PPP Infrastructure Projects Indonesia: Batam-Bintan Bridge
The Batam Indonesia Free Zone Authority (in Indonesian: Badan Pengusahaan Batam) is currently preparing the Batam-Bintan Bridge project. This could become the area's first public-private partnership (PPP) project. Batam and Bintan are two islands that are located in Indonesia's Riau Islands province, just south of Singapore. While Batam is a major industry hub, Bintan is being promoted as the new Bali.
Purnomo Andiantoro, spokesman for the Batam Indonesia Free Zone Authority, said the feasibility study and technical design have already been completed. The next step would be organizing the tender process. Considering Batam and Bintan involve two separate administrations, it is the provincial level (Governor) where the tender needs to be offered and submitted.
The Batam-Bintan bridge project will be offered to private investors using the build–operate–transfer (BOT) scheme, wherein the private investor receives a concession from the governor to finance, construct, and operate the bridge. Eventually, ownership of the project will be transferred to the local government.
The Batam Indonesia Free Zone Authority estimates the seven kilometer-long bridge will require IDR 3 trillion (approx. USD $226 million) worth of investment. The bridge is part of Indonesian President Joko Widodo's target to enhance connectivity throughout Indonesia.
Investors from China and South Korea have already expressed their interest in the project and are studying the economic viability of the project. Chinese state investment firm China Power Investment Corp has already sent in a proposal. Of essential importance for investors is the study of traffic that will use the bridge. Currently, sea transportation (ferries) between both islands is "lively". However, Andiantoro added that it remains somewhat difficult to predict demand from (land) passengers for the bridge.
The Batam-Bintan bridge project involves three separate packages: (1) from Batam to Tanjung Sauh island, (2) Tanjung Sauh island to Bau island, and (3) from Bau island to Bintan.
The plan to build a bridge between both islands was once initiated by the Batam Industrial Development Authority back in 2005. However, when a South Korean investor backed away from it the whole project was off the table.
A connection between Batam and Bintan (by bridge) is expected to cause the so-called multiplier effect for the region, which includes a free-trade zone that attracts significant investment in the industrial sector (especially from Singapore). The bridge would also provide a boost to tourism development on Bintan.
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