The Indonesian Chamber of Commerce and Industry is urging the new government to issue an emergency regulation to address the slow pace and high cost of land acquisition for public infrastructure projects.
An emergency regulation carries the force of law, but must be ratified by the House of Representatives (DPR) within three months or be revoked.
“By issuing an emergency regulation, the government could accelerate the land-acquisition process, which always takes an inordinate amount of time due to negotiations with land owners on compensation,” Fathur Rochman, chairman of the chamber’s toll-road committee, said on Thursday.
He said an emergency regulation would attract investment to the toll-road and public housing sectors.
Otherwise, he argued, the issue would have to be reviewed by the House, which would likely be a long, drawn-out process.
Fathur said both the chamber, also known as Kadin, and toll-road investors had been disappointed with the slow progress of expressway construction around the country.
To date, he said, only 690 kilometers out of the 1,700 kilometers targeted by the government for the 2004-2009 period had actually been built.
“There are no clear mechanisms governing land acquisition, the decision-making process or negotiations for compensation. These are the key issues holding back the construction of expressways,” Fathur said.
One of the biggest problems, he said, was the lack of an independent agency to intervene to assess fair and reasonable land prices.
He said the emergency regulation should also assign the responsibility for resolving land-price disputes to the courts. “In the past, demands for compensation payments could halt land acquisition. But in the future, we want to see the removal of this sort of obstacle,” he said.
He said land acquisition should be made the responsibility of the government, rather than the investor. This was necessary, he said, to allow investors to focus on construction.
Kadin is also urging the government to address the slow rate at which public housing supply is coming on stream, due to the slow land-acquisition process.
Lukman Purnomosidi, Kadin’s deputy chairman for infrastructure and public housing, said the country needed to build about 800,000 homes per year to meet demand.
To overcome this, he said, developers and the government should accelerate the provision of public housing by redeveloping urban slums.