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.

Jakarta Post

Turkey eyes Indonesian infrastructure projects, new capital development

  • Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Fri, June 26, 2020   /   09:18 am
Turkey eyes Indonesian infrastructure projects, new capital development President Joko "Jokowi" Widodo inspects the site of the future capital city. The Turkish government and businesspeople have expressed their interest in building infrastructure in Indonesia, including for the new capital city to be developed in East Kalimantan. (Presidential Palace Press Bureau/Muchlis Jr)

The Turkish government and businesspeople have expressed their interest in building infrastructure in Indonesia, including for the new capital city to be developed in East Kalimantan.

Turkish Ambassador to Indonesia Mahmut Erol Kilic said only a few dozen Turkish companies were operating in Indonesia despite the latter being the world’s 16th biggest economy and the largest in Southeast Asia.

“Of course, we have more capacity than this, especially in the field of constructon, as Turkey had really successful projects in Astana, in Doha and in many other [places],” he said during the Turkey-Indonesia contracting sector business forum, which was held online on Tuesday. “We are eager to enter the Indonesian market.”

Indonesia has been extensively developing infrastructure in the last five years to help support its economic growth. Public Works and Housing Ministry data show that the government has built 1,500 kilometers of new toll roads, 3,867 km of other roads, 58,346 meters of new bridges and 61 water reservoirs during the period of 2015 to 2019.

According to the ministry, Indonesia plans to add 2,500 km of toll roads, 3,000 km of other roads, 60,000 m of bridges and 35,000 m of overpasses and underpasses from 2020 to 2024.

Indonesia currently has 223 key national projects worth around Rp 4.2 quadrillion (US$295.25 billion) on its priority list, ranging from seaports and airports to special economic zones and priority tourist destinations. Recently, the government announced a plan to add another 89 projects to the list for the next five years. 

It also plans to move its capital city from Jakarta to North Penajam Paser in East Kalimantan, with construction to begin in 2021 and estimated to cost Rp 466 trillion.

Indonesia’s infrastructure development has captivated Turkish contractors as they are eager to expand their market in Asia after being involved in many projects in Eurasia and the Middle East.

“We would like to diversify our market; we would like to find new markets, and we are more focused on Indonesia and the Phillipines,” Turkish Trade Minister Ruhsar Pekcan said in the same event.

Turkish Contractor Association (TCA) data show that South Asia and Far East countries contributed only 3 percent to the more than 10,000 projects worth $403 billion in 127 countries that the association’s members have had from 1972 up until May.

“We hope our contractors can take part in [more Indonesian projects], especially with regard to moving the capital city. Our engineers and constructing companies are very much willing to take part in such projects,” said Pekcan.  

In addition, Turkish companies were interested in toll roads, energy facilities, waterworks and transportation-related infrastructure, he added.

Public Works and Housing Minister Basuki Hadimuldjono encouraged both countries to have follow-up working groups to talk further about possible cooperation, such as on the trans-Sumatra toll road and water dam projects.  

“This is the opportunity for Turkish contractors to come and participate in constructing the toll road, either as contractors or as investors through public-private partnerships,” said Basuki.

He also invited Turkish architects to see the new capital’s urban planning design and welcomed future discussions.

Indonesian Ambassador to Turkey Lalu Muhammad Iqbal said it was the right moment to tighten bilateral ties as the Indonesia-Turkey trade volume was quite small at only $1.6 billion in 2019.

Meanwhile, Investment Coordinating Board (BPKM) data show that Turkey’s total direct investment to Indonesia amounted to $24.8 million last year, placing Turkey 29th on the list of foreign direct investors.