ADB-PLN Electrical Grid Strengthening Program
| Conventional - PPP Comparison.
Conventional Procurement
VS
PPPS
.
•
•
.
PLN can meet its transmission needs with
conventional borrowing and traditional EPC
construction.
PLN has the experience, know-how, and staff
to build transmission in Indonesia.
Total life-cycle costs of the new transmission
assets are not fully transparent and difficult to
evaluate with government projects.
In Brazil, India, Peru, etc., overall value for
money judged to be less than that of PPPs.
.
Indonesia's PPP rules require qualitative &
quantitative value-for-money analysis to fully &
transparently justify projects.
Indonesia's PPP process is time consuming.
Preparation plus competition lowers private
sector costs but there is local content.
PPPs take on (and pay for) many project risks
that can increase project costs.
Total life-cycle costs often lower than for
conventional procurement, which increases
value for money.
Date 23rd Feb 2021
ADB
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