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Stalled projects to get boost
Franky Sibarani - JP/DON The Investment Coordinating Board (BKPM) is upping efforts to revive stalled investment projects that could give a significant boost to Southeast Asiaâs largest economy
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Franky Sibarani - JP/DON
The Investment Coordinating Board (BKPM) is upping efforts to revive stalled investment projects that could give a significant boost to Southeast Asia's largest economy.
The investment agency has identified 95 projects in 25 provinces with a total value of Rp 423.7 trillion (US$33.4 billion) that have stalled after encountering problems such as land acquisition and licensing. The sectors include electricity, petrochemical, food and beverage and tourism, among others.
BKPM chairman Franky Sibarani said the body would directly approach businesses to find out problems with the projects, as well as expand its one-stop service program nationwide to ease licensing.
A revision to a presidential regulation (Perpres) on land acquisition for development purposes and public interest will also help revive the stalled projects, as it will apply also to ongoing projects.
'The revision will enable the construction of other stalled projects to be completed,' Franky told businesspeople during a meeting with dozens of members of the Indonesian Chamber of Commerce and Industry (Kadin), where he also sought input on problems encountered on the ground in various investment projects.
Seven industries would be prioritized ' power plants, labor-intensive, import substitutions, exports-oriented, maritime, agriculture-based and tourism ' BKPM deputy for investment planning Tamba Parulian Hutapea said.
'The construction of a coal-fired power plant in Batang, Central Java, is one of them,' Franky said.
The $4 billion Batang power plant, which has a 2x1,000 megawatt (MW) capacity, has been delayed for years as a result of land acquisition problems. It will be built by PT Bhimasena Power Indonesia, a consortium established by coal firm Adaro Energy's subsidiary Adaro Power with J-Power Electric Power Development Co. Ltd. and Itochu Corp.
The Batang power plant will sell the electricity it produces to state-owned electricity company PLN under a 25-year contract as part of the administration's goal to procure 35,000 MW within President Joko 'Jokowi' Widodo's five-year tenure.
Franky expressed hope that the Batang power plant would finish construction in March this year thanks to the revised land acquisition rules.
The 5,000 MW-power plant project in Cilacap, Central Java, as well as forest clearing for plantations in West Kalimantan would also benefit from the new land acquisition presidential regulation, he added.
BKPM's recently launched one-stop integrated service (PTSP), which allows investors to obtain investment permits from one body only ' the BKPM ' is also expected to help the board resolve problems on the ground, as it will eliminate costly red tape for investors.
'We are in the process of campaigning for the one-stop service. Currently, there are 63 regencies, cities and provinces that have yet to establish the one-stop services, but we will complete them all before the end of the year,' he explained.
Kadin chairman Suryo Bambang Sulisto said business owners often experienced different treatment from various central and regional government institutions as well as contradictory policies, saying that 'the conditions can be debilitating for the investment climate if there is no synergy or coordination'.
Indonesia's realized investment for the period of January-December last year reached Rp 463.1 trillion, exceeding a previous target of
Rp 456.6 trillion and up by 16.2 percent from Rp 398.6 trillion in the same period of 2013, BKPM data show.
The investment board expects total investment in 2015 to reach Rp 516.5 trillion, up by around 11.5 percent, consisting of Rp 343.7 trillion foreign direct investment and Rp 175.8 trillion domestic direct investment.
Investment is a key component in Indonesia's gross domestic product, making up 30 percent of the country's economy, and its growth is crucial at a time when the global economy is weak, as it is at present.
Jokowi has said he wants to see 7 percent economic growth during his term, which will end in 2019, from around 5 percent at present.
