THE APPLICATION OF SOUTH KOREA’S PUBLIC PRIVATE PARTNERHSIP PPP OF BUILD-TRANSFER-LEASE BTL METHOD IN INDONESIA:
THE OPPORTUNITY OF PRIVATE SECTOR INVOLVEMENT IN SOCIAL INFRASTRUCTURE DEVELOPMENT
1. Introduction
Republic of Korea herein after South Korea development has been achieving remarkable progress over the last half century.
In 1950s, South Korea was one of the poorest country in the VYSKHM[LYZ\ќLYLKMYVT2VYLHUHYZLJHUZLLMYVT;H-
ble 1, in only less than 50 years , South Korea has grown to be one of the biggest economy in the world. In 1960, GDP per
capita of South Korea was only US 155 and in 2013, it has grown to US 25,976 WDI, 2014.
Table 1. South Korea’s Gross Domestic Product 1960-2013
Source: World Development Indicator, 2014
This success story of development or so-called “Miracle in the HU9P]LY¹I`THU`2VYLHUZOHZHK]HUJLK:V\[O2VYLHPU
becoming rich, technologically advanced, mature democracy with an impressive record of innovation, economic reform, and
sound leadership.
The success story of South Korea is not formed easily, at the ILNPUUPUNVM[OL Z¶HM[LY[OLZPHUÄUHUJPHSJYPZPZPU
it found shortage of infrastructure facilities such as roads, rail- ways, seaports, airports, etc Kim, et.al, 2011. The government
HZHHYLKVMP[ZPUHIPSP[`[VÄUHUJL[OLI\PSKPUNVMPUMYHZ[Y\J- ture and recognized the potential of the private sector to work
with the public sector as an alternatie means to develop the infrastructure. South Korean government started to develop
the Public Private Partnership PPP Mechanism in 1990s. The PU[YVK\J[PVUVMHÄYZ[WYVNYHT[VWYVTV[LWYP]H[LZLJ[VYWHY[PJ-
ipation in infrastructure development started in 1994. PPP has ILLUZLLUHZLќLJ[P]LH`[VYLZVS]L[OLÄUHUJPHSJVUZ[YHPU[Z
faced by the government in developing infrastructure and has been treated as an important issues by the government.
The scope of PPP projects is expanding from existing one in economic infrastructure such as road and transportation facil-
ities to social infrastructure such as schools, hospital, cultural and environment facility. And the mechanism of PPP delivery
has expanded from BTO Build Transfer Operate for the eco- nomic infrastructure to BTL Build Transfer Lease for the social
infrastructure. The success story of South Korean’s PPP devel- opment especially in the BTL mechanism could be translated
as lesson learned for developing countries in order developing their PPP including in Indonesia.
2. Public Private Partnership in South Korea
