Sat, 04 Nov 2006
From: Tempo Interactive
By Friday, 03 November, 2006 | 12:20 WIB
TEMPO Interactive, Jakarta: Investment realization from Europe on the infrastructure sector in Indonesia is targeted at 40 billion euro or around Rp464 trillion. The amount is equal to five percent of Europe's investment ability in the infrastructure sector every year at 800 billion euro.

Deputy Chairman of the European Business Chamber Michael Olson said that 200 companies owned by its 83 members will invest in Indonesia. All infrastructure projects were of interest except toll road projects. He explained that toll road projects was not suitable for European investors. Matters on land acquisition and competition with regional players were the obstacles.

Other projects that European investors were less concerned with was the clean water projects. This is in connection with the regulations and the tariff for the water. “Investors will have losses,” said Olson at Indonesia Infrastructure 2006.

The project that European investors were mostly interested in was telecommunication. The reason was that the sector has been controlled by European investors. “It has a distinct market,' he said yesterday (11/2). In addition to telecommunication, electricity was also on their list.

Investment realization from Europe, said Olson, depended on how the existing difficulties could be removed. According to him, the biggest barrier was communication. The government was evaluated as not understanding investors' wishes. In addition, investors did not take in the details as regards infrastructure projects. “We've been waiting for years,” he said.

Vice President Jusuf Kalla said a big business opportunity on the infrastructure sector for foreign investors lies in Indonesia. He explained that with a 6 percent target of economic growth per year, an additional electricity supply of 3,000-4,000 megawatt will be required. “That will be a very big business opportunity for you,” he said when speaking before the conference yesterday (11/2).

Kalla said the government has issued a support letter for the 10 thousand megawatt project. The government, he said, will pay liabilities to investors if PLN is unable to pay.

While, Coordinating Minister for the Economy Boediono said that up until now there is not yet any funding commitment from foreign parties for financing infrastructure projects. “Financial institutions have only mentioned their interest,” he said. The institutions include the Asian Development Bank, International Finance Corporation and Middle East investors.

HARUN MAHBUB | SUTARTO | EWO RASWA



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