The regional government of Surabaya, Indonesia's second-largest city after the capital city of Jakarta, is planning to tender two separate infrastructure projects - open to both foreign and domestic investors - at the start of December 2013. The two projects involve the construction of the city's monorail, valued at IDR 6.42 trillion (USD $558.3 million), and the construction of a tramline, valued at IDR 2.41 trillion (USD $209.6 million). When finished, the two projects are expected to reduce traffic congestion in Surabaya, East Java's economic center.
Both projects fall under the government's public-private partnership (PPP) scheme. Through the Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI), the government promotes PPP projects in order to tackle the country's grave infrastructure problems. The lack of quality and quantity of infrastructure has been blocking Indonesia's economic growth from reaching its full potential. Being a highly industrialized city (with a population of over 5.6 million people including the metropolitan area), Surabaya has to cope with increasing traffic problems (similar to Jakarta), which raises logistics costs significantly. Through the monorail and tram projects, which will be built above each other, the local government aims to reduce the city's traffic problem. Construction of both projects, of which the feasibility study has already been conducted, will take 1.5 to two years.
The private sector will not need to finance the whole projects. Being PPP projects, the Indonesian government will contribute to the expenses. The mayor of Surabaya, Tri Rismaharini, said that the government will finance 42.7 percent of the monorail project (IDR 2.74 trillion/USD $238.3 million) and 31.5 percent of the tram project (IDR 766 billion/USD $66.6 million).
• Visit the official website of the Surabaya Monorail & Tram Project for project information