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On the feasibility of a new multi-partner
Indonesian infrastructure institute...
Some Early Findings
Dr Chris Hale The University of Melbourne
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Infrastructure Development Pathways
• Reference ‘high quality’ infrastructure development pathways
• East Asian mega-cities: Tokyo, Seoul, Taipei, major Chinese cities
• Success stories among medium-sized cities: Munich, Washington DC, Singapore, Melbourne (?)
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Conceptual precedent - International Scan
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Infrastructure Research Units
• University units the main models, but others
• Need exceptional and specialist research staff to be effective
• Australian “co-operative research centres” combine university, industry and government in a collaborative, pool-funded model – reasonably successful
• CRCs involve mix of cash, in-kind contribution
• Grant funding awarded to best proposals
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Professional Institutes
• Networking & info exchange within profession
• Some lobbying on member’s behalf
• Focused on entry to professional status rather than career development
• American Planning Association, Engineers Australia etc
• Struggle to handle cross-disciplinary activity
• No known institute focused on infrastructure
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Industry Associations
• Networking can be a strength
• Can be very active with events
• Some have broad membership base
• Membership fee structure may be relevant
• Better examples have research activity
• Straddle into lobbying
• Can lose sight of ‘public interest’, become narrow in approach
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NGOs
• Seem to be improving, becoming more prominent and professional
• Often have strong environmental, social elements
• Advocacy
• Sometimes reaching a broader public, audience
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Infrastructure in Government, internationally
• Models of infrastructure delivery evolving rapidly
• So is stance and expectations of government
• Increasing demands for independence, expertise, even-handed assessment – but is this ultimately best placed coming from government...?
• When government-owned is done right, it is brilliant (eg – HK MTR)
• Best practice seems to be “a process”
• Only build the best: “star” projects
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Seamless infrastructure delivery – the new definition of ‘best practice’
• 1) Strategies and plans
• 2) Project concept
• 3) Modelling, analysis
• 4) Basic concept design
• 5) Pre-feasibility assessment, comparison of alternatives
• 6) Refinement, more design work
• 7) Business case, BCR
• 8) Financing options
• 9) Assessment
• 10) Compare to other projects
• 11) Decide (including on implementation package)
• 12) Build
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Organising an institute around meaningful themes
• Balance specialisation & breadth
• Common themes (procurement, finance) but widely differing technical context
• Varied stakeholders
• Project risk profiles very different (eg - rail v road v power supply)
• Cross-cut from geographic/ regional/locational context
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Stakeholder discussion during September SIG meetings – a summary
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Integrated Metropolitan Infrastructure
• patchy application of urban design guidelines • incorporation of effective transport infrastructure and
options in new developments • Accountability • multi-modal integration • sheer scale of Jakarta as a mega-city • Jakarta’s mix of old and new urban development
patterns • effectiveness from plans into implementation • incorporation of waste management facilities and
operations into urban landscape
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Policy, Procurement & Investment
• land acquisition • problems in procurement model selection • mis-matches between government project priorities and
willingness of private sector • impacts of major infrastructure projects not fully
considered – including social impacts such as urban heritage
• uncertainty and trust issues between public and private sectors
• bid costs in PPP and other projects • legal complexity and uncertainty • sovereign risks • decentralization and its impacts • budget limitations, resourcing • problems with rate of project realization.
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Commercial Transport
• freight movement efficiency (including balance between use of small and large trucks)
• utilization of rail for inter-city or inter-nodal freight • whether cost or price incentives appropriate to support mode shift
from road to rail • ‘perverse incentives’ at play (incl low cost of heavy vehicle
registration, fuel subsidy) • questions over structure of rail track access charging • broader pricing questions • fuel subsidy, as an ‘input based’ measure overwhelming ability to
drive policy effectively via ‘output-based’ measures • ‘too many’ freight trips being made, due perhaps to low cost of
driver labour • a ‘financing gap’ between freight and commercial transport plans
and implementation.
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Water Supply & Sanitation
• complex interactions between capital and operational financing • financing packages • loan terms and duration for water supply or wastewater projects • land acquisition • accountability and transparency • predictability and certainty for investors • “politics” • jurisdictional issues, including the fact that many projects cross
administrative boundaries • commitments from local governments to long term arrangements; • general standards of sanitation across Indonesia and the idea that a
major sanitation investment effort is needed • sectoral laws and regulations • effectiveness of vertical and horizontal integration within sector
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• providing ‘best practice’ clusters in smaller cities and regional locations
• having geographic foci
• progressing into activity in smaller cities over time
• having a segmentation strategy (according to locations and city scale)
• providing services and support through a ‘needs-based’ approach
• including at least some less-developed regions
• acting to drive policy
• supporting funding applications made by smaller government actors
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Energy Supply
• tariff setting
• Maintenance
• Efficiency
• new supply sources (such as solar)
• economic viability of generation
• project financing, guarantees, lender responses, and uncertainty
• progress toward coverage or ‘electrification’ goals (ie from 75% to 95%).
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Regional & Rural • dilution of impacts and understanding for policies developed at the centre • availability of decent, appropriate reference cases for cities other than
Jakarta • less money and fewer resources for delivering quality infrastructure • generally under-developed infrastructure of all kinds • ineffective regional politics • different priorities to central government • different and diverse systems of government • diversity and non-uniformity across the archipelago • the level of inclusion or exclusion from the centre of various locations • the large number of smaller cities in Indonesia • questions around boundaries and regionalization per se • land reform • ‘extractive’ practices in regional and rural areas • labour conditions • the issue of ‘grid scale’ and market scale for infrastructure systems in rural
areas • different/alternative systems or technologies may be more appropriate for
infrastructure solutions in rural areas (particularly in energy and water).
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Suggested Functions & Operations
• a focus on open communication • providing recommendations for implementation
co-ordination • providing practice reviews and explanation • undertaking new research (with government buy-
in) • a new project or policy evaluation capability • independent policy analysis and/or advocacy • Publishing • Providing ‘context’ for policy development
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• organizing and delivering events and fora for high-level discussion
• provision of expert knowledge
• interaction and exchange
• dissemination and communication
• skills development
• a source of impartial public interest advice
• adding value (within the sector)
• delivering case studies
• an independent assessment capability
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• providing broader independence within the sector
• sustaining a public interest focus
• informing professionals about standards of better practice and conduct
• open discussion of options and issues
• balancing different stakeholders (both public and private) as active members
• having potential status as a statutory body
• and/or potentially being associated with a university.
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• knowledge exchange • critical analysis • being a “think tank” • providing background studies • providing peer review (for policies, plans, projects) • actively considering social, economic and environmental
perspectives • providing a destination for formal stakeholder engagement
programs related to government activities • being multi-partner in terms of involved stakeholders • could also undertake some commercial activity • could be quasi-public • should enhance government policy-making • tracking of statistics - sectoral, and sub-sectoral
performance • generating new evidence and knowledge • supporting improved transparency and accountability.
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Synthesis of core functions
New research & studies
Professional skills development
Knowledge exchange, communication &
dissemination
Independent analysis & peer review of plans, policies
Integrating & supporting diverse
stakeholders –
Jakarta & beyond
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Potential Structure
Board & executive staff
*strategy & governance
*operations & budget
*membership & publicity
*events, training, knowledge exchange & dissemination
*research contracts
SIG
integrated metropolitan infrastructure
(example only)
SIG
policy & investment
(example only)
SIG
commercial transport
(example only)
other SIG
other SIG
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Resourcing at Mature Phases (indicative only)
Item Annual $USD at 2014
Commissioned original research $400,000
Independent professional board members (4 at 0.2 FTE)
$156,000
Executive staffing (one CEO, one admin) $260,000
General operating $80,000
Total Cash $896,000
Office space In-kind
Board members – major funding partners (4-8)
In-kind
Data and access to information In-kind
Staff time from partners - supporting research activity, events
In-kind
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Early Recommendations
• Should be a vehicle for supporting broad-based infrastructure-led economic development
• “Separate but close” to government
• Core focus – “value adding” through enhanced sectoral skills and capabilities
• Membership base – strength in diversity
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• New commissioned research – the focus of exchange, information, ideas and capabilities
• The ‘public interest’ as shared driver
• Topics and themes – broad coverage across infrastructure