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10th of April, 2015

Final Coordination Meeting

Feasibility Study for Jakarta-Bandung


High Speed Railway Project
(as a part of Jakarta-Surabaya)
Phase I
JAPAN INTERNATIONAL COOPERATION AGENCY
Japan International Consultants for Transportation Co., Ltd.

COOPERATIVE
FIRMS

PT Matra Rekayasa Internasional


ENGINEERING & MANAGEMENT CONSULTANT

Universitas Gadjah Mada


JICA Study Team

Table of Contents
Project Schedule and Progress

P3

Worldwide High Speed Railway Systems

P4

Route Alignment

P5

Demand Forecast

P7

Preliminary Environment and Social Considerations P 9

Cost Estimation (Project Cost)

P 10

Project Effects

P 11

Business Scheme and Implementation Plan P 12


Economic and Financial Analysis

P 23

Overall Study Summary

P24

Phase I Study Conclusions

P25

Recommendations & Way Forward


Possible Financing Resources in Future

P 26
P 28

Implementation Schedule

P 30

JICA Study Team

Project Schedule and Progress


2014

2015

Construction

Follow Up

Oct. 17th
MoM

Feasibility Study Phase I

Feasibility Study Phase II

Engineering Service

Inauguration

Phase I

Phase II

E/S

Preliminary analysis
on JKT-BDG-SBY
Feasibility of JKT-BDG
Demand forecast
Comparison of
technical spec.
Route alignment
Location of station
Preliminary
environment and
social consideration
Implementing
structure and
scheme
Economic and
financial analysis

Review of route
alignment
Detailed technical
and engineering
studies
Operation and
maintenance
Detailed project
implementation plan
Detailed cost
estimation
EIA report/ LARAP
Detailed economic
and financial analysis

Detailed design
PPP design
Tender documents
preparation
Tender assistance

Follow up and
preparation are
essential to go
to Phase II.

JICA Study Team

Worldwide High Speed Railway Systems


Japan

France

Spain

China

South Korea

First Inauguration year

1964

1981

1992

2007

2004

Class

E5

TGV-POS

S112

CHR3C

KTX-Sancheon

320km/h

320km/h

300km/h

300km/h

300km/h

Output/Passenger capacity

13.1kW

26.0KW

22.0kW

15.8kW

24.2kW

Weight/ Passenger Capacity

0.62t

1.18t

0.89t

0.76t

1.11t

Maximum Gradient

35

35 *

12.5

20

15

Earthquake Frequency*

29

Earthquake Experience

Much

Little

Little

Little

Little

Tokyo
1,529mm

Paris
653mm

Madrid
437mm

Beijing
534mm

Seoul
1,429mm

Topography and
weather

Vehicle performance

Country

Maximum speed
(in commercial operation)

Annual Rainfall*

* 35 in less than 4km gradient. 25 when longer.


* Earthquake frequency is counted over magnitude 7.0 in each country since year 2000.
* Annual rainfall in Indonesia; 1,480mm(Jakarta), 1,656mm(Bandung)

JICA Study Team

Route Alignment
Dukuh Atas (underground) is advisable for Jakarta Sta. due to ridership
and connection with other transportation.

1.Jakarta Kota

Selection of the
Candidate Sites

Commercial and
business district
Discussion with
the related
organizations

2.Kemayoran

3.Gambir

Primary
Selection

Secondary
Selection

Current state of open space


(Existence of construction
space)
Future scalability
Hazardous area of natural
disaster

Technical aspect
Economic aspect
Environmental
aspect

4.Pasar Senen

5.Dukuh Atas
6.Manggarai
7.Senayan

8.Halim

JICA Study Team

Route Alignment
Only 37 minutes from Jakarta to Bandung
Station Name

Distance
from
Jakarta

Jakarta

0km

(underground)

(Manggarai*1)
(underground)

(3.5km)

Bekasi

26.1km

Cikarang

42.0km

(Karawang*2)

(59.3km)

(Walini*3)

(100.6km)

Bandung

128.5km

Gedebage

140.0km

Stations to be opened
in future

Embankm
ent,
24.7%

TBM
(Shield
Tunnel),
10.0%

NATM,
20.1%
Cut &
Cover,
0.4%
Bridge,
1.1%

Cutting,
16.9%
Viaduct,
26.9%

*1 Manggarai : after Manggarai redevelopment plan is implemented


*2 Karawang : when new airport inaugurates in future
*3 Walini : after Walini development as a new administration center of West Java Province Gov.

JICA Study Team

Demand Forecast
Result of Demand Forecast
350.000
323.000

HSR ridership (pax /day)

300.000

JKT-SBY

JKT-BDG

Conv. Rail

252.000

250.000

5%

200.000
148.000

150.000
100.000

Air
18%
Bus

Car

12%

65%

161.000
115.000

44.000

50.000

68.000

Conversion share from Each


Transportation mode

0
2020

2030

year

2040

Bus Conv. Rail


4%

2050

(Jakarta Surabaya in 2050)

HSR Fare

Car

Conversion share from Each


Transportation mode

Jakarta - Bandung

Jakarta - Surabaya

Rp 200,000

Rp 800,000

(Jakarta Bandung in 2020)

JICA Study Team

Demand Forecast
Comparison on Transportation Density
1200
1000
800
600
400
200
0

Transportation Density

Type

Line

Distance

Yearly
Passenger
Volume

Year of Statistics

Java (Study)

Jakarta Bandung

140 km

16,060,000

2020 (Estimated)

Java (Study)

Jakarta Bandung

140 km

54,020,000

2050 (Estimated)

KTX

Gyeongbu

412 km

15,220,000

2009

TGV

Atlantique

290 km

32,000,000

2008

339 km

46,310,000

2013

515 km

154,820,000

2013

(Pax/day/km)

Taiwan HSR
Shinkansen

Tokaido

Java HSR will have a high level transportation density among the world wide HSR
Comparison on Fare and Wage
Indonesia

Taiwan
Japan

DKI
Low income
(2013)
DKI
High income
(2013)
All Area
(2007)
All Area
(1964)
All Area
(1992)

HSR Fare
(A)

Wage/day
(B)

(C)=(A)/(B)

Remarks

Rp. 200,000

Rp. 204,501

1.0

Rp. 200,000

Rp. 445,517

0.4

NT$ 1,490

NT$ 1,480

1.0

\ 2,480

\ 1,191

2.1

\ 14,430

\ 13,620

1.1

Non-agricultural
low income level
urban household
Non-agricultural
high income level
urban household

Planned HSR fare is reasonable price as compared with Shinkansen fare

JICA Study Team

Preliminary Environment and Social Considerations

Refined cost estimates associated with land acquisition and resettlement


Estimated market price for lands and structures through sample survey in each Kota /Kabupaten
Incorporated special requirements of compensation for forest and paddy fields
Estimated allowance and other costs associated with LARAP implementation
Province

Land (ha) Household No.

DKI Jakarta

6.6

West Java

265.1*1

2,941

271.7

3,188

Total

247

compensation (land, structure, underground space)


allowance indirect cost contingency
cost for preparing irrigated paddy field etc.

Approx. IDR 3,960 billion

*1: This figure includes 31ha of irrigated paddy field and 32ha of forest.

Reviewed mechanism and schedule for LARAP implementation

Timeline for land acquisition (Phase II + min 319 / max 583 working days)
Planning
(Phase II)

Preparation
(max 289 days)

Implementation
(max 257 days)

Handover
(37 days)

JICA Study Team

Cost Estimation(Project Cost)


Project Cost
= 6,223 million USD (Total Length = 140km)
Construction Cost = 4,429 million USD (31.6 million USD/km)
Item

(1)Construction / Procurement Cost

Civil Works
140
Disaster Prevention Equipment
1
Track Works
140
Station Works
1
Depot/ Workshop
1
Electric Facility
1
System/Automatic Fare Collection
1
Signaling and Telecommunications Facility
1
Rolling Stock
84
Maintenance Equipment
1
Preparation for Operation
1
Construction/Procurement Cost (sub-total)
140
(2) Land Acquisition Cost
272
(3) Consulting Service Cost
1
(4) Management Cost
1
(3)x 10%
(5) Contingency
1
(1)(3) - Rolling Stock Costx 5%
(6) Value-added Taxes
1
(1)(3)x 10%
Project Cost
140
Project Cost (USD)
140
Project Cost (%)
(1) - (Rolling Stock + Maintenance Eq. + Preparation for OP.)
:
{(1) - (Rolling Stock + Maintenance Eq. + Preparation for OP.)} 5%

F/C
L/C
Total
(million USD)
(billion IDR) (million USD)
km
916
16,253
2,591
LS
19
10
20
km
131
1,924
329
LS
78
617
141
LS
228
1,399
372
LS
440
1,312
576
LS
35
0
35
LS
224
1,364
364
cars
360
0
360
LS
22
0
22
LS
10
98
20
km
2,463
22,977
4,831
ha
0
3,962
408
LS
104
1,144
221
LS
0
215
22
LS
110
1,206
235
LS
0
4,902
505
km
2,677
34,406
6,223
km
2,677
3,547
6,223
43.0
57.0
100.0
The base month for the calculation is March 2014.

1 USD=9,701IDR=99.24JPY

JICA Study Team

10

Project Effects
Effect of Operation

Effect of Construction
Investment
HSR Development

Economic Benefit
Travel
Time
Saving

O&M

VOC*
Reduction

*: Vehicle Operation Cost

Increase in demand for


relevant industrial sector

44,800 billion IDR


(Almost double of
initial construction cost)

Increase
in Consumption

Increase
in demand

2,400 8,000 billion IDR


(Unit: billion IDR)

10.000
8.000
6.000
4.000
2.000
0

2.400
2020

Employment creation in construction stage

4.500
2030

6.900

8.000

2040

2050

Approx. 35,000 workers


JICA Study Team

11

Business Scheme and Implementation Plan


Preconditions for examination of the institutional framework
Preference of the Indonesian side on the project modality
Consideration of private participation in the project implementation
Financial constraint of the state government

Evaluation of Options
PPP-based Model: Preferred
Vertical Separation Model: Alternative (with establishment of two SOEs)
=> Similar to the structure of Japan and France

Implementation Structure
A new authority (High Speed Railway Authority) under the MoT
Need the authority for technical control of HSR
A new SOE engaged in HSR infrastructure development
An entity that can be a borrower of external debt
Introduction of new technology (i.e. standards, safety control, paradigm) that is
different from the conventional lines
JICA Study Team

12

Business Scheme and Implementation Plan (PPP Model)


Establishment of HSR Authority (HSR-A)
and SOE for HSR development
Technical assistance to HSR-A
Engineering services to SOE
PPP for O&M and concession for
business around stations

[Stage 1: Engineering Services ]


Proponent
Donor

ODA Loan for


Engineering
Services (E/S)

On-lending/
transfer for
E/S

MoF

MoT (DGR )

Recurrent
cost for the
new
authority

Establishing a new
authority for HSR and
PMU

New unit of HSR


(HSR-A)

TA Provider

PMU

Capital Injection
GCA

: Financial Flow

Direct Appointment

SoE
(Development and Asset
Management Company)

Tender Process for PPP

: Other control/permit/contract
: PPP procurement process

Consulting Services
Phase-1: Engineering Services
*** Basic Design, Detail Design
*** Project Modality Design
*** Tender Document Preparation
& Tender Assistance for Civil
Works, Procurement and PPP

Technical Support
contract for O&M

Supporting Entity

Debt

Business Entity
SPV
(Operating Company)

Tender
Process

Civil Works, Depot,


Other Facilities

Financial Institutions
Investors

Equity

Railway Systems &


Track Works, Supplier:
Rolling Stock

Property
Development
(Station Building, etc.)

Associated Business
O&M of HSR

(Retail, advertising,
etc.)

JICA Study Team

13

Business Scheme and Implementation Plan (PPP Model)

[Stage 2: Construction ]
Donor

Repayment of
ODA Loan for
Engineering
Services

Government
Guarantee
ODA Loan for
Construction
and
Procurement
(Direct
Lending)

Proponent

MoF

Recurrent
cost for the
new unit

Government
Budget for
Construction

MoT (DGR )

New unit of HSR


(HSR-A)

PMU

Supervising

SoE

Technical assistance to HSR-A


Direct lending by SOE for construction
Engineering services to SOE
Cost sharing between Gov., SOE
(development company) and SPV

TA Provider

: Financial Flow
: Other control/permit/contract
: PPP contract

PPP Agreement & Supervising

Consulting Services

(Development and Asset


Management Company)

Phase-2: Construction Management


*** Supervision of Construction
Works and Procurement
*** Supervision of SPV's property
development and pre-operation
*** Technology transfer

Technical Support
contract for O&M

Supporting Entity

Debt

Business Entity
SPV
(Operating Company)

Supervising

Financial Institutions
Investors

Equity

Civil Works, Depot,


Other Facilities

Railway Systems &


Track Works, Rolling
Stock

Matching by SOE

Property
Development
(Station Building, etc.)

O&M of HSR
(Pre-operation)

Associated Business
(Retail, advertising,
etc.)

Inspection by SPV before leasing

JICA Study Team

14

Business Scheme and Implementation Plan (PPP Model)


[Stage 3: Operation ]
Donor

Negotiating
fare changes

MoF

MoT (DGR )

Repayment of
ODA Loan for
Engineering
Services

Recurrent
cost for the
new unit

New unit of HSR


(HSR-A)

Government
Guarantee
Repayment
of ODA Loan
for
Construction
and
Procurement

Lease of infrastructure and facilities to


SPV
Lease fee payment by SPV to SOE
Repayment of loan by SOE
Technical control by HSR-A
Necessity of government support to the
demand risk (ex. availability payment)

Controlling technical aspect

SoE
(Development and Asset
Management Company)

PMU

TA Provider

: Financial Flow
: Other control/permit/contract
: PPP contract

Controlling technical aspect

Sharing the
remaining Fare Box
Revenue with the
government

Availability Payment

Technical Support
contract for O&M

Supporting Entity

Repayment

Business Entity
SPV
(Operating Company)

Asset Leasing

Lease Fee Payment from


Fare Box Revenue

Property
Development

Charge

Service

Customers

O&M of HSR
(Full operation)

Fare

Service

Passengers

Financial Institutions
Investors

Dividend

Associated Business
(Retail, advertising,
etc.)
Charge

Service

Customers

JICA Study Team

15

Business Scheme and Implementation Plan (PPP Model)


Task Allocation
Players
DGR

Function/Action

Approving technical standards prepared by HSR-A


(approval only, actual enforcement will be done by HSR-A)

Stage 1,2,3

HSR Authority
(HSR-A)

Developing HSR technical standards and certification systems


Enforcing the regulations and standards
Supervising the project implementation (including O&M by SPV)

SOE

Getting loans for the HSR development from donor(s)


Conducting the basic and detail design (with Engineering Services)
Preparing the tender documents (with Engineering Services)
Procuring and supervising contractors and suppliers (with Engineering Services)
Training the company staff (with Engineering Services)
Managing the assets after construction
Receiving lease fee from SPV and repaying the loan to donor(s)

Stage 1
Stage 1
Stage 1
Stage 2
Stage 1,2,3
Stage 3
Stage 3

Implementing the PPP portion (station building construction, pre-operation,


etc.)
Training the O&M staff
Operating and maintaining HSR
Paying the lease fee to the SOE
Carrying out the associated business

Stage 1, 2

SPV

Stage 1
Stage 2,3
Stage 2,3

Stage 1,2,3
Stage 3
Stage 3
Stage 2,3

Stage 1: Engineering Services / Stage 2: Construction / Stage 3: Operation

JICA Study Team

16

Business Scheme and Implementation Plan (PPP Model)

Risk Allocation (1/2)


Risk Exposure

Risk Allocation
State Govt.

HSR-A

SOE

SPV

XX

XX

Preparation Stage
Establishment of HSR-A and SOE

XX

Land Acquisition

XX

Selection of suitable loans

XX

(coordination)

Stage 1: Engineering Services


Approval process of the project

XX

Procurement of SPV

XX

Development cost and consulting


fees

XX

JICA Study Team

17

Business Scheme and Implementation Plan (PPP Model)

Risk Allocation (2/2)


Risk Exposure

Risk Allocation
State Govt.

HSR-A

SOE

(coordination)

XX

SPV

Stage 2: Construction
Land development
Design fault

XX

XX

XX

XX

Commissioning

XX

XX

Matching (System integration)

XX

Cost overrun and delay

(Support)

Stage 3: Operation
Inspection before leasing

XX

Availability of facilities

XX

Performance of services

XX

Ridership

XX

Government policy change

XX

XX

End of concession transfer

XX

XX

XX

XX

JICA Study Team

18

Business Scheme and Implementation Plan (PPP Model)


Financing Plan
Financing
Soft loan
Commercial Bank Loan

Major part of initial investment


Private investment portion

Avoiding cash flow financing to cover the repayment


Setting less annual lease fees paid by SPV (operating company)
Cost Sharing among Key Players

Civil works cost

Borne by the government and SOE

Less risks uncontrolled by SPV

HSR core systems

NOT to be separated

Avoiding the system integration risk


(Delay in full operation due to integration of separated systems)
JICA Study Team

19

Business Scheme and Implementation Plan (PPP Model)


PPP Model

Private Model

(Unit: trillion IDR)

Gov

SOE

SPV

Gov

SPV

Sub-Total

9.67

45.23

5.89

3.96

56.83

Direct Lending from


donor to SOE (excluding
management cost)

Share (%) to Total


Project Cost

- Land Acquisition
6.5%
- Engineering Services
(ES-I)
1.2%
- Management Cost 0.1%
- VAT exemption
8.2%

NOT Feasible
Cash Flow for Private Model

Land Acquisition

Deficit balance over almost all the project years


Accumulated Loss in 2035: -91,675 billion Rp.

16%

74%

10%

6%

94%

Total Project Cost

60.79

60.79

EIRR (%)

12.50

12.50

FIRR (%)

0.97

14.93

4.90

Equity IRR (%)

109.69

Negative Net Cash Flow

Project IRR (%)

22.65

Negative Net Cash Flow

DSCR (Minimum)

1.52

Project Year: 50 year


Social discount rate: 12%
Economic Benefit: supplier benefit,
reduction of travel costs, reduction of
vehicle operation cost

0.18

Loan conditions
SOE: interest rate 0.1%, 40 years repayment period
(10 years grace period
(assuming conditions of STEP Loan)
SPV: interest rate 14%, 10 years repayment period
Debt equity ratio of SPV: 85 - 15

< Findings >


Private model NOT feasible
due to continuous cash flow
financing
Need concessionary loans
such as STEP to reduce the
financial cost
Need availability payment to
attract business entities to
participation in the project

JICA Study Team

20

Business Scheme and Implementation Plan (PPP Model)

Optimizing the cost sharing


Unit: billiion IDR
Breakdown

Item

Pattern 1 (Base Case)


Gov

Embankment

Civil Works

Construction/ Procurement Cost

Cutting
U type Retaining Wall
Viaduct (Regular Bridge)
Bridge
Tunnel (Mountain Tunneling)
Shield Tunnel
Cut and Cover
Transverse
Service Road
Environmental Program
Sub-Total
Disaster Prevention Equipment
Track Works
Station Works
Depot/ Workshop
Electric Facility
System/Automatic Fare Collection
Signaling and Telecommunications Facility
Rolling Stock
Maintenance Equipment
Preparation for Operation
(1) Construction/Procurement Cost
(2) Land Acquisition Cost
(3) Consulting Service Cost
(4) Management Cost
(5) Contingency
(6) Value-added Taxes
Total Project Cost
Percentage to Total Project Cost

SOE
2,114
766
167
8,178
419
5,266
6,402
881
422
358
165
25,138
196
3,193

Pattern 2

SPV

Gov

SOE
2,114
766
167
8,178
419
5,266
6,402
881
422
358
165
25,138

1,371
3,611
5,584
339

1,269
5,584
339
3,535
3,490

3,535
3,490

0
3,962
680
68
34
4,921
9,665
16%

41,550

216
196
5,317

1,397
139
2,147

266
27
279

45,233
74%

5,889
10%

0
3,962
680
68
34
4,921
9,665
16%

Pattern 3
SPV

0
196
3,193
1,371
2,342

39,354

1,288
129
2,032

376
38
394

42,803

SOE
2,114
766
167

SPV

Gov

SOE
2,114
766
167

8,178

216
196
7,513

70%

Gov

Pattern 4

8,321
14%

419
5,266
6,402
881
422
358
165
16,959
196
3,193

8,178

8,178

419
5,266
6,402
881
422
358
165
16,959

1,371
3,611

3,611
5,584
339
3,535
3,490

3,962
680
68
34
4,921
9,665
16%

8,178
196

3,193
1,371

SPV

5,584
339
3,535
3,490

36,907

216
196
9,961

1,575
157
1,924

89
9
502

40,563

10,561

67%

17%

0
3,962
680
68
34
4,921
9,665
16%

33,100

216
196
13,767

1,384
138
1,724

279
28
702

36,347

14,777

60%

24%

Note: These figures are just for reference in order to examine the cost sharing among the government, SOE and SPV.

JICA Study Team

21

Business Scheme and Implementation Plan (PPP Model)

Optimizing the cost sharing


Base Case

(Unit: trillion IDR)

Item
Land
Acquisition
Engineering
Services

Gov

Gov

SOE

SPV

Gov

SOE

Gov

SPV

3.96

3.96

3.96

0.71

0.71

0.71

0.71

0.06

VAT

4.94

Total

9.67
(16%)

Financing

SPV

Pattern 4

Pattern 3

3.96

Construction
& Others

Percentage to
total project cost

SOE

Pattern 2

45.23

5.89

0.06

42.80

8.32

4.94
45.23
(74%)

5.89
(10%)

9.67
(16%)

60.79

0.06

40.56

10.56

4.94
42.80
(70%)

8.32
(14%)

9.67
(16%)

0.06

SPV

36.34

14.78

36.34
(60%)

14.78
(24%)

4.94
40.56
(67%)

10.56
(17%)

9.67
(16%)

60.79

60.79

SOE

60.79

L-ES

L-C

CBL

L-ES

L-C

CBL

L-ES

L-C

CBL

L-ES

L-C

CBL

GB

OB

GB

OB

GB

OB

GB

OB

VAT: Exemption by the Government

L-ES: ODA loan for engineering services


L-C: ODA loan for construction
E: Equity from investors

GB: Government budget for other part


OB: Own budget for management cost
CBL: Commercial bank loan for debt portion

JICA Study Team

22

Economic and Financial Analysis (PPP Model)

Optimizing the cost sharing


Base Case
Item

Gov

SOE

Pattern 2

SPV

Gov

SOE

SPV

EIRR (%)

FIRR (%)

Pattern 4

Pattern 3
Gov

SOE

SPV

0.98

9.91

Gov

SOE

SPV

0.97

8.69

12.50

0.97

14.93

0.97

12.35

Equity IRR (%)

109.69

62.80

24.71

19.08

Project IRR
(%)

22.65

17.36

13.13

10.08

DSCR
(Minimum)

1.52

1.11

0.76

-1.70

Debt : Equity = 85 : 15

JICA Study Team

23

BLANK

JICA Study Team

Overall Study Summary

Travel Time: 37minutes between Jakarta and Bandung


Route: 140 km between Jakarta Gedebage with 5 stations at opening
Train Operations: 12 car trains (Capacity 925 pax.)
Passengers: 44,000 pax./day (2020)
Fare (Jakarta Bandung ): Rp 200,000
Decline of Road Traffic: 30% in 2020, and 58% in 2030
(Jakarta - Bandung OD pair, if no road construction is made)
Multiplier Effect: Almost double of initial construction cost
and 35,000 new employment creation
Land Acquisition: 31ha of irrigated paddy field and 32ha of forest
Project Cost: US$ 6,223 million
Project Scheme: Public sector-led project funded its major part of initial
investment with;
Concessional interest rate, and
Ultra-long term maturity (e.g. 40 years)
EIRR: 12.50% (beyond Social benchmark of 12%)
FIRR of SPV: 14.93% to 8.69% (SPV cost sharing: 10% to 24%)
FIRR of SOE: 0.97% to 0.98% (SOE cost sharing: 60% to 74%)
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Phase I Study Conclusions


1.

2.

3.

HSR Jakarta Surabaya is necessary

Accelerating and spreading high economic and social development by


reducing regional gaps among major cities
Introducing an energy- and environment-friendly fast public transportation
mean compared to others

Jakarta Bandung is recommended as Priority 1st Phase Section

As the first section with a high potential considering funding, managing


railway ability and demand
Suitable for intensified technology transfer of HSR operation know-how and
technology

Introducing Japanese HSR is relevant and appropriate

Safety at most importance - Japan having no passenger fatalities and even no


injuries history over 50 years
Technically most advanced - rich measures for earthquakes, steep gradient,
humidity and small tunnel cross section technology.
Reliable and Punctual Service - by highly reputed Series E5 (Max.320km/h)
with 300km/h at the beginning of operation
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Recommendations & Way Forward 1/2


1.

2.

HSR Route to be Registered in Spatial Plans

TOD plan at HSR station considering transfer to/from feeder services


and access to roads
To regulate land use alongside the alignment
To relax Floor to space index around stations

HSR Project to Start NOW


Long preparation period is required to make legislations and regulations
Rapid urbanization will make it difficult to conduct land acquisition of
suitable route

3.

Land Acquisition to be Conducted in Quick Manner

Compensation generated exclusively by Public Projects - Undergroundpass, Reduction of income tax, etc
Compulsory Land Acquisition Law - Enactment and enforcement

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Recommendations & Way Forward 2/2


4. PPP Project Enabling Framework to be well Introduced

Improvement of PPP regulations on government support to ridership risk


(provision of availability payment)
Direct lending allowed to SOEs for Infrastructure Projects

5. Institutional Building for HSR to be Conducted Soon

HSR-A for technology and safety: Basic specification, Pre-Opening


processes, Drivers license, Safety and investigation
SOE Establishment for development of HSR infrastructure and facilities

6. Capacity Building for HSR-A and SOE to be done accordingly

HSR-A: Technical assistance to develop technical regulations and


standards and certification systems
SOE: Engineering services to support technical aspects of HSR

7. Possible New and Innovative Financing Tools to be Explored

Possible financing sources in future Partial Risk Guarantee, REIT, LVC,


Town Planning Scheme and Station Area Development
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Possible Financing Resources in Future


Conventional Financing Menu
From Indonesia
PT Sarana Multi Infrastruktur (IIF)
Equity/Lending
IIFF Lending - PT SMI with Partners (e.g. SMBC,
MUFG)
PT Penjaminan Infrastruktur Indonesia (IIGF)
Guarantee
Municipal Bond Issue

Innovative Financial Menu

From Japan (possibility)


To Public Portion
JICA ODA (Untied, STEP Loan)
To Private Portion
JICA PSIF Equity/Loan
JBIC Export, Investment Loan
JOIN Equity Investment
Japanese Bank Infra Finance
Case: Private Sector Finance with Partial Risk Gurantee

Construction Period
Loan Disbursement

O&M Period
Loan Repayment

Partial Risk Guarantee

Partial Risk Guarantee


Private Sector Bank Loan rather short for
Infrastructure Finance
World Bank & JBIC Offering Partial Risk
Guarantee beyond the period Private Sector
Bank can assume

Real Estate Investment Trust(REIT)/


Infrastructure Investment Trust(InvIT)

1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Case: ODA LOAN + REIT

Construction Period
Loan Disbursement

(10 years of grace)

O&M Period
Grace Period

Loan Repayment

REIT

listed to stock exchange, a perpetual certificate


1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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Possible Financing Resources in Future


Land Value Capture Financing

HSR Impact to Regional Growth

Financing Mechanism Capturing Future


Land Value
Monetizing and Facilitating Infra / Urban
Development Implementation
Well developed in USA, Japan and India

New Way of Financial Resources


Suitable for PPP Projects
Attractive to both Public and Private Sector
Development-based LVC and Tax-based LVC

Cities with
HSR Stations
Population Growth
(1975 - 1995)
Company Number Growth
(1975 - 1991)
Local Gov't Receipt Growth
(1980 - 1993)

National
Average

32%

12%

46%

21%

155%

110%

Source: Shinkansens Local Impact, 2010, Christopher Hood, Oxford Univ.

(1) Town Planning Scheme (TPS)


No land acquisition necessary, but
Local municipalities, railway station owners and
land owners are invited

(2) Station Development


HSR/Railway Stations are not only Entry /
Departing Points for Passengers.
Stations Facilities for Passengers but also
Visitors to Stations

Enhancing business
opportunities of local
companies

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Implementation Schedule (Conservative Case)


Groundbreaking
2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Responsible Entity

(1) Policy and Legal (Enabling) Framework


Amendment of law for direct lending to SOE

MoF

Improvement of PPP regulations for Availability Payment

MoF, Bappenas

Development of presidential decree on HSR-A & SOE establishment

MoT, MoF, MoBUMN

(2) Institutional Building


Establishment

Preparing for establishment of HSR-A

MoT

Development of technical regulations and standards of HSR

HSR-A

Establishment

Preparing for establishment of SOE (Development Company)

MoT

(3) Capacity Building


For government officials on HSR development
(legal, technical, safety, etc.)

Coordination by CMEA

For HSR-A on technical regulations and standards and supervision


of development and operation

HSR-A

For SOE (development company) on design,


procurement and supervision of construction works

SOE

On-Site

For operation company (Training in the classroom & On-Site)

SPV

(4) Possible New (and Innovative) Financial Tools


Consideration of possible financial resources in future

Coordination by CMEA

Detail design (Project Implementation with PPP)

Management by SOE

Tendering process

Inauguration

Construction works, rolling stock procurement and pre-operation


Phase II Study
[ Engineering Services (ES) ]

Management by SOE
Supervised by SOE
Donor & Consultant

ES - I
ES - II

Donor & Consultant

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Implementation Schedule (Accelerated Case)


Ground Breaking
2019

Go Sign by Government of Indonesia


2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Responsible Entity

(1) Policy and Legal (Enabling) Framework


Amendment of law for direct lending to SOE

MoF

Improvement of PPP regulations for Availability Payment

MoF, Bappenas

Development of presidential decree on HSR-A & SOE establishment

MoT, MoF, MoBUMN

(2) Institutional Building


Establishment

Preparing for establishment of HSR-A

MoT

Development of technical regulations and standards of HSR

HSR-A

Establishment

Preparing for establishment of SOE (Development Company)

MoT

(3) Capacity Building


For government officials on HSR development
(legal, technical, safety, etc.)

Coordination by CMEA

For HSR-A on technical regulations and standards and supervision


of development and operation

HSR-A

For SOE (development company) on design,


procurement and supervision of construction works

SOE

On-Site

For operation company (Training in the classroom & On-Site)

SPV

(4) Possible New (and Innovative) Financial Tools


Consideration of possible financial resources in future

Coordination by CMEA

Detail design (Project Implementation with PPP)

Management by SOE

Tendering process
Construction works, rolling stock procurement and pre-operation
Phase II Study
[ Engineering Services (ES) ]

Inauguration

Management by SOE

Supervised by SOE
Donor & Consultant

ES - I
ES - II

Donor & Consultant

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Terima Kasih

HSR Transportation capacity corresponds to 10 lanes toll road


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32

APPENDIX

Concept of Transport Network


With
High Speed Railway Development

TOD (Transit Oriented Development) is recommended


centering on the new HSR stations.

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DKI Jakarta

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Bekasi

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Cikarang

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Bandung and Gedebage

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