Government Open Up Opportunities to Ease Infrastructure Investors

Indonesia International Infrastructure Conference and Exhibition 2012 (IIICE 2012), a Government of Republic of Indonesia initiative was held from 28th to 30th August 2012, at Jakarta Convention Center, Jakarta, Indonesia.

Online PR News – 05-September-2012 – Jakarta, Indonesia – The Government of Indonesia through two of its ministers once again invited private investors to participate in the country's infrastructure development. Various convenience have been prepared by the government to accelerate road and energy infrastructure in the country. Many opportunities and potential are still open to be explored by the private sector.

Such was stated on the second day of the Asia Pacific Ministers & Regional Governors and Indonesia International Conference & Exhibition (IIICE) 2012, at Jakarta Convention Center, Wednesday (29/8).

“We are inviting private investors to participate in the development of a freeway in Indonesia,” said Minister of Public Works of the Republic of Indonesia, Djoko Kirmanto before the conference participants. This freeway investment opportunity is still wide open. “There are still many opportunities to invest in more than 4,500 km freeway plan,” he stated.

The freeway itself will consist of Trans Java, Trans Sumatera and support toll roads. “With regards to support roads, investment opportunities in Pandaan-Malang and Pasir Koja-Kroya toll roads are now open,” he said.

The government has set up strategic steps to facilitate investors. “We've done regulatory framework reforms to accelerate highway construction,” said Djoko. Those regulatory reforms are related to land acquisition and concessions cooperation patterns between the government and private sector.

“Presidential Regulation No. 56 in 2011 concerns private partnerships for infrastructure work,” he said. Key points in the regulation sets government support in the form of land acquisition, permits, taxation, project implementation, and community development.

Thus, investors need not worry about land acquisition, which has often become a problem. This year the government has issued Law No. 2 in 2012 on Land Procurement for Development of Public Interest, and Presidential Regulation No. 71 in 2012 as a basis for implementation.

“Those two regulations becomes a certainty in easing land acquisition,” said Djoko. With those laws the negotiation time is shortened so as to accelerate land acquisiton. In addition, land prices are set by an independent appraiser. “In addition to that, incentive coordination and communication with other stakeholders such as the local government, court, the police, serves to speed up the land acquisition process,” he explained.

Toll Road Regulatory Agency (BJPT), as a contract admininstration agency, has also improved the concession agreement model to be more bankable and in accordance with market wishes (market value, market driven). In this concession agreement it is made possible for a cooperation agreement to reach as much as 50 years Financing are completed during 2 months after 75% of the land has
been freed by the government and independent consultants to correct contruction work. In addition, the toll rale adjustments are done in 2 years by considering minimum service standard compliance.

The Governor of South Sumatera, who is also Chairman of the Sumatera Governors Association, Alex Noerdin, added that all local governments will help in acquiring land for the construction of toll roads. As planned, the Trans Suamtra highway will have a length of 1980 km extending from Bakauheni to Banda Aceh. “Land acquisition will be conducted by the local government of each province in Sumatra,” he said.

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Conclusion :

On the 2nd day of the Asia Pacific Ministers & Regional Governors and Indonesia International Conference & Exhibition (IIICE) 2012, the focus of the whole discussion was more and more involvement of private sectors in the infrastructure development. For this, the Government of Indonesia has also brought an amendment to Land Procurement for Development of Public Interest and Presidential Regulation No. 71. With this new change, it surely hopes to continue its development on a vigorous note.