent Room
- Utilities
- Other Non-Aeronautical Revenues
TOTAL REVENUE
OPERATING EXPENSES
- Other expenses
-
Depreciation & amortization (existing
facility)
- Depreciation & amortization (new facility)
- Bad debts expenses
301,968
7,687
- People Mover
21,426
50,000
TOTAL OPERATING EXPENSES
OPERATING INCOME
874,071
1,879,315
1,257,467
1,913,495
(Million IDR)
5-7
Based on the above premises, in the event that only the 70 billion yen for renovations for Terminals
1 and 2 as well as extension work for Terminal 3 are borne by AP-II, financial internal rate of return
(FIRR) for the 20 years after completion will be 19% (See Table 5-5 for the Base-Case FIRR
Forecast for Package (3) invested by AP-II). On the other hand, in the event that the 89 billion yen
for works related to the terminals and ancillary works including people mover, are borne by AP-II,
the financial internal rate of return
(FIRR) will be 14%. (See Table 5-6 for the base-case FIRR
forecast for Packages (2) and (3) invested by AP-II).
5-8
Table 5-5: Base-Case FIRR Forecast for Package (3) invested by AP-II(in Million IDR )
Source: Prepared by the Study Team based on financial statements of AP-II and other sources
5-9
Table 5-6: Base-case FIRR Forecast for Packages 2 & 3 invested by AP-II(in Million IDR)
5-10
3)
Overview of the Results of the Preliminary Economic Analysis
The followings are possible economic effects that may arise as a result of this project, other than
financial revenues for the operator.
a) Increase in revenues for retailers in the terminals
In tandem with the expansion of terminals, commercial space will expand to six times that of the
current size, thereby creating various business opportunities such as retail and Food&Beverage.
Based on the premises of the financial analysis laid out under the previous item, it is estimated that
the commercial sector will gain sales of 4.4 trillion IDR five years after the completion of the new
terminal, and 5.5 trillion IDR ten years after the completion of the said terminal, significantly
exceeding the 2010 projected sales of 1.3 trillion IDR.
b) Construction demand
Total construction-related spending of 104.5 billion yen is projected, and is expected to generate
benefits to the related companies, centered on Japanese and Indonesian companies.
c) Growth in employment in tandem with the expansion of terminals
As the terminals will occupy a floor space that is approximately twice the size of the current floor
space after the expansion, the number of employees is also expected to double. Employee expense
for Soekarno Hatta Airport was 271.5 billion IDR for 2010; against that, employee expense is
projected to be 501.3 billion IDR after the new terminal is put into operation.
Of these, as part of the attempt to quantify benefits other than those captured by business entities
directly involved as lenders or shareholders, with regard to a) above, we computed the revenue
5-11
increase to the tenants in the terminal facility, such as retailers and service providers, in the event
that this project is implemented (“With” condition) and in the event that it is not implemented
(“Without” condition), and assessed the economic internal rate of return (EIRR) based on the
assumption that 30% of the revenue increase becomes the economic profits of the tenants.
The reasons for adopting only a) are that for b) Construction demand it is difficult to make a
comparison with the benefits from other projects in the event that this project is not implemented, as
well as the difficulty in making a comparison with the benefits from the current work carried out by
newly-hired staff with regard to c) Growth in employment. On the other hand, with regard to a), as it
is difficult to conceive of alternative spending for the consumption made by passengers while they
wait for their flights in their terminals, it has been assessed to be a new economic activity generated
as a result of this project.
5-12
[Premises]
 Through the enhancement of commercial facilities and services under the “With” condition, in
2016, when terminal expansion and renovation has been completed, it is assumed that the per
passenger consumption for domestic flights will increase 56% year-on-year and 81%
year-on-year for international flights. Thereafter, it is assumed to grow at an annual rate of 5%
for domestic flights and 2% for international flights.
 Under the “Without” condition, it is assumed that per passenger consumption for domestic
flights will increase from the current level to 5% per annum, and 2% per annum for
international flights.
 The benefits to passengers and airline operators using the terminal were replaced by the
business profits computed in the financial analysis laid out in Chapter 5, section (2) 2).
 With regard to project costs, Package (1), implemented as a public project by the Indonesian
government, has been added to the figures for Packages (2) and (3) used in the financial
analysis.
[Results of computation]
The EIRR obtained based on the above assumptions is at a high level of 17% in the base case.
5-13
Table 5-7: Base-Case EIRR Forecast for Package (3) invested by AP-II(in Million IDR)
5-14
Chapter 6
Planned Project Schedule
(1) Planned Project Schedule
The projected implementation schedule for this project, at this point in time, is set out as follows.
Figure 6-1: Projected Implementation Schedule for the Project
2011
2012
2013
2014
2015
2016
2017
Year
Quorter Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
Overall plan
Terminal 3
Pre F/S
Selection of consultant
Basic plan
Bid for project rights
Detailed design
Construction works
Project management
Terminal 2
Detailed design
Construction works
Project management
Terminal 1
Detailed design
Construction works
Project management
Taxiways, etc.
Detailed design
Construction works
Project management
Cargo terminal
Detailed design
Construction works
Project management
Connected Building Detailed design
Construction works
Project management
6-1
(2) Issues Pertaining to the Project Schedule
1) Establishing the division of functions for the passenger terminals
This study took reference from the JICA Master Plan study that had been started earlier, and the
schedule was reviewed based on the assumption that Terminal 3 will be used as an international
terminal. However, in the hearing sessions conducted by the Study Team in the site survey, it was
verified that policies relating to the division of functions for each terminal under this project have
also not been established within AP-II.
Hypothetically, in the event that the policy is to prepare Terminal 3 as a dedicated terminal for
domestic routes, the renovation plans for Terminals 1 and 2 will differ greatly from the assumptions
set forth in this study. Furthermore, it is also expected to have a significant impact on the shape that
concession projects will take.
In driving this project forward in the future, it will be important to decide, at an early stage, the
policies pertaining to the division of functions for the passenger terminals.
2) Relationship with the development plan for transportation infrastructure
While it has not been included in the scope of our project, the Indonesian Government has plans to
develop a rail system connecting the heart of Jakarta to Soekarno Hatta Airport. AP-II’s Grand
Design also takes it into consideration to enhance the connection between terminals and planned
railway station.
As the location of the rail station greatly influences the division of functions for passenger terminals,
and the location of concession businesses, it is necessary to take prompt steps to consult with the
6-2
related authorities on the tentative location of the rail station, and to come to a decision at an early
stage.
6-3
Chapter 7
Implementing Organization
1) AP-II
AP-II, the implementing organization on the Indonesian side, is a state-owned enterprise that is
100% owned by the Indonesian Government. It manages and operates Soekarno Hatta Airport,
which is the subject of this project, as well as 12 airports in the western part of Indonesia.
AP-II’s business area covers the management of the entire airport facility, including basic facilities
and terminal facilities. In addition, air traffic control operations for the western part of Indonesia are
also implemented by AP-II.
The management structure of AP-II comprises a head office organization made up of four
directorates (Operation and Engineering, Commercial and Business Development, Finance, and
Personnel and General Affairs) that come under the charge of the President Director. A branch office
is also located in each airport. The organization has a total of 4,988 employees. The highest
decision-making authority for managerial decisions is the Board of Commissioners.
7-1
Figure 7-1: AP-II Organizational Structure
Source: Prepared by the Study Team based on JICA,”Master Plan Study on Multiple-Airport Development for
Greater Jakarta Metropolitan Area in the Republic of Indonesia: Progress Report”, (March 2011)
Business conditions for AP-II have remained steady with the increase in passenger numbers
accompanying economic growth in Indonesia in recent years. In 2011, the company recorded strong
revenue takings with sales of 33 billion yen and ordinary income of 12 billion yen. Soekarno Hatta
Airport is a core business for the company, generating 80% of its sales and 134% of its profits.
Under the project scheme that has been in place till now, development and improvement of the
airport have been carried out under the direct control of the state, then transferred to AP-II for
management and operation after development has been completed. However, with the privatization
7-2
of state-owned enterprises under the Yudhoyono regime, AP-II has been shifted to a scheme under
which the company carries out airport development works independently. Currently, with regard to
the Medan airport, which is undergoing airport development works, while the development of basic
facilities comes under the state, the development and improvement of terminal buildings are being
implemented by AP-II. Other than Soekarno Hatta Airport, which is the target for this project, future
renovation plans for other airports are underway. However, these are scheduled for implementation
as independent AP-II projects.
In this study, we are proposing the scheme to jointly implement the passenger terminal development
project. AP-II has had the experience of establishing a joint venture with the airport authority of
Schiphol Airport during the development of the existing Terminal 3, and of driving a project. In
addition, AP-I, which is managing and operating airports in the eastern part of Indonesia, concluded
a business partnership with the Incheon International Airport Corporation in 2011 on future airport
development.
To sum up the above, AP-II is assessed to have more than sufficient capacity, in terms of business
conditions, organizational structure, financial base, achievement, and knowhow, to take on the role
of the implementing organization for this project.
7-3
Chapter 8
Technical Advantages of Japanese
Companies
(1) Expected Form of Japanese Involvement (Investment,
engineering, procurement & management, and operation &
management)
The anticipated projects for the expansion of Soekarno Hatta Airport are divided into the five broad
categories shown below. The anticipated sources of funds based on information obtained from
dialogues with the Indonesian Government and AP-II conducted to date and reports from media are
laid out as follows.
Table 8-1: Outline of the Soekarno Hatta Airport Expansion and Upgrading Project, and Anticipated
Sources of Funds for AP-II
Project item
Current anticipated source of funds
Implemented as public works with government
Package (1)
Repair of runways, aprons and taxiways,
etc.
funding
⇒After implementation, assets shall be transferred
to AP-II as equity or a grant.
Package (2)
Utility plant buildings, people mover, etc.
Retained earnings of AP-II, and procured from the
Package (3)
domestic market with AP-II as the borrowing entity.
Passenger terminal buildings
Package (4)
Cargo terminals
JV, including third-party funds.
Package (5)
Commercial buildings, hotels, offices, car
parks
Against the above, the Study Team proposes the following.
8-1
Table 8-2 : Anticipated Sources of Funds, Based on Assumptions by the Study Team
Project item
Current anticipated source of funds
Package (1)
Repair of runways, aprons and taxiways, etc.
Implemented as public works using yen loans.
As for Package (1), implemented as public works
Package (2)
using yen loans. However, in the event that it is not
Utility plant buildings, people mover, etc.
carried out as a public work, development will be
carried out through JV as per Package (3).
The managing company for Soekarno Hatta
Airport will be separated from AP-II, carry out
Package (3)
development of the terminal buildings using third
party equity participation, and operate for a fixed
period of time.
Package (4)
Cargo terminals
Construction is carried out in a concession style
Package (5)
Commercial buildings, hotels, offices, car
using third party funds.
parks
The expected form of involvement by Japanese investor group: Japan Air Terminal Co., Ltd., Itochu
Corporation and Shimizu Corporation, collectively called as “JIS”, can be summarized as follows.
8-2
Table 8-3: SHIA Expansion and Upgrading Project—Project Scheme Proposal
The management entity for aeronautical operations in Soekarno Hatta Airport is AP-II. For Packages
(1) and (2) described above in the event that they are implemented as public works, Japanese
involvement will mainly take the form of contractor for civil engineering and construction projects.
In addition, for Package (2), Japan is also expected to take on the role of operator under a BTO
(Build Transfer Operate) contract for services agreement, centered on post-completion maintenance.
With regard to Package (3), Japanese involvement will take the form of investing in equity of the
management company of Soekarno Hatta Airport spun off from AP-II. Japan is also expected to
develop the terminals as part of a joint venture with AP-II, and after the completion of the project, to
operate them jointly with AP-II.
With regard to Packages (4) and (5), Japan is expected to shoulder the construction and management
8-3
of facilities as an independent project implementing body. With respect to each type of contracts,
reviews were conducted as follows.
Commission for Package (1) Civil engineering works for runway extensions as well as the repair and
new construction of taxiways, and Package (2) Construction and operation of shared facilities
As the construction works for this project are expected to be implemented by the Indonesian
Government as public works, Japan is considering participating in the project through Japanese
companies that will act as construction contractors and operation contractors, rather than as the
primary project implementing body.
For a long period of time since the postwar recovery period, Japan has contributed to the
development of infrastructure in Indonesia, including roads and ports. In the area of airports, Japan
also has a proven track record, with Shimizu Corporation—a member of the recent
consortium—developing the new Padang airport in 200240, and Hazama Corporation developing the
new Palembang airport41 in 2003. AP-II currently owns and manages both of these airports, and
these results are expected to have an appeal.
In recent years, several projects have been implemented in the transportation sector, making use of
Special Terms for Economic Partnership (STEP). If we were to assume that Package (1) is
implemented as a government project, there is also a possibility that for development to be
implemented under STEP, as per the above. The Indonesian Government also has policies aimed at
40
Shimizu Corporation press release, January 4th, 2002
41
Hamaza Corporation press release, September 28th, 2005
8-4
reducing its public debt (detailed in Chapter 9: Financial Outlook), and requests for yen loans for
this project have not been confirmed.
Table 8-4: Track Record for Yen Loans Under the Special Terms for Economic Partnership (STEP)
in Indonesia’s Transportation Sector
Project
Jakarta Metropolitan Area
Highway Improvement
Project (I)
Jakarta Metropolitan Area
Highway Improvement
Project (E/S)
Tanjung Priok Port Access
Road Construction Project
(II)
North Java Corridor
Flyover Project
Tanjun Priok Port Access
Road Construction Project
(I)
Contracted
Loan contract
date
amount
Project implementing body
(Million yen)
March 31st,
48,150
2009
Government of the Jakarta
Special Capital Region
Directorate General of
November
1,869
28th, 2006
Railways, Ministry of
Transportation
March 29th,
26,620
2006
Highways, Department of
Public Works
March 31st,
4,287
2005
Regional Infrastructure,
Department of Public Works
March 31st,
26,306
2005
Regional Infrastructure,
Department of Public Works
Source: Prepared by the Study Team based on the information from JICA website
A point of concern is the possibility of a drop in price competitiveness, as the exchange rate for yen
against rupiah has risen more than 50% since 2002 and 2003, when Shimizu and Hamaza
Corporations were commissioned to take on airport projects in Indonesia. As shown in the following
figure, while the rupiah had maintained a rate of approximately 70 yen to 75 yen in 2002 and 2003,
the impact of the global financial crisis had caused it to rise beyond 130 yen by 2009. Thereafter,
although it rose to above 100 yen momentarily in April 2010, the yen continued to appreciate against
8-5
a weakening rupiah, and the rupiah depreciated to 116 yen as of November 2011.
Figure 8-1: Fluctuations in Yen and Rupiah Exchange Rates for the Past Ten Years (2002-2011)
■Most recent value/Closing
value/Price/Revised value 116.8939
High value 01/30/09
131.3907
Simple average
89.2401
Low value 06/06/03
68.8377
Source: Bloomberg (accessed on November 29th, 2011)
With regard to the development of shared facilities (utility plant, people mover, etc.) under Package
(2), while there are originally a part of the terminal building and a part of Package (3), they were set
up as a separate package due to the possibility of yen loans, in consideration of the public nature of
shared facilities (means of passenger transportation, the electricity and water supplies that are vital to
aviation services, etc.). The people mover is also operated in Narita Airport and Kansai International
Airport. In addition, an appeal can be made for the results achieved under each local government, in
the form of the new transit system—a short-distance unmanned transit system that can also operate
outside the airport.
8-6
Table 8-5: New Transportation Systems in Japan
Route (Known as)
Railway/
Operating
Year of
Tracks
distance
establishment
Remarks
Ina Line (New Shuttle)
Railway
12.7km
1983
AGT (side guide rail）
Nippori-Toneri Liner
Tracks
9.8km
2008
AGT (side guide rail)
Tokyo Waterfront New
Railway
6.8km
Tracks
7.9km
Tracks
10.6km
1989
Railway
2.8km
1985
Railway
4.1km
1982
AGT (center guide rail)
Railway
8.9km
2005
HSST (Maglev)
Nanko Port Town Line
Railway
3.3km
(New Tram)
Tracks
4.6km
Railway
3.0km
Liner)
Tracks
7.8km
Rokko Island Line (Rokko
Railway
1.5km
Liner)
Tracks
3.0km
Tracks
1.3km
Railway
0.3km
Tracks
18.1km
Transit Waterfront Line
(Yurikamome)
Kanazawa Seaside Line
Yamaguchi Line (Leo
Liner)
Yukarigaoka Line
Tobu Kyuryo Line
(Linimo)
Port Island Line (Port
1995
1981
VVVF inverter control
AGT (guide rails on both
1981
sides): First application in
Japan
1990
Hiroshima Short Distance
Transit Seno Line
1998
Skyrail
(Skyrail Midorizaka Line)
Hiroshima New Transit
Line 1(Astram Line)
1994
Source: Prepared by the Study Team based on “New Transportation System” on Wikipedia
8-7
Package (3) New construction of terminal buildings
While both the Indonesian Government and AP-II appear to be in agreement toward undertaking
construction with AP-II shouldering responsibility for the terminal buildings, there is a possibility for
the incorporation of third party funds for the development and operation of the terminal buildings.
This is due to a lack of knowhow on the construction and management of large-scale facilities, or
issues pertaining to funds procurement due to adverse changes in economic situation in the future.
The Study Team will review opportunities to participate in Soekarno Hatta Airport operations as a
project partner.
Previously, Indonesia had operated in the following style—the state would develop airport facilities,
and the completed facilities would be transferred to AP and AP-II . However, since several years ago,
it had shifted to a developmental policy aimed at suppressing government funds—existing airports
would be developed by the airport operators AP or AP-II, while new airports would be developed
through PPP by private-sector companies, selected through an open tender.
The new terminal buildings constructed using AP-II funds under the new government policy
includes Soekarno Hatta Airport Terminal 3 (total construction cost of 200 billion rupiah 42 ,
approximately 1.7 billion yen43 ), which commenced operations in 2010, and the New Medan
International Airport that is currently a work-in-progress, and which is slated to be the second largest
in scale in Indonesia.
42
http://baltyra.com/2010/03/05/terminal-3-soekarno-hatta-airport/
43
As of November 30th,１ IDR = 0.0085 yen (Bloomberg.com)
8-8
The New Medan International Airport airside is owned by the Indonesian Government, while the
landside is owned by a joint venture established between AP-II and the state and operated under a
30-year contract. Thereafter, the ownership rights will be transferred to AP-II through the BOT
(Build Operate Transfer) system. AP-II is anticipated to inject a total of US$315 million
(approximately 24.2 billion yen44) into this project45, and has allocated a carrying value of 1,050.3
billion IDR (approximately 9.1 billion yen46) to the construction in progress and other assets on its
balance sheet as of the end of 2010. Based on reports released in July this year, although the new
terminal is approaching completion, the construction of roads connecting the city to the new airport
has been greatly delayed, and the original launch of the airport scheduled for July this year will be
postponed to after 2013.
Photo 8-1: Terminal building of the New Medan International Airport
Source: July 13th, 2011 by Medan Indonesia, Medanku.com
44
Calculated at the rate of US$1 = 77 yen
45
May 15th, 2009, Kuala Namu International Airport | Medan Indonesia Pride http://www.medanku.com/
46
Calculated at the rate of 1 yen = 115 IDR
8-9
Photo 8-2: Grand design of the Medan airport (including after future extensions)
Source: May 15th, 2009 by Medan Indonesia, MedanKu.com
While the investment in the New Medan International Airport is one of the largest to-date by AP-II,
it has not been confirmed that there has been a significant increase in the amount of loans taken out
in tandem with the progress of this
project. The new terminal for Soekarno Hatta Airport is
believed to be the first project of a scale that requires the taking out of loans.
Expected Form of Involvement by Japanese Companies in the Management of Soekarno Hatta
Airport
As Soekarno Hatta Airport currently forms a part of AP-II, the following are the options that can be
taken into consideration as means of accepting third-party funds, including those from Japanese
companies.
8-10
a) Investing in AP-II
Figure 8-2: Conceptual image of investment in AP-II
AP II
Assets
Liabilities
12 airports in
various parts
of Indonesia
Capital
Japanese
Investors
AP-II is currently owned wholly by the Indonesian Government, and there are no plans for
privatization.
Hypothetically, even in the event that the Indonesian Government takes up the option of partial
privatization, investment analysis would be difficult due to the need to assess policy risks,
including the future of an unprofitable airport for investors.
b)
Spinoff of Soekarno Hatta Airport into a separate company for a fixed period of time
Figure 8-3: Conceptual image of Soekarno Hatta Airport spin-off
AP II
T1, T2,
T3, cargo,
land
Liabilities
Capital
Soekarno Hatta
Spin-off
Financing by
AP-II
8-11
Japanese
financing
Soekarno Hatta Airport is the most profitable airport, and this form would be the easiest way to
receive third party equity and the procurement of debt.
The spin-off and partial privatization of Soekarno Hatta Airport was reviewed after the Asian
economic crisis, at the request of the IMF. In reality, an international bidding took place (Paris
Airport Authority won the negotiation rights). However, as a result of opposition within
Indonesia and other factors, it was not implemented, and complete privatization is believed to
be fraught with difficulties.
As such, we believe that the review should proceed with a focus on proposing to keep the
ownership of the airport with AP-II, separate all Soekarno Hatta Airport operations for a fixed
period of time, accept third party funding, and develop the terminals and improve operations.
This would be similar to the concept of concessions applied to infrastructure PPP. The
assumption is that AP-II, which is the current owner of the facilities and concession rights, will
exchange the relevant assets and rights for a certain value, and lend these to a third party for a
fixed period of time.
However, there is a need to conduct detailed studies, including dialogues with the Indonesian
authorities, into the practicalities as well as legalities involved in bringing this to fruition.
8-12
c) Separation of passenger terminal operations for a fixed period of time
Figure 8-4: Conceptual image of passenger terminal spin-off
AP II
Extension
Existing
facility
Existing
facility
Japanese
financing
Financing by
AP-II
This scheme involves the separation of the operations of Soekarno Hatta Airport, which is
currently managed under a vertically integrated system (as for Narita Airport); airside
operations including runways and apron will be handled by AP-II, while the ownership and
management of the terminal buildings will be undertaken by the newly established JV (as for
Haneda Airport).
As for b), there is no need to the separation to be permanent; after a fixed period of operation,
the ownership rights will be transferred to AP-II under the concession system.
The division of roles for AP-II and JV after the vertical separation can be classified under two
broad categories.
8-13
(1) Annuity (receive certain fees from AP-II)
Figure 8-5: Conceptual image of annuity arrangement
Dividend
Usage fees
AP II
Equity investments
Shared
services
among
buildings
JV
Facility
usage fees
Loans
(T1-3)
Equity investment and
O&M
User
Passengers
Airlines
Bank
Repayment
Dividend
Japanese
Companies
This system is frequently used by Japanese PFI. On the one hand, JV will be able to
enjoy stable revenues in the form of facility usage fees from AP-II; on the other hand,
the scope for increase in benefits are limited.
8-14
(2) Concession (Investors take business risks)
Figure 8-6: Conceptual image of concession arrangement
Dividend
Usage fees
Financing
AP II
Agreement
on
operations
JV
Usage fees
Repayment
(T1-3)
Financing
O&M
User
Bank
Dividend
Loans
Japanese
Companies
This system is used by the international terminal of Haneda Airport. However, as the
bulk of Soekarno Hatta Airport’s profits are made up of airport taxes, it would be an
issue to have AP-II and JV come to an agreement on profit sharing rules.
Comparison of Options and the Orientation of This Study Team
The merits and demerits of each option to investors have been organized as follows.
8-15
Table 8-6: Comparison of Options and the Orientation of This Study Team
Merits
(a) Investment in AP-II
Demerits
No costs accompanying the
Need to maintain unprofitable
separation of operations,
local airports, as well as to bear
such as negotiations,
the costs of development
administration, taxes, etc.
(b) Investment in spinoff of
Possibility of gaining
Gives rise to obligation to pay a
increased profits from airline
large concessionary fee to
companies as a result of the
AP-II.
enhancement in the aviation
department, as well as the
Citizens are expected to oppose
increased profits as a result
the partial privatization of an
of sales expansion in the
airport in the capital city.
commercial department.
(c) (1) Separation of
Stable profits
Limited room for expansion of
operations for the terminal
profits
(Annuity)
(c) (2) Separation of
Possibility of gaining
Possibility of suffering losses
operations for the terminal
increased profits as a result
in the case that the commercial
(Concession)
of sales expansion in the
department does not fare well.
commercial department.
This study team is oriented toward (b) Spinoff of Soekarno Hatta Airport into a separate company
for a fixed period of time. This option allows us to aim for greater profits not only from the
enhancement of non-aviation sectors such as the commercial department, but also from the increase
in aviation income from landing fees and aircraft parking fees.
Summarizing the dialogues and media reports to date, the Directorate General of Civil Aviation
(DGCA) of Indonesia views the participation of foreign companies in this project as one of the
options under consideration. On the other hand, AP-II is headed toward the direction of conducting
8-16
the aviation and passenger terminal businesses by itself, while working in collaboration with foreign
companies on the new cargo terminal, the commercial sector, and hotels. This differs from the form
of involvement that our group is considering.
Even as the maximum investment (of 49%) remains a legal limitation to the fixed-period spinoff of
Soekarno Hatta Airport, which is what our study team prefers, AP-II’s policy is to keep up the
operation of the airport—its core business—independently. For that reason, the first step toward
bringing this project to fruition would be to gain AP-II’s understanding on the involvement of a third
party in the operation of Soekarno Hatta Airport. Going forward, it is important to keep up outreach
efforts in view of the potential merits to be gained in partnering with our group.
Packages (4) and (5)
With regard to Terminals 1 and 2 connecting buildings, the new cargo terminal, commercial facilities,
and hotels, AP-II has reviewed these and designated them as non-core businesses.Therefore, AP-II
appears to be considering undertaking the development of these facilities using third party funds
under the concession system.
Currently, at Soekarno Hatta Airport, part of the non-aeronautical operations such as commerce- and
cargo-related operations are managed using third party funds under the concession system, and
concession revenues make up the largest share among non-aeronautical revenues.
8-17
Table 8-7: Major Concession Contracts
Contracting party
PT Wahana Dirgantara
Project
Contract
Period
type
year
(Year)
BTO
2005
Contents
Development of warehouse
2,292m2, offices 340 m2, space for
disposal of goods 2,664 m2, car
parks 2,584 m2, connecting roads
Sanggraha Daksa Mitra
BOT
1999*１
20 years
Development and management of
golf course, parks, shopping
centers located on approximately
1,000,000 m2 of land
PT Birotika
BOT
1999
20 years
Semesta/DHL
Construction and management of
warehouses and offices located on
approximately 1,411.20 m2 of land
*1
There are no records of contract date on AP-II annual reports. Date of commencement of operations for golf
course based on information from Wikipedia.com.
The period of “20 years after commencement of operations” is set out in AP-II’s annual reports.
*2
Calculated based on the rate of 1 yen = 115 IDR.
In a concession contract, the participating company takes over, from AP-II, the rights to use the land
and carry out operations laid out in the contract for a fixed period of time (20 to 25 years), and
constructs facilities and carries out business operations at its own risks. The strengths of Japanese
companies with regard to air cargo handling facilities and the operation of commercial facilities are
as follows.
 Japan’s air cargo handling volumes clearly surpasses that of Indonesia’s, and it also possesses
experience in working with ground logistics.
 With respect to the operation of commercial facilities in airports, Japan has significantly
higher per passenger expenditure than Indonesia, and possesses a high level of knowhow in
the development and management of facilities in diverse areas, such as product retail, F&B,
8-18
hotels, and multistory car parks.
Packages (4) and (5) are not the main targets for review in this report, and consideration of
involvement in these packages is dependent upon future developments.
(2) The Competitive Advantage that Japanese Companies have in
the Implementation of this Project (Technology , Economic
Aspects)
1) Technology
a) Environmental technologies
Airports are made up of massive buildings and civil engineering structures, and leave a deep impact
on the environment throughout all stages of development, construction, and management. With
regard to Japanese airports, consideration is given to the environment during development, and
environmentally friendly technologies are actively incorporated into the buildings. Similarly, in this
project, through design and construction work carried out by Japanese companies, it is possible to
create environmentally friendly architectures that incorporate numerous environmental technologies.
For that reason, Japanese companies have a strong competitive advantage in this project. The
concrete measures are as follows.
[Use of natural energy]
Settingup of photovoltaic systems
Conservation of energy through the use of natural light in wide, open spaces
8-19
Figure 8-7: Example of the use of natural energy in the airport
Solar power generation panels
Utilization of daylight
Source: Records of terminal facility construction at Central Japan International Airport
[High-efficiency facility systems]
Introduction of high-efficiency equipment aimed at energy conservation, such as inverter and LED
lighting.
Introduction of lighting controls that utilize daylight sensors and motion sensors.
Setting up of cogeneration systems.
[Effective use of resources]
Introduction of rainwater recycling systems
Introduction of water recycling systems
Use of recycled materials
b) Construction technologies
With regard to construction technologies with low environmental burden, Japanese construction
companies may also have superior technological prowess. For instance, in the construction of
Central Japan International Airport, iron and steel slag (by-products that arise in the manufacturing
of steel) were actively used in the roadbed of large-surface roads such as runways, as part of efforts
8-20
to use resources effectively. In addition, in concrete paving works such as for aprons, Japanese
companies have a track record for using slip form methods (approximately 60% of the paving
surface) as opposed to formwork47. The utilization of high quality management knowhow in the
management of construction materials and waste materials during the period of construction is also
anticipated. With regard to consideration for the surrounding environment during construction,
Japanese companies have also previously succeeded in reducing the burden on the surrounding
environment through methods such as continuous monitoring.
c) Disaster response and support for BCP (Business Continuity Plan)
The quake-resistance levels of Japanese architecture are the highest in the world, and buildings that
utilized Japanese quake-resistant technologies are also considered to have been extremely effective
in protecting lives and serving as emergency centers during the recent major earthquake in Indonesia.
With regard to measures against the large number of natural disasters that have hit Indonesia in
recent years, such as volcanic eruptions, earthquakes, and hurricanes, it is also possible to formulate
facility plans that utilize BCP support technologies refined through natural disaster responses in
Japan. These include response measures when infrastructure is cut off, such as measures in the event
of power outages and water shortage.
d) Operations
At Soekarno Hatta Airport, with its conspicuous inadequacy of security and aging equipment,
Japanese companies will also be able to exert their competitive edge in operational aspects, such as
the introduction of advanced security systems such as fingerprint authentication systems, as well as
the introduction of the latest baggage handling systems that make use of IC tags and CT scans. Japan
47
Homepage of Central Japan International Airport (http://www.cjiac.co.jp/)
8-21
is also considered to have superb technologies in the area of BMS systems, which are able to grasp
energy consumption patterns in a building and carry out the appropriate energy management,
including tenant billing.
2) Economic aspects
While the technological superiority of Japanese companies is often acknowledged, the historical
impact of yen appreciation has given rise to an undeniable disadvantage in terms of cost. With
respect to technological capabilities that can justify high costs, it is important to work toward
convincing the parties in question.
On the other hand, in the aspect of financing through ODA and export finance institutions, Japanese
companies are believed to have a competitive advantage over other countries. As will be described
later in Chapter 9, Japanese ODA has a very dominant position with respect to the Indonesian
Government, and Japanese financial institutions are also providing loans toward infrastructure PPP
projects in Indonesia.
(3) Measures Necessary to Promote the Issuance of Orders with
Japanese Companies
The three Japanese companies that proposed this study—Itochu Corporation, Shimizu Corporation,
and Japan Airport Terminal Co., Ltd.—have the intention of participating in this project. The three
Japanese companies involved in this study envisage participation in the passenger terminal project as
part of a joint venture with AP-II, the current operator of Soekarno Hatta Airport, and the assumption
is that independent account projects such as hotels will be commercialized under a corporate entity
8-22
centered on a Japanese company. However, as of now, AP-II has announced to the press its
intentions to independently implement the terminal project and acknowledge external investments in
concession projects such as hotels. This is not in complete accordance with the intentions of the
three Japanese companies.
For that reason, while it is important to continue to push for swift consultations with AP-II toward
the implementation of the project, we look forward to receiving the following support from the
Japanese Government as a push toward consultations.
1) Financing
While details will be laid out in the following chapter, in the event that the Indonesia side raises a
request for yen loans for the public works portion of the project, we would like to request that the
Japanese Government take prompt steps to review the provision of yen loans, and to provide
capacity building support for AP-II and other related agencies that have no experience in utilizing
yen loans.
2) Personnel exchange, and invitational exchanges for AP-II
As it appears that the management of AP-II is conducting observations and training to airports
overseas, as countermeasures, we believe that it would be very meaningful to invite AP-II
management to conduct observations and training at Haneda Airport. We look forward to receiving
support from the Japanese Government toward such observations and training.
8-23
Chapter 9
Outlook for Fund Procurement
(1) Review of Sources of Funds and Financing Plans
The anticipated sources of funds for each of the five packages included in his proposal are laid out as
follows.
Table 9-1:Anticipated Sources of Funds for Each Target Construction Project
Project item
Current anticipated sources of funds
Package (1)
Taxes
Repair of runways, aprons and taxiways,
Government bonds (domestic and foreign)
etc.
Loans from aid agencies, such as yen loans
Package (2)
In the event of public works: Same as
Utility plant buildings, people mover,
Package (1)
etc.
In the event of JV: Same as Package (3)
Package (3)
Self-funding by AP-II and JIS
External loans (Subletting of yen loans from
the government, local banks, Japanese
government agencies)
Categorizing these sources of funds gives us the following.
Table 9-2: Target Construction Project for Each Source of Funds
Source of funds
Target construction project
a) Yen loans (for the public works
portion of the project)
Package (1)
Consider potential for Package (2)
b) External loans
(Subletting of yen loans, banks,
bonds)
Package (3 )
c) Japanese government agencies
Probably for Package (2)
d) AP- II self-funding
e) JIS self-funding
9-1
In our consideration of possibility of funding and cash flow analysis contained in the following
chapters, we assumed that 60% of total costs for Package (2) and (3) should be raised from debt.
Given the assumption on the investment costs in Chapter 5 of 19 billion Yen for Package (2) and 70
billion Yen for Package (3) plus 10% for design and contingency, total debt would be 58.7 billion
Yen, or 7 trillion Rupiah, for Package (2) and (3) and 46.2 billion Yen, or 5.4 trillion Rupiah, for
Package (3).
(2) Possibility of Funding
1) Yen loans (for the public works portion of the project)
Financing by the Indonesian Government for large-scale public works such as Package (1) is
obtained from the broad categories of taxes, issuance of government bonds in the domestic market,
issuance of government bonds overseas, and loans from overseas aid agencies.
As described in Chapter 1, the Indonesian Government adheres to a strict code of fiscal discipline.
For that reason, for projects that require massive investments and for which returns can only be
recouped in the long-term, financing is obtained not through taxes, but through long-term debts.
The means through which a government can procure financing include the issuance of government
bonds locally and overseas, as well as loans from aid agencies; it is up to the Indonesian Government
to decide the course it wishes to take. Japan makes up a significant proportion in the area of loans
from aid agencies, and there is a high possibility for the materialization of a long-term, low-interest
loan (yen loan) from JICA should the Indonesian Government wish to receive assistance from the
Japanese Government.
9-2
Table 9-3: Balance of ODA Loans Taken Out by the Indonesian Government
(As of the Second Quarter of 2011, million USD)
Creditor
Loan outstanding
Share
Japan
27,001
43%
ADB
10,866
17%
IBRD
8,932
14%
IMF
3,163
5%
France
2,436
4%
IDA
2,392
4%
Germany
1,983
3%
USA
1,187
2%
Total
62,317
100%
Source: prepared by the Study Team from Indonesian Financial Statistics Vol.9, www.bi.go.id
Loan terms for yen loans are overwhelmingly advantageous to the debtor with regard to nominal
interest rate. The current distribution yield of Indonesia’s national debt in the domestic market has
dropped to its lowest levels historically, against a background of subsiding inflation. Despite that,
the yield on a 10-year loan is 6.75% in the local currency and 4.46% in US dollars. In contrast,
Special Terms for Economic Partnership (STEP) yen loans have a fixed interest rate of 0.2% over a
40-year loan period, and a fixed interest rate of 1.4% (similarly targeted at countries with low GDP)
over a 30-year loan period even under standard terms.
9-3
Figure 9-1: Indonesia’s Yield on Government Bonds in its Local Currency (Closing Prices as of
November 24th, 2011)
Source: http://asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=government_bond_yields
Table 9-4: Loan Terms for Yen Loans
Income
GNI per capita
level
(2009)
Below US$1.906
Below US$3.945
Interest
Repayment
Option
rate (%)
period (Year)
Standard
1.40
25
7
Option 1
0.95
20
6
Option 2
0.80
15
5
Standard
0.65
40
10
Priority
Option 1
0.55
30
10
terms
Option 2
0.50
20
6
Option 3
0.40
15
5
Standard
0.20
40
10
Option
0.10
30
10
Terms
General
terms
Middleincome
countrie
s
Grace
Standard/
STEP
period
(Year)
Procurement
conditions
Untied
Untied
Tied
Source: JICA Website
However, it is not possible to make a comparison of loans in different currencies based only on
nominal yields; there is a need to include exchange rate fluctuation risks in the review. While the
9-4
Indonesian rupiah is relatively stable against the US dollar, its value against the yen has dropped
significantly. Hypothetically, if it had received a yen loan around August 2008, the principal and
interest calculated in rupiah would have increased by approximately 35% in three years. Should it
have received a yen loan before the Asian economic crisis, the principal and interest calculated in
rupiah may have become more than five times that of the original. In comparing the cost of loans,
there is a need to recognize that the debtor’s outlook for exchange rate fluctuations can also play an
influencing role.
Figure 9-2: Long-term Trends for Indonesia Rupiah and Japanese Yen Exchange Rates
■Most recent value/Closing
value/Price/Revised value 116.8939
High value 01/30/09
131.3907
Simple average
77.6308
Low value 04/11/97
19.0840
Source: Bloomberg
In addition, information has also been received to the effect that AP-II has raised concerns that yen
loans take too much time to materialize. Yen loans are based on a principle of cooperative formation,
and there is a need for coordination with aviation authorities and planning ministries in Indonesia,
negotiations between the Indonesian and Japanese Governments, and budgetary measures in Japan.
That is why a certain amount of time is required for the process, from the commencement of
9-5
negotiations to the granting of funds.
2)
On-lending of yen loans to AP-II
As a public work, yen loans are provided directly to the government but on-lent to state-owned
enterprises when they act as the main entities to projects. However, with regard to this project,
there have been no discussions from AP-II pertaining to the on-lending of yen loans.
AP-II is a state-owned enterprise, and is able to receive yen loans on-lent from the Indonesian
Government. The terms of conditions for sub-loans are currently under review, pending the revision
of an article, by the Ministry of Finance of Indonesia, but are as follows under existing regulations48.
(i) In the event that the Ministry of Finance of Indonesia converts it to rupiah and on-lends it to a
state-owned enterprise, the interest rate will be 1% on top of the market interest of Indonesia’s
central bank securities (SBI).
(ii) In the event that it on-lends the loan in yen, the interest rate will be 0.5% on top of the yen loan
interest rate.
With regard to the interest rate of the central bank securities (SBI), items with a six-month period
have conventionally been used as an indicator. However, as six-month central bank securities are no
longer being issued, the substitute indicator has not been established. According to the Indonesia
Financial Statistics49, comparing the average values for September 2011, assuming that the interest
rate—in the event that the policy interest rate (Bank Indonesia Rate or BI Rate) is cited—is 7.75%
(BI Rate 6.75% plus 1%) (as of September 2011), the interest rate in the event that nine-month
48
Article 3 of the Regulation of Minister of Finance of Republic of Indonesia Number: 259 / KMK.017./1993
49
Bank Indonesia Website as of November 19, 2011
9-6
central bank securities are cited will be 7.28% (SBI 9 months 6.28% plus 1%) (as of September
2011); these will be more advantageous to the debtor than the average 10.57% rupiah loan interest
rates offered by state-owned commercial banks. However, as the potential of the issuance of bonds
and of obtaining loans with much more advantageous loan terms than those of the average interest
rate, as a result of the strong financial base and profitability of AP-II, is also plausible, there is a need
to be cautious in asserting the advantages.
Taking out loans in yen is not a common practice among Indonesian enterprises. According to
statistics released by Bank Indonesia, 16% of all bank loan balances as at the end of August 2011
were in foreign currency denominations50, and according to an interview study of local bank officials,
most of these foreign loans were in US dollars. According to the Indonesia Financial Statistics51
mentioned previously, the average interest rate for US dollar-denominated loans is 4.75% (as of
September 2011). Despite being significantly lower than rupiah-denominated loans, these loans are
mostly taken out by export companies that gain revenues in US dollars, and there are few companies
that would attempt to maximize interest savings while bearing the risks of exchange rate fluctuations.
In the Asian economic crisis that hit after 1997, many business operators who have retained the
memory of the rupiah crash have been reluctant to take foreign exchange risks. As the yen has also
risen significantly against the rupiah in recent years, there is a need to assess how AP-II evaluates the
foreign exchange risks that accompany the taking out of yen loans. Swaps, which hedge the foreign
exchange risks for long-term yen loans, which extends to more than 30 years, do not exist in rupiah.
(Please refer to the previous “Long-term Trends for Indonesia Rupiah and Japanese Yen Exchange
Rates.”)
50
Indonesian Banking Statistics, Vol.9, August 2011, p.4, “Commercial Banks’ operation”
51
Bank Indonesia Website as of November 19, 2011
9-7
In addition to these concerns, as described earlier, the promulgation of external debt reduction
policies by the Indonesian Government is also an important point to consider in reviewing the
advantages of a yen loan. As the subletting of the loan in rupiah, described in (1) above, is expected
to provide better loan terms that that for borrowing from a commercial bank, it may be a desirable
option for AP-II. On the other hand, there may be some unease as to whether or not the Indonesian
Government, in its drive to reduce public debt, will select the option of taking a yen loan as a public
debt in a case where AP-II is able to procure financing independently.
3) Loans from local banks
Indonesia’s financing environment is considered to be in good condition. Against the background of
a favorable economy, bank finance is seeing an annual growth of more than 20%, and the bond
market is also developing gradually. With the high profile and monopolistic position in air travel in
the Jakarta metropolitan area, it is considered possible for AP-II to procure tens of billions yen
necessary for the implementation of Packages (2) and (3). However, with regard to Packages (4) and
(5) which will be implemented as independent projects under JIS, despite having a monopolistic
position in the areas of “treatment of air cargo” and “passenger services in the airport,” it faces high
commercial risks as it lacks the track record of having the stable revenues that the passenger
terminals are able to generate. As such, there is a possibility that the parent company is requested to
act as guarantor.
Financing Capability of Bank Indonesia
As of the end of June 2011, the ratio of loans to local commercial bank deposits was as low as 66%52.
52
Financial Stability Report, No.11, September 2011, Bank Indonesia, page 26
9-8
In order to ensure economic growth, Bank Indonesia has even taken the exceptional measure of
penalizing banks that do not lend out more than 78% of their deposits (starting from March 2011) 53.
While the low loan-deposit ratio serves as a liquidity measure for the Indonesian economy, which
faces extreme fluctuations, a large part of it can be attributed to the lack of good financing targets.
Major banks seeking borrowers are believed to welcome new financing demands from good
borrowers.
The lending power of major Indonesian banks is a factor, but there is also a need to take note of the
fact that Indonesian regulations on the maximum lending limit that can be provided to a single
company to 20% of its shareholders’ equity. Under current conditions and based on Indonesian
Banking Statistics, the loan limit for the top four banks as of the end of 2010 was 252.9 billion yen.
The tens of billions yen of funds that are needed urgently for the expansion of Soekarno Hatta
Airport is unlikely to hit the loan limit ceiling.
Table 9-5: Assets and Loan Limit of the Top Four Banks in Indonesia
(IDR billion)
Rank
Bank Name
Market
share
Total
assets
Loan limit
(20% of
equity）
(JPY 100 million)
Total
assets
Lending
limit
1
Bank Mandiri
13.59%
449,775
8,309
38,231
3,531
2
BRI
11.37%
404,286
7,335
34,364
3,117
3
Bank Central Asia
10.84%
324,419
6,822
27,576
2,899
4
BNI
7.75%
248,581
6,624
21,129
2,815
43.55% 1,427,060
29,089
121,300
12,363
Total
Source: Prepared by the Study Team from Indonesian Financial Statistics Vol.9, www.bi.go.id
In reality, three of the four banks listed above provided a total of 4.7 trillion IDR (approximately 47
53
“Bank Indonesia’s lending drive risk creating bad loans”, Jakarta Post, March 1, 2011
9-9
billion yen at prevailing rates at the time54) for the infrastructure project in Indonesia described
below, under a financing agreement concluded in January 2010.
Table 9-6: Breakdown of Financing for Semarang-Solo Road (Toll Road, 76km)
(1 trillion IDR)
Use
Source
6.83
4.70
Loan
1.84
Bank Mandiri
1.61
Bank Negara Indonesia
1.15
Bank Rakyat Indonesia
0.10
Bank Jateng
2.13
Financing
Jasa Marga(State Owned)
Sarana Pamganguan Jawa Tengah
（Regional Government Owned）
Source: Prepared based on an article from Projectfinancemagazine.com55
Although average loan interest rate are announced for each type of bank, these include the average
values for small and medium-sized enterprises; loans for large, blue-chip companies are thought to
carry lower interest rates than the rates shown below, and higher risk transactions, such as for
nonrecourse financing, should carry higher interest rate.
In addition, while the following statistics are valid up till September, Bank Indonesia’s interest rate,
which is a policy interest rate, fell by 0.25% in October and 0.5% in November. Currently, it has hit
its lowest level in history at 6%, and thecurrent rupiah interest rate may fall even lower than the rate
as of September.
54
Calculated based on the rate of 1 IDR＝0.01 yen
55
Four lend into Trans-Java toll road, 08 Jan. 2010, www.projectfinancemagazine.com
9-10
Table 9-7: Average Interest Rates of Yen and US Dollar Denomination Facility Loans
Average Interest Rate for Rupiah-Denomination Facility Loan (%, from Jan to Sep 2011)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
State-owned
10.71
10.67
10.61
10.61
10.59
10.60
10.60
10.56
10.57
banks
Commercial
12.25
12.20
12.18
12.16
12.16
12.13
12.11
12.10
12.06
banks
Foreign
10.56
10.79
10.96
10.64
10.64
10.65
10.47
10.56
10.11
banks
Average Interest Rate for Dollar-Denomination Facility Loan (%, from Jan to Sep 2011)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
State-owned
5.04
4.96
4.82
4.83
4.88
4.85
4.64
4.64
4.75
banks
Commercial
5.17
5.06
5.12
5.07
5.00
4.90
4.77
4.73
4.86
banks
Foreign
3.30
3.39
3.39
3.26
3.14
3.14
3.11
3.12
3.22
banks
Source: Prepared based on the website of the Central Bank of Republic of Indonesia, Indonesian Financial Statistics
The problem of collateral could pose a problem when receiving bank financing. With regard to the
fixed period spin-off of Soekarno Hatta Airport under consideration for this project, if the ownership
rights of the land and buildings are wholly transferred to the new company, the bank may require
collateral before providing a loan. In the event that the ownership rights remain with AP-II, there is a
need for a framework for collateral provided by a third party guarantor.
Issuance of Bonds in Indonesia
In the event that the amount obtained through the bank loan is insufficient in making up the amount
needed, there is also an option of bond issuance, with consideration for the creditability status and
high profile of AP-II. While the interest rate for bonds tends to be higher as compared to bank
financing, banks that require large amounts of long-term funding as well as power companies and
9-11
vender finance companies that have a demand for funding that exceeds the bank loan limits have
issued tens of billions yen in bonds.
4) Loans from Japanese government agencies, excluding yen loans
In the event that AP-II and the Japanese companies that will become sponsors have the intention of
borrowing at dollar denominations, there may be room to make use of low-interest, long-term
financing and guarantees from Japanese governmental financial institutions.
While it is entirely possible to offer favorable terms for the dollar-denomination facility financing
loans from the abovementioned Indonesian banks should Japanese governmental financial
institutions seek support from the Indonesian Government, there is a possibility that it could become
a burden to AP-II.
5)
Risks in procurement of funds
The recent European financial crisis is in an extremely precarious state. Should its impact reach
ASEAN, including Indonesia, it is possible that it would have considerable influence on the
procurement of financing for this project. However, in such a situation, the Study Team may be able
to exert its strength in utilizing public low-interest, long-term financing from Japan even more
effectively.
9-12
(3) Cash Flow Analysis
In financial analysis, based on the involvement form b) in Chapter 8 (1), the concession rights for 20
years of operation of Soekarno Hatta Airport are acquired at a consideration of 600 billion IDR
(approximately 5.1 billion yen56) yearly, and the feasibility of the project was verified through the
computation of its Financial Internal Rate of Return (FIRR) in order to derive the health of its
investment and profit balance, in the event that a terminal renovation and extension project is
implemented. This assumption differs from AP-II’s policy of “having AP-II independently develop
and manage the terminals,” and ultimately, the review was conducted only as one of the project
implementation options available.
As described in the appended materials, assuming that 40% of total investment costs by equity and
the remaining 60% by local debt (12% fixed interest and twenty-three year term), return on equity
(ROE) is a satisfactory 15% when the ancillary facilities are not included (See Table 9-8); however,
should the ancillary facilities be included, the rate will be 11%, a level at which judgment could fall
either way (See Table 9-9). In addition, as there is a risk that aviation demand may decline as a result
of various factors such as terrorism, war, and infectious diseases, a “down-side case” hypothesis was
also established in which the number of passengers decreases by 10% every three years. In this case,
the return on equity (ROE) will be 14% if ancillary facilities are not included and 10% if they are
included (See Table 9-10 and Table 9-11).
However, as investment yield is largely dependent upon the increase in concession costs to AP-II,
the appeal of the project to Japanese companies will depend upon negotiations with AP-II.
56
As of November 30th, 1 IDR = 0.0085 yen (Bloomberg.com)
9-13
The cash flow analysis is based on the following key premises.
Form of involvement: A joint venture is established in partnership with AP-II, and concession rights
to operate Soekarno Hatta Airport for 20 years are acquired.
Premises for income
 Under the base case, based on the estimates in the interim report drawn up by the JICA Master
Plan Team, the total number of passengers on domestic and international routes are expected
to continue increasing in the future, reaching the maximum permissible number of 60 million
people by 2017, and flattening out thereafter. Under the “down-side case,” starting from 2018,
the number of passengers is predicted to decrease by 10% every three years.
 Air traffic control operations, which are under review to be transferred to the government, are
not included in the income forecast. (The air traffic control revenue for 2010 for this airport is
assumed to be 82% of AP-II.) There are no changes to landing and aircraft parking fees, and
income is predicted to increase at the same rate as that of passenger increase.
 Airport tax is assumed to stay at current levels—40,000 IDR for domestic routes and 150,000
IDR for international routes.
 With the enhancement of commercial facilities, the unit sales for each passenger has been
raised to approximately 220,000 IDR (in line with other international airports) by the year
2019 for international route passengers, and to approximately half of that at 120,000 IDR for
domestic route passengers. The airport receives 15% of the amount as concession revenue.
 Floor rent is taken to be same amount as it currently is, and vacancy rate—including the
increased floor space—remains at 80%.
9-14
Premises for expenses
 No significant cost reductions are predicted. Operating expenses for Soekarno Hatta Airport
for 2010 are expected to increase at the same ratio as the terminal floor area. (Operating
income for 2010 for the airport is assumed to be 82% of AP-II.)
 One trillion IDR (more than 60% of Soekarno Hatta Airport’s operating income for 2010) is
paid to AP-II as the concession fee collateral for the operation of Soekarno Hatta Airport.
 The establishment of the new company is taken to be the year 2012, and construction
investment takes place in the four-year period from 2013 to 2016. From 2016, it is predicted
that the total building floor area (307,147 m2 as of 2010) will double to 682,147 m2, and the
floor area that can be leased will increase 6.25 times from the current 8,000 m2 to 50,000 m2.
 Ancillary works, including airside projects and unmanned people mover, are assumed to come
under the national budget for public works and be transferred to Soekarno Hatta Airport at no
charge. However, a second scenario, in which ancillary works are undertaken at the expense of
Soekarno Hatta Airport, is also under consideration.
 The operating cost of the unmanned people mover is predicted to be 50 billion IDR per year
(approximately 425 million IDR57).
 60% of investment costs will be financed with a rupiah-denomination loan at 12% interest,
and the loan will be returned over 19 years (5% of principal every year, and 10% in the last
year only) from the year after works on all terminals have been completed.
 One trillion IDR (more than 60% of Soekarno Hatta Airport’s operating income for 2010) is
paid to AP-II as the consideration for concession rights.
57
As of November 30th, 1 IDR = 0.0085 yen (Bloomberg.com)
9-15
Table 9-8: ROE for Package (3), without ancillary facilities (BASE CASE) (IDR million)
9-16
Table 9-9: Equity IRR for Packages (2) and (3), with ancillary facilities (BASE CASE)
(IDR million)
9-17
Table 9-10: Equity IRR for Package (3), without ancillary facilities (DOWNSIDE)
(IDR million)
9-18
Table 9-11: Equity IRR for Package (2) and (3), without ancillary facilities (DOWNSIDE)
(in million rupiah)
9-19
Chapter 10 Action Plan and Issues
(1) Status of Activities for the Implementation of the Project
1) Status of activities of three Japanese companies
Three Japanese companies, namely ITOCHU Corporation, Japan Airport Terminal Co., Ltd., and
SHIMIZU Corporation, are enthusiastic about participating in the Soekarno Hatta Airport expansion
project. As indicated in Chapter 8 (1) of this study, the three companies propose to participate in the
project in its entirety. Specifically, the companies envision participating in the passenger terminal
project jointly with AP-II, the current operator of Soekarno Hatta Airport, and furthermore,
establishing standalone businesses, including hotels, with Japanese companies fulfilling a central
role in the corporate structure.
As of this report’s publication, AP-II has announced to the press its policy to implement its own
terminal project and to permit foreign investment in concession projects, including hotels. This
policy contradicts partially with the wishes of the three Japanese companies.
In parallel with this study, Japan Airport Terminal Co., Ltd. has proposed to forge a business alliance
with AP-II for the operation of the airport. Japan Airport Terminal Co., Ltd. has over a 50-year track
record with terminal building operations at Haneda Airport. Soekarno Hatta Airport shares many
similarities with Haneda Airport, including: its positioning as a capital city airport; the characteristics
of its passengers (the number of domestic flight passengers significantly outweigh the number of
international flight passengers); and its function as the hub airport of the country. It is thus believed
that the business alliance will be extremely effective for the future operation and management of
Soekarno Hatta Airport.
10-1
2) Status of other activities in Japan
Ahead of this study, JICA, at the request of DGCA, is implementing the Project for the Master Plan
Study on Multiple-Airport Development for Greater Jakarta Metropolitan Area in the Republic
Indonesia. The objective of the aforementioned study is to formulate a master plan for the
development of a new airport and Soekarno Hatta Airport for coping with the anticipated continued
increase in air traffic demand in Jakarta as a result of Indonesia’s economic development.
The Soekarno Hatta Airport expansion project has also been designated as a “fast track project”
based on the Memorandum of Cooperation on the Cooperation for Establishing Metropolitan Priority
Areas (MPAs) signed between the Governments of Indonesia and Japan in December 2010. With a
view to materializing the MPA concept, JICA has been implementing the Master Plan Study for
Establishing Metropolitan Priority Area for Investment and Industry (MPA) in JABODETABEK
since May 2011 and supporting the realization of the project through high-level talks among
government-related organizations.
(2) Status of Activities of Relevant Government Agencies and
Implementers in Indonesia for the Implementation of the
Project
1) Status of activities of AP-II
AP-II formulated an expansion plan in 2007 for increasing the number of runways and terminals in
response to the increasing demand of Soekarno Hatta Airport. This plan, however, has not been
approved based on the view of DGCA that a drastic resolution is necessary.
10-2
Meanwhile, there are signs that the increase in airport demand is exceeding forecasts. Furthermore,
the situation was having a major impact on the operations of Soekarno Hatta Airport. In this light,
AP-II formulated and presented the Grand Design in 2011 to serve as the future plan for the whole
Soekarno Hatta Airport. At a private-sector session of the Japan-Indonesia administrative
vice-ministerial meeting on transportation which was held in Tokyo in July, Deputy President
Director of AP-II who was in attendance explained the Grand Design and stated that AP-II will
quickly select a Project Management Consultant (PMC) and move forward with the project.
However, as of the interview conducted by the Study Team during the site survey, the PMC had not
yet been selected.
2) Status of activities of DGCA
DGCA, as a national authority responsible for overseeing aviation administration in Indonesia, has
asked JICA to carry out a master plan formulation study as discussed earlier. The objective of the
study is to establish a vision for the modality of the airports of the Greater Jakarta Metropolitan
Area.
(3) Legal and Financial Restrictions of Indonesia
This section will present an overview on the possibility for foreign companies to enter the
anticipated project and whether there is preferential treatment as well as on the licenses which
companies should acquire for the implementation of this project. At the same time, while not directly
applicable to this project, this section will discuss the applicable PPP for the development of new
airports.
1) Regulations on foreign entry and preferential treatment
10-3
2) Necessary licenses for establishment of new joint ventures and business management
3) Infrastructure development using the PPP method
1) Regulations on foreign entry and preferential treatment
Conditionally open business fields
The sectors in which foreign entry is prohibited in Indonesia are listed in the Presidential Regulation
No. 36 of 2010 (May 25th, 2010), Appendix I “List of Business Fields Closed to Investment.” With
regard to the transportation sector (airport), the investment sector related to this project, only “Air
Traffic Guiding Service” applies among the business fields listed. Among the “List of Business
Fields Open, With Conditions, to Investment” in Appendix II of the said Regulation, the (partial) list
of conditions to foreign entry applicable to the transportation sector, which are believed to be
relevant to this investment project, are as follows. With regard to airport-related services, no
regulations on foreign entry exist in particular except for those business fields which set forth a
maximum foreign investment restriction of 49%.
10-4
Table 10-1: Sectors in Indonesia Open with Conditions to Foreign Investment (Airport-Related)
Business Field
Condition
10. Transportation Sector (Airport-Related)
Terminal supporting business
Airport service
Air transportation supporting service (reservation system via
computer, ground handling for passenger and cargo, and aircraft
leasing)
Air transportation non-commercial
Services related to airport
Freight forwarder service
Airplane cargo service
General Selling Agent (GSA) of foreign air transport company
Source: Presidential Regulation No. 36 of 2010, Appendix I & II (May 25th, 2010)
2) Necessary licenses for establishment of new joint ventures and business management
First, joint ventures between Indonesian and foreign companies must apply for deed of establishment
and investment plan registration as a Limited Liability Company (LLC) with the Investment
Coordinating Board (BKPM). Then, joint ventures will obtain a Capital Investment Approval Letter
from BKPM.
Registrations58
The following is an outline of the investment plan, deed of establishment, and company registrations
required for new companies.
58
JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a
Company by Foreign Enterprises]
10-5
Table 10-2: Outline of Registration Procedures Required for Establishing New Companies
Registration
Investment
Procedure

registration

Applicable Law
Register investment plan with BKPM of
BKPM Regulation No. 12
Indonesia and obtain initial approval.
dated December 23rd, 2009
Obtain investment basic license only for
(Issued January 2010)
investments in business fields requiring
financial accommodation.

Investment registration may precede or follow
company establishment.

Prepare quarterly reports on progress of
construction work to BKPM and BKPM
authorities at the provincial or city levels.
Deed of
Apply and register with Ministry of Justice and
establishment
Human Rights. Obtain approval letter for
Same as above
establishment from Minister of Justice and Human
Rights.
Company
Register company with Ministry of Justice. After
Regulation of Minister of
registration
obtaining Approval Letter from Minister of Justice,
Trade No. 37 dated
apply with Ministry of Trade. Certification of
September 4th, 2007
company registration issued immediately (effective
(No.37/M-DAG/PER/9
5 years).
/2007)
Source: JETRO website: [Indonesia – Investment System – Procedures and Necessary Documents for Establishing a
Land rights59
Currently, Indonesia has 11 types of land rights which individuals and companies may possess with
government approval pursuant to the laws and decrees prescribed regarding land60. Among the 11
types, six types (right of ownership, business operation right, right of building, right of use,
reclamation right, and right to harvest and lease forestry products) require government approval. The
59
60
Government Decree No. 5 of 1960 “Basic Agrarian Law” and Government Decree No. 24 dated July 8th, 1997
“Real Estate Registration System”
10-6
remaining five types (land lease right, tenancy right, right of pledge, residency right, and right to
lease agricultural land) may be transferred and obtained among stakeholders without government
approval.
Right of ownership is approved only for Indonesian nationals and may not be acquired by foreign
nationals. Therefore, it has traditionally been the case with joint ventures between foreign and
Indonesian companies that Indonesian investors apply for the right to conduct business operations on
the land and register the right in their names. These title holders lease the use of the land to joint
businesses, and in this way, joint ventures have used the land for business operations61. Meanwhile,
ever since the 1994 government regulation allowed the formation of companies with 100% foreign
investment, foreign joint ventures have been able to acquire the land business operation right directly
under their names.
According to Presidential Decree No. 34 of 1992 concerning the use of the land for which the land
business operation right and right of building were granted to a foreign joint venture, a foreign joint
venture, with regard to the business operation right granted to it: 1) May assign the right (however,
prior approval of the Minister of Territorial Jurisdiction is necessary); 2) May turn the right into a
loan guarantee through establishing a mortgage; and 3) May retain the right for a maximum of 35
years and extend the right for a maximum of 25 years. While there are advantages, including the
possibility of renewal, there are also restrictions. 1) A foreign joint venture may not use the land for
purposes other than those prescribed in the business operation right (e.g., constructing a building
61
Regulations on business right and construction right concerning foreign investment companies established through
mergers between an Indonesian investor (for this project, we assume AP-II) and a foreign investor (for this project,
we assume JIS) (i.e., newly established joint ventures): Presidential Decree No. 32 of 1992 (follow-on law of
Presidential Decree No. 23 dated March 20th, 1980).
10-7
which serves a purpose other than the initial purpose). 2) If a foreign joint venture uses the land for
uses and under conditions other than those prescribed in the contract, the business operation right
will be revoked. 3) The right will apply only to the businesses of the foreign joint venture. 4) The
right applies only to land for which an Indonesian investment company has already acquired the
business operation right.
If the land is not owned by an Indonesian investment company (i.e., if the land for construction and
business operations under this project is owned by the Indonesian Government and is provided to
AP-II for the aviation business), the foreign joint venture may be granted the right to manage the
land provided by the government by the Minister of Territorial Jurisdiction (Land Minister
Regulation No. 9 dated December 6th, 1965). On this basis, an Indonesian investment company is
permitted to transfer the right of use and right of building associated with the aforementioned land to
a foreign joint venture. The following is an outline of the right of building, right of use, and right of
operation.
10-8
Table 10-3: Outline of Key Land Rights
Land Right
Right of building:
Right to construct
and own buildings
built on
government-owned
land, land for
which right of
operation was
granted, or
individually-owned
land
Right of use:
Right to use
government-owned
land, land for
which right of
operation was
granted, or
individually-owned
land
Right Holder
Indonesian
nationals,
corporations
in Indonesia
founded in
line with
Indonesian
law
(including
foreign
investment
companies),
etc.
Indonesian
nationals,
corporations
in Indonesia
founded in
line with
Indonesian
law
(including
foreign
investment
companies),
etc.
Condition
－Right may be assigned through
sale/purchase, exchange, capital
participation, donation, or accession.
－Right may also be turned into loan
guarantee through mortgage (mortgage
expires with determination of right of
construction)
－Obligations of right holders include:
1) Payment of amount and by the payment
method stipulated in the decision regarding
the right of building
2) Use of land according to the purposes and
conditions set forth in the decision regarding
the right of building and contract
3) Maintain land and buildings in favorable
stage and preserve the environment
(Pay sufficient considerations to interests of
local communities)
4) Following the determination of the right,
swiftly return the land to the
Government/holder of the right of
operation/landowner
return the title certificate to land authorities
－Right may be assigned through
sale/purchase, exchange, capital
participation, donation, or accession.
－Right may be turned into loan guarantee
through mortgage (mortgage expires with
determination of right of use
－Obligations of right holders include:
1) Payment of amount and by the payment
method stipulated in the decision regarding
the right of building, contract for use of land
with operation right, and contract for right of
use with landowner
2) Use of land according to the purposes and
conditions set forth in the decision regarding
the right of building, contract for use of land
with operation right, and contract for right of
use with landowner
3) Maintain land and the buildings on the
land in favorable stage and preserve the
environment
swiftly return the land to the
Government/holder of the right of
operation/landowner
return the title certificate to land authorities
10-9
Deadline
Effective for
maximum of 30
years with
possibility of
20-year maximum
extension.
Extension of right
of building on land
for which right of
operation was
offered requires
prior agreement
with right holder.
Renewal possible.
In principle,
maximum of 25
years with
possibility of
20-year maximum
extension, if the
land is
government-owned
or is land for
which right of
operation was
granted and the
land is used only
for the same
purpose. Renewal
possible.
Right of operation:
If land provided by
the Government to
a government
agency is provided
to a third party for
the use of the land,
the right granted
by the Minister of
Territorial
Jurisdiction to the
aforementioned
government
agency
Government
agencies,
including
ministries
and agencies
and
directorates
general
Those granted with the right of operation are
recognized to have the following rights:
(1) To plan the purpose of the application
and use of the aforementioned land
(2) To use the land for the purpose of its
application and use
(3) To assign a six-year right of use to part of
the land to a third party
(4) Receive funds in the form of income,
compensation, and annual payments
The following restrictions apply to (3):
1) Maximum area which can be assigned:
1,000m2
2) Assignee is restricted to Indonesian
nationals and corporations located in
Indonesia which were established according
to Indonesian law. Assignment is permitted
only once.
Registration is
specified if the
effective date for
the right of
operation exceeds
five years. If
effective dates are
not specified in
particular, it is
deemed to be over
five years.
(Provisions on
registration are set
forth in the
Minister of Land
Regulation No. 1
dated January 5th,
1966).
Source: JETRO report, Real Estate Usage System in Indonesia (2010).
Applicable laws: For right of building and right of use, Government Decree No. 5 of 1960 “Basic Agrarian Law,”
Government Decree No. 24 of 1997 “Real Estate Registration System,” and other laws; for right of operation,
Minister of Land Regulation No. 9 dated December 6th, 1965.
Building license62
The construction of a connecting building to Soekarno Hatta Airport requires the acquisition of a
building license. Specifically, pursuant to the provisions of the Minister of Home Affairs Regulation
No. 32 dated April 30th, 2010, the company will apply for and obtain a building license from the
provincial or city public works authorities with regard to buildings and non-buildings (e.g., parking
space, sports court, pool). The provincial governor and city mayor (in the case of Jakarta, special
provincial governor) issue the building license pursuant to the locality’s District Spatial Plan Details
(RDTRK), Plan for Building and Environment (RTBL), or district technology plan (RTRK). The
building license is also a precondition for receiving public services (e.g., electricity, water, sewage,
and telephone).
62
10-10
Business license63
A company which is newly founded for the said investment project must acquire a business license.
The company will apply for and obtain the license from BKPM or the provincial BKPM authority.
The business license for foreign companies is effective for 30 years from the start of business or
production. After obtaining the business license, the company will bear an obligation to:
 Prepare quarterly reports on the progress of the construction work to BKPM and BKPM
authorities at the province or city; and
 Provide reports on investment activities in the first and second half of the year to BKPM and
BKPM authorities at the province or city.
Taxation and preferential treatment measures which will serve either as investment incentives or
disincentives for the implementation of the project are listed below.
A variety of license and non-license procedures are required for activities ranging from the founding
of a new company to the start of construction and business operations. In recent years, however,
these procedures have become simplified. For example, One-Stop Integrated Services are provided
which allow for the submission of most applications at a single location within the BKPM (Articles
26 and 28 of the provisions of the New Investment Law No. 25 dated April 26th, 2007). One-Stop
Integrated Services are available also in the special province of Jakarta at the Jakarta Investment and
Promotion Board (BPMP) (Governor Regulation No. 14 dated January 20th, 2010). According to the
overview provided by JETRO, the services provided by One-Stop Integrated Services are as follows.
63
BKPM Regulation No. 12 dated December 23rd, 2009 (issued January 2010). JETRO website: [Indonesia –
Investment System – Procedures and Necessary Documents for Establishing a Company by Foreign Enterprises]
10-11
Table 10-4: List of Services Provided by One-Stop Integrated Services
License Services
a. Investment registration
Non-License Services
m. Producer import license (API-P)
b. Basic permit for investment
n. Expatriate employment plan (RPTKA)
c. Basic permit for investment expansion
o. Recommendation for temporary residency
visa (TA 01)
d. Basic permit for investment modification
e. Business permit, business expansion permit,
permit for joint business with investment
company, permit for business modification:
Commerce, agriculture, fisheries, livestock,
forestry, industry, tourism, mining,
transportation, information and communications,
labor, education, services, public works services,
and other services
p. Expatriate employment permit (IMTA)
q. Local incentives
r. Information and complaint services
f. Location permit
g. Permit of land use appropriation (IPPT)
h. City special planning (KRK) / Building
arrangement plan (RTLB)
i. Permit for construction of buildings
(IMB)/IPB/KMB
j. Nuisance Act Permit (UUG/HO)
k. Company registration certificate issued by
Ministry of Trade (TDP)
l. Other permits necessary for investment
Source: JETRO “Indonesia – Investment System – Investment Promoting Organization “Investment Promoting
Organization” Details”
The following paragraphs summarize the financial incentives available for the anticipated
construction project (multilevel parking garage at the building connecting to Soekarno Hatta Airport,
commercial business complex, hotel) and real estate rental business.
Relevant taxation systems, etc.64
1) Value-added tax (VAT) (PPN in Indonesia): Standard tax rate = 10%; tax rate reduction measures
available for specified products and services.
64
JETRO website: “Indonesia – Investment System – Taxation System ‘Other Taxation System’ Details”
10-12
 VAT on hotel and parking space services
According to the revised VAT law65, hotel services and parking space services are not subject
to taxation.
 VAT on rents
100% of service fees are subject to VAT on rents of commercial business buildings (e.g.,
shopping malls, offices) (No.SE-14/PJ.53/2003 dated June 3, 2003). If the VAT is not shifted
to the rents of tenants, the owner of the real estate will bear the costs.
2) Land and building tax
A 0.5% tax is applied to the taxable amount. If the Government’s appraisal value is less than 1
billion rupiah, the taxable amount is equal to 20% of the said amount. If the Government’s appraisal
value is more than 1 billion rupiah, the taxable amount is equal to 40% of the said amount.
Preferential treatment of foreign companies
Preferential tax treatment is offered to companies in Indonesia (however, limited to Limited Liability
Companies) in which foreign investors are investing. Specifically, Article 18, paragraph (3) of the
New Investment Law No. 25 dated April 26th, 200766 set forth that facilitation measures are
provided to businesses which meet at least one of the following conditions. The underlined
conditions are believed to apply to the said investment project.
 Take in many workers
 Included in high priority fields
65
The Value-Added Tax Law No. 8 of 1983 was amended for the third time through Law No. 42 dated October 15th,
2009. Issued on April 1st, 2010. Minister of Finance Regulation No. 80 dated April 5th, 2010 (No.80/PMK.03/2010)
has been issued to serve as administrative instructions.
66
BKPM website (http://www6.bkpm.go.id/contents/p14/tax/14)
10-13
 Include infrastructure development
 Conducts technology transfers
 Implements pioneering business
 Invests in frontier areas, underdeveloped areas, border areas, or other areas deemed in need of
investment
 Engages in activities directed at maintenance of natural environment
 Conduct research and development and innovative activities
 Has partnerships with very small as well as small and medium enterprises or with
cooperatives
 Industry that utilizes the country’s capital goods, machinery, or facilities
The contents of the preferential tax treatment are presented below. Article 18, paragraphs 4 to 6 of
the New Investment Law set out provisions on preferential tax treatment, while paragraph 7 of the
said law provides that the Ministry of Finance (MOF) will prescribe the details of the treatment set
forth in paragraphs 4 to 6. Because the measures will be offered in line with the Government’s
National Industrial Policy (Article 19 of the said law), it is believed that the applicable details will be
amended as appropriate.
10-14
Table 10-5: Preferential Tax Treatment for Foreign Investors
Preferential Tax
Treatment
Contents of Regulation
Applicable Law
Income tax
reduction
Income tax reduction for investments up to a specific limit
which were made during a specified period
Import duty
reduction
-
Article 18,
paragraph (4) a of
New Investment
Law
Article 18,
paragraph (4) b&c
of said law
VAT exemption
and extension
Special
depreciation
Reduction of import duty on capital goods and
equipment which cannot be procured domestically
- Reduction of import duty on raw materials and
ancillary materials which were imported with
conditions during a specified period
Exemption (for a specified period) or tax payment
extension for VAT on capital goods and equipment which
cannot be procured domestically
Rapid amortization
Fixed asset tax
reduction
Reduction of fixed asset taxes in specific business fields in
specified regions and districts
Corporate tax
reduction
Reduction of corporate taxes of specified amounts and for a
specified period. New investments in pioneer industries
(industries with significant ripple effects; industries with
high added value, high external economic potential, new
technologies, and strategic value for the national economy)
Import duty reduction for all investors updating their
existing facilities
MOF will set forth the details of the above system of
preferential financial treatment.
Import duty
reduction
MOF additional
measures
Article 18,
paragraph (4) d of
said law
Article 18,
paragraph (4) e of
said law
Article 18,
paragraph (4) f of
said law
Article 18,
paragraph (5)
Article 18,
paragraph (6)
Article 18,
paragraph (7)
Source: New Investment Law dated April 26th, 2007.
3) Infrastructure development using the PPP method
The Yudhoyono administration in Indonesia, from its first term (2004-2009) and into its second term
(2009-2014), has consistently improved the infrastructure promotion environment by identifying
public-private-partnerships (PPP) as an approach for developing the investment environment without
increasing foreign debt.
 Applicable law: Enforcement of Presidential Decree No. 67 of 2005 concerning infrastructure
PPP procedures
 A Memorandum of Understanding (MOU) regarding the system of responsible authorities for
10-15
PPP was concluded in 2010 among three agencies: BKPM; BAPPENAS; and MOF.
 To cover for the risk of the PPP business, Minister of Finance Decree No. 38 of 2006
concerning risk management of PPP projects was enforced. In 2006, a risk management unit
which manages support measures was set up within the Ministry of Finance. Procedures
pertaining to site acquisition were amended (2006). The Indonesian Infrastructure Guarantee
Fund (IIGF) was established (2010).
 To ensure public financing for PPP projects, the Infrastructure Finance Facility was
established in 2009 and the Infrastructure Investment Fund in 2010.
 To promote infrastructure PPP projects, the Infrastructure Summit has been held (2005 and
2006) and the “PPP Book” has been issued (2009 and 2011).
The Government of Indonesia67, in hopes of receiving bids from foreign companies, intends to issue
the “PPP Book” annually, which will serve as an infrastructure PPP project plan, and will disclose
the tender results of infrastructure PPP projects as well as potential projects, priority projects, and
tender projects. The PPP Books up to PPP Book 2011 have listed multiple new airport development
and enhancement projects among the air transportation projects. Existing airports are owned by
state-owned companies, AP and AP-II, and it is believed that airport expansion and renovation
projects, including PPP Soekarno Hatta Airport, will be implemented by AP and AP-II.
 All PPP projects are 1) assumed to be economically viable, and 2) from the perspective of
whether or not projects by themselves are financially viable:
(a) For projects which are financially not viable by themselves, hybrid financing is envisioned, in
which the public sector will bear the construction costs and the private sector will bear the O&M
costs.
67
Reference: BAPPENAS, Infrastructure Project Plan “PPP Book 2010-2014.”
10-16
(b) If projects are financially marginal by themselves, PPP with Government support is envisioned,
in which the public and private sectors will bear the construction costs and the private sector will
bear the O&M costs.
(c) If projects are financially viable by themselves, a regular PPP is envisioned, in which the private
sector will bear all the costs (construction costs and O&M costs)68.
 A rough guide to understanding the PPP projects listed in the PPP Book for private companies:
“Potential projects” indicate projects which are at the stage of preliminary economic analysis,
including cost recovery; “Priority projects” indicate projects requiring pre-FS or FS; and
“Tender projects” indicate projects approved by the Government (MOF).
 The PPP projects listed in “priority projects” specify the type of solicitation. While a great
majority of the projects are “solicited” projects which are submitted in accordance with the
solicitation from the contracting agency, “unsolicited” projects which are submitted at the
discretion of the private sector in the absence of solicitation are permitted. In the case of the
latter, the contracting agency may purchase the project for a price commensurate with the
contents of the FS proposal (if not participating in a tender), or offer bonus points (10%
maximum) to the assessment of the bidder at a tender, and thereby, giving the bidder
preferential treatment69. Therefore, it is believed that while all infrastructure PPP projects are
subject to competitive tendering, waiting until the competitive tendering is in fact too late and
68
Reference: BAPPENAS, “PPP Policy and Regulation in Indonesia,” by Dr. Ir. Bastary Pandji Indra, MSP Director
for PPP Development (8 February 2011).
69
BAPPENAS, by Bastary Pandji Indra, Director for Public Private Partnership Development, “Infrastructure PPP in
Indonesia”, Bangkok, 15 February 2009.
10-17
it will become essential for companies to participate earlier on, i.e., during the pre-FS or FS
stage (“priority project” stage).
 In accordance with the MOU concluded in August 2010, BAPPENAS will offer guidance for
the development of PPP projects throughout the process (planning and preparations) until the
tender of a PPP project. The MOF is responsible for viability gap funding (to supplement
construction funds) and debt guarantees for the Government-funded portion of PPP projects70,
while BKPM is responsible for promoting PPP projects and marketing.
The main contracting agencies are the Ministry of Transportation (airport, port, railway, coal railway,
and urban transport), Ministry of Public Works (toll roads and water supply and sewage), the
Government-owned national electricity company PLN (power generation), and provincial
governments. Domestic and international companies wishing to make a bid must negotiate directly
with the contracting agencies.
(4) Necessity of Additional Detailed Analysis
1) Promotion of detailed plan of passenger terminal project
This project is crucial for the future development of the Indonesian economy, and its swift
commencement is desirable. On the other hand, Soekarno Hatta Airport is the gateway of
international flights in Indonesia and serves as the hub of its domestic flights. As such, a diverse
range of challenges need to be solved for promoting the plan. AP-II has indicated its intent to move
forward with the project by recruiting a PMC, and this is an effective method for advancing this
project. However, ultimately, the operator will need to make its own judgment.
70
Presidential Regulation 78/2010 and Ministry of Finance Regulation PMK 260/2010.
10-18
The three Japanese companies have indicated its wish to participate in the project as co-business
operators. These companies have an extensive background in project promotion. In particular, with
respect to promoting the project, the Study Team believes that it will be extremely effective to
implement additional detailed analysis concerning the passenger terminal project and making a
proposal to AP-II from the perspective of the business operator.
2) Considerations regarding Japanese support, including ODA loans
As of the publication of this report, AP-II has indicated its intent to start this project using its own
funds and bank loans. However, in addition to this project, AP-II has plans to repair nine airports,
and their financing is anticipated to pose a significant challenge. In particular, bearing in mind that
Soekarno Hatta Airport serves as a core business for AP-II, it is believed that financial assistance for
this project will have tremendous impact on AP-II’s management.
In this light, as this study has proposed, the Study Team believes that offering financial support
including the use of ODA loans for certain project components such as the construction of basic
facilities will be very effective for moving along this project. However, as AP-II, the state-owned
company, will be the core implementer of this project, the use of ODA loans will require
consultations with the Indonesian Government. Such factors may significantly affect scheduling and
other aspects. The promotion of this project will require the cooperation of the Government of Japan
for the early implementation of various procedures.
10-19

STUDY ON SOEKARNO HATTA INTERNATIONAL AIRPORT

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