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Major Projects and Tenders Indonesia

Indonesia is one of the world’s fastest growing economies and it presents exciting opportunities for U.S. companies that offer products and services that help it meet its rapidly expanding infrastructure needs. Indonesia is seeking to invest $250 billion in its infrastructure. And has created a number of forward-looking economic development models, including the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development or “MP3EI”. Additionally, the country seeks to bridge the infrastructure gap through private sector participation to fund half of this massive expansion through the Public-Private Partnership (PPP) model. The rapid growth of the Indonesian economy (projected about 6% for the next 5 years) has created a pressing need for infrastructure development and the country needs significant outside expertise to meet its ambitious targets. U.S. industry is well qualified to supply the kinds of architectural, design and engineering services and project management skills needed to successfully tackle major projects. U.S. technologies are also well positioned to rationalize energy use and production to support new industrial zones as they are built in this chronically energy deficit country.

The Masterplan

On May 27, President Yudhoyono unveiled the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI), which will carry the country through to 2025. It aims to make Indonesia, the 17th largest economy in the world last year, one of the world’s 10 biggest economies by 2025, taking GDP to $4.5 trillion and increasing the per capita income from $3000 now to $15,000.

To achieve this, the master plan seeks to raise average annual growth to 8-9 percent between 2015 and 2025, from 6.5% in 2012. The MP3EI also sets the target of bringing inflation down from 6 percent now to 3 percent by the middle of the next decade.

The plan outlines Rp 4000 trillion ($468.5 billion) in investments to be made over the next 14 years, including in infrastructure work. Some Rp 544 trillion ($63.72 billion) of government cash has been earmarked for investment to 2025, to be supplemented by Rp 836 trillion ($97.93 billion) from state firms.

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Indonesia’s top Infrastructure sectors are:

  • Energy – Electrical Power Generation and Transmission; Geothermal and Biomass
  • Aviation – Airports, Ground Support and Logistics
  • Environmental Technology - Water Resource Management and Pollution/Disposal Technologies
  • Architecture, Construction and Engineering – Toll Roads, Port Infrastructure and Major Projects

Indonesia market information

Energy - Electrical Power Generation and Transmission; Geothermal and Biomass

The electrical power industry in Indonesia has experienced a high growth in demand, averaging seven to nine percent per annum in the last five years. However, due to the lack of infrastructure in the power sector, during 2000-2005, Indonesia still faces a power crisis in various areas. Electrification rates in Indonesia were 70.4% in 2011, one of the lowest rates of installed capacity in the region. This shortage affects an estimated 80 million Indonesians, especially in rural areas.

As Indonesia continues to develop, the government-owned Electric company, PLN, is under significant pressure to create new power plants and to upgrade the current generation and transmission infrastructure. Construction of power plants, transmission and distribution lines in Indonesia should bring significant commercial opportunities for U.S. companies that supply engineering services and equipment such as turbines, substations, transmission, transformers and distribution equipment.

Additionally, with some of the highest rates of geothermal availability in the world, Indonesia offers a number of opportunities for companies along the energy cycle, from drilling to plant installation to transmission. Biomass from palm oil plantations and other sources of bio waste also offer small-scale production and opportunities for investment by US companies with technological advantage.

For more tender opportunities visit the website(s) :

1. PT PLN :

2. Indonesia oil, mining and energy : www.petromindo.com

Aviation - Airports, Ground Support and Logistics

With a population of more than 240 million spread over 17,000 islands, Indonesia presents itself as an enormous aviation opportunity and one of the fastest growing domestic air traffic markets in the world. The increase in the number of airline passengers in the last three years has been quite impressive, from 43.8 million in 2009 to 58.85 million in 2011. The Directorate General of Civil Aviation, Ministry of Transportation, predicts that the industry will grow between 15 and 20% in 2012.

Significant opportunities exist along all subsectors, especially in the areas of Airport development, ground support technology and logistical infrastructure. As a result of surging demand created by an emerging middle class and a large population, spread over an archipelago the width of the United States, Indonesia’s private airlines are looking to compete in mid-markets, necessitating significant and concurrent development of airport infrastructure in many regions. Specifically, there is a current and pressing need for air traffic control systems, airport ground support equipment, safety and security equipment, IT infrastructure and services, and engineering and logistics surrounding the airport supply chain.

For tender opportunities please visit the website(s) :

1. PT Angkasa Pura I : http://www.angkasapura1.co.id/index.php/home/lelang

2. PT Angkasa Pura II : http://www.angkasapura2.co.id/?app=Procurement&t=1332357934

Environmental Technology - Water Resource Management and Pollution/Disposal Technologies

Indonesia faces a constant struggle to provide adequate clean water and sanitation for its rapidly growing population. Similarly, demand for clean water is steadily increasing due to economic activity in urban and rural areas, and a massive influx of citizens into the middle class. While access to clean water will near 50% in 2012, it is still far below Millennium Development Goals (MDGs) for clean water access.

The GOI faces several challenges in providing clean water supply such as scarcity of raw water resources, water leakage problems (average of 33% of non revenue water), and mismanagement of water company. US firms have significant opportunities to advise the process at multiple levels, and have a good reputation for their quality and advanced technology in the field of water and wastewater treatment. Although the market is price sensitive, U.S. products are strong competitors in water filtration, water purification equipment and control systems, water treatment chemicals, positive displacement pumps, valves and meters.

Additionally, urban areas in Indonesia, especially the Municipality of Jakarta (DKI Jakarta,) are increasingly facing issues in managing sanitation within and outside of the city as the population continues to rise, and property development and urbanization reach to all corners of the archipelago. US firms have opportunities in solutions for waste disposal, especially in managing pick-up and delivery logistics, and Waste-to-Energy (WtE) technology.

Architecture, Construction and Engineering: Toll Roads, Port Infrastructure and Major Projects

Infrastructure development in Indonesia is guided by the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), which was released to much fanfare in May 2011. A total of 367 infrastructure projects worth an estimated US$440bn were showcased in the master plan, with the majority of these projects in transport (i.e. roads, toll roads, railway, and ports). The recent approval the land acquisition bill in December 2011 is expected to have major implications for speeding up the implementation of these projects, especially roads, toll roads and railways. Real growth for transport is expected to average over 8% for the next five years.

While the Indonesian government recently announced the cancellation of a major container terminal port, the Government is still targeting port development, as five out of the country's six largest container ports are currently suffering from congestion and an estimated 15mn TEUs of extra capacity are required by 2020. Currently, the Government of Indonesia is seeking assistance to rapidly construct three new ports in Jakarta, Batam and Papua. Opportunities exist for US companies with experience in port architecture, construction and engineering, as well as logistics and container management.

For tender opportunities please visit the website(s);

1. PT KAI : http://e-proc.kereta-api.co.id/