The projects, deriving from local and foreign investors and valued at Rp 351.2 trillion (US$29.5 billion) and $54.6 billion, respectively, could not be realized because of various reasons, according to data from the Investment Coordinating Board (BKPM).

The hurdles faced are mostly to do with business permits, followed by zoning and land acquisition, regulations, facilities and incentives, legal issues and terminated cooperation, among others.

BKPM deputy director for investment monitoring and realization Azhar Lubis said the board was coordinating with various institutions to find a way to bring these projects to fruition.

“Every problem has its own characteristics. It can be related to locations or business sectors, so the solutions are also specific and must be achieved through discussions with relevant institutions,” he said on Thursday.

Until recently, the central government through the Home Affairs Ministry had scrapped uncertain bylaws to ease investment procedures, but then the Constitutional Court revoked the ministry’s authority to do so.

Now the Supreme Court is in charge of scrapping problematic rules, which businesspeople see as lengthy processes.

The central government has planned to set up a business acceleration task force in industrial estates and special economic zones (SEZ) starting in March.

Burdensome regulations have been among the biggest obstacle affecting investment in Indonesia.

From 2012 to last year, BKPM only saw 25.5 percent of proposed projects realized by foreign investors, while only 32 percent were realized by local investors.

The board’s target is to increase overall investment projects submitted by local investors in 2019 to 39 percent.

Realized foreign direct investment (FDI) in Indonesia amounted to $15.8 billion on average annually in the 2012 to 2016 period. That figure accounts for only 1 percent of global FDI totaling $1.5 trillion over the same period, BKPM data shows.

From January to June, the overall investment rose by 12.7 percent year-on-year (yoy) to Rp 336.7 trillion, representing 49.6 percent of Rp 678.7 trillion targeted for this year.

The board hopes to jack up its investment target by 23.7 percent to Rp 840 trillion next year to help the country’s economy expand by 6.1 percent, up significantly from 5.2 percent outlined this year.

Separately, Industry Ministry industrial estate development director general Imam Haryono said investment in the manufacturing industry, especially those located in industrial estates, could be realized more quickly because of an integrated business permit process and special dispute management.

To prevent hurdles in infrastructure projects, the government has been holding monthly meetings to monitor the progress of 248 projects ranging from toll roads to dams listed as national strategic projects.

Indonesia Chamber of Commerce and Industry’s (Kadin) vice chairman for international relations Shinta Kamdani said the government had to ensure infrastructure construction would trigger business activities in surrounding areas, especially to boost businesses of micro, small and medium enterprises (MSMEs).

“We need to make sure that the local businesses would gain benefits from every completed infrastructure project,” she said.

Indonesia’s biggest business lobby group has announced plans to list troubled investment projects by year-end and help the government solve the problem.

Projects facing a high risk of stagnancy include ports and power plants due to complicated land acquisition and unsettled agreements on electricity tariffs between independent power producers and the country’s sole electricity supplier PLN, respectively, according to the group.

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