1. Toward a new multi-partner Indonesian
infrastructure institute
Institutions and better
infrastructure
Dr Colin Duffield

2. Agenda
1.
2.
3.
4.
5.
Objective
Involvement in projects and Indonesia
Global infrastructure outcomes
Model of successes and reality
Best practice thinking – the depth of the business proposition
for investment
6. Concluding remarks

3. Objectives
We seek to answer the following high level questions:
1. Can an independent infrastructure institute assist in overcoming Indonesia’s
infrastructure issues?
2. Is now the time to establish such an institute?
3. What tasks would such an institute undertaken and what authority would it
have?

4. What sort of infrastructure are we
talking about?
Shaping Infrastructure
Following Infrastructure
-
Major roads
Ports
Freight routes
Planning and land use plans, including
industrial hubs
- Energy grid
- Choice of strategic infrastructure
technology, e.g. telecommunications
-
Characterised as complex and requires
integration with other services.
Best optimised by responsible
Departments and delivery Agencies
Arterial roads
Hospitals
Schools
etc

5. International approaches
Country approach
Leadership and
thought leadership
Underpinning driver
Comments
Master plan
Requires strong
leadership and
authority
Involvement from all
key stakeholders to
identify and optimise
investments
Value for money
investment in a
timely manner
Requires complex
process and
procedures that
facilitate innovation
Company initiated –
typically focused only
at project level
Profit
Potential of
monopolistic
outcomes due to IP
protection
Control – Centralised Central Agency –
planning
input
China from specialists
as required
EUStrategic direction
(e.g. decrees, policy,
frameworks,
guidance
Market driven
AUS
US

6. Conceptual models for infrastructure planning
Concept,
engagement
Country
input
Working
parties
Research
actions
Local decision
(including
expert advice)
EU
decisions
Local
legislation
Governmental
decisions
Advisory (nonpolitical)
Departmental
Agency
…….
Funding
policy

7. Indonesian process

8. Project level complexity

9. Complexity of finance

10. NZ approach
A reference/advisory group provides technical and
other advice to the project team as required.
“The Quality Team”
Members of the reference/advisory group have
specific expertise that may not be required on a fulltime basis and is called on as needed.
• Management of quality plan
• Setting the quality standards
• Audit of the deliverables as required

11. NZ: Note programme group and advisory group

12. Appraisal and Evaluation in Central Government (UK)
• The purpose of the UK Treasury Green Book is to ensure that no
policy, programme or project is adopted
• without first having the answer to these questions:
• ❑ Are there better ways to achieve this objective?
• ❑ Are there better uses for these resources?

13. Infrastructure Australia
Infrastructure Australia advises governments, investors and infrastructure
owners on a wide range of issues. These include:
• Australia's current and future infrastructure needs mechanisms for financing
infrastructure investments, and policy, pricing and regulation and their
impacts on investment and on the efficiency of the delivery, operation and
use of national infrastructure networks.
• Infrastructure Australia's focus is on assisting Australian governments to
develop a strategic blueprint for unlocking infrastructure bottlenecks and to
modernise the nation's economic infrastructure.
• Infrastructure Australia reports regularly to the Council of Australian
Governments through the Federal Minister for Infrastructure and Transport.

14. The General
Australian PPP
process

16. Investment Lifecycle
Direction
• Service strategy
• Asset strategy
Concept & feasibility
• Strategy assessment
• Options analysis
• Problem definition
• Solution definition
• Benefit definition
Validation & planning
• Business case
• Procurement strategy
Implementation
• Planning & scheduling
• Delivery
• Contract Management
• Asset reporting
Operation
• Functional operation
• Maintenance
• Disposal
• Benefit reports

17. Better business case structures

18. A business case provides the necessary support on which to make decisions for the
approval and or funding (p17 IEPG). The decisions need to be informed by:
 The government policy and priority context in which the investment proposal is
made;
 the financial and socio-economic impacts of the proposal on the State;
 the degree of confidence that the Government can have in the proposal being
successfully implemented to achieve its objectives within the stated budget,
timeline, management structure, financial agreements etc; and
 the relative “value for money” that the proposal has against other proposals being
made to Government.

19. Lifecycle Stages
•
•
•
•
•
•
•
•
Need
Strategic assessment
Options
Business case
Acquisition/Procurement
Delivery
Operation/maintain
Disposal/extension/upgrade

20. Starting point: Identification

21. Analysis framework

22. Adaption of systems thinking – relates to authority

24. Thoughts on best practice
• No one system is used universally
• Independent input and critique is a common thread
• Whole of life thinking is important and this is consistently
outworked via comprehensive strategic thinking that is developed
through a ‘business case’
• The style of system – eg master plan, strategic direction, market
lead, informs the authority and reporting arrangements for
independent input

25. Questions
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