2022 State Budget and Fiscal Incentives Presentation
Limited Concession Scheme as an Alternative of Financing
through Presidential Regulation No 32/2020 on Infrastructure Financing
through Limited Concession Scheme
2
Limited
Concession
Scheme (LCS)
Definition
Limited Concession Scheme of
Infrastructure Asset is the asset
concession agreement to improve
operations of Government assets
(BMN) and/or SOEs' assets to
generate revenue to improve similar
project operations and/or finance
other infrastructure provision
Infrastructure Financing
Priority
Revenue generated by the LCS will be
used to fund the priority infrastructure
projects and/or national strategic
infrastructure projects
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
ā 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
ā 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
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)
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