Institutionalism and Financing-Scheme in The Development of Bandarudara Internasional Jawa Barat (BIJB) Kertajati
Institutionalism and Financing-Scheme in The Development of Bandarudara Internasional Jawa Barat (BIJB) Kertajati
Institutionalism and Financing-Scheme in The Development of Bandarudara Internasional Jawa Barat (BIJB) Kertajati
Abstract
Besides as National Strategic Project (PSN), Bandarudara International Jawa Barat (BIJB) is
also as one of the Mega Project in Indonesia. The aims of this research are to describe BIJB as
the mega project and the critical background why regional government became the airport
development initiator. This research also explanation the two aspects that differentiate BIJB and
other airports in Indonesia; in operational (formed institution and mechanism) and financial. The
research applies qualitative analysis by using secondary data as main data for analysis process.
BIJB can be categorized as mega project because it fulfills its criteria and description. Based on
historical BIJB development process, the initial initiation came from Chamber of Commerce and
Industry. PT BIJB as Regional-Owned Enterprises (BUMD) reflects historical institutionalism
approach in which the formation and change of institution occur through the political power
influence. Decentralization implementation in Indonesia has triggered partnership between PT
AP II and PT BIJB, thus new value has been created by transformation process.
1. INTRODUCTION
Bandara Internasional Jawa Barat (BIJB) Kertajati is a new airport and considered as the
second largest airport in Indonesia. The development of the airport was regulated by Regional
Regulation of West Java Province Number 13 Year 2010 of Establishment and Development of
West Java International Airport and Kertajati Aerocity. It was initiated by the West Java Province
Transportation Agency due to the consideration of the limitations of the Husein Sastranegara
Airport in its services because it is considered as a multi-functional airport (commercial airport
and military airport). The development of BIJB was prioritized since it is included in the National
Strategic Project, based on Presidential Regulation of The Republic of Indonesia Number 56 Year
2018 Concerning Second Amendment to Presidential Regulation Number 3 Year 2016
Concerning Acceleration of National Strategic Implementation.
Main factor underlying the government’s decision was the airport development was expected
to support the implementation of Cirebon Raya Metropolitan development concept as well as to
foster development redistribution in Bandung Raya Metropolitan and in metropolitan area of
Bogor, Depok, Bekasi, Karawang, Purwakarta (Bodebekarpur). Development site of BIJB is
1,800 ha and its surrounding area is planned to be developed as an aero city on 3,480 ha. The area
is considered of having high accessibility supported by road, toll road, and railway network from
Bandung, toll road access from Karawang Industrial Area and direct access to Cirebon Harbor.
Construction process of BIJB was started in year 2012 or ten years after its first initiation.
During the decade, central and local government had enacted some regulations as basic rules for
the development such as Regulation of Minister of Transportation Number 34 Year 2005 on
Determining of Airport Location in the Sub-District of Kertajati of Majalengka Regency, West
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Java Province; Regional Regulation of West Java Province Number 13 Year 2010 on
Development of West Java International Airport and Kertajati Aerocity; Regional Regulation of
West Java Province Number 22 Year 2010 on Regional Spatial Plan of West Java Year 2009-
2029; and Regional Regulation of Majalengka Regency Number 11 Year 2011 on Regional
Spatial Plan of Majalengka Regency Year 2011-2031. The project location of BIJB displayed on
Figure 1.
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2. RESEARCH METHOD
This research paper involves writing process using secondary data as main data for analysis
process such as articles, presentation materials, theses, master plans, reports, papers, journals, and
other publication obtained from internet, related institution, and library literature. The research
applies qualitative analysis by using case study, which is the development process of BIJB, to
elaborate the implementation of related institutional and financing theories. Qualitative analysis
method enables researcher to integrate the data and the information received into certain
interpretation (Hasan in Lestari, 2006). Thus, according to its purpose, the analysis on this paper
contains of explanation based on theories over some phenomena in BIJB development including
the local initiation of development, the dual-involvement both national and regional enterprises
in airport operations, and the multi-actors of airport financing including public and private
sources.
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No. Element Characteristic and Description BIJB Project
hinder economic growth instead
of advancing it.
5. Complexity Requires the management of
numerous, concurrent, and
complex activities
Contains a large element of
technological innovation
6. Impacts Impacts on the community,
environment, state budgets.
Socio-political impacts
7. Singularity Unique, no mega projects look like
another
8. Stakeholders and Attracts a high level of public
shareholders attention or political interests.
The nature and number of project
owners -
Conflicts, poor cooperation
between partners
9. Uncertainty Associated with high risk.
10. Implementation Requiring multidisciplinary inputs
owner from many organizations
A “virtual enterprise” for the
execution of the project.
11. Knowledge New subject of research
Source: Mega projects characteristics and descriptions, modified from Zidane, et.al. (2013)
In the case of development of BIJB, the regulation was made as there were riots between local
communities in the construction. But what the government forgets about making the regulation is
justice for the local community, the meant of justice here is that the government does not see how
the community as a partner in developing joint infrastructure between the local community and
the government. The research from Nok Elis (2016) has formulated the several factors that
causing the conflict including the absence of dissemination, there is no clear compensation price,
relocation and welfare guarantees, while the conflicts that occur between the people who reject
and support BIJB are caused by differences in the assessment of project development. It is clear
that the development of mega project will generate impact to the community that caused by some
different factors. Therefore, these factors can be identified so that the government are able to
know how to act in dealing with local communities who will be involved in the process of
infrastructure development in the location area
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To finalize the plan, the West Java Provincial Government carried out the next stages of
planning as stated in Government Regulation No. 70 of 2001 and Decree of the Minister of
Transportation No. KM 48 of 2002 concerning Airport, which is one of them is conducting a
feasibility study covering economic feasibility, technical feasibility, operational feasibility,
environmental feasibility, and feasibility in terms of air transportation business. The feasibility
study was carried out by observing at 421 points in West Java, and selected three alternative
locations for the International Airport, namely (1) Bandung Regency, in Ciparay and surrounding
areas, (2). Subang Regency, in Lanud Suryadarma (Kalijati) and its surroundings, and (3)
Majalengka Regency, in Lanud Sukani and surroundings. Then from the three locations,
Majalengka Regency was chosen, precisely in Kertajati Subdistrict for the construction location
of West Java International Airport (BIJB), because the results of the feasibility were considered
Kertajati District as the most suitable to be used as the location of the BIJB construction.
(Setyawati, 2013).
The West Java Provincial Government then submitted the results of the feasibility study of
the development to the Central Government in this case the Ministry of Transportation. Initially,
based on their study, the Ministry wanted to build an additional airport in Karawang, because of
their potential industry. The Ministry and Angkasa Pura (AP) II recommended making small-
sized airports for ATR type aircraft, but the Regional Government wanted a wider airport with a
runway length of 2,500 meters. (Putra, 2019). Eventually in 2005, Decree of the Minister of
Transportation Number 5 of 2005 was issued which stipulated the location of the construction of
the airport in Kertajati Majalengka District.
The development can be said to be a considerable development that will be carried out in
Majalengka district, especially in the Kertajati District area. The construction of airports covers 5
villages from 14 villages in Kertajati District, namely Kertajati, Bantarjati, Sukakerta, Kertasari
and Sukamulya villages. In the development of the airport, the government procures land by
releasing land from the community that the government paid for the compensation. The released
land is mostly agricultural land, resulting in the conversion of land from agriculture to non-
agriculture (Ismaniar, et.al, 2016). Thus, for the construction of the airport and the development
of the surrounding area, it resulted in land use change. In land economics studies, land use change
is focused on the process of diverting land use from agricultural or rural to non-agricultural or
urban uses (Pierce, 1981, in Adriansyah, 2013). In fact, the development has received a positive
response from major community. The research conducted by Setiawati (2013), explained that
63,9% of the community agrees that the development of the BIJB can improve the welfare of the
community, and can open up new jobs so that it can change the pattern of community livelihoods.
In the study of urban political economy, it is known an approach to see the development of
cities from a growth perspective, which is often referred to as a growth machine. According to
this approach, capitalist city development is always driven by growth engines that are formed
from a business alliance. This approach was introduced by Logan and Molotch (1987), who has
the thesis that business activism has always been the driving force of the formation and growth
of cities. The strength of business here is specifically 'rentiers' or groups of developers who benefit
from the development or investment process. While the word 'growth' here sometimes does not
always refer to overall economic growth in a city, but rather leads to property and physical
development. That way, the development of the city is seen as a result of encouragement from the
business activities carried out by the rentiers. The strength of the business that is the engine of
growth does not work alone. They usually form an alliance consisting of business groups
(rentiers), government and community groups that benefit. The government is involved in engine
growth alliances because those who are most concerned need growth for the city. The legitimacy
of growth is needed because it relates to regional income and political support. What happened to
the current BIJB development, such as confirming the above argument, thus in this case, the initial
initiation of development came from Chamber of Commerce and Industry. This is in line with
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Molotch theory that business activism has always been the driving force of the formation and
growth of cities.
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The growth of partnerships is defined as the transformation of central-local government and the
alteration of state-private relationships; thus, partnerships can be viewed whether it is the result
of the transformation or the cause of the change of relationships (McQuaid, 2000). In the case of
BIJB, in particular on the managerial institution, partnerships between PT AP II and PT BIJB is
formed due to the implementation of decentralization in Indonesia where local government are
allowed to become the initiator of development considering their needs. However, PT BIJB is
facing limitation regarding human resources and experience thus the needs for engaging
partnerships emerges.
During operational collaboration years in managing BIJB, government of West Java Province
expects that the partnerships will bring transformation in PT BIJB through transfer knowledge
and values from PT AP II as an experienced organization. At the end of the partnerships, PT BIJB
should be ready for running the operational of BIJB independently. Therefore, the process of
transformation is important as the result of partnerships in managing the airport. However,
collaboration may face difficulties since it stands on two institutions try to merge and work
together. Collaboration requires new relationships, procedures, and structures which often distinct
from of what the organizations have previously, so the transformation process may not easy, time
consuming, and expensive (Cheadle, Beery, Wagner, et. al, 1997; Fawcett et. al, 1997; Kreuter,
Lezin, and Young, 2000; Mitchell and Shortell, 2000; Wandersman, Goodman, and Buttefoss,
1997 in Lasker, Weiss, Miller, 2001). In BIJB, such issue has been minimized by dividing the
managerial organization for PT BIJB and PT AP II as in Figure 3. The organization scheme of
BIJB operational arranged to accommodate the partnerships between PT BIJB and PT AP II
where PT BIJB responsible for handling the operation of the airport commercial side while PT
AP II manage the operation of airport airside and maintenance illustrated in Figure 3. In order to
form a solid operational organization, coordination line between those two divisions has been
established.
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of the land side as well as the development and operation of the international airport including in
the management of financial development. The financing sources in Phase 1 consisted of two
sources, namely: 70% equity (Rp. 1.82 T) from the West Java Provincial Budget (60%), PT
Angkasa Pura II (20%), Private Equity Fund (18%), Cooperative of West Java Government
Officer and PT Jasa Sarana (2%), and 30% loan (Rp. 780 B) from syndication of Islamic Banking
(Bank Jabar Banten, Bank Jateng Syariah, Bank Sumut Syariah, Bank Sulbar Syariah, Bank
Kalbar Syariah, Bank Kalsel Syariah, and Bank Jambi Syariah).
In order to assist the Ministry of National Development Planning/Bappenas, the PINA Center
established in accordance with Presidential Regulation No. 58 of 2017 concerning the National
Strategic Program. The PINA Center for Private Investment has three main functions, as follows;
facilitation function (bring national strategic projects to the stage of financial close), pipelining
function (provides up-to-date information about project listings and project developments for
investors), and ecosystem function (creating a business ecosystem that facilitates investment in
Indonesia by providing policy recommendations and accelerating the implementation of creative
financing instruments). Regarding the construction of airports in Phase 2, PINA Center has signed
an Investment Agreement with Huatsing Holding Co.Ltd (China) as an investor that will provide
a total project value of Rp. 29 T, with an initial investment disbursement scheduled in March
2018. The financing scheme illustrated in Figure 4. There are several factors that have caused the
success of attracting investors of BIJB development, which are the deployment of BIJB as the 15
New Airport Project in the 2015-2019 RPJMN document, continued progress in the construction
of air-side infrastructure which is considered as opportunity value, and success in the synergy of
the central government and regional governments in accelerating the bureaucratic process.
4. CONCLUSIONS
Regarding the mega project’s characteristics and descriptions, the development of BIJB can
be categorized as mega project. The development of mega project will generate impact to the
community that caused by some different factors. Based on historical BIJB development process,
the initial initiation came from Chamber of Commerce and Industry. It indicates that business
activism has always been the driving force of the formation and growth of cities in accordance
with Molotch Theory. PT BIJB as a formal institution reflects the path dependency which is the
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key for historical institutionalism approach that describes how a set of policy applied for a
particular situation limited by past decisions, also the formal procedure embedded in the political
economy organizational structure. The collaboration between PT AP II and PT BIJB has denoted
the growth of partnerships due to the decentralization implementation in Indonesia. Through the
transformation process, new value has been formed in the institutions. The development of the
BIJB is the first airport built through the PINA scheme in Indonesia. According to the financing
scheme, there are several investors supporting the development. Several factors attracted investors
are the deployment as the new Airport Project in RPJMN document, opportunity value from
continued progress in the construction of air-side infrastructure, and achievement of the central
government and regional governments synergy in accelerating the bureaucratic process.
5. ACKNOWLEDGEMENT
We would like to thanks to Mr. Delik Hudalah, ST, MT, M.Sc., Ph.D. as our lecture who
taught us about Development Institution & Financing and his assistant, Ms. Mita, who provide us
some input in the preparation of this paper.
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