Tanjung Buton Industrial Estate as a Machine of Growth: Evaluation of the Impact of the PPP Scheme on Siak's PAD Posture

Rissa Octaviana; Tito Handoko

doi:10.63922/ijevss.v5i04.6672

Rissa Octaviana University of Riau (UNRIDA) Indonesia
Tito Handoko University of Riau, Indonesia

DOI: https://doi.org/10.63922/ijevss.v5i04.6672

Keywords: Tanjung Buton Industrial Estate, Public-Private Partnership (PPP), Local Original Income (PAD), Machine of Growth, Regionally-Owned Enterprises (BUMD) Governance, Fiscal Independence

Abstract

The Tanjung Buton Industrial Estate (KITB) in Siak Regency is projected as a major engine of growth to transform the regional economic structure from dependence on the raw extractive sector to downstream processing industries based on palm oil and maritime logistics. Although the Siak Regency Government has allocated up to tens of billions of rupiah in capital participation from the Regional Budget (APBD) to the managing Regional Owned Enterprises (BUMD) (such as PT KITB and PT Sarana Pembangunan Siak/SPS), the performance of this area's contribution to Regional Original Income (PAD) has not been optimal. This study aims to analyze the KITB's posture, dissect governance and capital participation issues, describe key indicator trends during the 2021–2024 period, and evaluate the implementation of the Public-Private Partnership (PPP) scheme to optimize Siak Regency's PAD posture from 2025 onward. This study uses a descriptive qualitative method based on policy document studies, regional financial reports, and literature synthesis. The results show that governance issues such as uncertainty about the legal status of Management Rights (HPL) land, overlapping land allocations between BUMDs, and limited financial capacity of managers are the main obstacles to the realization of the PPP project. Data trends over the past four years (2021–2024) confirm that Siak's PAD portion remains between 10% and 15% of the total regional budget (APBD), with dividend contributions from regionally-owned enterprises (BUMDs) managing KITB (Tribunal-owned enterprise) remaining very limited. Restructuring the PPP scheme through equitable risk sharing, clarity of legal status, and integrated investment incentives is projected to transform Siak's PAD structure through a surge in regional tax revenue, levies, and BUMD profit shares.

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