Following the state visit by South Korean President Moon Jae-in to Indonesia last week, the East Asian country has laid out concrete plans to get involved in Indonesia’s infrastructure projects through both government loans and private sector financing.
In a meeting between Public Works and Public Housing Minister Basuki Hadimuljono and South Korea’s Minister of Land, Infrastructure and Transport Kim Hyun-mee, the latter said her country was interested in developing two water conveyance systems to distribute water from the Karian Dam in Lebak, Banten, to nearby Serpong, Tangerang, South Tangerang and West Jakarta and an intelligent transport system (ITS) in Indonesia’s toll roads as well as building prefabricated houses for the low and middle-income population.
Korea keen on water distribution, toll road support, housing projects. Project to be funded through loans, private sector financing
The construction of the dam, set to become the country’s third largest dam after the Jatiluhur and Jatigede dams in West Java, began in October 2015 by state-owned construction enterprises PT Wijaya Karya dan PT Waskita Karya, along with South Korea’s Daelim Industrial Co, Ltd.
South Korea has channelled a loan that will total Rp 1.07 trillion (US$ 78.9 million) and cover most of the project’s costs. The construction, which is 48 percent complete, is expected to finish in 2019, on year faster its initial target in 2020.
“We discussed how to complete the Karian Dam according to the schedule,” Hyun-mee told reporters recently. Once complete, the dam willbe able to store 314,7 million cubic meters of water that can cover 22,000 hectares of land in banten province.
During the meeting, South Korea conveyed its commitment to provide a loan worth Rp 2,1 trillion through the Economic Development Cooperation Fund (EDCF) to build water pipes from the dam to Serpong. The loan agreement is expoected to be signed at the end of 2018.
Prior to that, a feasibility study will be carried out for six months so that the project can be proposed into the government’s list of foreign-funded projects, also known as the green book. The facilities are scheduled to be finished the same time the dam development concludes in 2019.
Another water conveyance project to distribute water from the dam to Tangerang, South Tangerang and West Jakarta will be carried out under a public-private partnership (PPP) and engage Korean government agency Korea Water Resources Corporation (K-Water)
K-Water is conducting a feasibility study for the project, which is slated for completion by January next year. When the process is done, the Public Works and Public Housing Ministry will put the project in a bidding under the right-to-match scheme for K-Water as the solicitor of the project.
The Korean Minister also expressed Korea’s interest in installing an ITS in toll roads. “The Ministry of Public Works (and Public Housing) plans to implement this ITS in 3,000 KM long toll roads by 2019 in November, Korean experts will visit Indonesia to analyze and investigate the site and figure out how to implement this project,” Hyun-mee said.
For the housing priject, state-owned construction firm PT Pembangunan Perumahan will team up with Korean construction firm Hanwha Engineering and Construction. Basuki said the ITS in toll roads would help in the flow of traffic across multiple lanes, as outlined in its e-toll program. “We have another offer from Hungary and we will compare its price with this [South Korea’s offer],” Basuki said.