The Government Collaborates with Rp21 Trillion Satellite Internet Project

03 MAY 2019

Jakarta, The government signed a guarantee agreement, and regress the project of government cooperation with business entities (PPP) in the Multifunctional Satellite Project (SMF). The total value of the project reaches IDR 21 trillion.

The value of the project includes the activities of design, construction, launch, operation, until maintenance during the 15-year concession period.

The plan, the satellite named Satellite Republic of Indonesia (SATRIA) will begin construction in late 2019 by satellite manufacturer from France, Thales Alenia Space.

Coordinating Minister for Economic Affairs Darmin Nasution revealed that the SMF project is one of the National Strategic Projects listed in Presidential Regulation Number 56 of 2018.

This project is in line with the government's efforts to strengthen the national infrastructure foundation in order to boost people's economic activities.

"I am sure that building infrastructure means investing in the next few years that will support the creation of better economic activities in our community," he said while attending the SMF PPP Signing event at the Jakarta National Museum on Friday (3/5).

With high-speed internet technology that can reach up to the rural level, Darmin hopes the community can feel the benefits. For example, in terms of cutting the distribution chain, farmers can use internet-based applications that can connect farmers and consumers.

"What is expensive for our farmers is their bargaining position is not there," Darmin said.

At the same place, Minister of Communication and Information Rudiantara revealed that the SMF project was one of the efforts of the Ministry of Communication and Information (Kemkominfo) in resolving issues of connectivity to government public services in all regions of Indonesia, especially in 3T (lagging, front and outermost) and border areas .

"Indonesia's geographical condition as an archipelagic country which is quite challenging in providing terrestrial networks is the main reason so that satellite technology is the right solution in alleviating the gap in broadband internet access," he said.

Unlike previous satellite projects, SATRIA is dedicated to providing high-speed internet services.

The government targets SATRIA to be completed and ready to be launched in the second quarter of 2022. After reaching orbit 146 BT, SATRIA which uses Ka-band frequency with Very High Throughput Satellite (VHTS) technology with 150Gbps frequency capacity is expected to operate in early 2023.

The coverage of SATRIA services will reach almost 150 thousand public service points, which consist of educational facilities, health facilities, defense and security administration, and regional government throughout the territory of Indonesia.

The impact of the SATRIA project on the economy will also be felt through increasing online links and communication networks significantly for the UKM Transactional Center, e-Office processes, reducing operational costs, and accelerating and improving services.

In addition, satellites will also be used to support government programs in providing financial services, market information, business, and other activities that will significantly encourage regional and national economies.

In the education sector, SATRIA will support the provision of fast internet services in 93,400 elementary, junior high, high school, vocational, madrasa and Islamic schools.

In the health sector, SATRIA serves 3,700 health centers, hospitals and other health services so that it has fast internet services that aim to facilitate health service connectivity, especially in the 3T area.

Then, in the security sector, this satellite will help the TNI and POLRI in facilitating fast internet services at 3,900 points to meet the administrative needs of reliable defense and security.

In the local government sector, satellites will support 47,900 village / sub-district and sub-district offices in Indonesia to be connected online so that electronic-based government services (e-government) can be implemented quickly, efficiently and effectively.

Finally, in the financial sector, satellites will be used to support the acceleration of digitalization of ultra micro financing (UMi), in order to accelerate the realization of inclusive finance throughout Indonesia.

Regarding financing, the SATRIA project is the fourth project of the Ministry of Communication and Information that has successfully used the Business Entity Cooperation (PPP) scheme. With this scheme, the project does not burden the state budget directly.

Rudiantara said that the total value of the project reached IDR 21 trillion, which included design, construction, launch, operation, and maintenance activities during the 15-year concession period.

In the project procurement auction, the consortium consisting of PT Pintar Nusantara Sejahtera, PT Pasifik Satelit Nusantara, PT Dian Semesta Sentosa, and PT Nusantara Satelit Sejahtera have been named as winners. The four have formed PT Satelit Nusantara Tiga on April 26, 2019 ago. Meanwhile, the Ministry of Communication and Information acts as the Person in Charge of the Cooperation Project (PJPK).

PII Guarantees Project Investment Risk

Furthermore, the state-owned companies under the Ministry of Finance of the Indonesian Infrastructure Guarantee Corporation (PII) acted as guarantor of this project.

President Director of PII Armand Hermawan the return on investment in this project is done through a availability payment scheme with a 15-year concession period.

In this scheme, the IIGF guarantees that the government will pay installments to contractors periodically after the contractor meets agreed service standards. The amount of AP paid is around Rp140 billion per month after the satellite operates.

"If the AP fails to pay, we guarantee. This means that the private sector will get payment on time. We also guarantee that the government will later settle in the middle of the road," Armand said separately.