DETERMINATION OF FINANCIAL FEASIBILITY OF INDONESIA'S NEW CAPITAL ROAD CONSTRUCTION PROJECT USING SCENARIO ANALYSIS

Abstract

The plan to relocate the Indonesian capital from Jakarta to East Kalimantan Province in 2024 requires a significant amount of 442 trillion Rupiah to construct various new capital infrastructure such as roads for transportation. This study aims to analyze the funding scheme for new capital road construction projects in Indonesia using two alternative financing, namely the National Budget and Public-Private Partnership (PPP). This study used quantitative methods with a scenario analysis approach to determine the best funding scheme based on regional economic growth and financial viability. This study did not consider the project management factors during the construction period and the quality factors of the roads built during the concession period. The results showed that road construction projects in the new capital city can be implemented using two financing schemes. The National Budget financing scheme will increase the percentage of the budget deficit to GDP in the first five years of development. The financing scheme through PPP can help the government overcome the budget deficit but requires the resilience of the government's budget during the project concession period.