INVESTMENT FEASIBILITY ANALYSIS AND RISK ON PUBLIC-PRIVATE PARTNERSHIP WATER RESOURCE INFRASTRUCTURE PROJECT CASE STUDY OF KARANGNONGKO IRRIGATION PROJECT, CENTRAL JAVA
Rahmat Hidayat- Nur Dhani Hendranastiti

Faculty of Economics and Business
University of Indonesia

Abstract

Modernization of Agriculture is an essential part of the production-side GDP target in structural transformation to boost prosperity, where it is necessary to increase water resource infrastructure. There has been a substantial decrease in agricultural production in Central Java. Karangnongko Irrigation Development will become a water resource infrastructure to increase agricultural production. The Public-Private Partnership Scheme will assist the government in financing the project through the planning, development and execution phases. The goal of this study is to evaluate the feasibility and risks of the Karangnongko Irrigation Development Project in Central Java as a recommendation to the Special Purpose Vehicle, specifically PT Waskita Karya (Persero) Tbk. The data to be analysed was collected from references, including Balai Besar Wilayah Sungai Bengawan Solo, PT. Waskita Karya (Persero) Tbk, and other relevant references. The methodology used in this study is a feasibility analysis of financial modeling using capital budgeting and risk analysis including scenario analysis and sensitivity analysis. The hypothesis of this study is that it is possible to undertake the Karangnongko Irrigation Development Project in terms that government support is accessible, such as the Viability Gap Fund and Availability Payment.

Keywords: Investment Feasibility Analysis, Risk Analysis, Capital Budgeting, Public-Private Partnership, Water Resource Infrastructure Project

Topic: Financial Management and Accounting