Indonesia to tender US$200 million airport PPP this month

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Indonesia to tender US$200 million airport PPP this month

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The Airport Director of Indonesia's Ministry of Transportation has publicly stated that the Ministry intends to launch a tender for the expansion and operation of Komodo Airport, located in Labuan Bajo, East Nusa Tenggara province, this month. The project is thought to require a total investment of IDR3 trillion (~US$200 million).

At a market sounding event last week, the Director disclosed that the expansion is envisaged as increasing the airport's capacity fourfold, from the current one million to four million passengers per year by 2044. The airport will also begin serving international destinations, such as Singapore, Kuala Lumpur (Malaysisa), Darwin and Perth (both Australia).

The Ministry intends to select a preferred bidder in November and sign the contract for the PPP project in December. The selected private party will be expected to achieve financial close in the first half of 2019, and then begin construction works and take over operations of the airport in the second half.

Construction will include extending the airport runway to 2,450m (currently 2,250m) to accommodate medium-haul Boeing 737-800 aircrafts, and expanding the apron to 11,100m2. The domestic terminal will be expanded and a new international terminal constructed. The private partner will also develop the parking areas and supporting facilities.

The cost of these works is thought to be IDR1.17 trillion (US$78.4 million). The Ministry intends for them to be completed by 2020. Operational expenditure is projected to cost IDR1.83 trillion (US$122.6 million).

The selected private partner will make return on investment from airport service user tariffs over a 25-year concession period or until 2044.

The development of the airport is intended to support the increase in tourism in the region. Labuan Bajo has been selected by the government as one of ten flagship destinations to be promoted as New Bali.

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