Improving Feasibility of Mega Infrastructure Project Development Using Value Engineering Method, MA Berawi, B Susantono, T Suyono Dikun

Tags: Jakarta, Soekarno, airport, airport train, SPRING 2014, Dukuh Atas, construction cost, economic development, Public Railway, commercial area, project, private investors, Mega Infrastructure, Underground infrastructure, feasibility study, Halim airport, public transportation, questionnaire surveys, infrastructure development, Tommy Ilyas, International Airport, Perdana Miraj, Haa International Airport Railway Link, Value Engineering, PT Sarana Multi Infrastructure, infrastructure project, Teuku Yuri Zagloel, Bambang Susantono, Railway transportation, Soekarno Haa International Airport Railway Links, Berawi, International, Indonesia Infrastructure Guarantee Fund, focus group discussions, transportation sector, Herawati Zetha, Mega Infrastructure Project, project development, Suyono Dikun, Airport Railway, PT Jasa Marga, The questionnaires, maintenance cost, Investment Coordinating Board, PT Railink, PT Wijaya Karya, questionnaires, Ministry of Transportation, flood mitigation, private companies, development, Ministry of Public Works, flood control, Mohammed Ali Berawi, Abdur Rohim Boy Berawi, Mohammed A. Berawi, tunnel development, respondents, SMART Tunnel, questionnaire survey, PT Kereta Api Indonesia, Acceleration of Infrastructure Indonesia, Innovative ideas
Content: The Journal of SAVE International® VOL. 37 | NO. 1 | SPRING 2014 © 2014 SAVE International® IN THIS ISSUE: 1 Editor's Message: Achieving Efficiency by Unlocking Innovation in System Design and Engineering Mohammed A. Berawi, Ph.D. 3 Value Engineering Advisory System in Construction Projects (VEAS) I. Albalushi, F. Usman, and A. Alnuaimi 21 Business Sustenance through Open Innovation at Tata Motors Limited G. V. Srirama Kumar 32 Improving Feasibility of Mega Infrastructure project development Using Value Engineering Method Mohammed Ali Berawi, Bambang Susantono, Suyono Dikun, Tommy Ilyas, Herawati Zetha, Abdur Rohim Boy Berawi, Teuku Yuri Zagloel, Perdana Miraj, and Jade Sjafrecia Petroceany 32 Do Your VEERP? Arnecia Williams, AVS 47 Numerical Value Analysis and Evaluaton Techniques of the Esteem Function Kayo Uchida
Improving Feasibility of Mega Infrastructure Project Development Using Value Engineering Method
Mohammed Ali Berawi, Bambang Susantono, Suyono Dikun, Tommy Ilyas, Herawati Zetha, Abdur Rohim Boy Berawi, Teuku Yuri Zagloel, Perdana Miraj, Jade Sjafrecia Petroceany
Abstract According to RPJMN 2010 ­ 2014, the Government of Indonesia stated that the priority of infrastructure development was an increase of 10 ­ 14 percent in transportation sector. Railway transportation provides a significant role in national economic development with investment required about 41.20% from the total investment in transportation sector. Soekarno- Haa International Airport Railway Link (SHIARL), as one of mega infrastructure projects, is expected to provide accessibility and mobility for people and goods from and to the airport. Currently, the project realization by using PPP scheme is not able to aract private investors. Incomplete PPP project proposal preparations are argued to be the major obstacles which causes lack of quality in the feasibility study. Therefore, it is required an alternative approach to obtain values added to the project feasibility using value engineering (VE) method. VE is used to identify additional functions, to provide creative and innovative ideas and to produce the best options for the project development. This research is aimed to improve the quality of SHIARL feasibility study by implementing value engineering method in the planning stage. The research methodology is conducted by a combination of qualitative and quantitative approaches through questionnaire surveys, action researches and focus group discussions. The result of VE study indicates that Soekarno-Haa International Airport Rail Link (SHIARL) is an innovative conceptual design to overcome congestion and flood through the integration of airport rail link and MRT
line in one tunnel called Public Railway and Stormwater Infrastructure (PRASTI) Tunnel. Keywords Innovation; Mega Infrastructure; Airport Railway; Mass Transportation; Value Engineering 1. Introduction Priority of the infrastructure development in Indonesia is an increase in transportation sector of 10­14 percent with investment projection up to US$64 billion or 44.8 percent of the total infrastructure investment in 2010 ­ 2014. Railway infrastructure will play a significant role in national economic development by contributing 41.20 percent from the transportation sector investment (Dikun, 2010). Private sector is expected to contribute about 51.20 percent from the total railway project financial. Soekarno ­ Haa Airport Rail Link (SHIARL) is one of mega infrastructures in Indonesia railway transportation. As one of the busiest airport in the world, Soekarno ­ Haa airport has significant growth of passengers around 14% per year and serves 44 million passengers per year. Access to the airport depends mainly on the intercity roads and Sediyatmo highways, which naturally causes congestion and travel time uncertainty while in peak hours. On the other hand, flooded highways near the airport duringrainy season are worsening the accessibility and potentially reducing the transportation sector performance. In such condition, alternative mode of transportation through railway construction is
required in order to provide high mobility of passengers and goods from and to the airport. Therefore, SHIARL project is expected to increase punctuality and to provide a beer mass transportation for the public. SHIARL feasibility project was first employed in 2002 by PT.RAILINK and offered to the investors in Infrastructure Summit in the period of 2005 and 2006. Due to failure in its financial feasibility, the project was re-developed to aract private investors. Currently, SHIARL project downgrades its status from ready-to-offer project into priority project. Major gap between the initial cost and the return on investment to the private investors is argued to be the main reason why SHIARL is lacking of interest from the private investors. Therefore, alternative approaches are required by creating added values to improve the feasibility study of the project. This paper aims to improve the quality of the feasibility study of Soekarno Haa International Airport Railway Links (SHIARL) by applying value engineering (VE).VE has been applied in various projects, particularly in mega infrastructure projects. VE is a proven systematical method in analyzing functions of a system in order to provide optimum outcome for a project in term of quality (Sik-wah Fong and Shen, 2000; Woodhead and Berawi, 2007), technology breakthrough (Berawi,2013; Yang, et al., 2012), efficiency (Berawi andWoodhead,2005; Abdul-Rahman, et al., 2008) and innovation (Berawi and Woodhead, 2008; Chen, et al., 2010) Application of VE at the initial and conceptual stages of an infrastructure project will increase efficiency and effectiveness of the project. VE approach in SHIARL project is started by seeking additional functions that can be integrated into the project. The result is expected to provide an innovative conceptual design to address problems in Jakarta. 2. Methodology This research employed a combination of quantitative and qualitative approaches (Green & Caracelli, 1997). Quantitative approaches are characterized by the use of control variables and objectivity that are conducted through questionnaire survey and Life Cycle Cost (LCC) analysis. Qualitative approaches (Creswell, 1998) are conducted by using a participatory action research (participative action) which criticizing the assumptions and allowing for the learning process (Carr & Kemmis, 1986) and "grounded
theory" (Strauss & Corbin, 1998) through focus group discussions. The questionnaires were distributed by way of online (soft copy) and offline (mail/hard copy) surveys and aimed to identify the stakeholders' perception on the ideas generation produced by value engineering process. The respondents for offline questionnaires were government and private companies related to infrastructure development, including PT Kereta Api Indonesia (KAI), PT Railink, PT INKA, Ministry of Transportation, Ministry of Public Works, PT Jasa Marga, PT Wijaya Karya, Bappenas, PT IIGF (Indonesia Infrastructure Guarantee Fund), PT Sarana Multi Infrastructure (SMI), Special Commiee for the Acceleration of Infrastructure Indonesia, and the Investment Coordinating Board. While online survey questionnaires were sent to the respondents via email to six mailing groups of construction industries and value engineering practitioners in Indonesia. The data collected from the questionnaire surveys was then analyzed by using inferential statistics, Croncbach's Alpha and one sample T-test to determine the respondents' proportion and the reliability of the responses to the questionnaires based on a 95 percent confidence level. 3. Results and Discussion The process of questionnaire surveys took a month (30 days) from August 1st, 2012, to August 30th, 2012, with 32 returned questionnaires. Once the analysis of questionnaire survey was completed, the next stage, focus group discussions (FGDs) commenced. FGDs were conducted as a validation and verification in order to gain more inputs from various stakeholders of SHIARL project on the findings. 3.1. Questionnaire Survey Most of the respondents work for private companies with a coefficient of 43 percent and the second largest part of the respondents work for government agencies. Meanwhile, more than 50 percent of the respondents are post graduate holders and 26 percent of them hold managerial and general director positions. According to the respondents' answers, most of them agreed that punctuality was the major factor in selecting public transportation, particularly when using railway transport. Additional functions that could be integrated into SHIARL project were residential,
business centers and city check­in. Extra cost from these additional functions to SHIARL project can be tolerate up to 30 percent from the previous SHIARL total investment. Questionnaire results also showed that private sectors were expected to be much more involved in financial support with proportion of 40 percent government and 60 percent private sectors. Focus group discussions (FGDs) also confirmed that the questionnaire results on flood mitigation, fiber optic and transit-oriented development (TOD) as potential additional functions to the project. 3.2. Value Creation Valuable data gained from the questionnaire surveys and focus group discussions was used to create ideas by seeking additional functions that can be integrated into the project through a FAST diagram. Innovative ideas for SHIARL project are generated from various problems found in Jakarta region, targeted development set by the government in a period
Table 1. Innovative Ideas for SHIARL
Reference Limited land Lack of public transportation Flood Needs in communication Renewable energy Increase regional economy
Innovative Ideas Underground infrastructure Mass rapid transit (MRT) integration Flood tunnel integration Fiber optic integration Utilizing Natural Resources (solar, kinetic energies) Developing commercial areas (residences, business centers)
of 20 years and potential transportation development to be integrated in the project. One of the problems in Jakarta is devastating annual flood in rainy season and periodically disturbed accessibility of users to the airport which depends largely on the intercity roads and Sediyatmo high-

Figure 1. FAST Diagram for Kereta API Bandara (Soekarno Hatta Airport Railway Link [SHIAARL])

the application of natural resources to the project is expected to increase efficiency and quality of the environment. These ideas lead to the development of FAST diagram as shown in Figure 1 (previous page, boom).
Figure 2. Route of PRASTI Tunnel ways. This dependency also leads to congestion and travel time uncertainty during peak hours while commuters struggling to access or leave their office. The increasing number of commuters using their private vehicles is considered as a result of the poor public transportation and the limited land availability in Jakarta to serve the city functions and people activities makes the people moves to the city perimeters. On the other hand, the development of roads which are used for the commuter's vehicles accessibility is nearly below 1 percent per year and compared to over 1,000 new vehicles sold every day, the roads are predicted to be stuck in 2020. Rail­based project development is argued as the best solution to solve the transportation problems in Jakarta region. Potential railway project, particularly for urban development, is mass rapid transit (MRT) Jakarta planned along 110.8 km line, which is divided into north and south corridors. (See Table 1, previous page, top.) Various problems that occurred in Jakarta and the potency of development provoke innovative ideas for the project. Underground infrastructure is proposed as a solution for the limited land in Jakarta by integrating MRT line and flood tunnel that will be used to solve Jakarta's lack of public transportation and annual flood. Economic aspect is also considered by proposing commercial area and fiber optic integration to generate regional income. In the meantime,
3.3. Public Railway and Stormwater Infrastructure (PRASTI) Tunnel Public Railway and Stormwater Infrastructure (PRASTI) Tunnel is a conceptual design of multi­ function tunnel generated from function analysis stage of value engineering method. It is aimed to overcome congestion, reduce flood in Jabodetabek area and increase accessibility from and to Soekarno ­ Haa airport by integrating three main functions, namely MRT, airport railway, and flood control, in one tunnel development. The proposed diameter of the tunnel is 19 meter, about25 ­ 40 meter underground and span along 9 kilometer from Dukuh Atas station to Pluit. (See Figure 2, above.) The tunnel is divided into three (3) levels; the first level is served as flood control, the second level is Figure 3. Cross-Section View of PRASTI Tunnel
train and MRT, telecommunication, and commercial
area development. Although the construction cost for
tunnel around the world vary depends on numer-
ous factors, the initial cost for PRASTI Tunnel will be
determined through benchmarking tunnel projects
with similar diameter and functions. Comparisons
for unit prices for the tunnel projects were gathered
from benchmarking various tunnels in the world,
from SMART Tunnel in Malaysia to Channel Tunnel
in UK. Since PRASTI Tunnel diameter (19 m) is much
larger compared to SMART Tunnel (13.2 m), interpo-
lation approach is then used for calculating PRASTI
Tunnel's initial cost. On the other hand, operational
and maintenance costs for the tunnel are assumed
0.5 percent from the initial cost (Baumgartner, 2001)
or equals to US$78,554,192.63 increasing with annual
inflation per year.
Initial cost for the function of transportation
comprises of airport train and MRT. Both have
Figure 4. Diameter Analysis of PRASTI Tunnel
similar components consisting of tracks, electricity
served as airport accessibility through SHIARL and the third level is expected to increase public transport through MRT line. The cross-section visualization of PRASTI Tunnel concept is shown in Figures 3 (previous page, boom) and Figure 4 (above). As the result, a total route of about 38.5 kilometers connects Halim airport in Eastern Jakarta with Soekarno ­ Haa airport in Western Jakarta by using median road of the intercity toll road. This route is divided into three sections; the first section is from Halim airport to Dukuh Atas with elevated lane along 12 kilometers, the second section is from Dukuh Atas to Sedyatmo Toll Road near Pluit, which will be built by using PRASTI Tunnel along nine kilometers, and the third section from Sedyatmo Toll Road near Pluit to Soekarno ­ Haa airport with elevated lane along 17.5 kilometers.
for 18 km as well as signal and telecommunication for 9 km, and additional two units of sub-stations are added for the airport train. Therefore, the initial cost for transportation function is estimated about US$93,217,500.00 with US$622,575.00 per year for operational and maintenance cost in airport train section and US$720,450.00 per year for operational and maintenance cost in MRT section. Considering the fiber optic construction cost proposed by PT Telkom, an Indonesia's state owned enterprise for telecommunication, which is about US$15,933.33/km, the 9 km-long fiber optic construction in PRASTI Tunnel will cost about US$143,400.00. Meanwhile, operational and maintenance cost for fiber optic of PRASTI Tunnel will require about US$10,687.50 and increasing with annual inflation every year. Furthermore, there is a 5,600 square meters, commercial area located underground and
3.4. Construction, Operational and
divided into six MRT underground stations and Du- Table 2. Summary of PRASTI Tunnel Cost
Maintenance Cost of PRASTI Tunnel
PRASTI Tunnel Function
Initial Cost
Annual Operational and Maintenance Cost
The construction cost for PRASTI tunnel will be divided into four functions, namely Flood, Transportation which consists of airport
Flood Function Transportation Function a. Airport Train b. MRT Telecommunication Function Commercial Area Development Function Total Initial Cost
1,636,545,679.70 44,161,875.00 49,055,625.00 143,400.00 382,678,365.83 2,112,584,945.53
78,554,192.63 622,575.00 720,450.00 10,687.50 7,653,567.32 87,561,472.45
kuh Atas station. Construction cost for the commercial area is estimated about US$14,000,000.00. While six MRT and Dukuh Atas stations will cost about US$368,678,365.80. On the other hand, operations and maintenance costs are assumed 2 percent from the initial cost, which will cost about US$7,653,567.32. The overall calculation for the identified functions is summarized in Table 2 (previous page, boom). Currently, separate projects of related functions in PRASTI Tunnel have been proposed to be developed in Jakarta area. Firstly, the MRT project proposed by the Indonesian government to reduce congestion in Jakarta requires about US$3,388.8 million for 23.3 km from Lebak Bulus in South Jakarta to Kampung Banda in North Jakarta. Meanwhile, according to the Ministry of Development Planning (2013), airport train construction from Halim airport in Eastern Jakarta to Soekarno ­ Haa airport in Western Jakarta along 38.5 km requires about US$2,580 million and will be built with three main stations. Lastly, a flood control system is proposed with a cost of about US$1,700 million to reduce annual heavy flooding that caused a loss of about US$2,000 in 2013. Compared to US$7,668.8 million of separate projects that have been proposed before, US$2,112.58 million of PRASTI Tunnel investment, which integrates all the functions, is an effective way to overcome various problems in Jakarta and an innovative solution to obtain financial feasibility of the project. On top of that, the revenue estimation generated from transportation, commercial areas, utilities and benefits from flood control have shown that the feasibility of PRASTI Tunnel is increased with Public Private Partnership (PPP) financial scheme. 4. Conclusion Value engineering (VE) has been widely applied to produce optimum result for projects development through the fulfillment of the required quality, application of advanced technology and achievement of innovative ideas. VE application for mega infrastructure, particularly in SHIARL, has produced added value to the project. This method improves the existing conceptual design of SHIARL project by creating innovation through the development of Public Railway and Stormwater Infrastructure (PRASTI) Tunnel that combined the following functions: 1) transportation function through airport train and MRT; 2); flood function 3) telecommunication tunction, and
4) commercial area development function. Initial cost for multi­function tunnel is US$2,112,584,945.53 with operational and maintenance costs about US$87,561,472.45, increasing with annual inflation every year. Acknowledgement This research was fully supported by the University of Indonesia Research Grant and the Ministry of Education, Republic of Indonesia. References Abdul-Rahman, H., Yahya I.A., Berawi M.A., WaiWah L. (2008), A Conceptual Model for Mitigating Delay in Construction Projects Using a Project Learning Approach, Construction Management and Economics. Baumgartner, J.P. (2008), Prices and costs in the railway sector. Institut des transports et de planification. Berawi, M.A., Susantono, B. (2013), Developing Conceptual Design of Mega Infrastructure Project: Creating Innovation and Added Value, Value World, Vol. 35, Numver: 1, pp. 12-20, SAVE Press, USA. Berawi, M.A.,Woodhead, R.M. (2005), Application of Knowledge Management in Production Management, Human Factors and Ergonomics in Manufacturing, Vol. 15, No. 3, pp.249 ­ 257, Wiley and Son. Berawi, M.A.,Woodhead, R.M. (2008), Stimulating Innovation Using Function Models: Adding Product Value, Value World, Volume: 31, Number: 2, pp. 4-7, SAVE Press, USA. Carr, W.,Kemmis, S. (1986), Becoming Critical: Education, Knowledge and Action Research,Falmer Press. Chen, W.T., Chang, P.-Y., Huang, Y.-H., (2010), Assessing the overall performance of value engineering workshops for construction projects. International Journal of Project Management, 28, 514-527. Creswell, J. (1998), Qualitative Inquiry and Research Design; Choosing Among Five Traditions, Sage Publications, London. Dikun, S, (2010), The Interface Report: Substances to Support the National Railway Master Plan.Jakarta
Greene, J. C.,Caracelli, V. J. (1997), Defining and describing the paradigm issue in mixed-method evaluation, in J. C. Greene and V. J. Caracelli (eds.), Advances in mixed-method evaluation: The challenges and benefits of integrating diverse paradigms, New Directions for Program Evaluation, No. 74., pp. 5-18, San Francisco. Ministry of Development Planning. (2013), Public Private Partnership (PPP) Infrastructure Project Plan in Indonesia. Jakarta. Sik-wah Fong, Shen, Q. P. (2000), Is the Hong Kong construction industry ready for value management? International Journal of Project Management, 18, 317-326. Statistics Indonesia (2013), Statistical Yearbook of Indonesia, Jakarta, Statistics Indonesia. Strauss, A., & Corbin, J. (1998),Basics of qualitative research: Techniques and procedures for developing grounded theory (2nd Ed.). Thousand Oaks, CA: Sage Publications. Woodhead, R.M.,Berawi, M.A. (2007), An Alternative Theory to Idea Generation, International Journal of Management Practice, Volume 3,No. 1, pp.1-19. Yang, L.R., Chen, J.H., Wang, H.W. (2012), Assessing impacts of information technology on project success through knowledge management practice. Automation in Construction, 22, 182-191. About the Authors Dr. Mohammed Ali Berawi received his Ph.D. in innovation management from Oxford Brookes University at Oxford, UK. He currently researches value engineering/ value management and innovation in the context of infrastructure, construction and manufacturing industries. He has authored and co-authored more than 50 scientific publications. Dr Berawi has also been involved in many national and international research collaboration and consultancy works. He is currently the Head of Integrated Design and Technology (IDTech) Research Group, Faculty of Engineering, University of Indonesia. Dr. Susantono holds a Ph.D. in infrastructure planning from the University of California at Berkeley. He is the Head of Infrastructure Management Graduate Program, Faculty of Engineering, University of Indonesia. He has authored and co-authored numerous books, articles and scientific publications. Besides teaching in the university, Dr. Susantono has been appointed in various positions both in the public and private institutions. He
is currently the President of Intelligent Transportation System (ITS) of Indonesia, and serves as the Vice Minister of Ministry of Transportation, Republic of Indonesia. Dr. Suyono Dikun received his PhD in Transportation System Planning from the University of WisconsinMadison, USA. Dr. Dikun is a professor in infrastructure management at the University of Indonesia and has more than 30 years professional experience in infrastructure and regional development policy and planning for the National Development Planning Board (Bappenas). He is also a member of many national and international professional organizations in transport science and project management. Dr. Tommy Ilyas is a professor in geotechnical engineering at the University of Indonesia. He holds a PhD in Geotechnic from Sheffield University (UK). His research interests are in Engineering Mechanics, Soil Mechanics and Infrastructure Management. Dr. Abdur Rohim Boy Berawi holds a PhD in High Speed Train management from MIT Portugal. He currently researches value management and innovation in infrastructure and transportation industries and has published many scientific articles in international journal and conferences. Besides teaching in the university, Dr. Boy Berawi is also served as AUSAID's Advisor to the Ministry of Transport (MOT), Republic of Indonesia. Dr. T. Yuri M. Zagloel is a professor in Industrial Engineering Department, University of Indonesia. Prof. Yuri's research interests area in Quality Management and production system field. He is currently served as the Head of Production System Laboratory. Herawati Zetha Rahman is a Ph.D. candidate at the Department of Civil Engineering, University of Indonesia. Her doctoral research focuses on the improvement feasibility study on Public Partnership Project. She is a senior researcher at IDTech research group, University of Indonesia since 2008. Perdana Miraj is a senior researcher at IDTech research group and involved in mega infrastructure project research. He holds master degree in project management and has worked for a design and consultant company before joining IDTech research group. Jade Petroceany is serving as teaching faculty in Civil Engineering Department, University of Indonesia and researcher at IDTech. She earned her master degree in Infrastructure Management from Queensland University of Technology, Brisbane, Australia.

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