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Implementation of Minimum Revenue Guarantee as an Instrument for Mitigating Income Risk of PPP Projects in the Toll Road Sector in Indonesia: International Benchmarking

Article View:
148
Topic:
Public Private Partnership (PPP)
Author:
IIGF Institute, University Network for Indonesia Infrastructure Development (UNIID),
Published on:
05 Desember 2022
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MRG is an instrument to attract private participation when faced with uncertain traffic volume for toll road projects. The application of the MRG instrument as part of the PPP contract is intended as an effort to de-risk revenue risk so that the private sector is interested in an infrastructure project. This instrument is used in toll road projects, but does not rule out the possibility of this instrument being applied to projects with other types of infrastructure as long as it collects payments from users. This study is intended to examine the application of MRG, in a narrow sense, which is appropriate for PPP projects in Indonesia where MRG here is intended to guarantee the income of the private sector in user pay PPP projects and is contingent.