TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Business players highlight infrastructure for incoming govt
Business practitioners are urging the incoming government to prioritize infrastructure programs by increasing the participation of private companies in the projects in order to drive business growth
Change Size
B
usiness practitioners are urging the incoming government to prioritize infrastructure programs by increasing the participation of private companies in the projects in order to drive business growth.
Indonesian Employers Association (Apindo) chairman Sofjan Wanandi said on Monday that the new government should first focus on developing electricity infrastructure to help manufacturers boost production.
'Without electricity we cannot run the production. The second major infrastructure priority should be irrigation systems, followed by roads, airports and railway tracks,' Sofjan told The Jakarta Post.
Bosowa Group CEO Erwin Aksa, meanwhile, said that the incoming government's priority should be to involve more private companies in infrastructure projects.
'Private companies will be encouraged [to invest in infrastructure projects] with the existence of more feasible projects,' Erwin told the Post during an Idul Fitri gathering at Indonesian Democratic Party of Struggle (PDI-P) chairwoman Megawati Soekarnoputri's house.
'State-owned enterprises' roles should also be maximized,' he added.
According to Erwin, who is also the nephew of vice president-elect Jusuf Kalla, the new government should initially set up a team to solve classic problems surrounding infrastructure projects, including time-consuming land acquisitions, before offering the projects to potential investors.
'The government should first complete licensing matters, as well as land acquisition, before opening a tender so that it only offers projects that are ready for construction,' he said, adding that the feasibility of a project was the most important aspect for private investors.
The role of private companies in infrastructure projects is deemed crucial, as the National Development Planning Board (Bappenas) estimates that US$550 billion in funding will be needed between 2015 and 2019 to resolve Indonesia's current infrastructure crisis, which has hampered the country from growing at an optimal rate.
More than half of the required investment would need to be funded by the private sector or through public-private partnership (PPP) deals. Separately, Jokowi-Kalla economic team head Arif Budimanta said that to boost investment from the private sector, the incoming government planned to improve the public-private partnership plan, by offering only projects that had fully acquired the land needed for construction.
'We have learned from the current government that the PPP is unsuccessful because of the lack of uncertainty in land acquisition,' he said.
'Therefore, we have committed to acquiring the total land needed for particular infrastructure projects before offering them to investors.'
Arif said that one of the incoming government's main infrastructure projects was the development of 10 new seaports, mainly in the eastern part of the country, as stated in their working program.
'By focusing on sea transportation, we aim to improve the flow of goods, decreasing logistical costs that will lead to price stability,' Arif told the Post on Wednesday.
President-elect Joko 'Jokowi' Widodo has repeatedly conveyed the idea of providing regular freight ships to serve major cities from west to east, a concept he calls 'sea toll'.
