PATTERNS OF COOPERATION BETWEEN THE GOVERNMENT AND BUSINESS ENTITIES AT THE REGENCY/CITY LEVEL: A LEGAL AND POLICY STUDY IN INDONESIA
DOI:
https://doi.org/10.18623/rvd.v23.n4.5058Keywords:
Government and Business Cooperation, Regional Infrastructure, PPP, Contract Law, Public PolicyAbstract
Infrastructure development at the district/city levels faces challenges due to fiscal constraints and increasing demand for public services. The Government-Business Cooperation Scheme (KPBU) has emerged as an innovative financing alternative that enables risk-sharing, mobilises private capital, and increases project management efficiency. This article examines the pattern of cooperation between the government and business entities from a legal and policy perspective in Indonesia, by reviewing the evolution of regulations, from the national framework, such as Presidential Regulation No. 38 of 2015, to local government regulations under Law No. 23 of 2014. The analysis highlights aspects of value for money, risk allocation, the certainty of return on investment, and the government's position as a legal subject in public-private contracts. In addition, theoretical implications are discussed through classical and contemporary contract law approaches and a utilitarian perspective in assessing the policy's benefits. The findings show that the success of PPPs in the regions is largely determined by legal certainty, institutional capacity, procurement transparency, and harmonisation of regional development planning. With accountable governance oriented towards the public interest, PPPs have the potential to become a strategic instrument for accelerating sustainable infrastructure development and improving community welfare.
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