Logistic Aerocity: Optimizing financial feasibility through public-private partnerships

Logistics infrastructure is crucial in urban freight transport and regional economic growth. Airport-centric development has emerged as a potential solution for urban logistics by enabling faster freight movement and broader geographic coverage while integrating business, commercial, and industrial zones. However, this approach faces significant challenges, particularly in emerging economies like Indonesia, where limited public funding creates a substantial infrastructure financing gap. This study proposes a conceptual design for airport-centric logistics infrastructure to address this issue, using Radin Inten II International Airport in Lampung Province, Indonesia, as a case study. The research adopts a mixed exploratory-descriptive approach that integrates land use planning, transportation networks, and zoning regulations with financial engineering analysis through Life Cycle Cost (LCC) to evaluate spatial and financial feasibility. This study develops the Logistic Aerocity concept, which consists of five key zones: Airport Development, Integrated Logistics Hub, Industrial Park, Commercial Area, and Urban Open Space. The financial analysis confirms that a Public-Private Partnership (PPP) financing scheme enhances investment viability and attracts private-sector participation. The projected Internal Rate of Return (IRR) of 15.86% demonstrates the effectiveness of cost-sharing mechanisms between the public and private sectors in ensuring long-term financial sustainability. These insights provide a strategic foundation for policymakers and investors to enhance logistics infrastructure and strengthen urban connectivity through airport-centric development.