The risks of construction grant support in toll road investment faced by Indonesia's government

• Main Authors: Mahani Iris, Tamin Rizal Z., Pribadi Krishna S., Wibowo Andreas
• Format: Article
• Language: English
• Published: EDP Sciences 2019-01-01
• Series: MATEC Web of Conferences
• Online Access: https://www.matec-conferences.org/articles/matecconf/pdf/2019/19/matecconf_concern2018_05001.pdf

In order to increase the role of private sector in infrastructure implementation in Indonesia, the Indonesia government facilitates Public-Private Partnership (PPP), such as by providing Viability Gap Funding (VGF) in the form of construction grants. Some projects get a construction grant but in toll road investment, the support is provided in another form. If the government provides construction grant on toll road investment, there would be risks that government need to face. This study aims to identify the said risks and analyse them so that the government could mitigate the risks. It is also could be used for devising public policy. This study is conducted qualitatively based on interviews with government officials, businessmen, and members of society. Based on the risk identification at each stage of the given support, there are 9 (nine) risks. After preliminary screening, the qualitative analysis and validation indicate that there are 4 (four) risks that must be mitigated by the government. These risks include: the possibility of being disapproved by the finance ministry, the approval process at the finance ministry takes a long time, it is too costly the state budget could not provide it and lastly, the difficulty of obtaining approval from the legislative.