COOPERATION BETWEEN THE GOVERNMENT AND PRIVATE COMPANIES IN THE DEVELOPMENT AND OR MANAGEMENT OF
INFRASTRUCTURES
(Presidential Decree No. 7/1998, dated January 12, 1998) THE PRESIDENT OF THE REPUBLIC OF INDONESIA Considering :
a. that the development of infrasrtuctures is very important to support and realize smooth and continuous implementation of national development;
b. that in view of the limitation of state finance capability, and as part of efforts to continuously increase the implementation of the national development, steps to boost the involvement of private companies in the development and or management of infrastructures, in forms of close cooperation between the government and private companies, are required ;
c. that to provide the said participation with a clear foundation and to give direction so that the said cooperation continues to guarantee the realization of the public welfare, it is deemed necessary to stipulate provisions on the involvement of private companies in a Presidential Decree.
In view of :
1. Article 4 paragraph (1) and Article 33 paragraph (2) of the Constitution of 1945;
2. Presidential Decree No. 6/1995 on the Team for Evaluating the Procurement;
DECIDES : To stipulate :
THE PRESIDENTIAL DECREE ON COOPERATION BETWEEN THE GOVERNMENT AND PRIVATE COMPANIES IN THE DEVELOPMENT AND OR MANAGEMENT OF INFRASTRUCTURES
Article 1
Article 2
(1) The infrastructures as meant in Article 1 shall cover sectors of : 1. electric power generation, transmission and distribution; 2. natural gas transmission and distribution;
3. the processing and transport of oil and natural gas as well as the transport of their processed products;
4. the channeling, storage, supply, production, distribution and processing of clean water;
5. waste water and rubbish management;
6. the procurement and or operation of supporting facilities for providing services for the sea, air or railway transport of goods or passengers;
7. the tollroads and bridges, piers, ports of sea or river or lake, airfields and airports;
8. the procurement and operation of telecommunication facilities.
(2) The addition to or omission of fields and types of activities in the sectors as meant in paragraph (1) shall be stipulated by a Presidential Decree.
Article 3
The involvement of the private companies in the development and or management of infrastructures shall be implemented in forms of cooperation based on the following principles :
1. to observe the foundations, objectives, targets and concepts of the implementation of national development;
2. mutual need, mutual support and mutual benefit;
3. to increase the efficiency and quality of the development and or management of infrastructures;
4. to further boost economic growth;
5. to increase the quality of service and provide greater benefit for the public; 6. the process of participation is executed through open and transparent tenders,
so as to encourage the creation of a better investment environment;
Article 4
(1)By taking account of considerations of Ministers/Heads of Institutions responsible for infrastructural development, the State Minister of National Development Planning/Chairman of the National Development Planning Board shall stipulate plans along with priority rating of the infrastructures development projects whose development and or management can be carried out by involving private companies in the form of joint cooperation with the government.
(2)The implementation of the other infrastructural development projects excluded from the category as meant in paragraph (1) shall fully observe the provisions in Presidential Decree No. 16/1994 on the implementation of the budget of State Revenue and Expenditure along with its amendments.
Article 5
The plans of the projects of the development and or management of infrastructures as meant in Article 4 parapgraph (1) shall be filed by the Ministers/Heads of Institutions responsible for the projects to the State Minister of National Development Planning/Chairman of National Development Planning Board by enclosing :
1. pre-feasibility studies of the relevant projects;
2. evaluations of the feasibility of the projects an the involvement of private companies under the joint coopration covering aspects of socio-cultural, financial-economic, political and the state security and defense aspects:
3. plans and sources of the projects financing;
4. explanations on the scope of the projects, whether they are cover development and management or are merely limited to the management. along with reasons; 5. plans of tenders of the cooperation covering the timetable, process and methods
of evaluations;
6. other data stipulated further by the State Minister of National Development Planning/Chairman of National Development Planning Board.
Article 6
projects in the list of infrastructural development projects which can be undertaken in cooperation with private companies;
(2) The lis of infrastructural development projects as meant in paragraph (1) shall be declared open to the public and announced publicly.
Article 7
(1) The tenders for private companies to participate in the development and or management of the infrastructures shall be conducted openly by the Ministers/Heads of Instituions responsible for the relevant infrastructural development projects;
(2) By taking into account the characteristic, nature and degrees of the difficulties of the projects, in the framework of the tenders as meant in paragraph (1), the Minister/Heads of Institutions responsible for the projects shall be allowed to conduct pre-qualification of private companies, by considering, among others, the following aspects :
a. the experience in undertaking the similar projects, along with the references required;
b. the achievements and performance of the companies in handling the projects as meant in letter a
c. the capability of the private companies either in finance, expertise, equipment and others or in handling the projects under natural conditions or social, cultural, economic and other conditions surrounding them.
Article 8
(1) The forms and implementation of the tenders along with the methods of evaluation shall be in accordance with the provisions attached to this Presidential Decree.
(2) The evaluation of the tenders shall be executed by the Ministers/Heads of Institutions responsible for the projects.
Article 9
Economy, Finance and Development Supervision serving as the Chairman of the Team for evaluation of the procurement as meant in Presidential Decree No. 6/1995 on the Team for evaluation of the procurement;
(2) The Team for evaluation of the procurement shall conduct the evaluation and make decisions according to Presidential Decree No. 6/1995.
Article 10
(1)Contracts of the cooperation for the development and or management of the infrastructures shall be made by the Ministers/Heads of Institutions responsible for the projects by fully taking into account the principles as regulated in this Presidential Decree along with the attachment to it.
(2)The contracts of the cooperation shall at least cover the provisions on : a. the scope of projects;
b. the period of time;
c. tariffs of services, in the case of the cooperation relating to the management of infrastructures;
d. rights and obligations, including the risks that must be borne by parties; e. sanctions in the case of parties failing to fulfill the requirements of the
contracts;
f. the settlement of disputes;
g. the cancellation and termination of the contracts;
h. the reversion of the infrastructures and or thir management to the government or the State-Owned Companies/Provincial Administration-Owned Companies
(3)In connection with the use of the Intellectual Property Rights (HAKI), in the contracts, there must be clearly stated the guarantee from the relevant private companies stating that :
a. the HAKI used are entirely free from all kinds of legal violation;
b. the government will be exempted from all suits and indictments charged by whatever parties relating to the use of the HAKI in the development and or management of infrastructures;
c. while the settlement of the chases being underway because of suits or indictments as meant in letter b :
(1) the development and or management of infrastructures shall be allowed to be carried on;
Article 11
(1)In the case of the plans of the development and or management of the said infrastructures belonging to the projects of regional administrations :
a. the plans of the cooperation, tenders and evaluation shall follow the provisions in this Presidential Decree;
b. the contracts of the cooperation as meant in Article 10 shall be made by the relevant Governors/Heads of the First-Level Regions or Regents/Majors/Heads of the Second-Level Regions.
(2)In the case of the plans of the development and or management of the said infrastructures belonging to the projects of the State-Owned Companies/Provincial Administration-Owned Companies:
a. the plans of the cooperation, tenders and evaluation shall refer to the provisions in this Presidential Decree;
b. the contracts of the joint cooperation as meant in Article 10 shall be made by the relevant State-Owned Companies/Provincial Administration Owned Companies accoding to the provisions in their articles of association.
Article 12
In the case of the implementation of the cooperation of management relating to the tariffs of services, in accordance with the principles as meant in Article 3, the determination of the tariffs shall be stipulated by the govenrment according to the provisions in the laws in force.
Article 13
Article 14
Further provisions required to implement this Presidential Decree shall be stipulated by the State Minister of National Development Planning Board/Chairman of National Development Planning Board and the Coordinating Minister of Economy, Finance and Development Supervision serving as the Chairman of the Team for evaluating the procurement, according to their respective tasks.
Article 15
This Presidential Decree shall come into force as from the date of stipulation.
Stipulated in Jakarta on January 12, 1998
THE PRESIDENT OF THE REPUBLIC OF INDONESIA sgd
