Investment Feasibility Study of the Public Housing Project through Public Private Partnership Scheme

The provision of public housing by the government has not been able to meet the housing needs, particularly affordable housing for low-income communnity/citizen. Collaboration between the government and private sector is needed in the form of public private partnership to increase the feasibility of public housing projects, especially in the investment/financial context. This study aims to evaluate investment feasibility of the public housing project that planned through the PPP scheme based on a case study in Bandung City of Indonesia. An engineering economy method was used in this study to calculate capital budgeting and the life cycle cost including the revenue based on the data, standards/regulations, and interview from the government and other institution related to public housing. Public housing project planning through the PPP scheme was developed for the provision of public apartments (35%) and commercial apartments/facilities (65%) that utilize government-owned land by rental. The Project can generate investment valuation with the Internal Rate of Return (IRR) of 13.18%, Net Present Value (NPV) of IDR 610,063,962, Payback Period for 7.45 years, and Debt-Service Coverage Ratio (DSCR) of 1.14. In general, the investment of public housing project through PPP scheme is feasible based on various indicators, but still requires development to improve investment attractiveness for the private sector.