A comparative review of quantitative VFM methodology for PPP infrastructure project in Indonesia and Australia

The Government of Indonesia (GoI) increasingly relies on the private sector financing to build and operate infrastructures through public private partnership (PPP) schemes. However, PPP does not automatically provide the solution for the financing scheme due to value for money (VFM) issues. The procurement authority must show whether a PPP proposal is the optimal solution that provides best VFM outcome. The paper presents a literature review of comparing quantitative VFM methodology for PPP infrastructure project procurement in Indonesia and Australia. Public Sector Comparator (PSC) is used to assess the potential project VFM quantitatively in Australia. In Indonesia, the PSC has not been applied, where the PPP procurement authority tends to utilize a common project evaluation method that ignores the issues of risk. Unlike the conventional price bid evaluation, the PSC enables a financial comparison including costs/gains and risks. Since the construction of PSC is primarily on risk management approach, it can facilitate risk negotiation processes between the involved parties. The study indicates that the quantitative VFM methodology of PSC is potentially applicable in Indonesia for water supply sector. Various supporting regulations are available that emphasize the importance of VFM and risk management in infrastructure investment. However, the study also reveals a number of challenges that need to be anticipated, such as the need of a more comprehensive PPP policy at both central and local government level, a more specific legal instrument for bidding evaluation method and the issue of institutional capacity development in PPP Units at the local level.

A Critical Perspective of the Indonesian Institutional Framework for PPP Toll Roads

The development of toll roads in Indonesia started around 1978. Initially, the management and development of toll roads sat directly under the Government of Indonesia (GoI) being undertaken through PT JasaMarga, a state owned enterprise specifically established to provide toll roads. Due to the slow growth and low capability of toll roads to fulfil infrastructure needs in the first ten years of operation (only 2.688kms/year), GoI changed its strategy in 1989 to one of using private sector participation for roads delivery through a Public Private Partnership (PPP) scheme. In this latter period, PT JasaMarga had two roles, both as regulator on behalf of the private sector as well as being the operator. However, from 1989 to 2004 the growth rate of toll roads actually decreased further to 2.300kms/year. Facing this challenge of low growth rate of toll roads, in 2004GoI changed the toll road management system and the role of regulator was returned to the Government through the establishment of the Toll Road Regulatory Agency (BPJT). GoI also amended the institutional framework to strengthen the toll road management system. Despite the introduction of this new institutional framework, the growth of toll roads still showed insignificant change. This problem in toll road development has generated an urgent need for research into this issue. The aim of the research is to understand the performance of the new institutional framework in enhancing PPP procured toll road development. The methodology of the research was to undertake a questionnaire survey distributed to private sector respondents involved in toll road development. The results of this study show that there are several problems inherent in the institutional framework, but the most significant problem comes from the uncertainty of the function of the strategic executive body in the land expropriation process.

Marker gene elimination from transgenic barley, using co-transformation with adjacent 'twin T-DNAs' on a standard Agrobacterium transformation vector

We have tested a methodology for the elimination of the selectable marker gene after Agrobacterium-mediated transformation of barley. This involves segregation of the selectable marker gene away from the gene of interest following co-transformation using a plasmid carrying two T-DNAs, which were located adjacent to each other with no intervening region. A standard binary transformation vector was modified by insertion of a small section composed of an additional left and right T-DNA border, so that the selectable marker gene and the site for insertion of the gene of interest (GOI) were each flanked by a left and right border. Using this vector three different GOIs were transformed into barley. Analysis of transgene inheritance was facilitated by a novel and rapid assay utilizing PCR amplification from macerated leaf tissue. Co-insertion was observed in two thirds of transformants, and among these approximately one quarter had transgene inserts which segregated in the next generation to yield selectable marker-free transgenic plants. Insertion of non-T-DNA plasmid sequences was observed in only one of fourteen SMF lines tested. This technique thus provides a workable system for generating transgenic barley free from selectable marker genes, thereby obviating public concerns regarding proliferation of these genes.

UNICEF, Jakarta, Indonesia : Review of Satap Schools

A. Background and context 1. Education, particularly basic education (grades1-9), has been considered critical to promoting national economic growth and social well being1. Three factors that con-tribute to the above are: (i) Education increases human capital inherent in a labor force and thus increases productivity. It also increases capacity for working with others and builds community consensus to support national development. (ii) Education can in-crease the innovative capacity of a community to support social and economic growth—use of new technologies, products and services to promote growth and wellbeing. (iii) Education can facilitate knowledge transfer needed to understand the social and eco-nomic innovations and new processes, practices and values. Cognizant of the above benefits of education, the Millennium Development Goals (MDG) and the Education for All (EFA) declarations advocating universal basic education were formulated and ratified by UN member countries. 2. Achieving universal primary education (grade 6) may not be sufficient to maxim-ize the above noted socio-economic and cultural benefits. There is general consensus that basic literacy and numeracy up to grade 9 are essential foundational blocks for any good education system to support national development. Basic Education provides an educational achievement threshold that ensures the learning is retained. To achieve this, the donor partner led interventions and the UN declarations such as the MDG goals have sought universal access to basic education (grades 1-9). As many countries progress towards achieving the universal access targets, recent research evidence suggests that we need more than just access to basic education to impact on the na-tional development. Measuring basic education completion cycle, gross enrolment rate (GER) and participation rate etc., has to now include a focus on quality and relevance of the education2. 3. While the above research finding is generally accepted by the Government of In-donesia (GoI), unlike many other developing countries, Indonesia is geographically and linguistically complex and has the fourth largest education sector in the world. It has over 3000 islands, 17,000 ethnic groups and it takes as long as 7 hours to travel from east to west of the country and has multiple time differences. The education system has six years of primary education (grades 1-6), 3 years of junior secondary education (grades 7-9) and three years of senior secondary education (grades 10-12). Therefore, applying the findings of the above cited research in a country like Indonesia is a chal-lenge. Nevertheless, since the adoption of the National Education Law (2003)3 the GoI has made significant progress in improving access to and quality of basic education (grades 1-9). The 2011/12 national education statistics show the primary education (grades 1-6) completion rate was 99.3%, the net enrolment rate (NER) was 95.4% and the GER was 115.4%. This is a significant achievement considering the complexities faced within Indonesia. This increase in the primary education sub-sector, however, has not flowed onto the Junior Secondary School (JSS) education. The transition from pri-mary to JSS is still short of the GoI targets. In 2012, there were 146,826 primary schools feeding into 33,668 junior secondary schools. The transition rate from primary to secondary in 2011/12 was 78%. When considering district or sub-district level data the transition in poor districts could be less than the aggregated national rate. Poverty and lack of parents’ education, confounded by opportunity cost, are major obstacles to transitioning to JSS4. 4. Table 1 presents a summary of GoI initiatives to accelerate the transition to JSS. GoI, with assistance from the donor community, has built 2465 new regular JSS, mak-ing the total number of regular JSS 33,668. In addition, 57,825 new classrooms have been added to existing regular JSS. Also, in rural and remote areas 4136 Satu-Atap5 (SATAP) schools were built to increase access to JSS. These SATAP schools are the focus of this study as they provide education opportunities to the most marginalized, ru-ral, remote children who otherwise would not have access to JSS and consequently not complete basic education.