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Businesspeople demand greater certainty in PPP projects
Businesspeople have called on the government to provide greater certainty on executing projects under the public-private partnership (PPP) scheme to get more private companies to participate in infrastructure development.
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Infrastructure race: President Joko “Jokowi” Widodo (third right) inspects a section of a toll road construction project during a recent visit to Bogor, West Java. (JP/Ayomi Amindoni)
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usinesspeople have called on the government to provide greater certainty on executing projects under the public-private partnership (PPP) scheme, in order to get more private companies to participate in infrastructure development.
Erwin Aksa, deputy chairman for construction and infrastructure at the Indonesian Chamber of Commerce and Industry (Kadin), said many private companies were still reluctant to take advantage of the PPP scheme, because infrastructure projects, on many occasions, had turned out to be unprofitable.
“Often, the calculations made for feasibility studies on infrastructure projects such as toll roads were very different from the real results,” he said at a discussion forum in Jakarta recently, explaining that this had caused private companies to suffer losses.
In particular, he said, businesspeople complained about limited information from the Transportation Ministry surrounding the implementation of the PPP mechanism and the benefits firms could get if they participated in the projects.
Kadin advised the Transportation Ministry to create a centralized body inside itself that focuses on dealing with PPP projects. At present, projects under the PPP scheme are managed by different directorates under the ministry.
“We hope that the Transportation Ministry can create a centralized body that focuses on executing tender opportunities regarding PPP projects,” Erwin said.
The government still needs massive funds to develop planned infrastructure projects across the country. From 2015 to 2019, Indonesia needs Rp 4,769 trillion (US$336.4 billion) in infrastructure funding.
