Problematizing the Indonesian government’s facilitation of PPPs through the Project Development Facilities: Lessons from East Java

This research paper looks at the effectiveness of Project Development Facilities as an intermediary in achieving two main goals; creating a successful PPP project and at the same time, building the capacity of the local government as the project owner. The effectiveness of Project Development Facilities is being questioned since the appointment of state-owned enterprises tends to raise power implications between the national and the local government. The Umbulan Water Supply project in East Java will be used as the case study to analyze the implementation of the Project Development Facilities in practice. Using qualitative interviews as the main data collection method, this research paper tries to argue that the conceptual framework of the intermediary is contradictory. On one side, the intermediary is effective in creating a successful PPP project, however, it also prevents the local government from having their own capacity for running a PPP project.