Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network ...

144 Pages·2015·6.87 MB·English

Study on Economic Partnership Projects
in Developing Countries in FY2014

Study on Makassar Airport Upgrade Project through
the Indonesian Aviation Network Reconfiguration

Final Report

February 2015

Prepared for:
Ministry of Economy, Trade and Industry
Ernst & Young ShinNihon LLC
Japan External Trade Organization

Prepared by:
Mitsubishi Heavy Industries, Ltd.
Nippon Koei Co., Ltd.
Reproduction Prohibited
Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Preface

Preface

This report summarizes the results of the " Study on Economic Partnership Projects in Developing Countries in
FY2014" entrusted as a business project in FY2014 to Mitsubishi Heavy Industries, Ltd. and Nippon Koei Co.,
Ltd. by the Ministry of Economy, Trade and Industry.

This study entitled "Study on Makassar Airport Upgrade Project through the Indonesian Aviation Network
Reconfiguration" proposes the introduction of the BB/RH Network (Broad-Band/Regional-Hub Network) as a
newly conceived aviation network to meet the specific needs related to the worsening of the air traffic and airport
congestion in the Indonesian metropolitan area due to the increase in air traffic demand accompanying the
economic growth of Indonesia. Furthermore, this study targets Soekarno-Hatta Airport and Makassar Airport,
which is the gateway to eastern Indonesia, and has been implemented to examine the feasibility of constructing
the BB/RH Network and accomplishing the 71.4 billion yen project to upgrade Makassar Airport as a
regional-hub airport through the renovation, increase, and construction of facilities, which include airside facilities,
utility facilities, passenger and cargo terminals, and a system for connecting the terminals.

It is our hope that this report aids in the achieving of the above mentioned project and becomes a reference to the
relevant parties in Japan.

February 2015
Mitsubishi Heavy Industries, Ltd.
Nippon Koei Co., Ltd.
Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Map of the Project Site
Map of the Project Site

Location Map of Makassar Airport (1)
Makassar

Location Map of Makassar Airport (2)
Makassar Airport

Source: Created by the study team Via Google Maps
Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration List of Abbreviations

List of Abbreviations

Abbreviations Long Forms
APM Automated People Mover
AMDAL Analisa Mengenai Dampak Lingkungan
ANA All Nippon Airways Co., Ltd.
ANDAL Analisis Dampak Lingkugan Hidup
AP-I PT. Angkasa Pura I
AP-II PT. Angkasa Pura II
ASEAN Association of South-East Asian Nations
ATM Air Traffic Management
BOT Build Operate Transfer
Badan Perencanaan Pembanguan Nasional
BAPPENAS
(National Development Planning Agency)
BB/RH Broad-Band/Regional-Hub
BPS Badan Pusat Statistik
CDM Clean Development Mechanism
DGCA Directorate General Civil Aviation(Indonesia)
EIA Environmental Impact Assessment
EIRR Economic Internal Rate of Return
FIRR Financial Internal Rate of Return
F/S Feasibility Study
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
HIV Human Immunodeficiency Virus
IATA International Air Transport Association
ICAO International Civil Aviation Organization
IDR Indonesia Rupiah
IMB Izin Mendirikan Bangunan
IMF International Monetary Fund
JBIC Japan Bank for International Cooperation
JETRO Japan External Trade Organization
JFK John F. Kennedy
JICA Japan International Cooperation Agency
Japan Overseas Infrastructure Investment Corporation
JOIN
for Transport & Urban Development
LCC Low Cost Carriers
Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration List of Abbreviations
LTO Landing/Take-off
MD Merchandising
Ministry of State-Owned Enterprises
MOSE
(Indonesia)
MOT Ministry of Transportation(Indonesia)
Master Plan for Establishing Metropolitan
MPA Priority Area for Investment and Industry in
Jabodetabek Area
Master Plan for the Acceleration and Expansion of
MP3EI
Indonesia’s Ministry for Economic Development
NPV Net Present Value
PPP Public Private Partnership
RDTRK Rencana Detail Tata Ruang Kota
RENSTRA Rencana Strategis
RKL Rencana Pengelolaan Lingkungan Hidup
RPJM Rencana Pembangunan Jangka Menengah
RPL Rencana Pemantauan Lingkungan Hidup
RTBL Rencanan Tata. Bangunan dan Lingkungan
RTRK Rencanan Teknik Ruang. Kawasan
SPC Special Purpose company
SSC Shared & Service Center
STP Sewage Treatment Plant
ToR Terms of Reference
USD United States Dollar
VFR Visual Flight Rules
VIP Very Important Person
Weighted Equivalent Continuous Per Ceived Noise
WECPNL
Level
WHO World Health Organization
Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Table of Contents

TABLE OF CONTENTS
Preface
Map of the Project Site
List of Abbreviations
Table of Contents

Executive Summary
(1) Background and Necessity of the Project 0-1
(2) Basic Policy regarding Project Content Determination 0-2
(3) Project Overview 0-4
(4) Planned Project Schedule 0-10
(5) Feasibility of Implementation 0-12
(6) The Technical Advantage of Japanese Companies 0-13
(7) Maps indicating the project implementation site 0-14

Chapter 1 Overview of the Host Country and Sector
(1) Economic and Financial Status of Host Country 1-1
(2) Overview of the Targeted Sector for this Project 1-2
(3) Region Conditions 1-3

Chapter 2 Study Methodology
(1) Study Contents 2-1
(2) Research Methodology and Structure 2-2
(3) Research schedule 2-4

Chapter 3 Justification, Objectives and Technical Feasibility of the Project
(1) Background and Necessity of the Project 3-1
(2) Required Studies in the Content Determination of the Project 3-12
(3) Outline of Project Formulation 3-27

Chapter 4 Evaluation of Environmental and Social Impacts
(1) Present Environmental and Social Conditions 4-1
(2) Positive Environmental Impacts of the Projects 4-9
(3) Adverse Environmental and Social Impacts of the Projects 4-10
(4) Outlines of Relevant Environmental Laws, Rules, and Regulations in Indonesia 4-22
(5) Matters to be Completed by Related Authorities in Indonesia to Realize the Projects 4-25

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Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Table of Contents

Chapter 5 Financial and Economic Feasibility
(1) Project Cost 5-1
(2) Results of the Preliminary Financial and Economic Analyses 5-3

Chapter 6 Planned Project Schedule
(1) Planned Project Schedule 6-1
(2) Tasks related to the Planned Project Schedule 6-3
(3) Setting a Schedule related to Environmental Impact Issues 6-3

Chapter 7 Implementing Organization
(1) AP-I 7-1

Chapter 8 Technical Advantages of Japanese Companies
(1) Expected Roles of Participating Japanese Companies (financing, supply of machinery
and equipment, facility management, etc.) 8-1
(2) The Superiority of Japanese Companies when Implementing this Project
(from a Technical and Economic Viewpoint) 8-3
(3) Further Collaboration to apply Japanese Technologies 8-9

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Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Executive Summary
Executive Summary
(1) Background and Necessity of the Project
1) Background of the Project
The economic growth in Indonesia has created a growing problem of congestion at the Soekarno-Hatta
International Airport (hereafter referred to as Soekarno-Hatta Airport) due to an increase in air traffic demand.
The Indonesian government, as a method to alleviate air traffic and airport congestion in Jakarta, has planned
and promoted measures such as upgrading Soekarno-Hatta Airport and enhancing facilities at the Karawang
Airport, but these plans have not proceeded as planned due to land acquisition problems and other issues.
Currently, the Soekarno-Hatta Airport has been forced to operate at about three times its passenger terminal
capacity. These congestion problems related to the air routes and airports in the Jakarta metropolitan area are
not limited to the Jakarta metropolitan area only, but the growth in Indonesian air transport has, in turn,
created a situation for a potentially large bottleneck with regards to achieving sustained economic growth in
Indonesia.

This project proposes, as a method to alleviate air traffic and airport congestion in Jakarta, the transporting of
a large quantity of air passengers via a small number of airport slots by connecting large-sized jets (twin aisle
aircraft) to Soekarno-Hatta Airport and Sultan Hasanuddin International Airport (hereafter referred to as
Makassar Airport), which is the gateway airport for eastern Indonesia, while simultaneously positioning
Makassar Airport as a regional-hub airport so as to introduce a newly conceived aviation network
(Broad-Band/Regional-Hub Network; hereinafter referred to as the "BB/RH Network") that connects highly
convenient frequent operations for Makassar Airport and regional airports located in eastern Indonesia
through the use of small-sized jets (regional jets and turbo props). The introduction of this BB/RH Network is
expected to greatly reduce air traffic and airport congestion in Jakarta.

2) Necessity of the Project
Indonesia has up until now been able to achieve a large growth in air traffic demand, but faces the problem of
not having sufficient aviation infrastructure to support this growth. Indonesia currently has no prospects for
creating a fundamental solution to the air traffic and airport congestion in Jakarta that have become a
bottleneck for air transportation growth throughout Indonesia, while the country also faces the problem of
excessive airport capacity at Makassar Airport. The BB/RH Network proposed by this project would help
alleviate congestion of air routes and airports in the Jakarta metropolitan area via aviation network
reconfiguration, which can be implemented without overly relying on the need to develop the airports in the
Jakarta metropolitan area. In addition, the project facilitates the upgrade of Makassar Airport by allowing it to
function as a regional-hub airport, which increases the connectivity of the Jakarta metropolitan area with
airports in eastern Indonesia and makes it possible to meet the future demand of increased air traffic demand
in Indonesia.

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Study on Makassar Airport Upgrade Project
through the Indonesian Aviation Network Reconfiguration Executive Summary
(2) Basic Policy regarding Project Content Determination
1) Basic Policy of the Research
This study investigates the construction of the newly conceived BB/RH Network as a method to alleviate
congestion at Soekarno-Hatta Airport, and based on these results, investigates the scalability of Makassar
Airport to operate as a regional-hub airport. Based on the assumption of a future project, JICA overseas
investment and other financial means will be utilized with regards to Makassar Airport upgrade development,
and project formulation is an objective based on infrastructure development projects in anticipation of the use
of the superior technology and know-how of Japanese companies.

Makassar Airport, which is the subject of this study, commenced service of a new passenger terminal in 2008,
but due to strong demand, the terminal is already facing a situation in which it is exceeding its passenger
terminal capacity, and as a result, upgrade of Makassar Airport has become a pressing issue. PT. Angkasa Pura
I (hereafter referred to as AP-I), the company that operates Makassar Airport, is currently updating its master
plan that it drafted in 2009, and is planning an airport upgrade in consultation with outside consultants.

This study is being carried out independently of the master plan of AP-I with the intent of proposing to local
stakeholders an upgrade plan for Makassar Airport that incorporates the requirements of a regional-hub
airport needed in the realization of the BB/RH Network, and thereafter, an integration planning draft will be
created to propose the integration of the network with the master plan of AP-I.

2) Required Studies in the Content Determination of the Project
a) Demand Forecasting
Based on the results of consultation with local stakeholders and in consideration of factors that could
impact air traffic demand, an air traffic demand forecast for Makassar Airport has been established at
an air traffic demand forecast value of 21 million passengers a year (14.5 million domestic flight
passengers, 800 thousand international flight passengers, and 5.7 million transit passengers) for the
year 2024, which is the air traffic demand forecast value planned by the current master plan. This air
traffic demand forecast value has been used as the baseline of the airport upgrade project.

b) Makassar Airport Capacity Study Accompanying the Introduction of the BB/RH Network
In this project, a short haul domestic flight service via twin aisle aircraft, which have a long history of
utilization in Japan, will be adopted as a model under the assumption of frequent operations via twin
aisle aircraft between Soekarno-Hatta Airport and Makassar Airport. The results of passenger route
choice analysis and the initial aviation network analysis indicate that many airline passengers traveling
between Soekarno-Hatta Airport and airports in eastern Indonesia will choose a transit flight by way
of Makassar Airport. In such a case, since it is expected that the transit passengers using Makassar
Airport will greatly increase, this project has considered it appropriate to make classification of two
functions: (i) a function related to the BB/RH Network (BB/RH Function) that connects
Soekarno-Hatta Airport with airports in eastern Indonesia by way of Makassar Airport and (ii) an
existing function that connects Makassar Airport with the other main airports (including international
air routes).
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