<![CDATA[Electricity supply limitation and government budget constraint, State needs to encourage private involvement for supporting infrastructure development. Private participation through Independent Power Producer (IPP) had been implemented since 1990s, and to reduce business’s risks government has transformed IPP scheme into Public Private Partnership (PPP) since 2010. Unfortunately, the power plant project (2.000 MW) as part of PPP’s project has not been built since it first launched in 2011. This study based on field research in 2012 and conducted in two provinces, DKI Jakarta and Central Java. Primary and secondary data were used to analyse implementation of PPP in electricity sector, particularly identifying obstacles, problems, implementation issues, and policy recommendation. Primary data collected through in-depth interview with key institutions and Focus Group Discussion (FGD) which represented stakeholders. Using development economics, public economics and institutional economics approaches, the result explained through descriptive qualitative analysis. The finding shows that PPP implementation has remained stagnant caused by non-technical factors such as complexity of procedure and bureaucracy in Central and Local Government, society refusal of the project, land speculator, conflict politic of power between two local governments, and limitation of AMDAL process. Meanwhile for non-technical constraints are the widening gap on understanding PPP concept among stakeholders, financing issue between government budget source and PPP scheme, political economy in regions, and difficulty to maintain private’s commitment. The policy options to boost PPP implementation can be done through setting up particular team involving academics sector for land accusation; creating land- value-index for infrastructure; strengthening capacity of PPP centre and stakeholders; harmonizing regulation; and encouraging to prepare PPP document professionally.]]>
