This document outlines governance issues in Indonesia's Directorate General of Highways and proposes recommendations to address them. It finds that while the highway budget has tripled, network conditions have remained static due to inefficient policies around planning, design, procurement and implementation of projects. It recommends increasing funding for network development, accelerating land acquisition, and expanding capacity for public-private partnerships. It also suggests reforms to medium-term budgeting and performance measurement, asset management, project delivery and connectivity planning between economic centers. Overall, the document proposes facilitating the delivery of DGH's strategic plan through demonstration projects and governance improvements.

1. Governance in Directorate General Highways: IndII Findings and Proposals William D Paterson IndII Wrap-up Conference 14 June 2011

3. Budget Policy and Reform – MTEF-PBB

4. Road Network Development

5. Project Delivery and Implementation

6. Management Systems

7. Road Safety Program

10. Recommendations on applying MTEF-PBB

11. DGH achieves significant work and budget execution

12. but network obsolete, condition static, impacts uneven across regions, high demand to improve substandard roads

13. Funding tripled

14. but output flat, treatment increased and costs tripled

15. Preservation adequately funded if policies optimal

16. butdevelopment is under-funded

17. Technical policies and practices make inefficient use of budget:

18. Planning of service levels and capacity

21. Expressways

22. Accelerate land acquisition using additional budget

23. Expand BPJT capacity - to accelerate processing of projects

24. Provide budget for Viability Gap Funding to attract PPP investors

25. Drive expressway plan by connectivity and mobility requirements

26. Trunk Routes

27. Use corridor studies to determine optimal 20-25 year standard for arterial roads and build into pipeline of projects

28. Modernise assets through road renewal program, updating structural and functional aspects with road widening

30. TRANS KALIMANTAN NATIONAL ROAD PROGRAM Nunukan Nunukan Simanggaris Simanggaris KONDISI SAAT INI TARGET 2010 - 2014 Malinau Malinau Tj. Selor Tj. Selor Aruk Aruk Ng Badau Ng Badau Enttikong Enttikong Putusibau Putusibau Tayan Tayan Pontianak Pontianak Samarinda Samarinda Jalan yang belum terbangun digambarkan dengan garis putus-putus Jalan yang belum terbangun digambarkan dengan garis putus-putus Balikpapan Balikpapan Policy Issue – should 6m width std be skipped? (1) Widen to full 7m std for NR Arterial; or (2) Build new 7 m road on future highway alignment. Width Palangkaraya Palangkaraya >= 14 m >= 7 m 6 m 4.5 – 6 m Not Connected Sea Port Banjarmasin Banjarmasin 8

31. Policy Issue 3: Project Delivery and Implementation

33. Revision to Pavement Design Guide:

34. Long-life designs (low maintenance)

35. Catalog approach for greater reliability (based on detailed analysis and life-cycle costs)

36. Strong foundation and drainage for long life

37. Overloading incorporated in design

38. Flexible, rigid, reconstructed, and recycled pavements

39. Larger procurement package size improves cost and quality

40. Balai want to automate road condition surveys for better data

41. Options for improving management of routine maintenance

43. covering strategic roads, arterial roads, trunk routes, and expressways (incremental widening would be discontinued)

44. Prepare long-range capacity expansion profiles for the six economic corridors, including pipeline of projects and financing plan

47. Prepare road renewal strategies for heavily trafficked corridors in Balai 3, 4 and 5 including heavy-duty pavements

50. Working with Directorates

51. Demonstrating applications and reforms through outputs

52. Supporting MTEF budget preparations in 2012, 2013 & 2014

53. Progressive engagement:

54. Hold-points for review after initial stage and annual stages

55. Governance:

56. Building reliable data & information database for shared use

57. Facilitating deployment of new strategic KPI for travel time, asset age and activity costs

58. Launching public disclosure – possibly under CoST Initiative