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Sustainable Urban Development in Jabodetabek
Minister of National Development Planning/Head of the National Development Planning Agency
The 6th International Conference of Jabodetabek Study Forum: “Urban-rural and Upland-Coastal Connectivity in Managing Sustainable Urbanizing World”
Bogor, 29th August 2018
REPUBLIK INDONESIA
Urbanization in Indonesia
2
REPUBLIK INDONESIA
Indonesia’s Population Projection 2015-2045
2015 2045*
255.1 millionTotal Population
318.9 million
2.28Total Fertility Rate
2.1
70.8 years
Life Expectancy
75.5 years
49.2%Dependency Ratio
53.5%
65.76%Labor Participation
53,1% Urban Population 67,1%
Source: *Indonesia Population Projection Revision
2015-2045 (latest estimates)
• In 2045, Indonesia will experience a substantial population growth- an increase of 63.4 million or
24.7 percent. About 67.1 percent of population will live in urban areas.
• Numbers of working age population will continue to increase, but the share of younger groups
(aged 15-29) will decline. It is likely as the result of the extension of average years of schooling.
• The labor force is projected to grow over the next 30 years at an annual rate of 1.84 percent. By 2045, the labor force is projected to reach 206 million.
80%
Projection 2030 2045
Labor Force
(15+ years)
177.9
million
206.4
million
Labor Force
Participation
Rate77% 80%
Workers170.4
million
199.2
million15.000 10.000 5.000 0 5.000 10.000 15.000
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
Thousand people
2045
Laki-laki Perempuan Bekerja Sedang Sekolah LainnyaOtherMale Female Working Schooling
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12
4
Advanced Urbanization in Java
1
2
SUMATERA51,697,225 PEOPLE39.1% URBAN / 60.9%RURAL
KALIMANTAN14,105,730 PEOPLE42.2% URBAN / 57.8% RURAL
3 JAVA138,311,286 PEOPLE58.6% URBAN / 41.1%RURAL
SULAWESI17,663,879 PEOPLE33.6% URBAN / 66.4%RURAL
BALI AND NUSATENGGARA13,327,280 PEOPLE39.2% URBAN / 60.8%RURAL
MALUKU AND PAPUA11,972,106 PEOPLE29.4% URBAN / 70.6% RURAL
4
5
6
Tier 1 –Metropolitan>1,000,000
Tier 2 – LargeCity500,000 – 1,000,000
Tier 3 –Medium City100,000 – 500,000
Tier 4 –Small City<100,000
6
SURABAYA
3JAKARTA
5
Source: World Bank, 2015
IslandPopulation (000) Proportion to national (%) Population density (/km2)
2010 2045 2010 2045 2010 2045
Sumatera 50.860 72.407 21% 23% 106 151Jawa – Bali 140.941 176.177 59% 55% 1.042 1.303Nusa Tenggara 9.222 13.701 4% 4% 137 204Kalimantan 13.851 22.159 6% 7% 25 41Sulawesi 17.437 23.967 7% 8% 92 127Maluku – Papua 6.207 10.277 3% 3% 13 21
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Spreading Growth through Urban Development
= Main roads
= Rails
= National Activity Centers
= Regional Activity Centers
= Aerotropolis
= Port cities
Legend:
= PLTN
= Airports
= Palapa Ring Lane
= Dam
Mebidangro
Patungrayaagung
Jabodetabekjur
Bandung Basin
Kedungsepur
Gerbangkertosusilo
Sarbagita
Banjarbakula
Mamminasata
Manado-
Minahasa-Bitung
Ambon
Sorong
Jayapura
= KSN
= PKN
Mebidangro = Medan-Binjai-Deli Serdang-Karo
Patungrayaagung = Palembang-Betung-Indralaya-
Kayuagung
Jabodetabekjur = Jakarta-Bogor-Depok-Tangerang-Bekasi-
Cianjur
Kedungsepur = Kendal-Demak-Ungaran-Salatiga-Semarang-
Purwodadi
Gerbangkertosusilo = Gresik-Bangkalan-Mojokerto-
Surabaya-Sidoarjo-Lamongan
Sarbagita = Denpasar-Badung-Gianyar-Tabanan
Banjarbakula = Banjarmasin-Banjarbaru-Banjar-
Barito Kuala-Tanah Laut
Mamminasata = Makassar-Maros-Sungguminasa-
Takalar
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Urbanization Without Growth
• 1 % increased in Indonesia’s urbanization contributes to 4% increased in GDP per capita
• The better leveraged is urbanization, the more it will benefit national economic growth
• But if badly managed, there is a risk of “urbanization without growth”
y = 0.0482x + 5.8855
R² = 0.5674
4
5
6
7
8
9
10
11
12
0 80 100
Log G
DP
Per C
apita
(2010 C
onst
antU
SD)
20 40 60
Urban population share (%)
Indonesia
Log of GDP per capita –v– urbanization, 2015
Source: World Bank, 2017 (based on WDI data 2016)
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Urban Condition in Jabodetabek
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Transportation
Source: BPS DKI Jakarta , 2016, Kemenhub 2016, JICA, 2014
• POPULATION
• ECONOMIC
(GRDP)
• TRANSPORT
(MODE SHARE)
• MOTORIZATION
• MOBILITY
(SPEED)
10.1 Million
1,924 Trillion
Car 38%
Motorbike 49%
Public 13%
3.4 M car
13.9 M
motorbike
5-10 km/hour
Jakarta 5% of national population
Jabodetabek 12% of national population
14% of National GDP
Jabodetabek of 20% National GDP
The share of public transport continues to decrease
(40% 2002, 21% 2011, 13% 2015)
An average of 450 thousand new cars and
motorbikes / year (DKI Jakarta, 2016)
2013-2016 DKI's roads didn't increase: 6,995 km
Parameter 2015
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Housing Condition
Indicator National Jakarta Province
West Java Province
BantenProvince
2016 2017 2016 2017 2016 2017 2016 2017
1. Physical condition(Inadequate Roof/wall/floor condition)
21.57 25.64 57.60 50.76 24.79 31.91 30.70 40.71
2. Living area(living area per capita < 7,2 m2)
9.30 8.45 29.43 24.67 9.43 9.67 9.27 6.49
3. Access to Drinking Water 38.88 40.93 34.49 39.13 48.44 51.49 55.34 58.56
4. Access to Sanitation 23.63 23.09 9.58 9.63 32.66 31.80 23.26 23.28
Source: Susenas
Sub-standard Housing (%)
• Percentage of sub-standard housing in 3 provinces higher
than national percentage.
• In 2017, the highest percentage of sub-standard housing
is 74.55% (Banten Province)
“Housing that does not fulfill one of the standard condition of physical, living area, access to drinking water, and access to sanitation indicator”
• Nationally, the indicator that has the highest sub-standard condition is access to drinking water.
• The indicator that has the highest sub-standard condition in Jakarta Province is physical
condition.
• The indicator that has the highest sub-standard condition in West Java and Banten Province is
access to drinking water.
2014 2015 2016 2017
National 60,47 65,72 61,43 62,23
Jakarta Province 67,90 75,35 76,28 74,33
West Java Province 64,65 73,97 72,12 73,97
Banten Province 59,53 75,48 73,63 74,55
55
60
65
70
75
80
Sub
-sta
nd
ard
ho
usi
ng
(%)
Source: Susenas
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Drinking Water Access and Wastewater Management
Pipeline Network Water Supply
IDLE CAPACITY
8.233 L/sec
Access to Improved Drinking
Water (in %)
Source : Susenas BPS (2017)Source : SIMSPAM, PU (2017)
78,063 78,023
0
10
20
30
40
50
60
70
80
90
100
2016 2017
19.15%
Pipeline Network Access
Jabodetabek
Source : BPPSPAM(2017)
Water Supply
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
InstalledCapacity (L/s)
Productioncapacity (L/s)
Distributioncapacity (L/s)
Sold WaterCapacity (L/s)
Idle Capacity(L/s)
79.15%
3.57% Practicing Open Defecation
8.92% Unimproved Access
Sanitation AccessSource: Susenas BPS (2017)
Improved Access
12.9% Safely Managed
(Part of Improved Access)
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Land and Water
Land Limitation04
Flood01Raw Water Limitation02
River and Jakarta Bay Pollution03
Causes: Catchment Area degradation, Land Subsidence,
Sea Level Rises, poor conditions of urban drainage
In 2050, it is predicted that 35.61% of Jakarta's land will
be submerged in sea water
River water from upstream to downstream is
in poor condition, both physical quality,
chemical quality and biological quality
Non-optimal urban waste management
system causes wastewater entering the river
flow
Raw water needs in 2017 reached 28 m3/sec,
but can only be fulfilled by 18 m3/sec.
The projection of Jakarta City's raw water
supply needs in 2030 is 41.6 m3/sec.
Jakarta needs new space or land for
settlements, offices, industry, agriculture,
infrastructure and other business activities.
The Jakarta Bay coastline has changed due to the reclamation process
Land Subsidence in residential areas is greater than the port area
Jakarta Coast Line in
1740
Source : Diolah dari Heri Andreas (Geodesi ITB) dan Perpustakaan Nasional
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Land Use Change in Jakarta
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Source : Kementerian ATR, 2016
Bulit-up area
Waterbody
Forest
Non-rice field
vegetation
Rice field
1972 1983 1990 1995
2000 2005 2010 2012
Development of built-up area (besides happening in DKI Jakarta) occurs in the Bodetabekpunjur area,
especially in areas bordering DKI Jakarta
These developments indicate the growth of urban areas in the Jabodetabekpunjur region which are
functionally related to one another.
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JAKARTA AREA BANDUNG AREA SEMARANG AREA LUSI AREA
Cikarang area
Cirebon, Brebes, Pekalongan, Pemalang area
BLANAKAN-PONDOK BALI AREA
PEMALANG AREA
Demak area
Land Subsidence in North Coast Java
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Sustainable DevelopmentBanten-DKI Jakarta-West Java
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Issues in Capital City
WATER
RESILIENCE
GARBAGE AND
SANITATION
FLOODS
TRANSPORT
INFRASTRUCTURE
LAND SCARCITY
Low quality of existing on-site treatment system (septic tank)
Low progress of Waste Water Treatment Plant (WWTP) construction due to limited space and
house connection problem. Hence, the progress is not able to catch up the escalation of
pollution at riverbank and also at Jakarta Bay
WWTP does not treat industrial and solid waste at riverbank, only domestic waste
Obstructed drainage, river shallowing and flow blockage at the estuary cause Jakarta become
susceptible to urban flood
Land subsidence at the coast leads to rob flood. In addition, sea level rise magnifies the impact
Missing link which connects Tangerang and Bekasi burdens the capital particularly
northern route Jabodetabek (over capacity of existing road)
High dwelling time of Tj. Priok Port (3-4 days)
Low space of Tj. Priok Port Container Terminal
Soekarno-Hatta Airport is the busiest airport in ASEAN with1,200 airplane/day (Singapore
1,000/day). High usage of runway decrease the aviation safety
Jabodetabekpunjur has been developing rapidly and surpassed prediction. Therefore, the
demand of space is significant.
Agricultural land has turned into commercial district, industrial district, housing and
infrastructures without proper attention to food security
Current bulk water supply is 18 m3/s while the demand is 28 m3/s (deficit 10 m3s)
The demand is predicted to rise up to 38 m3/s in 2030
In bigger scale, bulk water demand of Megapolitan Banten-DKI Jakarta-West Java is
predicted at 103 m3/s
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Regional Development Vision of Jakarta Bay
1
2
3
Belt Road Initiative
Indian
Ocean
Kra Canal
Main Line of Sea Toll Road
(Tol Laut)
Indonesian Archilepelagic Sea Lanes/
Alur Laut Kepulauan Indonesia (ALKI)
Proposed Route
JAKARTA BECOME GLOBAL LOGISTIC HUB by
developing Tj. Priok Port to depth of -20 m and
utilizing Sunda Strait potential on ALKI 1
JAKARTA BECOME THE CENTER OF GROWTH
OF NATIONAL ECONOMY by providing space
of 8000 Ha at the north of Jakarta
SUNDA STRAIT has Traffic Separation Scheme (TSS) to manage
shipping line. The depth and width of the strait is 100 m and 24 km
respectively
INDONESIA is located between TPP (Trans-Pacific Partnership) and
BRI (Belt Road Initiative)
Member countries of TPP
JAKARTA BECOME WATER SELF-CONTAINED-CITY
by constructing offshore DAM which holds
2.44 billion m3 of bulk water at the north of Jakarta
JAKARTA BECOME GREEN CITY by using renewable energy
(wind, solar and water). The renewable energy infrastructure
will be built on the offshore DAM and on offshore sea wall
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Sustainable Development Megapolitan Banten-DKI Jakarta-West Java
WATER RESILIENCE
GARBAGE AND
SANITATION
LAND SCARCITY
1
2
3
4
5
Indonesia has issued
Presidential Decree No.
59/2017 regarding achieving
Sustainable Development
Goals (SDGs)
169 SDGs Indicators have
been integrated into
National Medium Term
Development Plan (RPJMN)
2020-2024
The solution of problems in
Megapolitan Banten-DKI
Jakarta-West Java has to be
harmonized with the
implementation of SDGs
The issues are closely
related to SDGs number 6,
9, 11, 13, 14 and 15
SUSTAINABLE DEVELOPMENT GOALS
FLOODS
TRANSPORT
INFRASTRUCTURE
ISSUES :
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FLOOD SOLUTION WITH
POLDER SYSTEM
Offshore Dam Concept at Jakarta Bay
SOLUTION FOR WATER
SUPPLY AND WATER QUALITY
Offshore DAM provides
reservoir of bulk water up to
1.6 billion m3
Downstream waste water
treatment by means of trash
rack, sediment trap, artificial
wetland, and WWTP
construction on new land
Provide space of 400 Ha for
final/temporary processing
place to treat waste (cut
tipping fee)
Offshore Sea Wall
construction (68,81 km) at
depth of 0 to -20 m
Transversal Waterway
construction which acts as
long storage with capacity of
±56.7 million m3
Retention lake with area of
±8,300 Ha and volume of
±831.5 million m3
The required pump capacity
is 190 m3/s`
PUBLIC INFRASTRUCTURE
DEVELOPMENT
Utilize new land for runway
or additional airport terminal
Support Tj. Priok Port
development to become
deep sea port (draft -20 m)
without dredging to
accommodate mother vessel
Land transport development
(toll and rail road) on
offshore sea wall
SELF-SUSTAINED ASSET
(RENEWABLE ENERGY)
Installation of Solar cell on
the surface of retention lake
Installation of medium wind
turbine along the offshore
sea wall
Micro-Hydro Power plant
operation by means of
elevation difference as the
consequence of lowering
water surface on offshore
DAM
CONSERVATION AND EXTENSION
OF VEGETATION ECOSYSTEM
Conservation of existing
mangrove (± 376 Ha)
New mangrove along offshore
sea wall and canal (± 352 Ha)
Fisherman still has
direct access to open
sea through the canal
National Fisheries
Center (NFC)
development (200 Ha)
FISHERMAN AND MARITIME
INDUSTRY DEVELOPMENT
Acquire new land (±8,000 ha)
as the result of lowering
water surface
TOTAL COST OF ALL OFFSHORE
DAM COMPONENT:
± RP 170 TRILLION ± RP 2.1
MILLION/m2
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Concept Development
OFFSHORE DAM CONCEPT
UPDATED MASTERPLAN NCICD 2016
2018
Updated Master Plan NCICD 2016
1 2
D
M
O
2016Phase O (2030-2040) consists of
several component:
a) Construction of Offshore Sea
Wall
b) Integrated treatment at
downstream, midstream,
and upstream
c) Construction of Offshore
DAM
d) Offshore pump installation
e) Construction of toll road on
offshore sea wall
f) Deep sea port development
Offshore DAM Concept
Combination of Phase M (extended folder) and Phase O (offshore sea dike) from
Updated Master Plan 2016
Regional development basis
Covers Megapolitan Banten – DKI Jakarta – Jawa Barat
Phase M (2019-2025) consists of several
component:
a) Integration of 17 islands
b) Extended Polder System
c) Integrated treatment at downstream,
midstream, and upstream
d) Construction of Offshore Sea Wall and River
Dike
e) Build retention lake between 17 islands and
mainland
f) Continuation of bulk water supply and clean
water network distribution improvement
g) Construction of toll road on offshore sea wall
h) Continuation of water quality and sanitation
program
i) Mangrove extension
j) Coastal revitalization with relocation of
affected locals
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Stages of Construction
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Preparation
Pre-Feasibility Study
Feasibility Study
Detail Engineering
Design (DED) by using
non-conventional dike
to reduce cost and the
technology is eco-
friendly
Public Private
Partnership (PPP)
preparation
Transversal
Waterway
Construction of
transversal waterway
by using non-
conventional dike
Transversal waterway
acts as coastal dike
Increase the river dike
elevation to contain
the maximum flood
discharge
Offshore DAM
Compartment
Construction of sea
wall per segment by
considering:
Segment for clean
water
Fisherman’s access
to open sea and
fishing port
Tj. Priok Port
Development
Toll and rail road
alignment
Supporting
Facilities
Water gate installation as
part of flood mitigation
system
Utilization of canal for
sorting out subsea
pipeline and cable at
Jakarta bay
Implementation of
downstream waste water
treatment
Installation of renewable
energy facilities
(solar, wind and water)
Land
Expansion
Water surface lowering
at offshore DAM up to
-5m resulting to new
land along the coast
Application of urban
inspiring design on the
new land to attract
investor
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1 2 3 4 5
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Offshore Dam as Role Model for Developmentof Northern Coast of Java
Development of Northern Java Coast:
New land : ± 176,071 Ha
Area of Offshore DAM : ± 652,686 Ha
Water Volume Offshore DAM : ± 48.96 Billion m3
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Discussion and Progress
MEETING AND DISCUSSION WITH MINISTRIES
MINISTRY OF TRANSPORTATION
MINISTRY OF ENVIRONMENT
AND FORESTRY
MINISTRY OF AGRARIAN AFFAIRS
AND SPATIAL PLANNING
MINISTRY OF MARINE
AFFAIRS AND FISHERIES
COORDINATING MINISTRY OF
ECONOMIC AFFAIRS
PELINDO
INSTITUT TEKNOLOGI
BANDUNG
UNIVERSITAS
INDONESIA
INSITUT PERTANIAN
BOGOR
MINISTRY OF PUBLIC WORKS
AND HOUSING
MEETING AND DISCUSSION WITH UNIVERSITIES
MINISTERIAL DECREE :
ESTABLISHMENT OF
INTEGRATED PLANNING TEAM
OF NORTHERN COAST OF JAVA
DEVELOPMENT
1. Team comprises of officials
and experts related to
coastal development
2. Establishment of expert
panel which consists of
experts, practitioner and
academics from 5
universities
3. Expert panel assess 7 aspect:
Technical
Social
Environment
Technology
Financial
Spatial planning
Law
UNIVERSITAS
GAJAH MADA
UNIVERSITAS
HASANUDDIN
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Sustainable Urban Planning and Development
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SDGs:
Universal; Integration; No One Left Behind
NUA:
Equality – Leave No One Behind: Sustainable and
Inclusive; Environmental Sustainability
Integrating SDGs and NUA in Indonesia
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Vision for Urban Development in Indonesia
Liveable Competitive Green and Resilient
Local urban identity
Instruments: Long term vision for each city
Integrated planning-budgeting-financing system
Institutional arrangement for multidistrict urban areas
Transparent, accountable and responsive governance
Information technology for efficient urban management
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Elements for Integrated Development
How will we improve statutory plans and their implementation for integrated planning?
What tangible benefits and impacts will we see?
Planning
Source: World Bank, 2017
CapitalInvestment & Financial Plan
Development Facilitation & Financing
Urban Management Monev & Control
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Defining a Metropolitan Statistical Area...Functional Urban Areas: a City and its Commuting Zone
Definition of a cityIdentification of a commuting zone
Source: Eurostat, accessed 2018
High-density cell (>1,500 inhabitants
per km²)
Urban centre(duster of high-
density cells with population >50,000
inhabitants per km²)
Commune> 50% of its
population in an urban centre
City Commuting area Commuting area after including enclaves and
dropping exclaves
City
Commune
Commune with > 15% of its employed population commuting to the city
Added enclave
Removed exclave
Larger urban zone
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THANK YOU
28
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APPENDIX
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Components of Sustainable Urban Development and Management
05
06 01
02
0304
Urban and Urban Areas Development
Infrastructurea. Drinking waterb. Sanitationc. Housingd. Electricitye. Telecommunicationf. Roads
Economya. Tradingb. Opportunities for investmentc. Funding resourcesd. Goods and people movement
(logistics)
Environment
a. Open Public Spacesb. Waste management strategies
c. Clean energy
Governance
a. Governmentb. Government control
c. Effective public policies
Sociala. Sport facilitiesb. Educationc. Place of worshipd. Healthcare
National Urban System (SPN)
a. City’s Functionb. Interrelation between cities
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31
Solutions for Infrastructure Development
FLOOD
PROTECTION
INCLUDING ROB
CLEAN
WATER AND
RAW/BULK
WATER
SUPPLY
DOMESTIC
WASTEWATER
TREATMENT
COUNTERMEASURE
LAND SUBSIDENCE
1
2
3
4
Dike or embankment construction on river and shore as short term solution
Pumping station construction and installation
Improvement on the upstream area
Completion of spatial document (DKI Jakarta)
Offshore dike construction as long term solution
Rain water harvesting and recycle water as alternative resources for clean water
Construction of raw/bulk water treatment installation
Provision of clean water and raw/bulk water transmission network and distribution
Construction of centralized, communal, and community based sanitation system
Development of monitoring method on land subsidence data and data sharing
mechanism including installation of monitoring tools (extensometer)
Formulation of mitigation actions against land subsidence accompanied with
application of those mitigation actions on the selected/prioritized location
Formulation of adaptation actions against land subsidence
Formulation of implementation and planning control framework on land
subsidence including action plan
1
2
3
4
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Elements for Integrated Development
How will we improve statutory plans and their implementation for integrated planning?
What tangible benefits and impacts will we see?
Planning
Source: World Bank, 2017
Capital Investment & Financial Plan
Development Facilitation &
Financing
Urban Management Monev & Control
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AVOID Reducing the need to travel and avoid unnecessary trip
SHIFT Promote Shifting to Public Transport with Inclusive
Design
IMPROVEIncreasing the energy efficiency of vehicles, fuels and transport
operations
Avoid Shift Improve Strategy:Urban Transportation Development
• Travel management with urban planning and mixed use concept
• Development of Transit Oriented Development (TOD)
• Benefit: travel time reduction, air quality improvement, health, safety, and more
• Increase the use of Public Transport, Pedestrian, and Bicycles
• Development of Public Transport• Benefit: congestion reduction and
equitable access, pollution and safety reduction.
• Energy-saving technologies (fuel)
• Intelligent Transportation Systems (ITS) Development
• Benefit: Increase the use of renewable energy, productivity, and affordability.
“Development of urban transportation is needed to be integrated with the support of mass public transportation and Transit Oriented Development (TOD) facility as well as technology improvement.”
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CURRENT CONDITION
• Urban sprawling condition where the lower middle class is increasingly
marginalized due to the inability to access the occupancy caused by the high
price of land in the middle of the city.
• The lower middle classes are increasingly bear the burden of the cost of
transportation resulting from staying away from the center of activity in the
middle of the city.
City Center
Urban Sprawling
IDEAL CONDITION
• Vertical consolidation needs to be encouraged because it is very efficient in the
utilization of land that remains relatively fixed with the need for increasing
occupancy.
• The development should be allocated to the locations that are well connected
with public transport and economic activity centers.
Stations /Public Transportation Terminals
Public Tranportation
Adjustment of Basic Building Coefficient (KDB) and Building
Floor Coefficient (KLB)
City Center
Concept of Vertical Development with TOD
Transit Oriented Development (TOD) to Support Liveable Cities
Transportation and spatial planning are interrelated with each other. Urban sprawling needs to be stopped with the development of integrated Transit Oriented Development (TOD) and mass urban transport infrastructure
Source : Kementerian Koordinator Bidang Ekonomi, 2017
Disadvantage:Inefficient travel;Negative impact on environmental carrying capacity (water recipe, energy)
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Best Practice: Synergy of Planning and Funding of Transit Oriented Development and Mass Transportation in Hong Kong
RAILWAY HONGKONG COMPANY REVENUES
66% of Hong Kong Railway's revenues are
derived from the development and rental
of residential and commercial properties
as part of TOD
HONGKONG MRT DEVELOPMENT SCHEME
• The business model used is the construction of Railway Plus Property (R + P) with revenue share from the property for the development of the rail network.
Source: World Bank, 2015
Share Revenue from MRT Hongkong
The Development of TOD + MRT Facilities in Hong Kong Since 1980
35
13%
34%
38%
15%
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Local Governments with immediate needs for infrastructure investments, and have expressed their interest in issuing Regional Bonds (8/93)
DKI JakartaSemarang
Surabaya
BandungYogyakarta
Prov.
Makassar
Balikpapan
Kalimantan
Province
Source: World Bank, 2017 36
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Investment needs exceeds financing capacity
Investment need gap
Borrowing capacity
Revenue (excl. Salary, earmarked and contingency fund)Surabaya
2,954
Makasar860
Balikpapan339
Banjarmasin651
Semarang1,262
Pontianak361
Denpasar606
Sidoarjo875Gresik
642
Surakarta279
Bogor521
Bangka449
Batam825
Lombok Barat339
Source: World Bank, 2015; Directorate General Fiscal Balance Ministry of Finance, 2015 37
Investment needs, borrowing capacity, and total revenue for 14 qualified subnational governments, USD Millions
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Urban Financing
Local
Government
Budget
Non-government
investment (PPP,
KPBU, PINA,
BUMN, etc)
Long term
municipal bonds
Transfer from
Central
Government
Bank and
institutional
loans Zakat
Projects for sustainable cities
Cap
ital in
vestm
en
t pla
nn
ing
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REPUBLIK INDONESIA
Financing Urban Infrastructure
Different sources of financing to answer Local Government’s different infrastructure investment needs
Addressed by creative financing such as
Regional Infrastructure Development Fund
(RIDF), KPBU, PINA, etc
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REPUBLIK INDONESIA
Why RIDF?
RIDFDemand-based, increase access to financing, rigorous appraisal, thorough monitoring including safeguards standards to ensure low default & good quality infrastructures
Before RIDFTop-down approach, limited LG access to financing, inadequate project preparation & appraisal, weak loan monitoring led to defaults & distressed projects
Eligible sectors Eligible sub-projects (examples)
Water &sanitation
WTP, pumpingstat
Environmental infrastructure
Sanitary landfill, waste processing fac
Low income housing and slum upgrading
Public housing, integrated urban upgrading
Productive and logistic infrastructure
Road construction, flyovers
Social infrastructure
School rehab
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REPUBLIK INDONESIA
Issues in Urban Financing in Tackling Inadequate Urban Infrastructure
Cities are not self reliant –
revenue is not enough to
cover expenses
Absence of financial
investment plans
Lack of financial viability –
weak creditworthiness
Low recognition for private
investment’s to support the
mission toward liveable
cities’ – high recognition
for competitiveness
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