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PT Angkasa Pura II (Persero), a state-owned enterprise responsible for the management of airports in western Indonesia, has launched a selection process for a strategic partner to co-manage and co-invest in Kualanamu International Airport (KNO), located in Deli Serdang, North Sumatra.

The selected strategic partner will support a planned expansion of airport operations and traffic, and contribute equity to fund further development. The expansion will include air side and land side facilities and existing infrastructure, such as the terminal, apron, runway and hangar.

Interested parties are invited to submit letters of interest before 15 November 2018. For more information, see the Business Opportunity.

KNO is the fourth largest commercial airport in Indonesia with total capacity of 9 million passengers per year. However, it is believed to have the potential to become the second international and domestic airport hub for Indonesia.

The strategic partnership will support this transformation, capitalising on the economic potential of the Sumatra region, KNO's advantageous location - the airport is well connected to Medan city - and the Government of Indonesia's commitment to developing infrastructure. 

Transport in North Sumatra is a priority area within the government's infrastructure plan - KNO is one of three airports in the region identified for development, estimated to require investment of US$796 million.

This project is one of several being offered by the Indonesian government to investors at the 2018 IMF-World Bank Group Annual Meetings in Bali, alongside three urban light rail schemes, another airport extensions and one seaport. The total estimated investments of the projects range between US$335 and 670 million.

The proposed structure of the strategic partnerships, such as distribution of risk, is unclear. However, Indonesia's Transport Minister publicly stated last month that the government would cooperate with investors interested in operating assets following completion, suggesting that the projects could be modelled as PPPs.