Minister of Finance Has Amended Regulation concerning Implementation Procedures on Utilization of State Owned Property for Infrastructure Procurement  : Opportunity for Foreign Investors.


Infrastructure development is one of priority programs of the current Indonesia government. Various policies also directed to support these programs. Based on The Global Competitiveness Report 2015-2016 issued by the World Economic ForumIndonesia is in ranked 62nd out of 140 countries in terms of infrastructure development.To support development of infrastructure which is included in the Ministry of Finance Strategic Plan of 2015-2019, the government has broaden up the opportunity in this sector for domestic and foreign participation.

To support this planthe Minister of Finance has issued new regulation No. 65/PMK.06/2016 on Amendment to Regulation of Minister of Finance

No.164/PMK.06/2014 concerning  Implementation Procedures  on  Utilization State Owned   Property for Infrastructure Procurement  ("PMK 65/2016") which amends Regulation of the Minister of Finance No. 164/ PMK.06 /2014  concerning  Implementation Procedures  on  Utilization of State Owned Property for Infrastructure Procurement.

State Owned Property (“SOP”) are all objects purchased or acquired at the expense of the State Budget (APBN) or any other means legitimately. Mechanism of SOP utilization provided by PMK65/2016 can be done in three scenarios. First, is by lease, which is the utilization of SOP by other parties for a certain period of time in return of payment in cash. Second, is by Utilization Cooperation/Kerja Sama Pemanfaatan (“KSP”) which is the utilization of SOP by other parties for a certain period of time to increase the Non-Tax State Revenue and the other financing sources. Third, is by Infrastructure Procurement Cooperation/Kerja Sama Penyediaan Infrastruktur (“KSPI”) which is the cooperation between the government and business entities to procure infrastructure with accordance to the prevailing laws. Article 14 of the PMK 65/2016 stipulates that the parties who are entitle to become a partner with the government on SOP utilization are (1) business or legal entities are allowed by the prevailing laws on SOP lease as a lessor, for SOP lease; (2) all parties are allowed by the prevailing laws on KSP, for KSP; and (3) State/Regional Owned Enterprise, private limited liability company, foreign legal entities, or cooperatives on KSPI. 

The additional of foreign legal entities as a potential partner for KSPI in PMK 65/2016 opens up the opportunity for SOP utilization by the foreign investorsThe appointment of KSPI partner based on PMK 65/2016 is done by tender or direct appointment of the proposed cooperation project in accordance with Presidential Regulation No. 38/2015 concerning Government Cooperation with Business Entities in the Procurement of Infrastructure  (“PP 38/2015”).

 As the result of SOP KSPI, there are several outputs that can be attained. One of them is the distribution of surplus profits (clawback). In its development, PMK 65/2016 stipulates that clawback can be removed by several requirements and the removal of clawback can only be done by Government Contracting Agency/Penanggung Jawab Proyek Kerjasama (“PJPK”). 

The additional requirement is PJPK is not required to propose the removal of clawback in terms of the KSPI is being requested by relevant [Ministry of Department] as the user of the SOP or PJPK as the responsible agency for SOP utilization to property manager until December 31st 2020 and the infrastructure projects must be listed in:

1.   The lists of Government – Business Entities Cooperation plans.

2.   Presidential Regulations concerning Acceleration of The Implementation Of Strategic National Projects.

3.   Committee for Acceleration of Priority Infrastructure Delivery (Komite Percepatan Penyediaan Infrastruktur Prioritas) Documents.

PJPK takes a full responsibility concerning the proposed clawback removal and it has to be stated in a written statement letter. 

The calculation of distribution of the clawback is amended by PMK 65/2016 by considering on several matters, such as:

a)   Infrastructure Characteristic

b)   Government Investment Rate;

c)   KSPI Partner Investment Rate;

d)   Risks Taken by The KSPI Partner;

e)   Government Support;

f)    Government Guarantee on  Cooperation Projects; and

g)   Profit That Has Been Agreed at The Beginning of The Cooperation Contract.

Letter (e) and (f) have been added to PMK 65/2016 in accordance with PP 38/2015, as the Government Support and Guarantees is newly stipulated in such regulation.  


The issuance of PMK 65/2016 is carried out by considering the synchronization of the related regulations, so that the regulation can be a contributing factor in the state development. Other than that, the role of SOP utilization is expected to boost economic growth as well as to rise public services in Indonesia.