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THE OPTIMAL PUBLIC PRIVATE PARTNERSHIPS MODEL FOR TRANSIT ORIENTED DEVELOPMENT Case Study Dukuh Atas, Jakarta, Indonesia Daniel Azka Alfarobi Supervisors: Ruth L Steiner, Professor William L. Tilson, Professor Christopher Silver, Professor A MASTER RESEARCH PROJECT (MRP) PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN ARCHITEC T URAL STUDIES WITH A CONCENTRATION IN SUSTAINABLE DESIGN UNI VERSITY OF FLORIDA 2015
2 Â© 2015 Daniel Azka Alfarobi
3 To my Family
4 ACKNOWLEDGEMENT This MRP might never have completed without help of many people that gave me contribution with data, information, knowle dge and support, which I would like to express my gratitude to all of them. I would like to foremost like to thank my family for their support during this period of my study, in particular to my wife Astriana Harjanti, my son Kimi Rafarel Alfarobi, and my daughter Priyanka Namira Alfarobi. I wish to express my sincere gratitude to Professor Ruth L. Steiner, Ph.D. for the guidance to complete this MRP with useful criti que s and encouragement. My deepest thanks also goes to Professor Christopher Silver, Ph.D. FAICP and Professor William L. Tilson who give me an opportunity to study S ustainable D esign at University of Florida. To all relatives, friends, and others who in one way or another shared their support, thank you. Last but not least, I gave deepest grati tude to Allah, SWT that made all of this possible. Daniel Azka Alfarobi
5 TABLE OF CONTENT S ACKNOWLEDGEMENT ................................ ................................ ....................... 4 TABLE OF CONTENTS ................................ ................................ ......................... 5 LIST OF TABLES ................................ ................................ ................................ ... 8 LIST OF FIGURES ................................ ................................ ................................ . 9 LIST OF ABBREVIATIONS ................................ ................................ .................. 10 ABSTRACT ................................ ................................ ................................ ............. 11 CHAPTER 1. INTRODUCTION ................................ ................................ ............................ 13 1.1 Background ................................ ................................ ........................... 1 3 1.2 Problem St atement ................................ ................................ ................ 1 7 1.3 Research Objective ................................ ................................ ............... 1 8 1.4 Research Question ................................ ................................ ................ 1 9 1.5 Conceptual Frameworks ................................ ................................ ....... 21 1.6 Structure of Master Research Project (MRP) ................................ ....... 2 3 2. LITERATURE REVIEW ................................ ................................ ................... 2 4 2.1 Public Private Partnerships (PPPs) ................................ ....................... 2 5 2.1.1. The Form Scope of PPP ................................ ....................... 2 5 2.1.2. PPPs scheme at The United States of America .................... 2 7 2.1.3. PPPs scheme in Indonesia ................................ .................... 2 9 2.1.4. Land Consolidation/ Right Conversions in Indonesia ......... 32 2.2 Transit Oriented Development (TOD) ................................ .................. 33 2.2.1. A transport and land use development challenge ................. 3 4
6 2.2.2. Principles of Transit Oriented Development (TOD) ............ 3 6 2.2.3. TOD Implementation Stages in Jakarta ............................... 37 3. RESEARCH METHODOLOGY ................................ ................................ ....... 3 9 3.1 Framework in Methodology ................................ ................................ . 3 9 3.2 Analytical Hierarchy Process (AHP) ................................ .................... 41 3.2.1. The Hierarchy Structure ................................ ....................... 41 3.2.2. Determination of Priority ................................ ..................... 43 3.2.3. Respondent/Expert Selection ................................ ............... 49 3.3 Cost Benefit Analysis ................................ ................................ ........... 50 4. GENERAL DESCRIPTION OF STUDY AREA ................................ .............. 52 4.1 M RT Development in Jakarta ................................ ............................... 54 4.2 Transportation Condition in Jakarta ................................ ..................... 5 7 4.3 Demography condition in Jakarta ................................ ......................... 59 4.4 Economic Condition in Jakarta ................................ ............................. 61 4.5 Alternative PPPs Concept at Dukuh Atas Area ................................ .... 65 5. ANALYSIS ................................ ................................ ................................ ........ 70 5.1 Transit Oriented Development at Dukuh Atas ................................ ..... 71 5.2 Benefit Cost Analysis ................................ ................................ ........... 73 5.3 Analytical Hierarchy Process (AHP) ................................ .................... 8 1 6. DISCUSSION ................................ ................................ ................................ .... 8 4 7. RECO MMENDATION AND CONCLUTION ................................ ................. 85 APPENDI CES 1. Pairwise Comparison Questioner ................................ ................................ ...... 86
7 2. Recapitulation Data of Questioner ................................ ................................ .... 91 3. Benefit Cost Analysis Calculation ................................ ................................ ..... 97 4. Analytical Hierarchy Process Calculation ................................ ......................... 108 REFERENCES ................................ ................................ ................................ ......... 112
8 LIST OF TABLES Table 2.1 Comparison Function between Urban and Neighborhood TOD ............. 3 4 Table 2.2 Staging of Rail Based TOD Implementation in Jakarta .......................... 38 Tabl e 3.1 Pairwise Comparisons Matrix ................................ ................................ . 44 Tab l e 3.2 Comparative Assessment Scale ................................ .............................. 45 Tab l e 3.3 Random Consistency Index (RI) ................................ ............................. 4 8 Table 4.1 Total Population and Population Density based on Census Results in 2010 and Projected Population in 2014 according to the Municipality/Regency ................................ ................................ ............. 60 Table 4.2 GRDP at Current Market Prices by Industrial Origin of DKI Jakarta (Million Rupiah), 2007 2013 ................................ ................................ ... 63 Table 4.3 GRDP at 2000 Constant Prices by Industrial Origin of DKI Jakarta (Million Rupiah), 2007 2013 ................................ ................................ ... 64 Table 4.4 Advantage and Disadvantage of BOT Model in the Context of TOD at Dukuh Atas ................................ ................................ ................................ ....... 66 Table 4.5 Advantage and Disadvantage of Right Conversion Model in the Context of TOD at Dukuh Atas ................................ ............................... 68 Table 5.1 Average CoLF 2007 2014 ................................ ................................ .... 75 Table 5.2 Size of the Building ................................ ................................ ................. 76 Table 5.3 ...................... 76 Table 5.4 Occupancy Rate ................................ ................................ ...................... 78 Table 5. 5 BOT Model (NPV an d IRR Analysis) ................................ .................... 79 Table 5. 6 Right Conversion Model (NPV and IRR Analysis) ................................ 80 Table 5. 7 Weight of sub Hierarchy Benefit and Cost ................................ ............. 81
9 Table 5.8 Overall Weight s of Criteria ................................ ................................ ..... 8 2 Table 5.9 Benefit Sub Hierarchy Economic ( Alternative Priorities) ....................... 82 Table 5.10 The Optimal PPPs model from AHP Analysis ................................ ...... 8 3
10 LIST OF FIGURES Figure 1 .1 MRT Station Phase 1 ................................ ................................ ........... 15 Fi gure 1.2 Conceptual Framework ................................ ................................ ........... 21 Figure 2.1 PPPs Regulation Diagram in Indonesia ................................ .................. 30 Figure 2.2 The Basic Correlation between Car, Tran sit and Walking Environment ................................ ................................ ............ 3 5 Figure 3.1 Framework in Methodology ................................ ................................ ... 40 Figure 3.2 AHP Hierarchy Structure ................................ ................................ ........ 42 Figure 4.1 DKI Jakarta Map ................................ ................................ ..................... 53 Figure 4. 2 Map of South to North MRT Line ................................ .......................... 55 Figure 4. 3 MRT station catchment areas ................................ ................................ 57 Figure 4.4 Traffic Condition at Dukuh Atas Area ................................ ................... 58 Figure 4. 5 BOT Model ................................ ................................ ............................. 66 Figure 4. 6 Right Conversion Model ................................ ................................ ........ 67 Figure 4.7 Map of Study Area ................................ ................................ .................. 69 Figure 5.1 Concept TOD at Dukuh Atas, Jakarta ................................ .................... 71 Figure 5.2 Public Space concept at Dukuh ................................ .............................. 72 Figure 5.3 Underground Connectivity and Artifici al Ground ................................ .. 73 Figure 5.4 The Conceptual Design of the Building at Dukuh Atas ......................... 77 Figure 5.5 Sectional Drawing ................................ ................................ .................. 77
1 1 LIST OF ABBREVIATIONS AHP Analytical Hierarchy Process BCA Benefit Cost Analysis BCR Building Coverage Ratio BRT Bus Rapid Transit FAR Floor Area Ratio GOI Government of Indonesia GRDP Gross Regional Domestic Produ ct IDR Indonesian Rupiah IRR Internal Rate of Return JABODETABEK Jakarta, Bogor, Depok, Tangerang, Bekasi JICA Japan International Cooperation Agency MRT Mass Rapid Transit NPV Net Present Value PPP Public Private Partnership TAD Transit Adjacent Development TDM Transport Demand Management TOD Transit Oriented Development
12 ABSTRACT Transportation demand management encourages people to use public transportation and Transit Oriented Development (TOD) is one of the concept that can support transportation demand management. In addition with implementing TOD concep t, sustainable financing become a major issue since public funding is limited. Public Private Partnerships (PPPs) can be an alternative mechanism to address this problem. To make the project more attractive for investor point of view, finding the optimal P PPs concepts is important. According to Japan Cooperation International Agency ( 2012 ) , two types of PPPs mechanism s are commonly used to develop TOD . The first is Built Operate Transfer (BOT) model and the other is Right Conversion model. This study elabor ate s both of these model s in order to find the optimal PPPs model. The Dukuh Atas area in Jakarta, Indonesia is chosen as a case study since this area is possible to develop using the TOD concept. Two different method s are used in this study. First is Ben efit Cost Analysis (BCA), and the other is Analytical Hierarchy Process (AHP). The BCA compar es the investment cost with potential net cash flow from the Dukuh Atas project. The d iscount rate is calculated based on the average 8 years data of Cost of Loana ble Fund from commercial banking in Indonesia. The result of the analysis showed that Right Conversion Model has a higher Equity Internal Rate of Return (IRR) compare d to the BOT model. The equity IRR right conversion model is 32% while the BOT model is on ly 30 %. AHP analysis is an expert choice model . T his tools is commonly used to solve a problem with multi criteria analysis. In connection with finding the optimal model for PPPs model, this analysis involve s not only economic variable s but also non econo mic variable s, such as social cost s and regulation issue s . When calculating only the economic variable, the result from the analysis shows the same result with BCA, the right conversion model has the better figures compare s to the BOT model. The priorities score from Right Conversion model is 0.5 42 while BOT model only 0.4 58 . After involving non economic variable s , the result from AHP analysis shift from Right Conversion Model into BOT model. The BOT model has the priorities score of 0.5 77 , while right conv ersion model is only 0.4 23 . The analysis shows after involving non economic variable s , the BOT is the most optimal PPP model for TOD s .
13 CHAPTER 1 INTRODUCTION 1.1 Background Transportation demand management ( TDM ) encourages people to use public transportatio n and transit oriented development ( T OD ) is one of the concept s that can support TDM . TOD is a concept that integ rate s transit and land use. Furthermore, TOD combin es concepts of compact and pedestrian oriented development with mixed land use. The basic idea of TOD is to make the city more livable and optimize the transit system (Cervero, R., & Sullivan, C, 2011). In addition with implementing the TOD concept, sustainable financing has become a major problem because TOD needs a lot of funding. PPP can be an alternative mechanism to address this issue. Private sector involvement is important to solve the limited source of funding. According to Suzuki, Cervero, and Iuchi ( 2013 ) , involving the private sector is possible as long as value capture from TOD can b e used as tool for generating the revenue to pay back the investment. The PPP concept is a win win solution between the private and the public sector. In the PPP concept, the government could provide basic infrastructure , such as rail development , while t he private sector can be involve d in supporting facility for instance like the transit system, station development, parking facilit ies or area development surrounding the train station or the main bus shelter. This study will use Jakarta as a case study. As a capital city of Indonesia, Jakarta becomes a growth center for other city surrounding Jakarta, and makes Jakarta
14 become a destination for many people who lived surrounding Jakarta. According to Jakarta Provincial Government (2013) , there were 21 mill ion movements per day in Jakarta in 2010 and this number is increas ing every year. Provision of better public transportation and integrated land use are some of the solutions to address the transportation issue in Jakarta. However due to public fiscal limi tation s , private sector involvement is necessary in order to reduce the gap between the demand and the supply of infrastructure. Trans Jakarta Bus Rapid Transit and JABODETABEK C ommuter Line T rain are the public transport system that is provided by the gov ernment. Trans Jakarta Bus Rapid Transit is provided by the local government, while the JABODETABEK Commuter L ine Train are managed by the central government. Th e involvement of different authorit ies makes the integration between th e se two public transport ation systems difficult and makes people still prefer using private vehicle since shifting between the mode s is not convenient. On the other hand, Jakarta is also having a problem with sporadic horizontal growth or urban sprawl. Low level s of service in pu blic transport and sporadic horizontal growth accelerate the traffic congestion in Jakarta. On 2014, Jakarta Provincial Government start ed the development of MRT to improve the public transport services. The phase 1 is from Lebak Bulus to Bundaran HI, arou nd 16 Km with 1 2 stations (Figure 1.1) .
15 Figure 1.1 MRT Station Phase 1 Source: Jakarta Provincial Government, 2010 In order to optimize the benefit of MRT, its development will need to be supported with infrastructure development su ch as integration between MRT s tation s , BRT shelter s and c ommuter line station. The TOD system is one of the alternative s that can be developed in Jakarta in connection with integration between stations and pedestrian s with residential and commercial area s . According to the Jakarta Provincial Planning Agency and a study from the Japan International Cooperation Agency ( 2012 ) , Dukuh Atas is one of the potential location s that can be developed for TOD. Dukuh Atas is an area that has a DKI JAKARTA BANTEN PROVINCE WEST JAVA PROVINCE PHASE 1 PHASE 2 MRT LINE COMMUTER LINE LEGEND LEBAK BULUS STATION FATMAWATI STATION CIPETE STATION HJ NAWI STATION BLOK M STATION SENAYAN STATION BLOK A STATIO N ISTORA STATION BENHIL STATION SETIABUDI STATION DUKUH ATAS STATION BUNDARAN HI STATION U N D E R G R O U N D E L E V E T E D
16 significant role for tra nsportation in Jakarta. It is located at the down town Jakarta and dominate s the commercial area. Sudirman train station for commuter line and Dukuh Atas bus rapid transit shelter for Trans Jakarta are also located at this area. However, those stations are riders of either system have a difficult time switching from the train station to the bus station and vice versa. According n MRT station and airport trains station will also located in the Dukuh Atas area. T he PPP scheme for TOD at Dukuh Atas is one of the alternative concept s that can be applied to solve the limitation of public funding. It combines public services and business profitability. In many PPPs project, the BOT concept is usually used in infrastru cture project s, such as models of PPPs , such as Build Operate Own or rights conversion , like in Japan , are view, the high er internal rate of return makes the project more interesting. On the other hand, from the government perspective the less it spend s, the better. This conditions leads to a question, what is the best PPPs model for TOD? This study focus es on analyzing the PPPs model for TOD Dukuh Atas. The first method us es Cost Benefit Analysis with discounted cash flow analysis to find the optimum model from a profitability point of view. The second model us es multi criteria analysis to find the best model from the stake holder point of view. All of the model s d to find the best model of PPPs for TOD s at Dukuh Atas.
17 1.2 Problem Statement Urban sprawl is a recent phenomenon in almost developing countries. A development away from the city center and car dependence is the characteristic have any choice except using their car to travel to their destination. Jakarta, Indonesia is perfect example from this situation. The increasing land value at the center of Jakarta makes people choose suburban areas for their residential and commute everyday using their car. This condition can cause some problems such as congestion and heavy pollution. As the ca pital city of Indonesia, Jakarta has become a magnet for people in Indonesia. However the increasing population in Jakarta has not been follow ed with infrastructure development . Currently, transportation. Start ing in 2014, the local government of Jakarta together with central government of Indonesia developed the MRT system in Jakarta. The f irst phase of the development is from South to North and then will be from East to West. The South to North line is under construc tion now while East to West is still under feasibility study. The development of MRT will need to be supported with other facilities , such as park and ride and pedestrian amenities to increase the ridership. The integration of land use using a TOD concept is important to maximize public transit ridership . The TOD approach can not only solv e the transportation issue, but also address urban sprawl problem s in Jakarta. Furthermore the TOD approach is shifting the development strategy from horizontal to vertica l approach with transit system connectivity.
18 Implementing the TOD concept is complicated, sustainable financing has a significant role for the success of TOD. Since the public funding in Jakarta is limited , alternative source s of financing have to be expl ored. PPPs are one of the scheme s that can be used to solve the financing issue. The basic idea of the concept is a win win solution between the government and the investor. The government can get the benefit from public service improvement and the investo r can get the profit . T he successful key from using PPP concept is defining the optimal PPPs scheme. This study elaborate the optimal PPPs scheme for TOD and using Dukuh Atas project as a case study since according to Japanese International Cooperation Age ncy ( JICA ) ( 2012 ) the TOD project at Dukuh Atas is possible to finance using a PPP scheme. 1.3 Research Goals and Objective s The goal of this research is to find the most optimal PPP model for Transit Oriented Development at Dukuh Atas Jakarta from investor p erspective. This goal will be achieved through the following objectives: 1. Analyzing each of PPPs model at Dukuh Atas Jakarta using Cost Benefit Analysis. 2. Analyzing each of PPPs model at Dukuh Atas Jakarta using multi criteria analysis. 3. Comparing the outpu t of Cost Benefit Analysis and Multi Criteria Analysis. 4. Analyzing the optimal PPPs model for development of TOD Dukuh Atas Jakarta.
19 1.4 Research Question New Urbanism concept is an approach for redesigning the neighborhood to become less automobile oriented an d encourage more people to walk, bicycl e , and ride transit for travel (Cervero and Radisch 1996). The key for New Urbanism approach are compact development, mixed land use, pedestrian oriented and prominent civic space area. On the other hand research supp ort s a claim that pedestrian orient ation and the integration between transit and land use will reduce automobile travel (Cervero, Radisch 1996) . Furthermore according to Suzuki , Cervero, and Iuchi ( 2013 ) , the integration between transit system and land use is one of the strateg ies to become a sustainable city. Many cities in developed country use this strategy in order to make their city more livable. For instance in Sin gapore, th ey used a radial corridor principle to connect the central area with regional and sub regional area s using a high performance transit system . T his strategy is a success > Singapore rank s as the most livable city in Asia based on ECA International research in 2015. Other cities like Tokyo in Japan, Hong Kong in China or Chicago in t he USA are also other example s of how the integration between transit and land use make s the city more livable. Integrat ion between high access to the transit system and well design ed urban space will reduce the use of automobile since it will encourage people to walk and bicycl e . These concept s are the basic idea of TOD. Furthermore implementing the TOD concept require s a high level of investment and financial sustainabil ity is the most important key. Cities like Singapore, Hong Kong and Tokyo have been success ful in implement ing the TOD concept because they create a synerg y between the public
20 and private fund s under the PPP mechanism , t hey can also creat e the value captur e from TOD. The investor can see the value capture from TOD concept and together with the government transfer it into a PPPs model. This explanation leads to a question The optimal PPPs model is import ant in order to make a balance between public benefit and profitability from the investor. In addition to elaborating the concept of TOD and PPPs model, this study use s Dukuh Atas Jakarta Indonesia as a case study. The reason is because implementing the TOD concept in Jakarta is necessary to make the city more livable and according to a previous study from JICA, a TOD project in Dukuh Atas is feasible to develop.
21 1.5 Conceptual Frameworks Compact Development Mixed Land Use Walk Friendly Urban Development Transit system connectivity Influence Travel Dem and Sustainable City BACKGROUND TRANSIT ORIENTED DEVELOPMENT (TOD) High Investment Value Capture from TOD Limited Public Funding Availability Public Private Partnership Scheme TOD at Dukuh Atas Jakarta Case Study W hat is the PPPs best model fo r TOD development ? Built Operate Transfer (BOT) Model Conversion Right Model Benefit Cost Analysis Discounted Cash Flow Multi Criteria Analysis AHP JICA Study 2012 Investor Profitability Public services improvement The Optimal PPPs model for TOD RESEARCH QUESTION ANALYSIS OUTCOME Figure 1.2 Conceptual Frameworks
22 Conceptual framework from this Master Research Project (M RP) is formulated from the literature review (Figure 1.2). According Cervero ( 2002 ) some variables influence travel demand, such as compact development, mixed land use, walk friendly urban development, and transit system connectivity. Furthermore, he expla ined that a city with good transit system become more sustainable and more livable compare with other city without a transit system. TOD is one strategy to make a city more livable. According to Cervero and Sullivan ( 2011 ) , TOD is a promising tool for bre aking the urban sprawl issue and car dependenc y by increas ing transit use and reinforcing compact station area development. On the other hand TOD needs a high investment and the availability from the public funding is limited. Cities like Singapore, Tokyo, Hong Kong, and others cities mostly in developed countries can generate revenue and capture value from property development through implementing TOD concept. Many of those cities use a PPP approach to address the funding issues. Since implementing the TOD concept is important for sustainable cities and PPPs is an alternative financing strategy then the most optimal PPPs scheme has to be defined as a win win solution between the investors and government. This study elaborates the optimal PPPs scheme from investor point of view and use Dukuh Atas Jakarta as a case study.
23 1.6 Structure of Master Research Project (MRP) The MRP report is structured into six chapters organized as follows: a) Chapter 1 Includes the background of the res earch , problem statement, res earch objective, research question, and conceptual framework. b) Chapter 2 Deals with literature review including elaborate the concept of TOD and PPPs . c) Chapter 3 Explained about Cost Benefit Analysis and Multi Criteria Analysis as a research methodol ogy at this research . d) Chapter 4 Describe TOD at Dukuh Atas as a case study area. e) Chapter 5 Discussed the results or findings of the research in connection with the optimal PPPs model for TOD. f) Chapter 6 C onclusions of this research g) Chapter 7 Recommendation
24 CHAPTER II LITERATURE REVIEW Investment is a complicated decision. M any criteria and method s are available for choosing the right investment decision. Investor tends to be more careful for uncertain investment condition such as poli tical instability, complicated bureaucracy, or volatile economic condition. In the normal condition, the investor chooses the highest rate of return for investment. However , in certain condition s , investors give close attention in other aspect such as the duration of the payback period, social risk from the project , and the supporting regulation from the government. The long er the duration of the investment, the more complicated the analy sis of the investment. In many countries, the government give s specia l incentive s mostly in a project with special characteristic such as a large project and a long term investment, Greenfield project (a new project started from zero), and others. The incentive can be in tax reduction , special interest rate or other conside rations that reduce risk or costs. PPP is one strategy to accelerate the development of projects. It can reduce the gap between the infrastructure demand need with the availability of public funding. This literature review presents some aspects of the P PP and TOD concept s .
25 2.1 Public Private Partnerships (PPP s ) At the first time PPP was introduced in early 1990s, many stakeholders thought that PPP has the same concept as privatization. However, according to Levy (2011), the PPP concept is completely differen t from privatization. The PPP concept is giving an operational project to the private sector in a long term (concession or lease type contract) but the ownership of the project is still maintained by the public authority. Colverson and Oshani (2012) define PPPs as a different type of contractual agreement between the public agency and private sector for the purpose of public infrastructure development and services provision. From the definition of PPP s , s ome expert s argue that there is no partnership in the PPP concept ; the relationship for a PPP is straight forward between lessor and lessee. However, the idea of the PPP is to cover the limitation of public services budget, the trend of infrastructure development remain stagnant due to budget limitation whil e the demand has r i se n exponentially. PPP is an alternative financing to develop many projects in order to make public services better (levy, 2011) . 2.1.1 The Form Scope of PPP According to Levy 2011, PPPs can take several form s including : 1. Build Operate Transfer (BOT) In this form, the private entity develops a project according to the guidance, such as providing design, construction, operational and maintenance for
26 a certain period or concession. The private entity collects the fund s during the c oncession period then give the project back into the public agency without any compensation. 2. Build Own Operate (BOO) With a BOO contract, a private entity has the right to develop, finance, design, build, own, operate, and maintain a project for a certain period. The p rivate entity cover s all the construction risk as well as the operating risk of the project. Over all, this scheme is almost the same as BOT however in BOO there is no transfer of the project at the end of concession since the value of the pro ject is already zero. This kind of approach is quite common in the power generation sector. 3. Design build operate maintain (DBOM): A private entity provides design build services then construct the public facility based on the design, furthermore they also responsible for operational and maintenance of the project for certain period. The idea of this approach is to get a high quality from the project since the private entity not only design s and build s but also has a responsib i l ity to operate and maintain t he project for the certain period. 4. Lease develop operate (LDO): A private entity leases a facility from a public agency, and is responsible to provide equity for upgrading or renovating the facility. This private entity has the right to operate the facil ity under a contract with the public agency.
27 5. Availability payment process: The p ublic agency periodically pays to private entity a certain amount in connection with providing a service. All service specification s are under an agreement between the public agency and the private entity. 6. Shadow tolling: In connection with collecting the revenue from a tolled roadway, a private entity gets the payment from public agency using a certain formula rather than physically e public agency and a private entity agree on a formula at the beginning of the PPP. Beside all the form s described above, other forms of hybrid financing in PPP model are still possible as long as all the stakeholder agreed to put these terms into an agre ement. 2.1.2 PPPs scheme at The United States of America The Federal Highway Administration (FHWA) realizes that the gap between development through public funding is widening and a ne ed for private sector involvement to reduce the gap (Levy, 2011). In addition with private sector involvement, the FHWA recognized that PPP s are one of the alternative s that can be applied to reduce the gap.
28 According to Levy ( 2011 ) , i n the USA, the publi c agency already has a financial guidance to execute PPP projects, these guidance can be use both for a mega project or smaller projects. Some of the guidance are as follow s : 1. Cost Estimate The c ost estimate is the total cost for the whole project from prov iding the design, construction, acquisition cost, insurance cost, and other cost including mobilization and demobilization cost . All costs are based on standard accounting methods and generally do not include costs of acquiring revenue (taxation, mortgage interest payment, and other items included in DOT Order 4600.17A / a guidance of financial term and condition for PPPs mechanism provided by The US Government) . 2. Implementation Plan The i mplementation plan includes all aspect for completing the projects , suc h as estimated expenditure to be covered by projected revenue, the plan, and operational and maintenance cost assumptions. The forecasting of project profitability is also made using several sensitivity analysis in order to find the fina ncial figures of the projects such as cost sensitivity, revenue sensitivity or other unpredictable condition like unanticipated environmental concerns that could be arise, high technology that can reduce the cost or the potential for litigation.
29 3. Revenue Sources The r evenue sources are projected using normal conditions and potential changes in expected revenue that may affect the whole project. Th ese changes may include the delays of the project or changes in government rules that could affect the s revenue. 4. Cash Flow Cash flow is the most important item for the continuity of projects. The revenue of the projects ha s to cover all operational and maintenance cost and also project obligation and expenditure payments. This guidance includes an annual schedule of cash needs and available cash to meet those needs. Overall, this guidance tr ies to address some of the concerns in connection with the completion of the projects . 2.1.3 PPPs schemes in Indonesia The Government of Indonesia (GOI) already has a policy in connection with PPP scheme s in Indonesia. The policy has changed several time s in order to attract and make it more competitive from the investor point of view. Furthermore the GOI, through the National Development Agency, issues a guidance handbook ev ery year as a reference for the investor who wants to participate in infrastructure development in Indonesia.
30 Figure 2.1 PPPs Regulation Diagram in Indonesia Source: National Development Planning Agency, 2013, page 7. The regulation as shown at the pict ure 2 .1 above are discussed PPPs mechanism in Indonesia (National Development Agency, 2013) , in general the PPPs regulation in Indonesia is governing about : Cooperation between the Government and the private sector Land acquisition.
31 Environmental ass essment and protection. sanitation, energy and telecommunications. The commitment from the GOI to attract the investor is clearly defined at the regulation of land acquis ition. The GOI is also issued some term s and condition s for PPP scheme s in Indonesia. This terms and conditions are made based on win win solutions approach for investor benefit and public service (social) benefit. Some of the term and conditions are: 1. The project must be economically feasible based upon the social cost benefit analysis; 2. The project must be technically, legally, and financially feasible based on the feasibility study; 3. 4. The need of land acquisition requirement are already identified; 5. If necessary, the need of government support/guaranteed have to identified; 6. Preliminary Environmental Impact Assessment (EIA) have to be started or in case agency for environmental permit is necessary; and 7. Preparing the plan for land acquisitions and resettlement. It is clear that PPP project s are not only feasible from the private sector economic perspective but it has to be also feasible from the social c ost benefit analysis.
32 2.1.4 Land Consolidation/ Right Conversions in Indonesia Land consolidation is one of the possible model s for the PPP mechanism. According to Coelho , Portela , and Pinto (1996), l and c onsolidation is a method that tr ies to solve the spatial issue by eliminat ing certain type s of land fragmentation and creating the new concentrations plot accompanied with infrastructure development , such as new road, irrigation f acilities and other services. Furthermore Yoshida (2003) mentioned that l and consolidation is an arrangement of ownership and land use with involving community participation by donates partially of their land for public space in order to make the environme nt better. F our aspects should be analyzed in connection with land consolidation process: economic, social system, physical and environment ( Coelho , Portela, and Pinto, 199 6). The success of land consolidation will depends on th e se four aspects. In the context of the land consolidation process in Indonesia, there are several case studies in Indonesia one of them is in Denpasar Bali in 1982. However, in the Jakarta context, t here is no case example of land consolidation implementation. According to Yoshida (2003), this conditions probably exists for two reasons. First, some parts of Jakarta area are already improved by the Kampung Improvement Program. This program use s a regio nal budget (APBD) to improve some slum area s in Jakarta. T he second reason is that most land in the urbanized area in Jakarta is already registered with a land title, and existing land owner may not be willing negotiat e with anyone about development.
33 2.2 Tran sit Oriented Development (TOD) Before describing TOD, several terms need to be defined . Parker, McKeever, Arrington and Smith Heimer, ( 2002 ) as cited in Lund, Cervero, and Wilson ( 2004 ) define s TOD as: density development, located within an easy w alk of a major transit stop, generally with a mix of residential, employment and [I t is ] designed for pedestrians without excluding the auto [ and can be achieved through either ] new construction or redevelopment of one or more buildi ngs whose design and orientation facilitate transit use (Parker, McKeever, Arrington and Smith Heimer, 2002). Furthermore t he Washington Metropolitan Area Transit Authority ( 2005 ) as cited in Faghri ( 2012 ) defines TOD as an area near the transit stop with smart growth concept development, high accessible for pedestrian and bicycles, less car dependences and enhance physical connection between the transit stop with the surrounding area. According to Calthr o pe (1993), TOD can be divided into two main u rban TOD and n eighborhood TOD. The u rban TOD is usually located only Â½ or 1 mile from the main transit station, and has the potential for commercial and high density residential. On the other hand neighborhood , TOD is located within 10 minutes or not more than 3 miles walking distance from a feeder line transit. Neighborhood TOD usually has low er density residential and smaller scale of commercial area compare d to urban TOD ( T able 2.1).
34 Table 2.1 Comparison Function between Urban and Neighborhood TOD Function Neighborhood TOD Urban TOD Public 10% 15% 5% 15% Commercial/Office 10% 40% 30% 70% Residential 50% 80% 20% 60% Source: Calthrope, 1993 Furthermore , R econnecting America and t he Center for TOD (2008) divide the typology of TOD based on fr equent public transportation services, and the land use characteristic such as : regional center, urban center, suburban center, transit town center, urban neighborhood, transit neighborhood, special use/employment district and mixed use c orridor . In gener al, TOD can be summarized as an area with commercial and m edium to high density residential land use s located within walking distance from public transit. Some important elements from TOD are the transit system, mixed land use, compact development, and wal kable communities. 2.2.1 A transport and land use development challenge The competitiveness of public transit relative to the car is determined from the characteristic of transport and land use ( Bertolini, Curtis and Renne, 2009). Thus condition makes the charac teristic both of transport and land use become very important for developing TOD. Accor ding to Bertolini and Le Clercq ( 2003 ) as cited in Bertolini, Curtis and Renne (2009) , two basics correlations exist between transport s of transportation system and second is
35 (page 4) . A car has a high flexibility, high speed but low capacity that is suitable for low density urban environments. On t he other hand public transit has a high speed, high capacity but low flexibility that is suitable for high density urban environment. Furthermore the non motorized mode has high flexibility, high capacity but lower speed and spatial reach. In order to prov ide an alternative for a car use, the competitive advantage from public transit and non motorized need to be combined. According to Bertolini, Curtis and Renne ( 2009) the combination of public transit and non motorized modes are important for implementing the TOD concept ( F igure 2.2) . Figure 2.2 The Basic Correlation between Car, Transit and Walking Environment Source: Bertolini, Curtis and Renne, 2009, page 5.
36 2.2.2 Principles of Transit Oriented Development (TOD) TOD is a one of the concept to address the u rban issue such as urban sprawl and congestion. The TOD concept allows development to move back to the city center and optimize the transit system and the land use. According to Calthrope ( 1993 ) , the development principles of TOD in connection with address ing urban design can be summarized as follow: a. Controlling growth on a regional level to be more compact and supports the function of transit. b. Placing a commercial, residential, offices and public functions within a comfortable walking distance from the poi nt of transit. c. Creating a road network that is friendly to pedestrians . d. Maintaining the regional ecological conditions and increase open public space quality. e. Encourage development that is infill and redevelopment in the transit area. However t he ap plicati on of TOD concept in the transit area development is also subject to criticism. One of them is the failure of planners in applying a comprehensive concept of TOD called Transit Related Development (TRD) or Transit Adjacent Development (TAD). TAD is an area th at physically ad jacent to transit, but in functional characteristics, such as land use composition, accessibility, and design , are n ot connected with the transit system. TAD break s many or all of the rules and principles
37 of the TOD co ncepts, If TOD enco urage s the users to walk and using modes of transit, TAD tends not to s timulate users to walk and use transit modes. 2.2.3 TOD Implementation Stages in Jakarta In Jakarta, several transit point s can be developed as intermodal transit integration. According to M aster Plan of Jakarta Metropolitan Area (JMA) Railway system (2012), Dukuh Atas and Manggarai station are some of the transit point that can be developed as intermodal transit integration. However implementing of TOD concept in Jakarta is still a big chall enge due to some problems. Land acquisition and sustainable financing are some of the challenge that need to address for implementing TOD in Jakarta. Prijanto (2013) in Dirgahayani, Syabri, Waluyo (2014) classified the TOD implementation in Jakarta into th ree level categories, as follow: 1. Seamless Mobility In this stage, the transit agency improve s the accessibility from and to the station with reducing the pedestrian flow interruption from road traffic. 2. Sustainable Neighborhood In this stage, the station is not only become a transit for the passenger but also become a place for their activity. 3. Optimum Growth District In this stage, the overall transit area is successfully creating a distinctive and vibrant transit oriented place.
38 Furthermore, a little differ ent with Prijanto (2013), Dirgahayani, Syabri, Waluyo (2014) classifies the TOD in Jakarta based on stage of implementation. The implementation of TOD in Jakarta can be described in three stages, as follow: Table 2.2 Staging of Rail Based TOD Implementatio n in Jakarta No Stage Facilities 1. Station as Destination: Rail station revitalization Parking or park and ride spaces (bicycle, motorcycle, and car) Drop off/ pick up bays Pedestrian way Commercial area (underground and upper ground) 2. Sustainable Tra nsit Oriented Neighborhood: Integration with activities within walking distance or rail service catchment area (up to 800 m radius from the rail station) Neighborhood pedestrian facilities Neighborhood cycling facilities Green open space Traffic calmi ng facilities Commercial centers Vertical housing for high, medium, and low income people 3. Seamless Mobility: Citywide multimodal transit and land use integration (beyond TOD) Sustainable transit oriented neighborhood Integrated feeder system Intermodal facility Pedestrian way from intermodal facility to the station Cycling facilities at the intermodal facility Source: Dirgahayani, Syabri, Waluyo (2014), page 7
39 CHAPTER III RESEARCH METHODOLOGY This study uses BCA and Multi Criteria Analysis for de termining the optimal PPPs model for TOD. BCA compares between initial investments with net cash flow and only involve economic variable s . On the other hand, m ulti c riteria a nalysis use both economic and non economic variable s . M any tools can be used for multi criteria analysis ; one of the most common ly use d for choosing the optimal alternative with many criteria is analytical hierarchy process ( AHP ) . Two different alternatives of PPP model s for TOD discussed in this study are the BOT model and the Right C onversion Model. Both of this alternatives are analyzed using BCA and AHP model. 3.1 Framework in Methodology The first step in this study is calculating the economic benefit from TOD at Dukuh Atas Jakarta using BCA . The net present value ( NPV ) from the BOT an d Right Conversion PPP m odel s are compared in order to find the highest profitable model from investor point of view. The second step is analyzing both of the BOT and Right Conversion PPP model s using multi criteria analysis. The hierarchy structure is the important key for developing multi criteria analysis using AHP . Based on the hierarchy structure, a question naire is constructed and given to a group of respondent who are knowledgeable of the topic of the analysis . The priority scale from the respondent expert s is the final result from AHP.
40 The main differen ce between the AHP and BCA model is the variable s involve d . In AHP, non economic parameter such as social and bureaucracy variable are discussed to find the optimal of PPPs model from investor point of view. Since AHP is an expert choice model then the subjectivity from the respondent is very dominant. The last step from this study is comparing the result from BCA with AHP in order to get the best optimal PPP model for TOD at Dukuh Atas. Figure 3.1 Fr amework in Methodology 3.2 Analytical Hierarchy Process (AHP) BCA The highest priority score of alternati ve PPPs Model Investment Cost Net Cash Flow Discount Factor Concession Period (For BOT Model) Net Present Value Alternatives of PPPs model for TOD Development Right Conversion Model BOT Model AHP Hierarchy Structure Expert Choice Model Economi c Variable Non Economic Variable The Highest NPV of Alternative PPPs Model The Optimal PPPs Model for TOD Comparison Priority Scale Source: Author (modified diagram f low fro m Akiki, Cisternas and Tudela, 2006)
41 3.2 Analytical Hierarchy Process (AHP) AHP wa s created by Thomas L. Saaty in the late 1970s and is commonly used to analyze weights of each alternative in many variable s involve d for solving a problem (Mendes, 2011). AHP req uires the respondent expert s to give a judgment about the relative importance of each criterion, and then, give a preference from each of the alternative s using those criteria. Providing a judgement is important in order to get a weight from each of criter ion. The result of AHP is a prioritized ranking of the alternatives based on the criteria (Mendes, 2011). According to Saaty (1986), three basic princip les are used to solve a problem using explicitly logical analysis; the first is the hierarchy structure, the second is the principle of setting priority , and the last is consistency logic principle. These are described below. Furthermore Xia and Wu 2007 as cited in Mendes 2011 mentioned that to develop problem solving using AHP, requires a three part sequence of ana lysis: The hierarchy structure, the matrix of pairwise comparison ratios, and finally, the method for calculating weights. 3.2.1 The Hierarchy Structure According to Saaty (1986), there are t wo type s of hierarchy . The first is structural hierarchy and the other is functional hierarchy. In structural hierarchy, a complex system is arranged descending into core component s according to their structural nature, for instance , the structural hierarchy of the universe is galaxy, solar system, planet and other sma ller structural units on each planet.
42 On the other hand , the functional hierarchy outlines the complex system into its elements according to their essential relationships. This study is used functional structure and involved both economic and non econom ic variable in order to find the optimal PPP model for TOD ( F igure 3.2) Figure 3.2 AHP Hierarchy Structure Source: Author (m odified hierarchy structure model from Akiki, Cisternas and Tud ela, 2006, and Nijkamp et al, 1993 as cited in Beria, Malte se & Mariotti , 2012) Finding the optimal PPPs model for TOD From Investor Perspective ECONOMIC C NON ECONOMIC BENEFIT COST NON ECONOMIC ECONOMIC C High Revenue Low Equity Portion Low Financial Risk Low Social Issue Rules and Regulation Support Investment Cost Maintenance Cost Interest Cost Tax Cost Social C ost Bureaucracy Cost
43 3.2.2 Determination of Priority According to Saaty ( 1986 ) , several stages are used for determining the priority in AHP model , as follow: 1. Relative Measurement es priority for a decision ma king process by mak ing a comparison from two things on the same criteria by using a ratio scale which would later become the basis of a model's input. The ratio scale limits of human perception in the AHP model is 1 to 9. In a pairwise comparison, the matr ix is used to help the analysis and provide a framework to test the consistency. The design of this matrix reflects two priorities, namely in terms of dominating and dominated. If the respondent already give his/her perception in determining which elements are most preferred or most importantly for each comparison between the elements that are in the same level then the result is composed on a matrix of pairwise comparisons. For instance, suppose there is a hierarchy subsystem x criteria and sub criteria un derlying a number n, A1 through An. Comparisons between sub criteria in a hierarchical structure can be made in the form of a matrix n x n, as the table below;
44 Tabel 3.1. Pairwise Comparisons Matrix X A 1 A 2 A 3 A n A 1 a 11 a 12 a 13 a 1n A 2 A 21 A 22 A 23 A 2n A 3 a 13 A 23 A 33 A 3n A n a n1 a n2 a n3 a nn Source: Thomas L. Saaty, 1986 A11 value is a value comparison element A1 (row) to A1 (column) that states the relationship: a. How far the level of interest of the A1 (row) against the criteria of x compared to the A1 (column), or b. How much dominance A1 (row) to A1 (column), or c. How many properties are on the A1 criteria x (row) compared with the A1 (column). Numerical values imposed for the whole comparison is obtained from the comparison scale in th e table below:
45 Tabel 3.2 Comparative Assessment Scale Scale of Importance Definition Information 1 Equally important Both elements have the same effect 3 Slightly more important Experience and judgment slightly favoring to one element compared to t he other element. 5 More important Experience and judgment so favoring one element compared to the other element 7 Very important One element is preferred and practically very real dominance compared with the other element 9 Absolutly more important One element of absolute proven preferable to other component at the highest level of confidence 2,4,6,8 Median This score is given if there is any doubt between two adjacent assessment Reverse A ij = 1/A IJ If activity i obtain a figure when compared with act ivity j, then j have the opposite values when compared with i Source : Thomas L. Saaty, 1986 After the comparison matrix for a group of elements are formed, the next step is to perception who has been included in the matrix. Weight calculation can be done manually (if the matrix is a 2 x 2) or by means of mathematical operations based on matrix and vector operations known as eigenvector by using a computer program.
46 2. Eigenvector and Eigenvalue The result from the respondent is compiled into a comparison matrix in order to determine which criteria are most preferred or most important. The matrix form is symmetrical/ square matrix in which the number of rows and columns depends on t he number of elements in one level. After the comparison matrix has been completed, then the next step is to measure the weight of each criteria on the basis of the perception of an expert who has been included in the matrix. The final calculation of the priority weight is a decimal number less than one and the total priority of the criteria at the same group is one. The most accurate way to calculate the priority weights is with a mathematical approach based on matrix and vector operation known as eigenv ector. Eigenvector is a vector , which when multiplied by a matrix , the result is itself multiplied by a scalar number or parameter which is known as eigenvalue. This vector together with a matrix used in mathematical operations to search for more accurate weights priority on a comparison matrix. Equations used in this operation are: where : A = Pairwise Matrix Comparison w = Eigenvector
47 Eigenvector is commonly referred as characteristics vector of a square matrix, while the eigenvalue is a characteristic root of the matrix. This method is commonly used to measure weight of the priority of each comparison matrix in AHP model since it is more accurate and calculate all the interactions between the elements and the matrix. The weakness of this method is that it is difficult to do it manually, especially if the matrix is composed of three or more criteria ; this requires the assistance of a computer program to solve. 3. Consistency AHP use a humans perception as their input, then the inconsistencies may be occur since humans have limitations in expressing perceptions consistently, especially if they need to compare with many elements. Measurement consistency in AHP model is conducted in two stages. The first stage is to measure the co nsistency of each comparison matrix, and the second stage is to measure the consistency of the entire hierarchy. Measurement of the consistency of a matrix itself is based on the maximum eigenvalue. With using the maximum eigenvalue, the inconsistency comp arison matrix can be minimized. The formula of consistency index (Consistency Index / CI) are: ( maks n ) CI = ( n 1 )
48 Where CI = Consistency Index max = Maximum eigenvalue n = size/orde matrix the eigenvalue and n is the size of the matrix, the maximum eigenvalue of a matrix will not be less than the value of n so that there can be no negative CI value. The closer the maximum eigenvalue to the magnitude of the matrix, the matrix is more consist ent and if equal then the matrix is 100 percent consistent or inconsistent 0 percent. Tabel 3.3 Random Consistency Index (RI) n 1 2 3 4 5 6 7 8 9 10 11 RI 0 0 0.58 0.90 1.12 1 .24 1.32 1.41 1.45 1.49 1.51 Source: Thomas L. Saaty, 1986 CR = CI/RI CR = Consistency Ratio RI = Random Consistency Index Furthermore, the consistency of the respondents in filling out the questionnaire measured. Consistency measurement is intended to look at the response s given inconsistencies. If CR <0.1 then the value of the pairwise comparison matrix given
49 criteria consistent. If CR> 0.1 then the value of the pairwise comparison matrix given criteria inconsistent. So if it is not consistent, the n filling the values of the matrix elements in pairs on the criteria and alternatives should be repeated. 3.2.3 Respondent/Expert Selection AHP is an expert choice model, that makes the expert selection is very crucial to find the appropriate result. Accor ding to Kumar (2011), in qualitative analysis, the information is collected until the data saturation point. In this case the concept of data saturation point is highly subjective. W ith consideration of the representation of each stakeholder for determinin g the optimal PPPs model for TOD, E ight experts with diverse experiences were involved in this study. All of the respondent had more than 10 years of experience in the investment climate of Indonesia. Two respondent work as a government official with PPP s experience in Jakarta City, one respondent from the Central Bank of Indonesia had exposure to creating investment regulation in Indonesia, one respondent from a commercial banking had high exposure in giving corporate loan in Indonesia, and the four rema ining are from the private sector with significant exposure and investment experience in Indonesia. The private sector respondent representation is great er than other groups because this study analyze s the optimal PPP model from an investor point of view.
50 3.3 Cost Benefit Analysis M any tools can be used to calculate the benefit cost analysis (BCA). According to Sobel et all as cited in Latif and Hanafizadeh 2011, NPV is one of the appropriate tools to analyze the project. The basic idea from NPV is calculating the fut ure value into the present value with a discount factor. Schwab and Lusztig ( 1969 ) , explained that NPV is calculat ed by taking the present value of all cash benefits using a discount factor rate then subtracting all the cash out flow s for the investment. F urthermore Schwab and Lusztig 1969 explained the NPV into a mathematical concept as follow: Where: b t all benefit generated in period t c t all cost, including operating and maintenance cost in period t r the discount rate that represent the time value o f money. The net present value of the investment is then given as NPV=B C Both of alternative PPPs model for TOD at Dukuh Atas are calculated using the NPV approach in order to get the highest profitable model from investor point of view. The
51 basic as sumption for the NPV calculation , such as total investment cost, discount rate, and others , is based on previous Dukuh Atas project study conducted by JICA in 2012. The final step from this study is comparing the result from AHP method with BCA method in o rder to get the optimal PPPs model for TOD at Dukuh Atas.
52 CHAPTER 4 GENERAL DESCRIPTION OF STUDY AREA DKI Jakarta lies in position 6Â°12' south latitude and 106Â° 48' east longitude. Geographically Jakarta bordering with the province of Banten in the we st, the province of West Java in the east and south, and Java Sea in the north ( F igure 4.1). Th irteen rivers and two canals pass through the Jakarta area. The Jakarta region lay on the lowlands with an average height of 7 meters above sea level. However, a ccording to the World Bank (2010), 40 percent of Jakarta area, mainly in the north, is below the sea level due to land subsidence (as cited in Hasudungan, Rasman, Pujiastuti, Utami, Supendi, 2014 , page 3) . This makes Jakarta highly vulnerable to flooding. Rivers and reservoirs normalization in Jakarta conducted by Jakarta Provincial Government is currently an effort in order to reduce the risk of flooding. Based on Law No. 29 of 2007, the Province of Jakarta as the State Capital, has a special status and gr anted special autonomy so that the whole policy of the government and the budget is dete rmined at the provincial level. In the structure of the administrative area, Jakarta is divided into one administrative district, and five city administration s T he tota l population of Jakarta is 9.78 million people and an additional 4 million commuters from the area around Jakarta o n working days (b ased on the results of the population census in 2010 ) . On the other hand, t he carrying capacity of the city is unable to acc ommodate the growth of people . This condition cause s some urban
53 problem s in Jakarta, such as urban sprawl, slum area, flooding, and urban transportation. Figure 4.1 DKI Jakarta Map Source: Jakarta Provincial Government (2010) Public transport in Jakar ta has been widely served by the various modes of transport, ranging from small vehicles such as taxi, and minibus; medium vehicle such as Metromini/ Kopaja; or big vehicle such as Trans Jakarta buses and commuter line trains . However all modes are not con nected , not yet integrated with in the area , and Java Sea Banten Province West Java Prov. C entral Jakarta North Jakarta West Jakarta South Jakarta East Jakarta
54 have development in its path ; these condition make urban transportation become a major problem in Jakarta. Jakarta need s reliable mass transportation system in order to support the entire movement of the city . On the other hand, Jakarta also needs to rearrange the city spaces to make the city more livable. Redevelopment and revitalization of the city space is important in order to optimize the mass transportation system. 4.1 MRT Development in Jakarta The idea of the development of an MRT system in Jakarta began around 1980. In its development, this idea had been halted due to economic turmoil in Indonesia in 1997. Even though this idea was reintroduced in 2002 by the Jakarta Provincial Government, the new deve lopment just begun on 2006 when the local government signed an agreement with JICA to realize this project. The construction of the MRT system will begin with the Phase 1 and Phase 2. Phase 1 will be located in the corridor from Lebak Bulus to Bundaran Hot el Indonesia , which has 12 points station development. While Phase 2 will continue the corridor development to the North of Jakarta and has 9 points station development. Most of the station s are underground, while the rest are elevated station s .
55 Figure 4.2 Map of South to North MRT Line Source: Jakarta Provincial Government, 2010 In connection with the macro region context in Jakarta, several points of MRT station in Phase 1 could a pool o rigin station modal transfer pe rsonal towards pub lic transport, as follow: Lebak Bulus Station This station is planned to be a MRT station (now is under construction), used to be this location was a bus station with several of modes. Lebak Bulus Station is the catchment area of Bintaro (6.7km), Bumi Ser pong Damai (13.3km), Ciputat (3.8km), Pamulang (8.3km), and Parung (15.5km). DKI JAKARTA BANTEN PROVINCE WEST JAVA PROVINCE MRT LINE COMMUTER LINE LEGEND PHASE 2 9 Underground Sta tion PHASE 1 6 Underground Station and 6 Elevated Station
56 Fatmawati Station. There is no terminal/station in the existing condition at this point , but there are several shadow terminal s at this location since this area is the catchment area from east of Jakarta such as Pondok Cabe (6.7km), Cinere (6.2km), Depok (14.5km), Ragunan (5.9km), Cibubur (15.8km), Bekasi (24km). Blok M Station. There is a central bus terminal near the location of Blok M station, and many modes of transportation pass through this area. This conditions make the Blok M station is one of the potential location s to be the pool of origin station modal transfer towards the public transport.
57 Figure 4.3 MRT station catchment areas Source: UDGL Sudirman Thamrin Jakarta 2013 4. 2 Transportation Condition in Jakarta The population and economic growth in Jakarta as the capital of Indonesia changes the city and make the city dynamic. This condition is also happen ing in the surrounding Jakarta area even though with a smaller scale . On the other side , the development of transport system is not growing as fast as the city changes , is not able to accommodate u rban development that occurred, and is causing urban problems, such as heavy congestion ( F igure 4.4) . Lebak Bulus Station Fatmawati Station Blok M Station
58 Figure 4.4 Traffic Condition at Dukuh Atas Area Source: Picture taken from Dukuh Atas area, on July 8 th 2015 at 08:00 PM According to Jakarta Provincial Government, 2013, the traffic congestion problem in Jakarta is caused by several condition s, as follow: The difference in the width dimension of the road at the same hierarchical level road , Systems parking and building access , The intersection of the rail lanes with the automobile crossroad, Side friction due to economic activities , Insufficient public transportation, and Unintegrated land use planning, In order to address this problem , the Jakarta Provincial Government has shift ed their strategy development from automobile dependence into a new urbanism concept (less dependence on a utomobile s ). I mplementation of this strategy will be done in stages,
59 and is expected to be realized by 2025. Several directives related to this strategy can be summed up with the following: It f ocuses on the pedestrian, introducing a new urban lifestyle which reduces th e use of private vehicles, and encourages compact and sustainable development. MRT corridor arrangement will lead to smart urban redevelopment smart growth with comprehensive policy and control arrangement. Reducing the urban sprawl and send back the dev elopment into the city center again with the MRT corridor as the backboned. Sustainable and more environmental ly friendly development. 4. 3 Demography condition in Jakarta The total population of Jakarta is increasing every year, either due to natural growt h or because of migration. Based on the results of the population census in 2010, the total population of Jakarta is 9.78 million. In 2014, the estimation of total population in Jakarta is around 10.07 million or can be assumed that the average population of Jakarta is increased by 7 people every hour, this number is based on population projections 2010 to 2035 from Indonesia Statistical Bureau (2014). Jakarta is the most populous province in Indonesia where the density reaches more than 15 thousand people every kmÂ² ( T able 4.1). Based on data from Indonesia Statistical Bureau (2014), the Central Jakarta is the most densely populated areas. In one of the districts in Central Jakarta, population density reached nearly 90 thousand people per kmÂ².
60 Table 4.1 Tota l Population and Population Density based on Census Results in 2010 and Projected Population in 2014 according to the Municipality/Regency Municipality/Regency Total Population Population Density 2010 2014 2010 2014 Thousand Island 21,520 23,011 2,465 2,645 South Jakarta 2,104,092 2,164,070 14,620 15,273 East Jakarta 2,748,371 2,817,994 14,367 14,963 Central Jakarta 904,630 910,381 18,603 18,914 West Jakarta 2,328,936 2,430,410 17,749 18,812 North Jakarta 1,679,141 1,729,444 12,019 12,573 Total 9, 786,690 10,075,310 14,750 15,415 Source: Hasudungan, Rasman , Pujiastuti , Utami, Supendi (2014) 64 ve age at the range 0 14 years and who are no longer productive or passed retirement in 2014 are continued to increase. This condition is like two sides of a coin, one side shows improvement s in the health of society with both a population that has not yet been productive or children/youth and an increasing elderly population in Jakarta . O n the other side, the liabilities to be borne by the productive population are more severe, especially in elderly people where the health care costs are greater. The Depe ndency R atio (DR) in 2014 reached 39.28 , an increase in 1.92 points compared to 2010. This figure can be interpreted that the productive population of 100 in Jakarta will need to provide for 39 economically unproductive age population. This
61 shows that Jaka rta still got a demographic bonus due to a DR value of less than 40% ( Hasudungan, Rasman, Pujiastuti , Utami , Supendi, 2014 ). 4. 4 Economic condition in Jakarta Jakarta economic structure is dominated by the financial sector, leasing, and business services; followed by trade, hotels and restaurants; and the manufacturing sector. The structure reinforces the role of Jakarta as the center services, finance, and trade in Indonesia. Jakarta G ross Regional D omestic P roduct (GRDP) according to current prices during the period 2007 2013 noted an increasing trend continuously. Jakarta in aggregate G R DP at current prices continue to rise, when in 2003 amounted to Rp 566,449.360 billion, then in 2013 increased to Rp 1,255,926.782 billion, of which the contribution of the financial sector, leasing, and business services and trade, hotel and restaurant is always dominant. During the period, the contribution of the financial sector, leasing, and business services reached an average of 27.94% of the G R DP of Jakarta; while the contribution of the trade, hotels and restaurants reached an average of 20.76%, followed with the manufacturing sector which contributes an average of 15.60%; the services sector amounted to 12.73%; and the construction sector amounted to 11.34%. ( T abl e 4.2) Similarly, when viewed from G R DP Jakarta in 2007 2013 , based on constant 2000 prices, it appears that the contribution of the financial sector, leasing, and business services to the G R DP is greater than in other sectors. The contribution of the fina ncial sector, leasing, and corporate services in 2007 amounted to 29.6% and in 2013 it
62 decreased to 27.21%. While trade, hotels and restaurants accounted for 21.70% in 2007 and continues to increase every year and in 2013 accounted for 22.08%. The conditio n describes the structure of the economy in Jakarta in the period 2007 2013 was dominated by the financial sector, leasing, and business services and trade, hotels and restaurants. G R DP Jakarta according to constant prices also informed that the contribu tion of the manufacturing sector to the G R DP of Jakarta tended to decline each year. If in 2007 it accounted for 16.90%, then in 2013 dropped to 13.6%. ( T able 4.3).
63 Table 4.2 GRDP at Current Market Prices by Industrial Origin of DKI Jakarta (Million Ru piah), 2007 2013 Industrial Origin GRDP 2007 2008 2009 2010 2011 2012 2013 1. Agriculture 571,425 687,829 762,980 849,560 918,712 968,362 1,044,225 2. Mining/Quarrying 2,636,093 3,178,746 3,155,761 3,701,136 4,934,368 5,182,086 5,466,950 3. Manufacturing Industry 90,446,591 106,418,776 118,163,190 135,614,690 153,620,854 172,334,747 191,337,110 4. Electricity, Gas, and Water Supply 6,021,390 7,525,841 8,294,308 8,879,872 9,583,515 10,234,109 11,023,861 5. Construction 63,448,564 76,502,861 86,646,985 98,424,987 112,056,288 126,274,091 140,171,537 6. Trade, Hotel and Restaurant 115,311,319 140,420,036 156,084,326 178,357,449 204,480,250 228,042,601 265,127,737 7. Transportation and Communication 52,793,003 63,430,684 74,970,893 87,688,423 1 01,265,389 114,228,509 131,763,264 8. Financial, Real Estate, and Business Services 162,297,780 193,513,702 213,437,911 239,155,971 270,951,564 305,617,626 348,546,440 9. Services 72,923,194 85,366,268 96,180,339 109,253,577 124,065,602 140,810,529 161,4 44,657 TOTAL of GRDP 566,449,359 677,044,743 757,696,693 861,925,666 981,876,542 1,103,692,660 1,255,925,781 Source: Hasudungan, Rasman, Pujiastuti, Utami, Supendi, 2014
64 Table 4.3 GRDP at 2000 Constant Prices by Industrial Origin of DKI Jakarta (Million Rupiah), 2007 2013 Industrial Origin GRDP 2007 2008 2009 2010 2011 2012 2013 1. Agriculture 298,415 300,720 301,754 304,274 306,623 309,136 314,206 2. Mining/Quarrying 937,343 937,999 936,029 949,742 991,055 982,250 973,975 3. Manufacturing Industry 56,195,163 58,367,314 58,447,652 60,555,943 63,591,049 65,591,049 65,134,279 4. Electricity, Gas, and Water Supply 2,183,806 2,343,587 2,450,865 2,556,922 2,675,718 2,794 ,493 2,874,116 5. Construction 33,600,764 36,178,854 38,422,395 41,143,270 44,115,689 47,126,748 49,830,408 6. Trade, Hotel and Restaurant 72,249,706 77,064,386 80,154,121 85,980,580 92,345,063 99,005,738 105,365,077 7. Transportation and Comm unication 30,697,406 35,258,578 40,769,712 46,766,560 53,233,290 55,509,410 65,960,941 8. Financial, Real Estate, and Business Services 98,558,328 102,707,651 106,788,434 111,312,730 117,190,316 123,460,986 129,848,397 9. Services 38,250,324 40,5 64,301 43,198,538 46,042,416 49,288,737 53,025,607 56,983,846 TOTAL of GRDP 332,971,255 353,723,390 371,469,500 395,612,437 423,737,540 447,805,417 477,285,245 Source: Hasudungan, Rasman, Pujiastuti, Utami, Supendi, 2014
65 4. 5 Alternative PPPs Conce pt at Dukuh Atas Area Dukuh Atas area is located at the center of Jakarta and is one of the Central Business District s in Jakarta. The main advantage of the Dukuh Atas area is that it easily access ed by different modes of public transport. However these di fferent modes of public transport are not integrated and not supported with convenient pedestrian facilities. In order to the re develop area using TOD concept, JICA and Jakarta Provincial Government in 2012 conducted a study of the re development of Dukuh Atas area using PPP mechanism s . According to JICA ( 2012 ) , two alternative scheme s can be applied to develop a TOD at Dukuh Atas, as follows: 1. B OT Model In the BOT model, it is assumed that the government already own s the land, and i n the case that the land is not owned by the government , it is responsible to acquire the land before appoint ing the private sector firm to develop the area using the BOT mechanism. In the BOT model, the private sector will take full responsibility for developing the Dukuh Atas a rea including development of supporting infrastructure such as artificial ground for BRT terminal and pedestrian tunnel to connect between the MRT station and the BRT terminal, and in return the government gives a concession for certain period to the priva te sector actors . After the concession is finished, the private entity transfer s all of the project to the public agency.
66 Figure 4.5 BOT Model Source: JICA, 2012, page 35 In general, the advantage and disadvantage of the BOT Model in the context of TOD at Dukuh Atas, Jakarta can be summarized as follow: Table 4.4 Advantage and Disadvantage of BOT Model in the Context of TOD at Dukuh Atas Government Private Sectors Advantage 1. At the end of the concession, The public agency will have the land and th e building 2. No need to spend public funding for development artificial ground and underground connectivity The project schedule will be more timely since in this model, the public agency is assumed already owned the land Disadvantage Since the public agency only owned 17% from the total area in Zona A, then the public agency needs to provide public funding to acquire the rest of Zona A, Zona B , Zona C, and Zona D at Dukuh Atas The private sector only has the right to operate the building during the co ncession period Source: JICA 2012 and Author Land Owner Land Owner Public Agency Land Acquisition Cost Public Agency Relocation Fund by Private Entity Public Infrastr ucture Fund artificial ground & pedestrian tunnel
67 2. Rights Conversions This type of PPPs project is a common project in developed countries , especially in Japan. The idea of this project is to make the existing ownership of the land still having the right to st ay at the area. In many project s , the people who live in the area an other area because their daily activities are already close to their home. This concept is accommodating the issue since the existing people who live in the area sti ll live in the area and get the benefit s from the development of TOD. However if one or more residents , the whole project can be delayed. Figure 4.6 Right Conversion Model Source: JICA, 2012, page 35 In this scheme the public agency can be joined with the consortium through a state owned company or only support a private entity with supporting regulation s . A private entity is also responsible to build the pedestrian tunnel to connect between Land Owner Land Owner Private No Land Acquisition Cost Fund by Private Entity Public Infrastructure Partial fund for artificial ground & pedestrian tunnel A B C A B C New Owner Existing Own er
68 the stations and build artifi cial ground to support the Bus Rapid Transit Corridor 4 & 6. On the other hand, a private entity gets compensation through the right to build at a higher flooring area ratio . This study analyze both of PPPs scenario at Dukuh Atas project using cost benefit analysis and multi criteria analysis in order to find the optima In general, the advantage and disadvantage from Right Conversion Model in the context of TOD at Dukuh Atas, Jakarta can be summarized as follow : Table 4.5 Adv antage and Disadvantage of Right Conversion Model in the Context of TOD at Dukuh Atas Government Private Sectors Advantage No public funding needed to acquire the land 1. FAR incentive 2. Possible higher revenue compare to BOT model Disadvantage The land is not owned by the public agency 1. Time consuming for negotiating with existing land owner 2. Possible to have cost overrun due to project's delay Source: JICA 2012 and Author
69 Figure 4.7 Map of Study Area 0 100 m MASTER RESEARCH PROJECT SCALE Zona D Zona A MRT Station Future Airport Station Zona B Zona C Commuter Line Station Artificial Ground for Bus Terminal Und erground Walkaway Facility BNI TOWER Source: Retrieved from google maps, 2015 JICA 2012 & Author
70 CHAPTER 5 ANALYSIS The Dukuh Atas area is located at the center of Jakarta and is consider ed as one of the most prestigious Commercial Business District s . According to a study conducted by JICA i n 2012, Dukuh Atas area ha s the potential to re develop using the concept of TOD. Furthermore the Jakarta Master Plan 2030 also mentioned that Dukuh Atas area is an area that can be developed using the concept of TOD. To support this planning, the Jakarta Provincial Government already make an Urban Design Guideline for Dukuh Atas area as part of MRT Corridor . Impleme nting the concept of TOD will need a lot of funding. On the other side, the public funding is limited. In order to address this issue, PPPs could be an alternative solution. In addition with PPPs mechanism, defining the optimal model that can accommodate b oth public and private interest is the key success of the project. In order to find the optimal model for PPPs, t his study use s B CA and AHP. The goal of the analysis is to choose the optimal PPPs model between Built Operate Transfer Model and Right Convers ion Model. Previous studie d conducted by JICA ( 2012 ) , shows that Right Conversion Model is preferable and this model is commonly used to develop an area in Japan.
71 5.1 Transit Oriented Development at Dukuh Atas According to previous study conducted by JIC A ( 2012 ) , the development of Dukuh Atas area is divided into four zones or zonas . Each of the zones is connected with the transit system and all of the movement s are on the ground level ( F igure 5.1). Based on the Urban Design Guideline (UDGL) of the Jaka rta Provincial Government (2012), the Dukuh Atas area has the average building coverage ratio (BCR) around 40% with the floor area ratio (FAR) of 600%. Figure 5.1 Concept TOD at Dukuh Atas, Jakarta Source: Author The basic design concept for TOD at Dukuh Atas will accommodate the UDGL from the Jakarta Provincial Government. The design of TOD at Dukuh Atas will be compact and pedestrian friendly , and ha ve an adequate open space network ( F igure 5.2). Green rooftop and green wall design are some of t he strategies that will be used in designing Zona A Zona B Zona C Zona D
72 the Dukuh Atas area in order to reduce the urban heat island in Jakarta due to massive development. Furthermore, in order to optimize the storm water infiltrations, the pedestrian facilities and the road will be made from pervious concrete. Figure 5.2 Public Space concept at Dukuh Atas Source: Author The picture s in F igure 5.2 are Raffles station at Singapore. Raffles S tation is an example of the successful TOD concept in Singapore. At Raffles S ta tion, people easily Location: Raffles Station Picture is Taken on 03/03 2015
73 shift between mode s as pedestrian s . Mixed land use, compact development, an adequate open space network and pedestrian friendly design are some of the important element s of the success of the Raffles Station as a TOD in Singapore. The d evelopment in Dukuh Atas area will also put those element s as an important aspect of the project . 5.2 Benefit Cost Analysis In connection with PPP mechanism s for the construction of TOD, the private partners are responsible for the construction cost of Duk uh Atas area including the connectivity and an artificial ground for the Bus Rapid Transit Terminal ( F igure 5.3). Figure 5.3 Underground Connectivity and Artificial Ground Source: JICA 2012, page 29 and Author In the BOT model, the land will be owned by the Government. In the Dukuh Atas area, at this time, the Government only has 3,000 mÂ² , or around 17% of the total land area, of Zona A and around 7,000 mÂ² at the MRT station. However, the MRT station have a structural limitation on developmen t. To implement the BOT mechanism, the government needs to provide public funding to acquire most of the land in Zona B, ARTIFICIAL GROUND UNDERGROUND CONNECTIVITY Zona A Zona B Zona C Zona D
74 Zona C, Zona D and some portion of land in Zona A. A fter the land is fully owned by the government then the government could cooperate with private sector with the PPP mechanism in the deve lopment of TOD at Dukuh Atas. The investors will cover the building construction cost, underground connectivity construction cost and artificial ground construction cost and in return they have the righ t to operate the building during the concession periods. After the concession period is finished, the Government will own the land and the building. In contrast, in the right conversion model, the role of the government is only as a facilitator to support the development. In this case, the area is fully owned by the private sector. But the government can support the private partners by giving an incentive such as higher FAR and supporting regulation s . However, since the government will give an incentive in FAR, then the private partners still has an obligation to develop underground facility and an artificial ground. In BCA, the analysis is only calculating the financial projections with economic variable s as the main driver from the investor for deciding t he most attractive PPP mechanism. In connection with forecasting the cash flow, some assumptions are made based on data from previous stud ies and surveys about economic and potential market in Indonesia, such as from JICA, Jakarta Provincial Government, Ce ntral Bank of Indonesia and Colliers International Indonesia. These include:
75 Discount Factor The discount factor for calculating the present value is refer on average Cost of Loanable Funds (CoLF) from commercial banking in Indonesia. The reason of usin g this reference is for conservative reason. Usually the calculation of discount rate is based on the Central Bank Rate, but, in reality , the cost of money from commercial b ank s in Indonesia is much higher than the Central Bank Rate. Because of this, this study is using CoLF rate as a reference for discount rate in order to make the present value calculation more reliable. The CoLF figures are obtained from the average of the data for 8 years. Table 5.1 Average CoLF 2007 2014 Year 2007 2008 2009 2010 2011 2012 2013 2014 CoLF 8.87% 8.49% 8.54% 8.01% 8.27% 8.38% 9.46% 9.53% Average 8.69% Source: Central Bank of Indonesia Banking Surveys, 2007 2014 Construction Cost The constructions cost is estimated around IDR 9.4 Million/mÂ² (equivalent with US $ 725 2012 with yearly escalation 8.69%/year (The escalation rate is using the same data with discount factor). Total size of the building both of the model s are as follow s :
76 Table 5.2 S ize of the Building PPPs Model Size (Total Zona A, B, C, D) BCR FAR Total Size of the Building Max Floor BOT 67,696 mÂ² 35% 600% 406,178 m Â² 17 Right Conversion 67,696 mÂ² 35% 1000% 676,964 mÂ² 29 Source: Author Both in the BOT model and the Right Conve rsion model, the private sector needs to develop underground facility and artificial ground for the BRT terminal as a public facility. According data from JICA ( 2012 ) , the estimat ed cost for developing the underground facility and artificial ground are as follow: Table 5.3 Artificial Ground Development Cost IDR Rp 385,203,319,473 USD $ 29,631,025 Under Ground Walkaway Development Cost IDR Rp 513,604,425,964 USD $ 39,508,033 Source: JICA, 2012 and Author Maintenance Cost The re development of Dukuh Atas area is using green development concept s. I t is more costly for capital expenditure but cheaper for O&M cost s . The assumption for maintenance cost is around 3% of the potential revenue. This ref erral number is from Jakarta Integrated Urban Transport Hub Development Project from JICA and Jakarta Provincial Government i n 2012.
77 Sectional Drawing In the BOT concept each zone has the same typical use as office and commercial use , while in the Right Conversion concept, the typical use is as residential and office, and commercial ( F igure s 5.4 and 5.5). Figure 5.4 The Conceptual Design of the Building at Dukuh Atas Zona B &C Zona A & D Source: Author Figure 5.5 Sectional Drawing Typical use for BO T Model BASEMENT PARKING (B1 & B2) LOBBY AND BANKING OFFICE SPACE (3 17 Floor) RETAIL SHOP AND RESTAURANT
78 Typical use for Right Conversion Model Residential, Office, and Commercial Source: Author Revenue Estimation A t the beginning of the operation, the occupancy rate is projected to be 55% and increase by 5% per year consecutively up to t he year 12, after which the occupancy rate will level off at 85% : Table 5.4 Occupancy Rate Year Percentage Year 1 0% Year 2 0% Year 3 55% Year 4 58% Year 5 61% Year 6 64% Year 7 67% Year 8 70% Year 9 74% Year 10 77% Year 11 81% Year 12 8 5% Source: Author (modified from JICA 2012 and Colliers International Research, 2015) BASEMENT PARKING (B1 & B2) LOBBY AND BANKING RETAIL SH OP AND RESTAURANT RESIDENTIAL (3 10 Floor) OFFICE (11 29 Floor) Construction Period Increased by 5% consecutively Level off at 85% until the end of concession period
79 After calculating Benefit Cost Analysis using the assumption s as mentioned above, the result of the analysis can be summarize d as follow: Built Operate Transfer Model T Ministry of Finance Regulation number 78, 2014, is 30 years without any possibilities for extension. In this study, the concession period is assumed to be 20 years. The reason is that with a 20 year concession period, the private investor will still have a room to ask for an extension for another 10 years in the case there is unpredictable economic situation. The previous studied from JICA in 2012 also used 20 years as a reference period for calculating the IRR and NPV. Table 5.5 BOT Model NPV and IRR Analysis IRR NPV PROJECT 20% $ 359,359,126 EQUITY 30% $ 364,158,750 Source: Author From the NPV and IRR result, The Dukuh Atas Re Development concept is profitable and possible to use PPPs. Right Conversion Model The main different between right conversions and the BOT model is in land ownerships. In the BOT model, the land is owned by the government. On the other hand, in the right conversion model, the land is joint ly owner ed b y the existing
80 owner and the investors. However the Government has to give additional incentives to make the project more attractive from the investor point of view. The incentive can be in tax abatement, a higher FAR , or other types of regulatory incenti ves . Since the tax incentive is more complicated (involve local and central Government in Indonesia) the higher FAR is chosen for this study as an incentive. The existing maximum FAR is 600%, and the incentive FAR given in this study is up to 1000%. The in centive is important to make the economic figure more attractive and also comparable with the BOT model. Table 5.6 Right Conversion Model NPV and IRR Analysis IRR NPV PROJECT 21% $ 628,642,020 EQUITY 32% $ 636,222,711 Source: Author The Equity IR R calculation showed that the right conversion model has a better economic figured compared to BOT model from the investor point of view. However the communication between the investor and the existing land owner is time consuming and can be the major cons traint for investor to finish the project on time.
81 5.3 Analytical Hierarchy Process (AHP) AHP is a method to solve problem with multi criteria analysis. In this study, AHP is chosen since it can analyze economic and non economic variables in connection with finding the most optimal PPP model for TOD development. The result from the AHP model showed that n on e conomic variable s are more considerable for investor when they want to invest their equity into the project. Non economic variable s ha ve the bigge r priorities both in benefit and cost criteria. The respondents were concerned about non economic variable since it is difficult to measure and could significantly affect the profitability calculation. Table 5.7 Weight of sub Hierarchy Benefit and Cost Economic Non Economic Benefit 0. 315 0. 685 Cost 0. 393 0. 607 Source: Author Overall the result of the weight of criteria can be summarized as follow:
82 Table 5.8 Overall Weight of Criteria Goal: Finding the optimal PPPs model for TOD Cri teria Weight Criteria Weight Benefit Cost Economic 0.315 Economic 0.393 High Revenue 0.195 Investment Cost 0.465 Low Equity Portion 0.296 Operational & Maintenance Cost 0.288 Low Financial Risk 0.509 Interest Cost 0.119 Tax Cost 0 .128 Non Economic 0.685 Law social issue 0.505 Non Economic 0.607 Rules and Regulation Support 0.495 Social Cost 0.645 Bureaucracy Cost 0.355 Source: Author The result from this process showed that calculating only the economic variabl e s gives the same result with BCA method. Right Conversion model has better results compare d to the BOT model ( Table 5.9 ). Table 5.9 Benefit Sub Hierarchy Economic Alternative Priorities BOT Right Conversion Economic 0.4 58 0.5 42 Source: Author In co ntrast, after calculating both economic and non economic variable there are significant changes in alternative priorities. The BOT model become s a higher priority
83 compared to the right conversion model. It is clear that non economic variable shift the resu lt of the analysis from right conversion model to BOT model ( Table 5.10 ). Table 5.10 The Optimal PPPs model from AHP Analysis Right Conversion BOT Optimal PPPs Model for TOD 0.423 0.577 Source: Author On the other hand the combined Consistency Index from all of the expert s for the analysis is 6%. This number is still tolerable. According to Saaty 1986, the consistency index for AHP analysis should be below 10%. The consistency index of 6% means that the expert s are consistent in their responses based upon the pairwise comparison.
84 CHAPTER 6 DISCUSSION Built Operate Transfer and Right Conversion Model are the alternative mechanism that can be used to implement the concept of TOD through PPPs mechanism at Dukuh Atas, Jakarta, Indonesia . Based on the BCA calculation, b oth BOT and Right Conversion model s ha ve a positive NPV , means that the projects is feasible from the financial perspective. Furthermore, t he BCA shows that the Right Conversion Model has a better economic figure compare d to the BOT model , the Equity IRR of Right Conversion model is 32% while the BOT model is only 30%. It can be concluded that from financial projection perspective , the investor prefer to choose the right c onversion model instead of BOT model in the context of PPPs mechani sm. On the other hand, the AHP analysis gives the same result with BCA when calculating only the economic variable. The Right Conversion Mod el has the priorities scale 0.542 while BOT Model only 0.458 . This result reinforces the conclusion that from financ ial projection perspective, the investors will tend to choose the right conversion models In contrast, after involving non economic variable, the result from AHP analysis is changed, BOT model has a better priorities scale 0.5 77 while right conversion mode l only 0.4 23 . This condition showed that the expert/respondent give more attention on non economic variable compare to economic variable. Overall, the AHP result shows that BOT model is the optimal PPPs model for TOD from investor point of view.
85 CHAPTER 7 RECOMMENDATION AND CONCLUSION TOD is a development strategy that could make a city more livable. This strategy need s sustainable financial sources and the public funding is limited. Involving the private sector could be an alternative solution to address the problem however the project needs to be attractive from investor point of view. M any tools can be used to analyze the most attractive scenario for TOD . This study use AHP and BCA in order to find the optimal PPPs model for TOD. BCA is a commonly used t o forecast the feasibility of the project, however most of BCA calculation only involve economic variable as the main consideration. The result of AHP analysis in this study shows that non economic variables shift the result of alternative priority. It can be ensured that the investor put a higher prior y o n non economic variable compare to economic variable in the context of Indonesia climate investment. In connection with this result, a further research with involving non economic variable in the BCA metho d is necessary in order to give a comprehensive overview to the stakeholder.
86 APPENDIX 1 Pairwise Comparison Questioner Name : Background : Contact No. : Email : Explanations Summary This research is using Analytical Hi erarchy Process for analyzing the most optimal public private partnership model for transit oriented development project at Dukuh Atas Jakarta. The first model is Built Operate Transfer model and the other model is right conversion model. This research i s comparing between benefit and cost from both of model and then determining the most optimal PPPs model for TOD project. Examples of terms and Scale use. If you think criteria A is 9 times more important than criteria B in attracting private to choose th e optimal PPPs model for TOD project at Dukuh Atas, then please circle as follows: CRITERIA (A) Intensity of Relative Importance CRITERIA (B) Economic 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Non Economic Note: Circle means that from private perspective, eco nomic benefit has extreme importance for choosing the most optimal PPPs model when compare with social or legal benefit. If you think criteria B is 9 times more important than criteria A in attracting private to choose the optimal PPPs approach for TOD p roject at Dukuh Atas, then please circle as follows: CRITERIA (A) Intensity of Relative Importance CRITERIA (B) Economic 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Non Economic Note: Circle means that from private perspective, Social and Legal benefit has ext reme importance for choosing the most optimal PPPs model when compare with Economic Benefit. Source: Saaty, 1986
87 AHP HIERARCHY STRUCTURE Source: Author ( Modified hierarchy structure model fro m Akiki, Cisternas and Tudela, 2006 , and Nijkamp et al , 1 993 as cited in Beria, Maltese & Mariotti , 2012) Finding the optimal PPPs model for TOD From Investor Perspective ECONOMIC C NON ECONOMIC BENEFIT COST NON ECONOMIC ECONOMIC C High Revenue Low Equity Portion Low Financial Risk Low Social Issue Rules and Regulation Support Investment Cost Maintenance Cost Interest Cost Tax Cost Social Cost Bureaucrac y Cost
88 BENEFIT CRITERIA Intensity of Relative Importance CRITERIA Economic 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Non Economic BENEFIT SUB ECONOMIC CRITERIA Intensity of Relative Importance CRITERIA High Reven ue 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Low Equity Portion CRITERIA Intensity of Relative Importance CRITERIA High Revenue 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Low Financial Risk CRITERIA Intensity of Relative Importance CRITERIA Low Equity Portion 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Low Financial Risk BENEFIT SUB NON ECONOMIC CRITERIA Intensity of Relative Importance CRITERIA Low Social Issue 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Rules and Regulation Support COST CRITERIA Intensity of Relative Importan ce CRITERIA Economic 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Non Economic COST SUB ECONOMIC CRITERIA Intensity of Relative Importance CRITERIA Investment Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Maintenance Cost CRITERIA Intensity of Relative Importance CRITERIA Investment Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Interest Cost CRITERIA Intensity of Relative Importance CRITERIA Investment Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Tax Cost CRITERIA Intensity of Relative Importance CRITERIA Maintenan ce Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Interest Cost CRITERIA Intensity of Relative Importance CRITERIA Maintenance Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Tax Cost
89 CRITERIA Intensity of Relative Importance CRITERIA Interest Cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Tax Cost BOT VS Right Conversion BENEFIT High Revenue CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Low Investment Risk CRITERIA Intensity of Relative Imp ortance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Low Equity Portion CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Low Social Issue CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Rules and Regulation Support CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversi on Model COST Investment Cost CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Maintenance Cost CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model
90 Interest Cost CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Tax Cost CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Social Cost CRITERIA Intensity of Relative Importance CRITERIA BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model Bureaucracy Cost CRITERIA Intensity of Relative Importance CRITERI A BOT Model 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Right Conversion Model
91 APPENDIX 2 QUESTIONNAIRE RECAPITULATION BENEFIT Economic Non Economic High Revenue Low Financial Risk WSB 6 WSB 6 ANP 3 ANP 3 SBW 6 SBW 6 AGG 8 AGG 4 AIS 4 AIS 7 BSN 3 BSN 6 HBS 7 HBS 3 DPW 3 DPW 3 High Revenue Low Equity Portion Low Equity Portion Low Financial Risk WSB 3 WSB 2 ANP 4 ANP 2 SBW 4 SBW 3 AGG 3 AGG 3 AIS 3 AIS 3 BSN 3 BSN 7 HBS 2 HBS 3 DPW 3 DPW 3 Low Social Issue Rules & Regulation Support WSB 3 ANP 6 SBW 3 AGG 4 AIS 7 BSN 4 HBS 4 DPW 4
92 COST Economic Non Economic Investment Tax WSB 2 WSB 5 ANP 4 ANP 3 SBW 3 SBW 3 AGG 6 AGG 3 AIS 3 AIS 2 BSN 4 BSN 5 HBS 2 HBS 3 DPW 3 DPW 3 Investment Maintenance Maintenance Interest Rate WSB 4 WSB 4 ANP 3 ANP 3 SBW 6 SBW 2 AGG 2 AGG 4 AIS 4 AIS 2 BSN 4 BSN 5 HBS 2 HBS 4 DPW 4 DPW 3 Investmen t Interest Rate Maintenance Tax WSB 5 WSB 6 ANP 2 ANP 2 SBW 6 SBW 2 AGG 8 AGG 3 AIS 7 AIS 4 BSN 7 BSN 3 HBS 4 HBS 2 DPW 3 DPW 3 Interest Tax Social Bureaucracy WSB 3 WSB 6 ANP 3 ANP 2 SBW 4 SBW 3 AGG 5 AGG 2 AIS 4 AIS 5 BSN 3 BSN 6 HBS 6 HBS 2 DPW 4 DPW 4
93 Right Conversion vs BOT WSB AIS Right Conversion BOT Right Conversion BOT High Revenue 3 High Revenue 3 Low Equity Portion 5 Low Equity Portion 4 Low Financial Risk 2 Low Financial Risk 3 Low Social Issue 4 Low Social Issue 5 Rules & Regulation Support 3 Rules & Regulation Support 3 Investment Cost 7 Investment Cost 3 Maintenance Cost 3 Maintenance Cost 6 Interest Rate Cos t 3 Interest Rate Cost 5 Tax Cost 2 Tax Cost 3 Social Cost 4 Social Cost 2 Bureaucracy Cost 3 Bureaucracy Cost 3 ANP BSN Right Conversion BOT Right Conversion BOT High Revenue 5 High Revenue 4 Low Equity Portion 7 Low Equity Portion 3 Low Financial Risk 4 Low Financial Risk 3 Low Social Issue 8 Low Social Issue 7 Rules & Regulation Support 7 Rules & Regulation Support 4 Investment Cost 5 Investment Cost 3 Maintenance C ost 6 Maintenance Cost 5 Interest Rate Cost 5 Interest Rate Cost 7 Tax Cost 4 Tax Cost 5 Social Cost 4 Social Cost 4 Bureaucracy Cost 4 Bureaucracy Cost 5 SBW HBS Right Conversion BOT Right Convers ion BOT High Revenue 5 High Revenue 4 Low Equity Portion 6 Low Equity Portion 3 Low Financial Risk 5 Low Financial Risk 6 Low Social Issue 4 Low Social Issue 5 Rules & Regulation Support 4 Rules & Regulation Support 4 Investm ent Cost 3 Investment Cost 4 Maintenance Cost 2 Maintenance Cost 5 Interest Rate Cost 3 Interest Rate Cost 5 Tax Cost 3 Tax Cost 6 Social Cost 4 Social Cost 3 Bureaucracy Cost 8 Bureaucracy Cost 4
94 AGG DPW Right Conversion BOT Right Conversion BOT High Revenue 3 High Revenue 3 Low Equity Portion 4 Low Equity Portion 4 Low Financial Risk 3 Low Financial Risk 4 Low Social Issue 4 Low Social Issue 3 Rules & Regulation Supp ort 3 Rules & Regulation Support 4 Investment Cost 6 Investment Cost 3 Maintenance Cost 3 Maintenance Cost 3 Interest Rate Cost 2 Interest Rate Cost 3 Tax Cost 4 Tax Cost 3 Social Cost 3 Social Cost 3 Bureaucracy Cost 2 Bureaucracy Cost 3 Source: Barata, Wisnu; Parulian, Andronico; Subowo; Gunawan, Agus; Shihab, Ady Iktimal; Nasution, Benny Swastika; Subangun, Heriman Budi; Wijaya, Dicky Pramayudha (2015) WSB :Wisnu Barata ANP :Andronico Parulian SBW :Subowo AGG :Agus Gunawan AIS :Ady Iktimal Shihab BSN :Benny Swastika Nasution HBS :Heriman Budi Subangun DPW :Dikcy Pramayudha Wijaya
95 Profile of Respondent 1. Wisnu Barata (WSB) WSB was born in Jakarta, March 28 th 1976, He got a bachelor degree and mast er degree in Civil Engineering from University of Indonesia. He started his career at PT. Pembangunan Perumahan (Indonesia state owned company in housing development) and then join with Jakarta Provincial Government. His professional experience more than 1 0 years both in private and public sector makes him understand about the investment regulation in Jakarta, Indonesia. Furthermore, his research in Public Private Partnerships in connection with 6 Toll Road development in Jakarta makes him familiar with PPP s scheme in Indonesia. 2. Andronico Parullian (ANP) ANP was born in Jakarta, July 9 th 1977, he got a bachelor and master degree in economics from University of Indonesia. He started his career in Asian Development Bank before join as government official. His expertise is in econometric and financial modelling. Currently, he is join with Jakarta Provincial Government, and doing some research in connection with transportation issue in Jakarta including Transit Oriented Development . 3. Subowo (SBW) SBW was born in B ojonegoro, July 19 th 1966, He got a master degree in Business Administration from IPMI, Jakarta, Indonesia. SBW has an experience in financial management more than 20 years both in local and overseas company (most of them in Japanese company). He has a kno wledge in Japanese investment regulation and Indonesia investment regulation. Beside his professional career, he also run his owned property business in Jakarta, Indonesia. 4. Agus Gunawam (AGG) AGG was born in Nganjuk, Dec 25 th 1959, He got a bachelor degre e in Geophysics from ITB, Indonesia and master degree in management from Prasetya Mulya Business School experience as Corporate Secretary in PT. Elnusa, Tbk Jakarta make s him understand about political issue, Government Issue, and other issue in connection with investment in Indonesia. 5. Ady Iktimal Shihab (AIS) AIS was born in Makasar May 30 th 1975, he got a master degree in industrial management from University of Indones ia. He started his career as an entrepreneur in automotive industry. After successful in automotive industry, he expanses his business in property and energy. As an entrepreneur, he is familiar with financial modelling and investment opportunity in Indones ia. He knows well Dukuh Atas area, since his family has a property located at Dukuh Atas area.
96 6. Benny Swastika Nasution (BSN) BSN was born in Pematang Siantar, December 28 th , 1982, he got his bachelor and master degree in Law from University of Indonesia. He has an experience in business and legal due diligence more than 10 years. His experience as a legal supervisor in MNC group make him understand about the acquisition process in Indonesia. 7. Heriman Budi Subangun (HBS) HBS was born in Bandung, Oct 1980, h e got Master of Science in finance and management from Cranfield University, United Kingdom. He has worked at Central Bank of Indonesia (BI) more than 10 years and has qualification in financial risk management. During his working time in BI, he has made a lot of research about economic and infrastructure development in Indonesia. 8. Dicky Pramayudha Wijaya (DPW) DPW was born on April 1 st 1980, He got a master degree of business administration from Gadjah Mada University, Indonesia and Asian Institute of Manag ement, Philippines. DPW has an experience in Banking Industry more than 10 years with qualification in commercial infrastructure financing.
97 APPENDIX 3 BCA BASIC ASSUMP TIONS Exchange Rate US $ 1 13,000 IDR Land Acquisition Cost Building Coverage Ratio (BCR) 35% IDR 66,904,000 /m2 Floor Area Ratio (FAR) USD 5,146 /m2 Right Conversion Model 1000% BOT Model 600% Discount Rate 8.69% Size of The Zonation Area Occupancy Rate Baseline 55% Block A 17,621 m2 Rise 5%/year consecutively and level off at 85% Block B 9,824 m2 Block C 12,646 m2 Maintenance Cost 3% From Revenue Block D 27,605 m2 Inflation Cost 5% Artificial Ground Dev. Cost IDR 385,203,319,473 Office Rent $25 /Month USD 29,631,025 Commercial Rent $35 /Month Un der Ground Walkaway Dev. Cost IDR 513,604,425,964 Interest Rate USD 39,508,033 Bank 12% Equity 15% Construction Cost WACC 13% IDR 9,424,641 /m2 Conces sions 20 Years USD 725 /m2
98 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW BOT Cash In Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Equity 114,063,374 Bank Loan 70,162 ,694 195,985,178 Revenue Block A 18,840,794 19,782,833 20,771,975 21,810,574 22,901,102 Block B 10,504,317 11,029,533 11,581,010 12,160,060 12,768,063 Block C 13,521,155 14,197,213 14,907,074 15 ,652,427 16,435,049 Block D 29,514,742 30,990,479 32,540,003 34,167,003 35,875,353 Sub Total 72,381,008 76,000,058 79,800,061 83,790,064 87,979,568 Total Cash in Flow 184,226,068 195,985,178 72,381,008 76,000, 058 79,800,061 83,790,064 87,979,568 Cash Out Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Building Construction Cost Block A 38,325,071.09 38,325,071.09 Block B 21,367,396.30 21,367,396.30 Block C 27,504,109 .02 27,504,109.02 Block D 60,037,523.50 60,037,523.50 Sub Total 147,234,099.91 147,234,099.91 Under Ground Walkaway Development Cost 19,754,016 19,754,016 Artificial Development Cost 14,815,512 14,815,512 Maintenance Cost
99 Block A 565,224 593,485 623,159 654,317 687,033 Block B 315,130 330,886 347,430 364,802 383,042 Block C 405,635 425,916 447,212 469,573 493,051 Block D 885,4 42 929,714 976,200 1,025,010 1,076,261 Sub Total 2,171,430 2,280,002 2,394,002 2,513,702 2,639,387 Interest During Construction Cost (IDC) 2,422,439 14,181,550 Interest Cost 30,801,936 28,125,169 25,108,9 21 21,710,138 16,548,024 Principal Payment 21,105,984 23,782,751 26,798,999 30,197,755 31,034,236 Total Cash Out Flow 184,226,068 195,985,178 54,079,350 54,187,922 54,301,922 54,421,595 50,221,647 Free Cash Flow 18,301,658 40,113,794 65,611,934 94,980,404 132,738,324 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW Cash In Flow Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Equity Bank Loan Revenue Block A 24,046,157 25,248,465 26,510,889 27,836,433 29,228,255 29,228,255 29,228,255 Block B 13,406,466 14,076,790 14,780,629 15,519,661 16,295,644 16,295,644 16,295,644 Block C 17,256,801 18,119,641 19,025,623 19,976,905 20,975,750 20,975,750 20,975,750 Block D 37,669,121 39,552,577 41,530,206 43,606,716 45,787,052 45,787,052 45,787,052 Sub Total 92,378,546 96,997,473 101,847,347 106,939,714 112,286,700 112,286,700 112,286,700
100 Total Cash in Flow 92,378,546 96,997,473 101,847,347 106,939,714 112,286,700 112,286,700 112,286,700 Cash Out Flow Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Building Construction Cost Block A Block B Block C Block D Sub Total Under Ground Walkaway Development Cost Artificial Development Cost Maintenance Cost Block A 721,385 757,454 795,327 835,093 876,848 876,848 876,848 Block B 402,194 422,304 443, 419 465,590 488,869 488,869 488,869 Block C 517,704 543,589 570,769 599,307 629,272 629,272 629,272 Block D 1,130,074 1,186,577 1,245,906 1,308,201 1,373,612 1,373,612 1,373,612 Sub Total 2,771,356 2,909,924 3,055,420 3,208,191 3, 368,601 3,368,601 3,368,601 Interest During Construction Cost (IDC) Interest Cost 13,944,391 9,129,667 3,704,316 Principal Payment 37,963,502 42,778,226 48,203,577 Total Cash Out Flow 54,679,24 9 54,817,817 54,963,313 3,208,191 3,368,601 3,368,601 3,368,601 Free Cash Flow 170,437,621 212,617,277 259,501,311 363,232,834 472,150,933 581,069,032 689,987,131
101 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW Cash In Flow Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Equity Bank Loan Revenue Block A 29,228,255 29,228,255 29,228,255 29,228,255 29,228,255 29,228,255 Block B 16,295,644 16,295,644 16,295,644 16,295,644 16,295, 644 16,295,644 Block C 20,975,750 20,975,750 20,975,750 20,975,750 20,975,750 20,975,750 Block D 45,787,052 45,787,052 45,787,052 45,787,052 45,787,052 45,787,052 Sub Total 112,286,700 112,286,700 112,286,700 112,286,700 112,286,700 1 12,286,700 Total Cash in Flow 112,286,700 112,286,700 112,286,700 112,286,700 112,286,700 112,286,700 Cash Out Flow Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Building Construction Cost Block A Block B Bl ock C Block D Sub Total Under Ground Walkaway Development Cost Artificial Development Cost Maintenance Cost Block A 876,848 876,848 876,848 876,848 876,848 876,848 Block B 488,869 48 8,869 488,869 488,869 488,869 488,869 Block C 629,272 629,272 629,272 629,272 629,272 629,272
102 Block D 1,373,612 1,373,612 1,373,612 1,373,612 1,373,612 1,373,612 Sub Total 3,368,601 3,368,601 3,368,601 3,368,601 3,368,601 3,368,601 Interest During Construction Cost (IDC) Interest Cost Principal Payment Total Cash Out Flow 3,368,601 3,368,601 3,368,601 3,368,601 3,368,601 3,368,601 Free Cash Flow 798,905,230 907,823,329 1,016,741,428 1,125,659,527 1,234,577,626 1,343,495,725 BOT Model IRR NPV Project 20% 359,359,126 Equity 30% 364,158,750
103 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW RIGHT CONVERSION Cash In Flow Year 1 Y ear 2 Year 3 Year 4 Year 5 Year 6 Year 7 Equity 176,038,656 Bank Loan 110,640,072 300,116,793 Revenue Block A 30,587,214 32,116,575 33,722,404 35,408,524 37,178,950 Block B 17,053,305 17,905,97 0 18,801,269 19,741,332 20,728,399 Block C 21,951,011 23,048,562 24,200,990 25,411,040 26,681,592 Block D 47,915,908 50,311,704 52,827,289 55,468,653 58,242,086 Sub Total 117,507,439 123,382,811 129,551,951 136,029,549 142,831,027 Total Cash in Flow 286,678,728 300,116,793 117,507,439 123,382,811 129,551,951 136,029,549 142,831,027 Cash Out Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Building Construction Cost Block A 63,875,118.49 63,875,118.49 Block B 35,612,327.17 35,612,327.17 Block C 45,840,181.70 45,840,181.70 Block D 100,062,539.16 100,062,539.16 Sub Total 245,390,166.52 245,390,166.52 Under Ground Walkaway Development Cost 19,754,016 19,754,016 Artificial Development Cost 14,815,512 14,815,512 Maintenance Cost Block A 917,616 963,497 1,011,672 1,062,256 1,115,369 Block B 511,599 537,179 5 64,038 592,240 621,852 Block C 658,530 691,457 726,030 762,331 800,448
104 Block D 1,437,477 1,509,351 1,584,819 1,664,060 1,747,263 Sub Total 3,525,223 3,701,484 3,886,559 4,080,886 4,284,931 Intere st During Construction Cost (IDC) 6,719,033 20,157,098.05 Interest Cost 47,537,884 43,406,721 38,751,623 33,506,143 25,539,242 Principal Payment 32,573,720 36,704,883 41,359,981 46,605,434 47,896,395 Total Cash Out Flow 286,678,728 300,116,793 83,636,827 83,813,088 83,998,163 84,192,463 77,720,568 Free Cash Flow 0 0 33,870,612 73,440,334 118,994,123 170,831,209 235,941,668 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW Cash In Flow Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Equity Bank Loan Revenue Block A 39,037,898 40,989,792 43,039,282 45,191,246 47,450,808 47,450,808 47,450,808 Block B 21,764,819 22,853,060 23,995,71 3 25,195,498 26,455,273 26,455,273 26,455,273 Block C 28,015,671 29,416,455 30,887,277 32,431,641 34,053,223 34,053,223 34,053,223 Block D 61,154,190 64,211,900 67,422,495 70,793,620 74,333,301 74,333,301 74,333,301 Sub Total 149,972, 578 157,471,207 165,344,767 173,612,005 182,292,606 182,292,606 182,292,606 Total Cash in Flow 149,972,578 157,471,207 165,344,767 173,612,005 182,292,606 182,292,606 182,292,606
105 Cash Out Flow Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Building Construction Cost Block A Block B Block C Block D Sub Total Under Ground Walkaway Development Cost Artificial Development Cost Mai ntenance Cost Block A 1,171,137 1,229,694 1,291,178 1,355,737 1,423,524 1,423,524 1,423,524 Block B 652,945 685,592 719,871 755,865 793,658 793,658 793,658 Block C 840,470 882,494 926,618 972,949 1,021,597 1,021,597 1,021,597 Block D 1,834,626 1,926,357 2,022,675 2,123,809 2,229,999 2,229,999 2,229,999 Sub Total 4,499,177 4,724,136 4,960,343 5,208,360 5,468,778 5,468,778 5,468,778 Interest During Construction Cost (IDC) Interest Cost 21,520,948 14,090,189 5,717,023 Principal Payment 58,590,629 66,021,388 74,394,554 Total Cash Out Flow 84,610,754 84,835,713 85,071,920 5,208,360 5,468,778 5,468,778 5,468,778 Free Cash Flow 301,303,491 37 3,938,985 454,211,832 622,615,477 799,439,305 976,263,132 1,153,086,960
106 In US $ (Exchange Rate US $ 1 ~ IDR 13,000) CASH FLOW Cash In Flow Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Equity Bank Loan Revenue Block A 47,450,808 47,450,808 47,450,808 47,450,808 47,450,808 47,450,808 Block B 26,455,273 26,455,273 26,455,273 26,455,273 26,455,273 26,455,273 Block C 34,053,223 34,053,223 34,053,223 34,053,223 34,053,223 34,053,223 Block D 7 4,333,301 74,333,301 74,333,301 74,333,301 74,333,301 74,333,301 Sub Total 182,292,606 182,292,606 182,292,606 182,292,606 182,292,606 182,292,606 Total Cash in Flow 182,292,606 182,292,606 182,292,606 182,292,606 182,292,606 182 ,292,606 Cash Out Flow Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Building Construction Cost Block A Block B Block C Block D Sub Total Under Ground Walkaway Development Cost A rtificial Development Cost Maintenance Cost Block A 1,423,524 1,423,524 1,423,524 1,423,524 1,423,524 1,423,524
107 Block B 793,658 793,658 793,658 793,658 793,658 793,658 Block C 1,021,597 1,021,597 1,021,597 1,021,597 1,021,597 1,021,597 Block D 2,229,999 2,229,999 2,229,999 2,229,999 2,229,999 2,229,999 Sub Total 5,468,778 5,468,778 5,468,778 5,468,778 5,468,778 5,468,778 Interest During Construction Cost (IDC) Interest Cost Principal Payment Total Cash Out Flow 5,468,778 5,468,778 5,468,778 5,468,778 5,468,778 5,468,778 Free Cash Flow 1,329,910,787 1,506,734,615 1,683,558,442 1,860,382,270 2,037,206,097 2,214,029,925 Right Conversion Model IRR NPV Project 21% 628,642,020 Equity 32% 636,222,711
108 APPENDIX 4 AHP RESULT The Optimal PPPs model for TOD (From Economic and Non Economic Variable)
109 Inconsistency Index
110 Grafic Model
111 Result Only from Economic Variable Analysis
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