Government Measures to Mitigate Covid-19 Risk
Efforts to Accelerate Infrastructure Provision
Limited Concession Scheme as an Alternative of Infrastructure financing
Presidential Regulation No 32/2020 about Infrastructure Financing through Limited Concession Scheme
Definition
Limited Concession Scheme of
Infrastructure Asset is the asset
concession agreement to improve
operations of Government assets
(BMN) and/or SOES' assets
generate revenue to improve similar
project operations and/or finance
other infrastructure provision
Infrastructure Financing
Priority
to
Revenue generated by the LCS will be
used to fund the priority infrastructure
projects and/or national strategic
infrastructure projects
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)
LCS Principles
LCS transfers concession rights from brownfield asset
owned by the Government and/or SOEs to private sector
to operate, maintain, and develop the assets;
As the rewards, Government and/or SOE will receive upfront
payment or annuity payment during the concession period
Future CAPEX during the concession period will be borne by
the concession holder to ease the Government and SOE
budget burdens
Technical Criteria for the LCS assets
The asset has been fully operated for minimum 2 years
The asset needs to improve operation efficiency based on international
standard
Asset's useful life minimum is 10 years
For the SOE's asset, the asset must have positive cash flow for minimum 2
years in a row and has been audited at least 3 years in a row
For Government asset (BMN), the asset should be on the Ministry Financial
report that has been audited based on the Government Accountancy
Standard in the previous period
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