Model Influence Risk and Incentive Variables on the Feasibility of Public-Private Partnership (PPP) in Highway Infrastructure Projects
International Journal of Civil Engineering and Technology 10(8), 2019, pp. 112-123.
12 Pages Posted: 18 Sep 2019
Date Written: August 2019
To achieve the level of infrastructure performance as a mid-income country, the Indonesian government must be able to provide adequate infrastructure budget so that the lack of infrastructure financing was filled with the Public-Private Partnership (PPP) scheme and Government Enterprise Cooperation. The infrastructure projects involving the role of the private sector is the highway project. Highway projects must have an economic feasibility level that can provide security guarantees for investment for investors from constraints and risks in planning, implementing, operating and overall investment. The government made a paradigm change through Presidential Regulation No. 38 of 2015 providing business certainty, licensing and incentives to improve the economic feasibility of the projects offered. The research built three variable relationships, namely risk variables, system incentive variables and economic feasibility variables along with their indicators using the Structural Equation Model based on Component-Smart PLS. The analysis aims to get the value of the influence of 15 indicators of the incentive system variable on 19 indicators of the risk variable and economic feasibility performance including Present Net Value (NPV), Benefit Cost Ratio (BCR), Payback Period (PP), and Internal Rate of Return (IRR). The results show that the implications of implementing the incentive system have a positive effect on the risk variables and economic feasibility variables, this will be an alternative for highway stakeholders and investors in considering their investments in highway PPP projects because the effect of risk can be minimized by implementing government incentive system.
Keywords: Highway, Public-Private Partnership, Risk, Incentive System, Economic Feasibility
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