Infrastructure inadequacy is widely recognised as one of the main hindrance for further advancement of Indonesian economy. New development has been lacking for the past decade and maintaining existing facilities is no less a problem due to low government funding capacity. Public private partnership (PPP) schemes have been tapped to ease the problem since early 2000s. The progress, however, is unsatisfactory as the number of projects funded under such schemes to date is still very low. This paper argues that the problem is mainly due to drawbacks in the existing institution governing PPP schemes in Indonesia. It evaluates the existing institution, at national and subnational levels, for PPP in Indonesia and proposed viable policy recommendations to redesign the existing PPP’s institution to make it work better.

*) Also published in Hefrizal Handa et al, 2012, IRSA Book Series

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