Setting the Stage for Project Readiness

Based on the results of the PS, the minister/ head of the institution/ regional head/ SoE directorate/ Director of Regional SOE is appointed as the GCA.

Or the GCA delegates authority to the organizational unit under its level.

The GCA may also involve public appraisers and/or government appraisers to calculate the reimbursement of costs to the Preparation Agency that supports the Pre-FS preparation. The GCA may charge the reimbursed costs to the IBE.

If a GCA needs a Preparation Agency in the form of an international institution/ organization, it submits a letter stating the need for the use of the Preparation Agency. The letter is accompanied by documents indicating the project's needs, including:

1. Name of PPP project
2. Sector or type of Infrastructure to be collaborated on
3. Brief description of the scope of work including (i) preparation to transaction or (ii) transaction and
4. Estimated cost of the Preparation Agency.

The GCA selects the PPP Preparation Agency based on the international institution/ organization Preparation Agency Panel delivered by the Ministry of Planning. The GCA carries out the selection procedure through direct selection, referring to the regulations of the institution responsible for government procurement policy.

Based on the results of direct selection, the GCA signs an agreement of Preparation Agency with the selected international institution/ organization.

The GCA ensures availability of budget for the following activities in the PPP preparation stage:

1. Preparation of Pre-FS and supporting documents
2. Land acquisition and resettlement if required
3. Market sounding
4. Public consultation (once or more than once), if required
5. Preparation of environmental permit, if required
6. Procurement of Preparation Agency and/or Process Advisor, if required and
7. Allocate a companion budget if the GCA receives facilitation from the Preparation Agency or the minister.

The GCA conducts:

1. Various studies that add up as components of the Pre-FS (strategic review, economic review, commercial review, financial review, management review)
2. Conduct the supporting activities & substantiate the same with documents in accordance with the regulations of the government institution responsible for government goods/ services procurement policy
3. Conduct the market sounding and
4. Public consultation

The Minister facilitates the GCA’s activities during the PPP preparation stage in accordance with their authority.

Such facilitation includes consultation, assistance, and/or support in preparing the Pre-FS in accordance with the provisions of the laws and regulations.

The Minister coordinates provision of facilitation to the GCA.

The facilitation does not absolve the GCA of their responsibility in the preparation stage of the PPP.

The Minister establishes the PPP Preparation Agency Panel by selecting from international institutions/ organizations based via defined criteria.

The Minister establishes the PPP Preparation Agency Panel actively, by inviting international institutions/ organizations to submit proposals.

The Minister establishes the PPP Preparation Agency Panel passively, if there are several international institutions/ organizations expressing interest in facilitating the assistance of PPP projects, including the desired sector or infrastructure.

The Minister applies the following criteria to select the Preparation Agency (international institution/ organization):

1. It has adequate competence, intensity, and capacity to work on the said PPP project. This should be demonstrated by certification of expertise or educational background of academics of the Preparation Agency and the number of other ongoing PPP projects supported by the entity.
2. It has sufficient time and human resource management expertise
3. It has experience in working on and/or assisting projects in a similar sector abroad with a relevant PPP project. This should be demonstrated by the number of successfully assisted similar PPP projects done abroad.
4. It has the best possible risk management plan to offer to the GCA and
5. Any other criteria set by the Minister. Example: experience in assisting PPP projects in a country with a similar economic condition to Indonesia or in Indonesia and so on.

The Ministry of Planning procures and delivers an international institution/ organization Preparation Agency Panel to the GCA in response to the GCA’s letter expressing the need for a Preparation Agency.

The validity period of the Preparation Agency Panel in the form of an international institution/ organization is for a maximum of 5 (five) years and can be evaluated every year.

A PPP node may involve or establish a work unit by involving other organizational unit/ work unit in the GCA based on needs.

The PPP node:

1. Assists the GCA in preparing the Pre-FS for the PPP
2. Assists the GCA in conducting supporting activities
3. Assists the GCA in coordinating with the Preparation Agency (if any)
4. Assists the GCA in conducting market sounding
5. Assists the GCA in conducting public consultation
6. Submits periodic reports to the GCA on implementation of the preparation stage
7. Collects documentation produced in the preparation stage
8. Formulates policies, synchronizes and coordinates in the preparation stage.

To perform the above functions, the PPP node may be assisted by:

1. Preparation Agency
2. Business Entity consultant
3. Individual consultant and/or
4. Academician.

At the regional level, the PPP node’s tasks may be carried out by regional government agencies responsible for regional development planning or regional development administration or other units/ organizations as needed.

At the Regional Government level. The PPP node’s tasks may be supervised by the internal government overseeing apparatus and/or the internal government auditor.

The head of the legal entity state university or the public broadcasting institution, as the receiving party of the delegation, can form its own PPP node.

The PPP Preparation Agency:

1. Assists the GCA in implementing the preparation stage
2. Assists the PPP node in performing its duties
3. Provides financing and assistance in preparation of the PPP to the transaction stage and in the transaction of the PPP.

The Preparation Agency may be entitled to reimbursement of costs by the GCA.

If the Preparation Agency takes form as an international institution/ organization, the GCA may utilize the PPP Preparation Agency Panel as an international institution/ organization that is established and designated by the Ministry of Planning.

The Process Advisor assists the GCA in carrying out activities in the preparation stage as follows:

1. Drafting of documents for the IBE procurement of PPP
2. Drafting of the PPP Agreement
3. Market Sounding and/or
4. Other activities related to IBE procurement and fulfillment of financing in the preparation stage.

During Pre-FS preparation, the GCA may seek input from companies and/or institutions engaged in financing provision.

A consultant - an expert consultant from a legal entity - is from a Business Entity or is an individual consultant - both with a nationally and/ or internationally recognized expert certification on PPP.
An academician may be appointed for similar roles as consultants.

The consultant is recognized in accordance with the provisions of the laws and regulations.

If appointed, a consultant or academician supports the PPP node in all its activities of the PPP preparation stage.