Link to teaching case:
Jakarta, Indonesia contains at least 9 million people and constitutes nearly one-fifth of Indonesia’s GDP. This metropolis is hamstrung by a sclerotic transportation system. It is estimated that the city lost approximately $1.3 billion as a result of poor transportation infrastructure in 2005, with this figure expected to increase five-fold by 2020. To address this problem, a complex web of public and private partners began work on a monorail system in 2003. PT Jakarta Monorail (PT JM), a concession company comprised of private and state-owned enterprises (SOEs), has managed the project since then. When the project was launched, PT JM included PT Adhi Karya, an SOE that constructed a series of monorail support pillars around the city from 2004 to 2006. This project constitutes a clear and illustrative example of a public-private partnership (PPP) in the developing world. In light of the complex web of stakeholders involved in this project, Indonesia’s difficult infrastructure business climate, the relatively poor institutional strength of Indonesia’s government, and the upcoming elections in 2014, the Jakarta monorail raises two questions: can this project succeed, and is it a viable solution to the city’s transportation woes?