T

he government is to issue a revision to a land-procurement regulation to expedite land acquisition, which has proved an obstacle to a number of infrastructure projects.

A presidential regulation (Perpres) on the implementation of the 2012 Law on Land Procurement for Public Infrastructure has been revised twice, but the intended faster land acquisition has yet to be seen.

For that reason, the government will issue a third revision with the aim of fixing previous problems by relaxing land acquisition procedures for existing projects, as well as easing financing procedures.

Firstly, all ongoing projects would benefit from the new land-acquisition law '€” which can force people to sell their property for public infrastructure projects, with fair compensation '€” said Luky Eko Wuryanto, an assistant to the coordinating economic minister.

Previously, infrastructure projects that had acquired three-quarters of the required land were subject to the old 1960 law, while those whose land-acquisition process was less than 75 percent complete had to start again, acquiring land using the new law. This complication drew bitter complaints from many investors.

The second major change to the law is that the government will allow the private sector to finance land acquisition to speed up the process, instead of waiting for state budget disbursement, which can be time-consuming, to help fund the projects. The government will then reimburse the spending if obliged to do so. '€œThis is because the private sector has more flexibility to finance projects than the government, which has to wait for state budget disbursement,'€ Luky told reporters.

Private companies carrying out infrastructure projects could either be assigned by the government through a tender process or work under a public-private partnership with the government.

President Joko '€œJokowi'€ Widodo'€™s infrastructure push has won acclaim from investors, who hope that his programs '€” which include a redirection of almost Rp 200 trillion (US$15.7 billion) from the state budget to basic infrastructure, capital spending, 35,000 megawatts (MW) electricity procurement and food self-sufficiency '€” could bolster growth in Southeast Asia'€™s largest economy.

The President, for his part, is hoping that these programs will boost Indonesia'€™s annual economic growth to 7 percent within his five-year term, from 5 percent at present.

Agrarian and Spatial Planning Ministry land director M. Noor Marzuki said that land procurement had become increasingly crucial as a result of the government'€™s ambitious growth-generating infrastructure projects.

As stated in the 2012 Law on Land Procurement, land acquisition should take a maximum of two years.

'€œThe government has revised the regulation twice, yet the law has not yet effectively expedited the land-acquisition process,'€ said Tri Agus Riyanto from the Indonesian Toll Road Association (ATI). '€œThe new regulation should be supported by the readiness of the government institutions in charge, the funds as well as the monitoring team.'€

Last week, lawmakers and the government approved the revised 2015 state budget, earmarking Rp 290 trillion for capital spending across ministries and agencies. The funds will be used, inter alia, to construct roads (Rp 57.82 trillion), to manage water resources (Rp 30.53 trillion) and to develop regional infrastructure (Rp 500 billion).

Over the next five years, the government aims to build 5,000 km of railway, 2,600 km of roads, 1,000 km of toll roads and 49 dams.