1. On the feasibility of a new multi-partner
Indonesian infrastructure institute...
Some Early Findings
Dr Chris Hale
The University of Melbourne

2. Infrastructure Development Pathways
• Reference ‘high quality’
infrastructure
development pathways
• East Asian mega-cities:
Tokyo, Seoul, Taipei, major
Chinese cities
• Success stories among
medium-sized cities:
Munich, Washington DC,
Singapore, Melbourne (?)

4. Conceptual precedent International Scan

5. Infrastructure Research
Units
• University units the main models, but others
• Need exceptional and specialist research staff
to be effective
• Australian “co-operative research centres”
combine university, industry and government
in a collaborative, pool-funded model –
reasonably successful
• CRCs involve mix of cash, in-kind contribution
• Grant funding awarded to best proposals

6. Professional Institutes
• Networking & info exchange within profession
• Some lobbying on member’s behalf
• Focused on entry to professional status rather
than career development
• American Planning Association, Engineers
Australia etc
• Struggle to handle cross-disciplinary activity
• No known institute focused on infrastructure

7. Industry Associations
•
•
•
•
•
Networking can be a strength
Can be very active with events
Some have broad membership base
Membership fee structure may be relevant
Better examples have research activity
• Straddle into lobbying
• Can lose sight of ‘public interest’, become
narrow in approach

8. NGOs
• Seem to be improving, becoming more
prominent and professional
• Often have strong environmental, social
elements
• Advocacy
• Sometimes reaching a broader public,
audience

9. Infrastructure in Government,
internationally
• Models of infrastructure delivery evolving rapidly
• So is stance and expectations of government
• Increasing demands for independence, expertise,
even-handed assessment – but is this ultimately best
placed coming from government...?
• When government-owned is done right, it is brilliant
(eg – HK MTR)
• Best practice seems to be “a process”
• Only build the best: “star” projects

10. Seamless
infrastructure
delivery – the new
definition of
‘best practice’
•
•
•
•
•
•
•
•
•
•
•
•
1) Strategies and plans
2) Project concept
3) Modelling, analysis
4) Basic concept design
5) Pre-feasibility assessment,
comparison of alternatives
6) Refinement, more design
work
7) Business case, BCR
8) Financing options
9) Assessment
10) Compare to other projects
11) Decide (including on
implementation package)
12) Build

11. Organising an institute around
meaningful themes
• Balance specialisation &
breadth
• Common themes
(procurement, finance) but
widely differing technical
context
• Varied stakeholders
• Project risk profiles very
different (eg - rail v road v
power supply)
• Cross-cut from geographic/
regional/locational context

12. Stakeholder discussion during
September SIG meetings – a summary

13. Integrated Metropolitan
Infrastructure
• patchy application of urban design guidelines
• incorporation of effective transport infrastructure and
options in new developments
• Accountability
• multi-modal integration
• sheer scale of Jakarta as a mega-city
• Jakarta’s mix of old and new urban development
patterns
• effectiveness from plans into implementation
• incorporation of waste management facilities and
operations into urban landscape

14. Policy, Procurement & Investment
• land acquisition
• problems in procurement model selection
• mis-matches between government project priorities and
willingness of private sector
• impacts of major infrastructure projects not fully
considered – including social impacts such as urban
heritage
• uncertainty and trust issues between public and private
sectors
• bid costs in PPP and other projects
• legal complexity and uncertainty
• sovereign risks
• decentralization and its impacts
• budget limitations, resourcing
• problems with rate of project realization.

15. Commercial Transport
• freight movement efficiency (including balance between use of
small and large trucks)
• utilization of rail for inter-city or inter-nodal freight
• whether cost or price incentives appropriate to support mode shift
from road to rail
• ‘perverse incentives’ at play (incl low cost of heavy vehicle
registration, fuel subsidy)
• questions over structure of rail track access charging
• broader pricing questions
• fuel subsidy, as an ‘input based’ measure overwhelming ability to
drive policy effectively via ‘output-based’ measures
• ‘too many’ freight trips being made, due perhaps to low cost of
driver labour
• a ‘financing gap’ between freight and commercial transport plans
and implementation.

16. Water Supply & Sanitation
•
•
•
•
•
•
•
•
•
•
•
•
complex interactions between capital and operational financing
financing packages
loan terms and duration for water supply or wastewater projects
land acquisition
accountability and transparency
predictability and certainty for investors
“politics”
jurisdictional issues, including the fact that many projects cross
administrative boundaries
commitments from local governments to long term arrangements;
general standards of sanitation across Indonesia and the idea that a
major sanitation investment effort is needed
sectoral laws and regulations
effectiveness of vertical and horizontal integration within sector

17. • providing ‘best practice’ clusters in smaller cities
and regional locations
• having geographic foci
• progressing into activity in smaller cities over
time
• having a segmentation strategy (according to
locations and city scale)
• providing services and support through a ‘needsbased’ approach
• including at least some less-developed regions
• acting to drive policy
• supporting funding applications made by smaller
government actors

18. Energy Supply
•
•
•
•
•
•
tariff setting
Maintenance
Efficiency
new supply sources (such as solar)
economic viability of generation
project financing, guarantees, lender
responses, and uncertainty
• progress toward coverage or ‘electrification’
goals (ie from 75% to 95%).

19. Regional & Rural
• dilution of impacts and understanding for policies developed at the centre
• availability of decent, appropriate reference cases for cities other than
Jakarta
• less money and fewer resources for delivering quality infrastructure
• generally under-developed infrastructure of all kinds
• ineffective regional politics
• different priorities to central government
• different and diverse systems of government
• diversity and non-uniformity across the archipelago
• the level of inclusion or exclusion from the centre of various locations
• the large number of smaller cities in Indonesia
• questions around boundaries and regionalization per se
• land reform
• ‘extractive’ practices in regional and rural areas
• labour conditions
• the issue of ‘grid scale’ and market scale for infrastructure systems in rural
areas
• different/alternative systems or technologies may be more appropriate for
infrastructure solutions in rural areas (particularly in energy and water).

20. Suggested Functions & Operations
• a focus on open communication
• providing recommendations for implementation
co-ordination
• providing practice reviews and explanation
• undertaking new research (with government buyin)
• a new project or policy evaluation capability
• independent policy analysis and/or advocacy
• Publishing
• Providing ‘context’ for policy development

21. • organizing and delivering events and fora for
high-level discussion
• provision of expert knowledge
• interaction and exchange
• dissemination and communication
• skills development
• a source of impartial public interest advice
• adding value (within the sector)
• delivering case studies
• an independent assessment capability

22. • providing broader independence within the
sector
• sustaining a public interest focus
• informing professionals about standards of better
practice and conduct
• open discussion of options and issues
• balancing different stakeholders (both public and
private) as active members
• having potential status as a statutory body
• and/or potentially being associated with a
university.

23. •
•
•
•
•
•
•
•
•
•
•
•
•
•
knowledge exchange
critical analysis
being a “think tank”
providing background studies
providing peer review (for policies, plans, projects)
actively considering social, economic and environmental
perspectives
providing a destination for formal stakeholder engagement
programs related to government activities
being multi-partner in terms of involved stakeholders
could also undertake some commercial activity
could be quasi-public
should enhance government policy-making
tracking of statistics - sectoral, and sub-sectoral
performance
generating new evidence and knowledge
supporting improved transparency and accountability.

24. Synthesis of core functions
New research
& studies
Professional skills
development
Integrating &
supporting diverse
stakeholders –
Jakarta & beyond
Knowledge exchange,
communication &
dissemination
Independent analysis & peer
review of plans, policies

25. Potential Structure
Board & executive staff
*strategy & governance
*operations & budget
*membership & publicity
*events, training, knowledge exchange &
dissemination
*research contracts
other SIG
SIG
integrated
metropolitan
infrastructure
(example only)
SIG
SIG
policy & investment
commercial transport
(example only)
(example only)
other SIG

26. Resourcing at Mature Phases (indicative only)
Item
Annual $USD at 2014
Commissioned original research
$400,000
Independent professional board members $156,000
(4 at 0.2 FTE)
Executive staffing (one CEO, one admin)
$260,000
General operating
$80,000
Total Cash
$896,000
Office space
In-kind
Board members – major funding partners
(4-8)
In-kind
Data and access to information
In-kind
Staff time from partners - supporting
research activity, events
In-kind

27. Early Recommendations
• Should be a vehicle for supporting broadbased infrastructure-led economic
development
• “Separate but close” to government
• Core focus – “value adding” through
enhanced sectoral skills and capabilities
• Membership base – strength in diversity

28. • New commissioned research – the focus of
exchange, information, ideas and capabilities
• The ‘public interest’ as shared driver
• Topics and themes – broad coverage across
infrastructure