SEVERAL INFRASTRUCTURE PROJECTS TO BE COMPLETED IN 2019

by Andi Abdussalam

Jakarta, Dec 15 (Antara) - After conducting intensive infrastructure development in the country over the past four years, several projects have been completed and will be inaugurated in 2019.         Since the start of President Joko Widodo's (Jokowi's) administration in October 2014, the government has been focusing on the development of the country's infrastructure in an effort to develop connectivity and open access to isolated areas for the smooth implementation of the nation's economic activities.         The government's next intensive program will prioritize the development of human resources after focusing on infrastructure. President Jokowi aims to inaugurate several completed infrastructure projects in the remaining year of his five-year term in 2019.          President Jokowi revealed that currently, the work on several infrastructure projects has been completed and awaiting inauguration.         "Many have lined up but because it is difficult to manage time, there are many that we cannot inaugurate yet," President Jokowi remarked while launching the 2018 National Infrastructure One-Map Policy and Geoportal Progress Book at the Bidakara Hotel, Jakarta, on Tuesday (Dec 11).

INDONESIA OFFERS INFRASTRUCTURE PROJECTS IN ASEM FORUM

by Andi Abdussalam

Jakarta, Oct 1 (Antara) -  Indonesia offered infrastructure projects to investors and discussed on-going others with partner countries during the 4th Asia Europe Meeting - Transport Ministers Meeting (ASEM-TMM) in Bali on September 26-28.         During the ASEM-TMM forum, Indonesia discussed cooperation in the transportation and other sectors with, among others, Britain, Japan, China, Poland, Hungary, South Korea, the Philippines and Singapore.         During the first day forum, Indonesian  Transportation Minister Budi Karya Sumadi held the first bilateral meeting  with British Consultants to discuss cooperation in guide ship in the  Malacca Strait.          The British Consultants welcomed the idea of collaboration in vessel guides with European, Chinese, or Japanese. "During the first discussion, I proposed to a team from Britain to create a collaboration with ships guide owned by Europe, China, and Japan, and they expressed their ability to do so," the minister said.          Minister Sumadi discussed two possible cooperation with the Minister of Maritime, Economic and Interior Affairs of the Republic of Poland, Marek Grobarcyzk. Firstly, cooperation in the maritime sector, which included efforts to modernize the port in Kuala Tanjung, North Sumatra. Secondly, the offer of cooperation in the bus building industry, which included production and distribution to nearby countries.

SECURITY ISSUES HINDER INFRASTRUCTURE DEVELOPMENT IN PAPUA

by Andi Abdussalam

Jakarta, Sept 9 (Antara) - The Indonesian government, in its efforts to advance the local economy, is launching massive infrastructure development in Papua despite the Indonesian easternmost province sometimes experiencing unfavorable security conditions.          President Joko Widodo, who had visited the province recently, said reducing isolation, creating new jobs, alleviating poverty, carrying out equitable development, and increasing the human development index are parts of the government's efforts to overcome challenges in Papua Province.          One of the most important infrastructure development projects undertaken in the province is the construction of the Trans-Papua Highway. However, roads should be constructed in line with the condition in the region.          Armed civilians or unidentified gunmen still sometimes disrupt the security situation in the province. For instance, Chief Brigadier Awaluddin Elakhan, a police officer, was hit by an armed civilian in Tiom Market in Lanny Jaya District, Papua, some three years ago.          Hence, the road construction work had to be halted when the security situation became volatile.         This was acknowledged by Minister of Public Works and Public Housing Affairs Mochamad Basoeki Hadimoeljono who said the construction of Trans-Papua roads is still constrained by security issues.

GOVT TO RETAIN FOCUS ON INFRASTRUCTURE DEVELOPMENT IN 2017

by Andi Abdussalam

Jakarta, Jan 3 (Antara) - Infrastructure is one of the backbones of economic growth so the government will retain its focus on infrastructure development this year.         Last year, infrastructure did not function optimally in supporting economic growth.         Moreover, many damaged infrastructural facilities have not yet been repaired. This has hampered industrial progress and efforts to improve the competitive edge of products.         Therefore, according to Prof Werry Darta Taifur, economic analyst of West Sumatra's Andalas University, the government will still focus on building infrastructure this year.          "I am convinced that infrastructure is the backbone of Indonesia in reinforcing its economic growth," Werry said in Padang on Tuesday.         Werry argued that, up to last year, infrastructure in the regions was not maximally utilized and many facilities needed improvement. As a result, economic activity, notably industrial development, was hindered and failed to increase product competitiveness vis-à-vis overseas goods.

ALLOCATING BUDGET FOR INFRASTRUCTURE

by Andi Abdussalam

Jakarta, Aug 19 (Antara) - Adequate infrastructure, including  connectivity, is vitally important for economic development and prosperity of the country.         As a country of more than 17 thousand islands, Indonesia needs to build connectivity to facilitate its inter-island, inter-provincial and intercity transportation systems and to support its economic development and growth.         "Sea, land and air connectivity has a positive impact on the country's economic growth," legislator Fauzih Amro of Commission V on transportation of the House of Representatives (DPR) said in a written statement in Jakarta on Thursday.          The government in its Draft 2017 State Budget (RAPBN 2017), therefore, allocated Rp346.6 trillion for infrastructure development, Rp29.5 trillion more than the Rp317.1 trillion worth of allocation set in the Revised 2016 State Budget (APBNP 2016).          In its RAPBN 2017 and the related Financial Note documents released on Thursday, the government classified infrastructure development into three main groups, namely, economic infrastructure, social infrastructure and supporting infrastructure.

INDONESIA TO RAMP UP DEVELOPMENT OF INFRASTRUCTURE PROJECTS

By Andi Abdussalam

Jakarta, Feb 11 (Antara) - Indonesia is boosting its infrastructure development in an effort to provide economic benefits to its people and increase the country's competitive edge in the face of the ASEAN Economic Community (AEC).         "For this purpose, the government has selected 30 infrastructure projects worth some Rp851 trillion as priority projects to be developed until the end of the current government in 2019," Luky Eko Wuryanto from the Chief Economic Minister's office said on Wednesday.         The 30 projects were selected by the government through the Priority Infrastructure Development Acceleration Committee (KPPIP).         They will receive various forms of guarantees from the government, such as political, license and financial guarantees.         The guarantees for the 30 projects for the 2016 to 2019 period will be regulated under the Presidential Decree No. 3 /2016 on National Strategic Project Acceleration, according to Luky, who is the deputy for Infrastructure and Regional Development Acceleration at the office of the Chief Economic Minister.         Luky revealed this while speaking to the press during the Infrastructure Outlook 2016 event on Wednesday.

FOREIGN ASSISTANCE NEEDED TO BUILD INFRASTRUCTURE

by Andi Abdussalam

Jakarta, Dec 11 (Antara) - The Indonesian government acutely needs to cooperate with the private sector and avail of foreign loans to implement its infrastructure programs in 2016.          It is now preparing to finalize all phases of the 2016 infrastructure projects. Under the Ministry of Public Works and Public Housing, for example, there are some 1,600 infrastructure projects that need government-private partnership (KPS) and foreign loans.          National Development Planning Minister Sofyan Dajlil said the government will secure US$150 million in foreign loans to help finance preparations for infrastructure projects.          The government will need these loans to accomplish all the phases of the 2016 project preparations by the end of this year, he stated at a meeting of investors in Jakarta here on Monday (Dec.7).          The phases of project preparations include feasibility study, technical engineering design, land clearance, and project documentation.      "A loan commitment of US$150 million has been made to fund project preparations," he noted     According to the Minister of State-Owned Corporations (BUMN), Rini Soemarno, the entire planned infrastructure in Indonesia needed a total financing of around Rp5,000 trillion rupiah.          "It is impossible to source funding of such magnitude from within the country. It means that we need to attract foreign investors," Rini emphasized, after attending the Pertamina Energy Forum on Tuesday (Nov 24).

INDONESIA TO EXPEDITE INFRASTRUCTURE PROJECTS

By Andi Abdussalam

Jakarta, Nov 27 (Antara) - The government hopes to start implementing infrastructure projects by early 2016 in an effort to stem the continuing slide in the economy.          It is in the process of finalizing government-private partnerships (KPS) and foreign loan-funded infrastructure projects that will be implemented soon. Some 1,600 infrastructure projects under the Ministry of Public Works and Public Housing are ready for auction.          Minister of National Development Planning and Head of the National Development Planning Board Sofyan Djalil said on Wednesday that the projects are ready for auction and construction can start by early 2016.          "Those (ministries/state institutions), who have received a huge budget for infrastructure development, have been responsive," he noted on the sidelines of an economic seminar.          The government is expediting the implementation of the infrastructure projects because this can help overcome certain problems in the economy, which is still slowing down.          According to Finance Minister Bambang Brodjonegoro, infrastructure development is part of the solutions that will help stem the economic slide.         "The economic slowdown is still taking place. We must have a reliable sector that can halt it. We should boost government expenditure in infrastructure development," the Finance Minister noted here on Thursday.

BETTER INFRASTRUCTURE NEEDED TO REDUCE LOGISTICS COSTS

by Andi Abdussalam

Jakarta, Nov 19 (Antara) - Indonesia needs to build adequate infrastructure to facilitate the flow of 150 thousand tons of goods per day and reduce its logistics costs, which still account for 26.4 percent of the Gross Domestic Product (GDP).          Transportation Minister Ignasius Jonan stressed that the government must ensure the development of infrastructure in an effort to reduce logistics costs.          "I am confident that if infrastructure is developed and improved, logistics activities will become more efficient and effective," Minister Jonan said during a "Tempo Economic Briefing" in Jakarta on Tuesday.          The minister said that even development and improvement of infrastructure across the country will smooth the dispatch of goods and reduce the logistics cost that the people should spend.          "We all know our ultimate goals in this respect. We want our logistics activities to be more efficient and more effective. The problem of infrastructure and logistics should be solved not only by the private sector, but also by the government and state-owned enterprises (SOEs)," the minister said.

GOVERNMENT TO ACCELERATE 10 PRIORITY INFRASTRUCTURE PROJECTS

By Andi Abdussalam

Jakarta, June 5 (Antara) - The government will expedite the development of 10 priority infrastructure projects to accelerate economic development and support the efforts to improve the people's welfare.          President Joko Widodo in a limited cabinet meeting on the acceleration of infrastructure projects on Tuesday, last week, ordered to simplify the implementation process of infrastructure projects, so that they could be executed easily, and the people's expectations on infrastructure development could be realized.        "If the current process is maintained, it will take time to implement the infrastructure projects. The implementation process of the infrastructure projects must be simplified, so that they will bear results soon," the president noted.         He cited the example of the development of Jakarta's Mass Rapid Transit (MRT) system, which has taken a long time during the planning, funding, and construction phases.         "The preparation phase has taken too long, and decisions were not taken soon. The MRT has been planned since 26 years," the president stated.         Joko Widodo remarked that after the planning phase, there are other phases to be carried out such as the feasibility study, bluebook, environmental impact analysis, financing sources, and organization setting.

INDONESIA DEVELOPS INFRASTRUCTURE TO PREPARE FOR AEC

By Andi Abdussalam

Jakarta, Feb 24 (Antara) -- A free flow of goods, people and services will characterize the launch of the Association of Southeast Asian Nations' Economic Community (AEC) at the end of this year.          Infrastructure facilities such as roads, airports and seaports will be some of the key factors that will play important roles in the ASEAN free trade. Therefore, Indonesia is developing its infrastructure, particularly in regions that will face the AEC.          So far, enterprises have complained about the lack of adequate infrastructure to carry out businesses in the regions. The availability of good infrastructure will facilitate a smooth flow of goods and services across the country, boost economic activities and increase economic growth.          According to Suhariyanto, the deputy chief of the Central Bureau of Statistics (BPS), the government's economic growth target of 5.7 percent for 2015 will depend on infrastructure development.          "As we have overcome the subsidy burden, we have funds to develop our infrastructure. So the target of 5.7 percent will largely depend on the use of funds to develop infrastructure," Suhariyanto said recently.

GOVT TO BOOST INFRASTRUCTURE DEVELOPMENT IN 2014

By Andi Abdussalam

Jakarta, Aug 17 (Antara) - The Indonesian government plans to increase its infrastructure development budget to Rp208 trillion in 2014, from Rp180 trillion this year, in an effort to boost the nation's economic growth.          In addition to setting aside Rp208 trillion for infrastructure projects in the draft 2014 state budget, the government will also make available Rp18.4 trillion, with some Rp11 trillion to be used for infrastructure projects.         "We are aware of the fact that the development of infrastructure is still far from enough. We often feel this as an impediment in carrying out our socioeconomic programs," President Susilo Bambang Yudhoyono said when delivering the government's financial notes and draft 2014 state budget here on Friday.          According to Chief Economic Minister Hatta Rajasa, the Rp208 trillion allocation has not yet included regional budget funding for local infrastructure development.  "So, the Rp208 trillion is a state budget for the central government's infrastructure development," he said.

MORE FUNDS NEEDED FOR INFRASTRUCTURE EXPANSION

 By Andi Abdussalam

          Jakarta, Aug 28 (ANTARA) - The total fund of Rp361.45 trillion allocated from the draft state budget of 2013 and other sources, will be inadequate for developing infrastructure in the country and maintaining a sustainable economic growth rate.

         Ideally at least 5 percent of the Gross Domestic Product (GDP) should be assigned for infrastructure development and achieving sustainable economic growth.

         The draft state budget has set aside Rp188.4 trillion for this purpose, while the regional budget will contribute Rp96 trillion, Rp77 trillion will come from state-owned companies and about Rp60 trillion from the private sector.

         Therefore, the total Rp361.45 trillion promised for development only accounts for 4.56 percent of the GDP, which is less than the 5 percent needed.

         "Funds for infrastructure development have been culled not only from the state budget, but also from other sources, and if taken together the total amount will not account for more than 4.56 percent, which is lower than the required 5 percent for maintaining sustainable economic development," Minister for National Development Planning Armida Salsiah said on Tuesday.

         She also pointed out that prior to the economic crisis of 1998, the Indonesian government always set aside a fund for infrastructure development amounting to about 7 percent of the GDP, but after the crisis, this allocation has dropped to about 3.5 percent.

         "Now we are trying our best to gradually raise the budget for infrastructure to 5 percent," Salsiah stated.

         "However, even the 5 percent is not sufficient for carrying out poverty elimination programmes, because if the state does that, it will have to further increase its investment in infrastructure expansion to between 7 percent and 8 percent of the GDP," she added.

         The minister said that funding for infrastructure growth will be raised gradually. For this purpose, the government is collaborating with state-owned firms and the private sector to expand infrastructure in various sectors under the Master Plan for the Acceleration and Expansion of Indonesia¿s Economic Development (MP3EI).

         For instance, the Indonesian government has set aside a budget of US $20 billion for investment in infrastructure development in the transportation and energy sectors.

         Finance Minister Agus Martowardojo said last year that the investment for infrastructure growth in the 2010 to 2014 period is estimated at Rp1,400 trillion. However, the government has only been able to finance around 30 percent of this total figure.

         The government also plans to accelerate infrastructure development to help integrate the country's six economic growth corridors, offset inflation and boost finished goods exports.

         If these plans are implemented effectively, the Indonesian economy could grow between 7.1 percent and 7.6 percent during the 2011 to 2014 period. It even has the potential to reach 8 percent if infrastructure is improved quickly.

         "If the participation of the private sector reaches 50 percent of the total amount needed, and if the government increases it¿s spending for transportation infrastructure to 20 percent, then the goal of 8 percent economic growth is achievable," Fauzi Ichsan, a senior economist at the Standard Chartered Bank said.

         Referring to the development of road infrastructure, President Susilo Bambang Yudhoyono said the government has set aside US $20 billion or Rp$190 trillion for the country¿s infrastructure development in 2013.

         "Most of the funds will be needed to develop the energy and transport sectors,¿ Yudhoyono said during the inauguration of the Asia Pacific Ministers and Regional Governor Conference (APMRGC) on sustainable infrastructure development on Tuesday.

         With the budget set for 2013, the government plans to extend national roads by 4,218 kilometers, build an additional 559 kilometers of new roads, and lay down 380 kilometers of new railway tracks and develop 15 new seaports.

         These sustainable and continuous infrastructure development efforts are aimed at meeting the development goals for the millennium. ¿The development of infrastructure facilities such as bridges will positively impact people¿s economy,¿ the president said at the Indonesia International Infrastructure Conference and Exhibition (IIICE) 2012.

         However, Indonesia still needs around US $250 billion for further infrastructure development.

         "Indonesia is always open to other countries or private parties investing here," Yudhoyono said, adding that faster development of infrastructure is needed to sustain the economic growth of the region.

         The president said he hopes that APMRGC will end by encouraging stronger cooperation for infrastructure development among the regional countries.

         Altogether, he pegged the cost of infrastructure construction in the country at US $250 billion.

         These funds will be needed for the advancement of electricity, energy, roads, railways, airport and seaport infrastructure and for expanding the country¿s information and communication technology systems, he said.

         The president therefore invited governments and investors from other countries to participate in Indonesia¿s infrastructure development.

         "In order to support the program, we have forged various comprehensive and strategic partnerships. We have developed a public-private partnership (PPP) scheme, which should hopefully attract more investors," he said.

         He also pointed out that many of the ongoing infrastructure projects under the MP3EI programme have been financed through this scheme. ***2***

(T.A014/INE/A014/KR-BSR/A/A014) 29-08-2012 16:56:1

RI FACING CRITICAL PERIOD IN INFRASTRUCTURE DEVELOPMENT

by Andi Abdussalam

Jakarta, Nov 25 (ANTARA)  - The coming three years will be a very critical phase for Indonesia in the development of its infrastructure as  it  would only have two options, namely developing fast and strategic infrastructures or being trapped in  structural and prolonged congestion.          The next three years until 2014 will be crucial for Indonesia's infrastructure development. However, observers see that the government still has no solid policy in the field that would support the development of its infrastructures.           "The government's latest policy in this sector such as a master plan for the acceleration and expansion of Indonesia's economic development (MP3EI) has not yet been prepared well in the field," Suyono Dikun, a professor at the University of Indonesia, said on Thursday.          Failure to develop enough infrastructures in the country will cause congestion in different sectors, not only in the traffic one.          "The congestion will happen not only on roads but also on railway tracks, ports, airports, power energy, irrigation, drinking water and others," Suyono said.          He said that if Indonesia failed to develop more modern, efficient and quality infrastructure in the coming few years, it would  lag far behind other nations.          Legislator Rhendy Lamadjido and expert staff of the ministry of public works Danang Parikesit shared Suyono's view.           Suyono, who is also a former deputy to chief economic minister for infrastructure pointed out that institutionally the government had basically tried to do its best to develop infrastructures such as through the Policy Committee for the Acceleration of Infrastructure Development Preparations (KKPPI) and the issuance of various presidential regulations such as Presidential Regulation No. 81/2003, Presidential regulation no. 42/2005 and No. 12 / 2011.          "Presidential Regulation No. 13/2010 on Public Private Partnership (PPP) has also been revised with presidential Regulation No. 56/2011, yet the long efforts made in the span of 10 years have not yielded an encouraging result," he said.           Sharing Suyono's view was legislator Rhendy Lamadjito of the House Commission V on public works affairs. He said that Indonesia's infrastructure development was now entering a critical period.          Rhendy said that so far there was something wrong with the budget policy on infrastructure. He cited as an example tenders for infrastructure projects. Tenders were called in June-July while their contracts were signed in August, only after which could the budget be disbursed.          "To make this more complicated difficult is the fact that there were post-fasting month and Christmas activities, while at the same time the budget year and disbursement were limited to the year-end," he said.          As a result according to Rhendy who is also chairman of the National Construction Services Development Institute, it is quite understandable if the absorption of public works budget in the infrastructure sector only reached 50.8 percent, leaving about 1,500 more infrastructure projects in the ministry not implemented.          "Players in the field also face a problem of interest rate where they need soft interest policy so that  it is urgent in this respect for the government to consider establishing a construction bank," Rhendy said.           The situation was also worsened by new policies issued to accelerate infrastructure development such as the Public-Private Partnership (PPP) and the Master Plan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI). It turned out that these policies had no strong legal basis such as law. "This is why it is difficult for foreign and domestic investors to enter infrastructure projects," he said.          Rhendy said that the other important thing was the fact that many legal products and other regulations had been issued but the government was inconsistent  in its implementation,  such Law No. 18/1999 on construction Services.          Expert Staff of the Public Works Minister, Danang Parikesit said that what the government expected in issuing a number of polices such as the PPP and MP3EI could not yet be realized as the scems could not be implemented in the field.          "Initially in November 2009 the MP3EI was only an idea, along with the idea of economic corridors, yet in May-June this year it was decided as a policy that has to be carried out while the instruments and strategies for its implementation in the field not yet existed. Only now does the government formulate it," Danang said.          Therefore, the government needs to stress the MP3E and PPP, whether they are merely re-branding or they are needed to boost development. "If they are only for re-branding, there is no need to support them with a law," he said.          Regarding the critical situation in the coming three years, Danang said it was in the context of comparing it with other countries."Yet, in the real sense, the Indonesian infrastructure is basically growing," Danang said.           In term of infrastructure development financing where the state budget is expected to provide 30 percent while the private sector is expected to contribute 70 percent, Danang said that if the 30 percent financing is carried out in the right way and transparently, the private sector would contribute the70 percent easily.          Some time ago, an estimate made by  the Indonesian Chamber of Commerce and Industry (Kadin) showed that Indonesia will need Rp2,855 - Rp2,910 trillion to finance its infrastructure development in the 2010 - 2014 period.          The government since recent years has the commitment to stimulating investment in infrastructure development in order to boost economic growth to about 6-7 percent by 2014.          The government hopes for a total investment of Rp2,000 trillion while actually it will have an investment of about Rp1,600 trillion in the next five years in order to achieve the growth target.          Owing to the big investment needed to develop infrastructure, the government has to promote its infrastructure development to the private sector as it could only finance 30 percent of the total funds needed for the projects.         About 70 percent of the infrastructure projects are expected to be financed by private companies, among others through a private public placement (PPP) scheme.***5*** (T.A014*E008/A/HAJM/23:51/a014) 25/11/2011

INFRASTRUCTURES NEED MORE FUNDS FOR ECONOMIC EXPANSION

By Andi Abdussalam

Jakarta, Sept 26 (ANTARA) - Despite President Susilo Bambang Yudhoyono's  efforts over the past two years to increase the state budget allocation for infrastructure development, many quarters  have assssed the amounts so far to be too small for accelerating economic development.          According to a World Bank economist, Indonesia has to increase its budget allocation if it wants to achieve the goals of its economic development as outlined in its master plan.          World Bank trade economist Henry Sandee said recently that so far Indonesia had allocated only a small amount of funds for the development of its infrastructures.          In the last ten years, the allocation for infrastructure was only about two to three percent, yet now there has been an improvement as it has been increased to 19.3 percent, he said.          Actually, in the last two years, President Yudhoyono had always promised to focus on infrastructure in order to boost the country's economic development.   The budget for infrastructure in 2011 was raised from Rp108 trillion in 2010 to RP126 trillion in 2011.          "We are going to focus the budget on development of good quality infrastructure facilities in our efforts to improve the pace of economic development," President Susilo Bambang Yudhoyono said when he delivered the government's financial note and the 2011 draft State Budget (APBN) in August 2010.          In the meantime, when he delivered the 2012 draft state budget last August, President Yudhoyono said the government had set Rp168.1 trillion in the 2012 Draft State Budget for the development of infrastructures, including energy, food resilience and communications infrastructure.          He said that in the 2012 draft state budget the allocation for capital expenditure was set at Rp168.1 trillion, up Rp27.2 trillion or 19.3 percent from the 2011 revised state budget.          According to the World Bank's trade economist, there has been an increase, yet it is not enough for accelerating economic development.          "There has been an improvement because capital expenditure for infrastructures has increased 19.3 percent, but if it is willing to achieve its MP3EI (Master Plan for Acceleration of Indonesia's Development and Economic Expansion) target, it should increase further the allocation," Henry Sandee said.          The funds Indonesia allocates for infrastructure development, including those for 2012 which stand at Rp168.1 trillion, are still small, Henry said.          The budget for infrastructure development in advanced countries like Germany usually accounts for seven to eight percent of their Gross Domestic Product (GDP), Henry Sandee.          He said Indonesia's fund allocations for the infrastructure sector in the last ten years only account for about two to three percent of its GDP.  Indonesia's total GDP IN 2010 was recorded at Rp6,422 trillion while its allocation for infrastructures was only Rp134.61 trillion or only about 2.09 percent of its GDP.          One of the strategy to achieve the MP3I target, according to the WB, is to cut logistics funds which at present reached 20 percent of the total operational and production costs.          The MP3I goals included an effort to include Indonesia among the world's big ten economies with a gross domestic product of US4.5 trillion and a per capita income of US$15,000.   Indonesia is currently included in the world's  big 17 economies with a per capita income of US$3,000.          Besides small budget, the government is also slow in absorbing budget for the development of infrastructure.          Up the end of last August, the absorption of the 2011 budget was still low, namely only 51.3 percent. Moreover, the realization of capital expenditure was only 26.9 percent.          "It is not good if the budget surplus is too big because some infrastructure projects which should be finished would be neglected," Kemal Azis Stamboel, member of House Commission XI on financial affairs said on Monday.          In the meantime,  Director General of State Treasury Agus Suprijanto has previously told a hearing with Commission XI of the House that the budget surplus up to the middle of September reached Rp74.3 trillion, which increased from Rp41.01 trillion at the end of last August.          The surplus was the difference between the realized state income of Rp779.9 trillion, or 66.2 percent of the  revised 2011 state budget's ceiling, and the realized state spending amounting to Rp700.6 trillion.          Kemal said that the delay in the development of an infrastructure project would reduce the country's supporting capacity in generating economic growth, creation of more job opportunities and improving the people's prosperity.          "In addition, our competitive edge will be reduced in the face of our competitors," he added.          He said that this year, the ranking of Indonesia's competitiveness dropped two points from 44 last year to 46. And one of the causes was related to the lack of infrastructures.          "This should be kept as an important note, so that parties responsible for the implementation of capital expenditure, particularly the one that concerns infrastructures, will seriously realize the absorption of the budget while not neglecting the funds that have been allocated," Kemal said.***5*** (T.A014/A/HAJM/21:35/a014) 26-09-2011 21:44:4

MORE BUDGET EXPECTED TO REMOVE DEVELOPMENT BOTTLENECKS

By Andi Abdussalam

Jakarta, Aug 18 (ANTARA)  - Increased budget on infrastructure is expected to be absorbed effectively to remove the bottlenecks in the infrastructure development and to enhance inter-regional connectivity so that the country's economy could grow well.         "The capital expenditure allocation for infrastructure must be used effectively.  The infrastructures that we build  must have economic functions," economic observer Enny Sri Hartati of the Indef said.          Enny made the statement in response to an increased budget of Rp168.1 trillion allocated for infrastructure development in the 2012 draft state budget President Susilo Bambang Yudhoyono unveiled on Tuesday.           The amounts of budget for infrastructure have continued to increase every year but the use of the funds for  development and maintenance of infrastructures was still low.          The absorption of the funds so far was not yet running effectively because the government tended to build and reconstruct physical facilities such as government buildings which had no economic functions.          "Infrastructure expenditures must be used mainly to eliminate  bottlenecks and improve  connectivity between cities and villages, food resilience and people's prosperity," she said.          In his state-of-the-nation address before the parliament on Tuesday President Susilo Bambang Yudhoyono said the government had set Rp168.1 trillion capital expenditure in the 2012 Draft State Budget for the development of infrastructure, including energy, food resilience and communications infrastructure.         "We design the increase in the capital expenditure for supporting infrastructure development, including energy, food resilience and communications infrastructure," the President said.           He said that infrastructure expenditures must be increased in order to overcome bottleneck in infrastructure and develop domestic inter-connectivity, food resilience, energy resilience and people's prosperity.           Infrastructure is one of the nine main targets of the state expenditures the president mentioned in his state address. For this, the president has promised to increase expenditure budget on infrastructure.          "We will aim expenditures at achieving nine main targets  namely expenditure on infrastructure," President Yudhoyono said.           He said, in the 2012 Draft Stage Budget, the allocation of capital expenditure for infrastructure was set at Rp168.1 trillion, up Rp27.2 trillion or 19.3 percent from the 2011 revised state budget.           Budget for infrastructure has continued to increase every year. In 2010, the budget for it was set at Rp108 trillion, and it was increased to Rp140.9 trillion in the 2011 revised state budget.          According to President Yudhoyono the budget for infrastructure in 2012 amounting to Rp168.1 trillion will be used to develop various infrastructure projects such as railways, airports, roads and bridges.          With that budget,  the government is planning to increase the country's inter-regional connectivity so that the capital expenditure was planned among others to build railways networks with a total length of 150 km, rehabilitate 116 airports, build 14 new airports in various places in the country.          "We will keep a balance in the development of even infrastructure in various parts of Indonesia," the president said.           In order to overcome infrastructure's bottleneck and increase the inter-regional connectivity, the government is planning to use the capital expenditure budget to upgrade and construct  new roads with a combined  total length of 4,005 km.          Besides, the government would repair, preserve and maintain 36,319 km of roads, build 7,682 meters of new bridges while maintaining 217,076 meters of bridges throughout the country.          According to Finance Minister Agus Martowardojo, investment in the infrastructural sector in the 2010 - 2014 period is estimated at Rp1,400 trillion. However, the government is only able to finance 30 percent of the needed investment.          The government will accelerate the realization of   as part of its efforts to integrate the country's six economic growth corridors, to offset inflation and boost finished goods exports.          If the best scenario is implemented, the Indonesian economy could grow by 7.1 percent to 7.6 percent during the 2011 - 2014 periods. It even has the potential to reach 8 percent in accordance with expectation if infrastructure is improved.         "If the participation of the private sector in the development of infrastructure could reach 50 percent of the needed investment, and the government   increases its spending for transportation infrastructure to 20 percent, the matter (8 percent growth) could be reached," Fauzi Ichsan, senior economist of Standard Chartered Bank, said recently.           He said that toll roads, electricity plants and ports were among the infrastructure facilities that needed to be improved. After all, the development of infrastructure in the last decade had run very slowly and depended on the government budget.         In this case, the government hoped that the private sector is expected to take part in the development of infrastructure.          According to Vice Minister for Financial Affairs Anny Ratnawati  investment in the infrastructure sector would be carried out through a partnership program.  "Investment in the infrastructure sector would be carried out through a government-private sector partnership program," the vice minister said once said.***5*** (T.A014/A/H-NG/00.58/a014) 19-08-2011 00:51:2

GOVT TO ACCELERATE INFRASTRUCTURE DEVELOPMENT

By Andi Abdussalam

Jakarta, Feb 22 (ANTARA) - The government will accelerate the realization of infrastructure projects worth US$90 billion as part of its efforts to integrate the country's six economic growth corridors, to offset inflation and boost finished goods exports.          In essence, the government wishes to accelerate and expand economic development in which all sectors and development focuses are integrated regionally. In the future, exports will be carried out in the form of finished goods.          "We do not want to only export raw materials. Each region must have a prime product. Therefore infrastructure and manufacturing development will be done based upon regional potentials," Chief Economic Minister Hatta Rajasa said on Monday.          He said that the funds that have been discussed several times amounted to US$90 billion to be put in infrastructure, airports, and railway and toll road development.          "That is what is meant by acceleration," the chief economic minister said.          In that way, the government hopes that inflation could be offset and economic growth could be boosted.          If the best scenario is implemented, the Indonesian economy could grow by 7.1 percent to 7.6 percent during the 2011 - 2014 periods. It even has the potential to reach 8 percent in accordance with expectation if infrastructure is improved.          "If the participation of the private sector in the development of infrastructure could reach 50 percent of the needed investment, and the government increase increases its spending for transportation infrastructure to 20 percent, the matter (8 percent growth) could be reached," Fauzi Ichsan, senior economist of Standard Chartered Bank, said.          He said that toll roads, electricity plants and ports were among the infrastructure facilities that needed to be improved. After all, the development of infrastructure in the last decade had run very slowly and depended on the government budget.          "The government is not yet able to allocate the needed funds while the participation of the private sector is still beyond expectation," Fauzi said. Moreover, the lack of infrastructure is the main factor causing investors to be reluctant to make their investment in Indonesia.          Fauzi listed six points that discouraged investors, namely legal uncertainty or corruption, regional autonomy, insufficient infrastructure, labor affairs, taxes and import duties.          In addition, the distribution of national land transportation system remains imbalanced while the development carried out on the islands outside Java is still below their real potentials.          "Compared with those of its ASEAN neighbors, Indonesia's ports are outdated and are overloaded so that they place Indonesia in a less competitive position in the face of international trade," said Fauzi.          At the same time, land transportation infrastructure, such as roads,  toll roads, railways and bridges are still concentrated in Java.          "Java is resided by 59 percent of the population and accounts for 7 percent of the country's land areas but it only contributes about 58 percent to the country's gross domestic products (GDP)," he said.          Therefore, Indonesia needs to overcome its infrastructure constraints to assure the growth of its economy based on its potentials --namely to grow by about 8 percent per annum-- and  to contain inflation in line with efforts to push down prices to a level equal to those in other countries in Southeast Asia.          Therefore, according to Chief Economic Minister Hatta Rajasa, the government is planning to accelerate Indonesian economic development through six economic growth corridors that would integrate economic development in Sumatra, Kalimantan, Java, Bali, Nusa Tenggara, Sulawesi, North Maluki, Papua and Maluku.          "There are three pillars in the corridors namely infrastructure, connectivity and human resource development and science and technology development," Hatta Rajasa said.          Regarding the implementation of the government plan, Hatta said a team would be established to monitor the implementation and problems met during the process so that they could be settled quickly and correctly. "There will be task forces assigned based on corridors in which there are also sectors," he said.          Hatta said in the economic acceleration program there are eight main programs and 17 main economic activities. The eight programs include industry, agriculture, mining, energy, marines, tourism, information and telecommunication and strategic zone development. The 18 activities meanwhile cover manufacturing industry involving products such as steel commodities, food and drinks and other commodities, mining that includes nickel, copper and other commodities.          In the infrastructure development, Industry Minister MS Hidayat has offered Japanese companies cooperation to develop infrastructure facilities in the country's six economic corridors.          The minister offered the cooperation during a meeting with Japanese businessmen grouped in the Japanese chamber of commerce (Keidanren) at his office last week.          "We plan to develop infrastructures along Jabodetabek (Jakarta, Bogor, Tangerang and Bekasi), ranging from Cikarang, Karawang to Banten so that we will have complete infrastructures," he said.          He said the ministry would discuss cooperation priorities with  Keidanren to develop the infrastructures. "We also promoted industrial clusters that need Japanese investment in the energy field," he said.          Earlier, Japanese business leaders grouped in the Keidanren led by its, Hiromasa Yonekura, have reaffirmed their commitment to helping the Indonesian government implement its infrastructure development program as part of the ASEAN-Indonesia connectivity system.          In a meeting with President Susilo Bambang Yudhoyono who was accompanied by Hatta Rajasa last week, the Japanese business leaders expressed their commitment to the development of priority metropolitan area as one of the Indonesian development corridors.           "The President presents five areas where cooperation needs to be increased namely transportation, food sector, renewable energy development including geothermal, environment and power plants," Hatta said.              (T.A014/A/HAJM/16:55/a014) 22-02-2011 16:45:1

BUSINESSES WANT BETTER INFRASTRUCTURAL FACILITIES

By Andi Abdussalam

Jakarta, Sept. 28 (ANTARA) - Businesses urge the government to focus on the development of infrastructure such as roads, seaports, airports, electricity and other facilities that support the activities of domestic industries so that they would improve the competitive edge of the country's products and boost economic growth.          "Last year we were the biggest low calorie coal exporter, had the largest agricultural land and highest volume of crude palm oil (CPO) production. These are assets for us to build sustainable economic growth. However,  this all would have weak contribution to the economic growth if they were not supported by enough infrastructural facilities such as roads,  electricity, seaports and airports," Vice President of PT Indika Energy Wishnu Wardana said here on Tuesday.          So far, businesses considered that the development of infrastructure in the country has not yet been done maximally. Thus, the competitive edge of the country's products could not yet be improved.          "There is no significant improvement in industrial competitiveness because the government fails to focus on infrastructure. The government can only meet 30 percent of the economic budget and the rest is for the business sector, but it should be supported by infrastructure and the budget should be focused on infrastructure," Andi Putra of the Indonesian Chamber of Commerce and Industry (Kadin) said  recently.          According to Andi, the government should start to focus 2011 budget on infrastructure development in agriculture sector in an effort to step up domestic industrial competitiveness.      "It is for agriculture infrastructure in wider sense. If the infrastructure for production and industrial products derivation in this sector is good, we will certainly be more competitive," he said.          Meanwhile Kadin deputy chairman for  fiscal policy and monetary Haryadi Sukamdani said that in making the policy the government should also consider the capability in business and industrial sector to maintain competitive power.          "Do not make a policy which systematically weaken the competitive power by raising basic electricity rate tariff and plans to raise it again next year," Haryadi said.  He said it's better for the government to improve energy policy so that industrial and business players were not burdened by high energy cost.         Indonesian Young Businessmen Association (Hipmi) chairman Erwin Aksa said meawhile that domestic business players so far were less competitive with overseas producers because infrastructure had yet to be well developed and the government policy did not support business and industrial activity.          "Industrial development is also slow and only grows by four to five percent per year while in reality it could reach 11 percent in 1998," he said.          President Susilo Bambang Yudhoyono said last month that the government would focus on the development of infrastructure in 2011. "We are going to focus the budget on the development of good quality infrastructure facilities in our effort to improve the pace of economic development," President Susilo Bambang Yudhoyono said in his statement on 2011 draft State Budget (APBN) last month.          The president said the funds would be used among other for construction of 4,551-meter flyovers and underpasses, and  bridges of a total length of 2,119 meters.          "We will also use the funds to preserve 355,961 kilometers of roads, 212 roads, and 212.36 kilometers of bridges in addition to stepping up the capacity of 2,613 kilometers of roads," the president said.          For infrastructure development next year, the government will increase its budget from Rp108 trillion to RP126 trillion.          According to Vice Minister for Financial Affairs Anny Ratnawati the budget for infrastructure in 2011 would increase Rp18 trillion to Rp126 trillion from Rp108 trillion in 2010.          "Investment in the infrastructural sector would be carried out through a government-private sector partnership program. In 2010, the budget for it is set at Rp108 trillion, and it will increase to Rp126 trillion in 2011," the vice minister said on Tuesday.          She said that the budget in the infrastructural sector should be managed as well as possible so that Indonesia's competitiveness could be increased. The increase in the infrastructure funds was expected to boost economic growth because the country's competitive edge would also be raised.          Businesses hailed the increase in the infrastructure budget, as what was said by Vice President of PT Indika Energy, Wishnu Wardana.          "The government cannot do it alone. It needs the private sector's role. But we need legal certainties which at present are being questioned by many quarters," he said.          After all, the government is only able to finance about 30 percent of the needed infrastructure development which reach about Rp280 trillion per year.  According to Finance Minister Agus Martowardojo, investment in the infrastructural sector in the 2010- 2014 period is estimated at Rp1,400 trillion, of which the government is only able to finance 30 percent.          In order to accelerate the development of infrastructure in the country,  the government will begin auctioning the 2011 infrastructure projects next November so that the disbursement of the budget could be realized earlier.          "Our target is that the auction  for infrastructure projects in 2011 would have begun in November this year and contracts would have been concluded in January 2011," director general for road construction of the Public Works Ministry, Djoko Murjanto said.           He said that accelerating the auction of the 2011 infrastructure projects and the finalization of the work contracts was to speed up the project realization and budget absorption so that it would not accumulate at year end.***2*** (T.A014/A/HAJM/22:34/H-YH) 28-09-2010 22:38:3

RI EXPECTS COMMITMENT ON INFRASTRUCTURE AT G20

By Andi Abdussalam

Jakarta, June 27 (ANTARA) - Indonesia, which needs over Rp2,000 trillion to build its infrastructure and to achieve an economic growth of about 6-7 percent in the next five years, expects investment commitments from bilateral countries taking part in the current G20 summit in Toronto, Canada.          The Indonesian government hopes that about 70 percent of infrastructure development in the next five years to boost domestic economic activities would be financed and carried out by  the private sector.          Therefore, according to President Susilo Bambang Yudhoyono, the Indonesian government would continue to encourage infrastructure development cooperation with private parties.          Speaking on board the Garuda Indonesia presidential aircraft flying him to Toronto on Friday, the president said infrastructure development could not be the government's responsibility only because it did not have enough funds.          "The government needs private sector involvement in infrastructure development at home. If necessary, foreign investors will be invited  to take part because our infrastructure sector is of high value," President Yudhoyono said.          Based on an estimate of the Indonesian Chamber of Commerce and Industry (Kadin), Indonesia will need Rp2,855 - Rp2,910 trillion to finance its infrastructure development in the 2010 - 2014 period.          Paskah Suzetta, then minister of national development planning/head of Bappenas, once said that the government will stimulate investment in infrastructure development in order to boost economic growth to about 6-7 percent by 2014.          "We hope for a total investment of Rp2,000 trillion while actually we will have an investment of about Rp1,600 trillion in the next five years in order to achieve this growth," he said.          Owing to the big investment needed to develop infrastructure, the government has to promote its infrastructure development to the private sector as it could only finance 30 percent of the total funds needed for the projects.          About 70 percent of the infrastructure projects are expected to be financed by private companies, among others through a private public placement (PPP) scheme.         According to President Yudhoyono, the infrastructure sector has an important position to step up national economy through among others transportation facility, agriculture sector, and services.          "We will continue to increase infrastructure budget because in many countries, infrastructure development is the unification of public and private partnership," the president on said on his way to Toronto.          The president among other hoped that cooperation between China and Indonesia could be further expanded in various sectors to bring more benefits to both countries.          "As we know, the cooperation and relations between Indonesia and the People's Republic of China have been very good and continued to develop. We hope the strategic partnership as well as cooperation and friendship will grow further," he said at a meeting with Chinese President Hu Jintao at Hotel Intercontinental in Toronto on Saturday morning.          He said the two countries had a very good history of relationship and he hoped with the meeting held on the sidelines of the G20 Summit the relations would continue to improve.          "China is an important partner and a good friend of Indonesia. We hope the cooperation would continue. I wish to hear anything we can do (for cooperation) in the future," he said.          In their later meeting Saturday evening China agreed to increase its investment on infrastructure so that by the end of 2014, its investment in Indonesia would reach US$50 billion.          According to Chief Economic Minister Hatta Rajasa,  Chinese President Hu Jintao and President Susilo Bambang Yudhoyono discussed the matter  in their meeting on the sidelines of the G20 summit which is being held in Toronto on June 26 and 27.          The minister said that the talks between Yudhoyono and Hu were very productive and that the two sides agreed to continue increasing both countries' economic relations.          China will continue to increase its investment in the infrastructure and trade sectors so that by 2014 it is expected to reach US$50 billion, Hatta Rajasa said.          Deputy Public Works Minister Hermanto Dardak said recently in Jakarta that four infrastructure projects funded with loans from China were likely be carried out fully by Chinese contractors.          "That is what the Chinese ambassador has said. The packages will be one hundred percent carried out by Chinese contractors. We are now still trying to ask for the involvement of local contractors in the projects," he said.          He said his office would continue to negotiate so that local contractors could be involved in the projects.          "In reality and based upon experience it was possible like in the construction of the Surabaya-Madura bridge which was also funded with loans from China. Indeed China controls up to 60 percent of the project with the rest going to local contractors," he said.          He said the four infrastructure projects to be carried out by Chinese contractors are the 25-kilometer long Medan-Kualanamu toll road project in North Sumatra worth US$150 million in investment, the Cileunyi-Sumedang-Dawuhan toll road project in West Java with part of its funding to come from national and regional budgets and the Tayan bridge in West Kalimantan and the Kendari Bay bridge in Southeast Sulawesi.    (T.A014/a/H-NG/a014)27-06-2010 16:54:0