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nfrastructure and industrial projects to be developed under the government'€™s Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) have shown insignificant progress since the plan was launched in May 2011.

Coordinating Economic Minister Hatta Rajasa said on Thursday that many infrastructure projects included in the MP3EI could not be realized due to land acquisition problems. The construction of the 2,000-megawatt (MW) Batang coal-fired power plant in Central Java is among the projects that have been delayed due to the land acquisition problem, he said.

He said the realization of investments in infrastructure and industrial projects in the MP3EI program during the period of May 2011 and the first quarter of this year had reached Rp 838.9 trillion (US$73 billion). The amount is far lower than the government'€™s investment target of Rp 4,367 trillion over the course of the 15-year MP3EI.

According to data from Hatta'€™s office, investment realization in infrastructure projects accounted for
Rp 397.7 trillion, while that in the industrial sector reached Rp 441.181 trillion. These investments came from the state budget, state-owned companies and the private sector.

The Sumatra corridor (which also includes parts of West Java) received Rp 133.23 trillion in both the infrastructure and industrial sectors, which included the construction of a railway line between Kota Sigli and Lhokseumawe, Aceh, and the construction of a blast furnace in Cilegon, Banten, by steel company PT Krakatau Steel.

The Java corridor received Rp 295.63 trillion for projects such as the extension of Tanjung Priok Port in North Jakarta and the construction of a double track railway, to ease traffic on the northern coastal highway (Pantura).

Kalimantan received Rp 177.32 trillion, including the construction of a 2x110 MW steam-fueled power plant in Muara Jawa near Balikpapan, East Kalimantan. In Sulawesi, investment realization reached Rp 69.86 trillion, including the hydroelectric dam mega project in Karama, West Sulawesi.

The MP3EI was launched in May 2011 as part of the government'€™s long-term program to spur the country'€™s economic development.

With the MPEI program, Indonesia is expected to become one of the top ten economies and raise per capita from $3000 to $15,000 by 2025. The policy focuses on the development of infrastructure facilities and industrial activities in six economic corridors based on the comparative advantages.

The government recently said it would soon revise the land acquisition regulation to speed up the land acquisition process.

With the revision, the acquisition of land of up to 5 hectares could be directly carried by land owners without government supervision.

Under the existing regulation, acquisitions not requiring the involvement of the government are limited to land acquisitions with a size of 1 hectare or smaller, while land acquisitions of more than 1 hectare are required to pass through several stages under the supervision of a special committee. (dyl)