2. Providing sector-specific training to enhance capacity-building

BWG members agreed on the importance of increasing capacity-building and harmonization at national and subnational levels. Some of the key PPP agencies are already focusing significant efforts in this area, as illustrated by the creation of the Indonesia Infrastructure Guarantee Fund (IIGF) Institute. Establishing dedicated PPP departments - or focal points for private-sector engagement - in sector ministries and across all provinces in Indonesia would also help to increase capacity-building.

However, conducting training directly within specific PPP projects is considered a key success factor for improving skills-sharing and developing expertise, thereby positively impacting project delivery in Indonesia. The BWG recommends beginning knowledge sharing within national agencies before extending this to local government.

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Learning how to do PPPs is by doing PPPs

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BWG member

Another effort to accelerate project delivery is by increasing the level of capital budget absorption. Despite the decision to increase the infrastructure budget for 2017, the Government of Indonesia has a disbursement track record of less than 100% (72% in 2015). This gap is mainly due to a lack of capacity to implement projects. Moreover, inappropriate performance assessment of the government contracting agencies (GCAs), which is against absorption of state budget and not in terms of delivery of PPPs, decreases incentive to invest in PPPs. Building capacity of public-sector official for infrastructure development and adopting appropriate incentive schemes to implement PPPs would help project delivery and increase private-sector participation in their development.