The Pemalang power plant in Central Java and the Palaci-Bangkuang railway line in Central Kalimantan have attracted the most interest of eight infrastructure projects announced by the government in March.
The National Development Planning Agency's (Bappenas) deputy chairman for infrastructure Deddy S. Priatna said here Tuesday at least 30 investors have submitted expressions of interest in the Pemalang power plant .
"They come from both domestic and international companies. Considering the large amount of investment, we see a favorable prospect for foreign investors," he told a seminar organized on the sidelines of the Asian Development Bank's annual meeting of shareholders.
The coal-powered power plant in Pemalang, Central Java, will have a total capacity of up to 2,000 mega-watts and needs a total investment of US$3 billion.
Deddy explained the government would officially open the tender process for the Pemalang power plant later this month.
Deddy also explained that the government had just completed a feasibility study for a railway project in Central Kalimantan. He said that while it has not yet made initial market sounding, it has already received expressions of interests from Japanese investors.
The proposed 185-kilometer long railway line would connect Palaci to Bangkuang in Central Kalimantan would cost US$700 million. It would be the first railway line on the island. The government, Deddy said, would launch the tender for the project within the next three months. The Japanese investors are welcomed to bid for the railway project, he added.
Dedy further explained that almost all investors had asked for government support, including in areas of land acquisition, subsidies and nonfinancial help, including in the processing of licenses and permits.
They also demand the government guarantee against political risks and other nonoperational risks, such as problems related to land acquisition, price increases, as well as demand risks.
Bappenas, the Finance Ministry and the coordinating minister for the economy will determine what supports the government can provide the investors with.
"We hope that the government support approval could be available within three months after their requests," he said.
The Central Java power plant and the Central Kalimantan rail-way line are two of eight infrastructure projects announced by the government last March that will be bid on by private investors this and next year.
The other six projects are toll roads in West Java and North Sumatra, a cruise terminal in Bali, a water treatment plant in Bandung, West Java and the much-anticipated railway line linking Manggarai in Jakarta with Soekarno-Hatta international airport. The eight projects are worth a total of $5.5 billion.
The eight projects are categorized as public-private partnership (PPP) projects, in which the government and the private sector would jointly invest.
To facilitate the execution of such projects, the government has established the Public-Private Partnership Center (PKPS) and will incorporate in June a state company guarantee fund to provide guarantees for the PPP projects.
Deddy said that the government would provide Rp 1 trillion as seed capital for the guarantee fund and would invite other partners, including the ADB, to invest in it.
