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Italy’s Economic Diplomacy, 6 August: latest news from the world

Indonesia: the Government’s priority is to expand airport infrastructure

The Government of Indonesia aims to expand its airport infrastructure with the aim of assuring the population growing access to airline services and, more in general, enhance their connectivity. In fact, Indonesia is considered done of the world’s most attractive emerging markets in terms of air traffic. Its aviation sector is the second-fastest growing industry after that of China in terms of aircraft orders and commercial value. Moreover, according to IATA (International Air Transport Association), the Archipelago’s air transport market is forecast to become the world’s fourth-largest over the next decade while today it is the tenth-largest.  

The Ministry of Transport (MoT) had already planned the construction of 15 new airports in its Medium-Term National Development Plan (RPJMN) 2015-2019. With the adoption of the RPJMN 2020-2024 Plan, the Ministry of Transport now intends to accelerate the process, by planning the construction of another 12 airports throughout the Country over the next five years. This project meets three basic needs: expand the connectivity and the accessibility of the most remote and peripheral areas of Indonesia; promote economic growth at State and regional level; foster the development of tourism in possible new destinations, in particular the so-called ”10 new Bali”.

Besides the construction of new infrastructure, the Government is also continuing the process of maintaining, consolidating and developing existing facilities, intervening on several hundred airports, mainly in border areas, in those most exposed to the risk of natural disasters and in the most isolated regions. The ambitious programme, managed by the Ministry of Transport with the support of airport operators AP I and AP II, will need massive investments that cannot be entirely guaranteed by the State. For this reason, the Ministry is trying to involve the private sector through Public-private Partnerships (PPP). In operating terms, the format applied would be the so-called “BOT” (Build-Operate-Transfer).

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