Determining contract conditions in a PPP project among deep uncertainty in future outturn travel demand

Kim, Kangsoo; Kim, Jin-Seog; Cho, Hyejin; Yook, Donghyung

doi:10.1007/s11116-022-10354-0

Cited by 2 publications

(1 citation statement)

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“…Stage 4: In this stage, three scenarios were made for the distribution of responsibilities in the PPP scheme. This scheme was carried out to attract private investors to be involved in financing the pioneer Kertalaya train by showing positive NPV and significant IRR (Kim et al, 2022). Three scenarios were chosen because they could be the basis for several other scenarios to be created by raising and lowering the percentage.…”

Section: J Omentioning

confidence: 99%

Public-private partnerships scheme of pioneer train case study in South Sumatera area

RACHMAN,

ARLIANSYAH,

KADARSA

2024

srees

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Pioneer trains in Indonesia have been fully funded by the government. The construction needs a lot of funding that would burden the state budget. One of the alternatives is the public-private partnership scheme. This study aims to analyze the most effective unbundling scenario for financing and maintaining the Indralaya-Tanjung Senai train. The life cycle costs and conducting sensitivity analysis according to applicable regulations. The scenarios are based on ticket price increases and government support for the operation and maintenance (O&M) for this pioneer train route, calculated net present value (NPV) and internal rate of return (IRR) value. Scenario 1 assumes that tickets do not receive subsidies; private companies are responsible for O&M costs. Scenario 2 assumes that ticket prices are set by private companies; the government is responsible for procurement and maintenance costs. Scenario 3 assumes that the government provides subsidies of IDR 10,000 per passenger as well as railway infrastructure; private companies bear the cost of procuring railbuses and operational expenses. Based on calculations with Scenario 1 NPV is IDR 0.73 billion; with Scenario 2 is IDR 4.64 billion and with Scenario 3 is IDR (–)1.34 billion. The analysis shows that increasing passenger fares according to price raises and inflation rates, and subsidies from governments for maintenance costs will make this railroad project financially feasible.

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Section: J Omentioning

confidence: 99%