Wed, 08 Nov 2006
Indonesia sought to reassure investors attending a key infrastructure summit that the government is fighting hard to end corruption and slash red tape in the country.

Hundreds of foreign and domestic investors attended the event at which 111 projects worth $19.1 billion were offered in an urgent bid to rejuvenate the nation's crumbling infrastructure.
Vice President Jusuf Kalla said regular media reports of arrests of corrupt officials were evidence that the government is serious about tackling entrenched graft, Agence France-Presse reported on Thursday (2/11/06).

Kalla told delegates that efforts to improve the huge bureaucracy's efficiency were also forging ahead. “I know that the bureaucracy is slowly moving. That's why we have many reforms of the law to make the bureaucracy work well," he said. "We will deliver confidence to anybody who will be starting business in Indonesia."

State Minister for State Enterprises Sugiharto said the president had sent a clear message that all state officials must improve their work ethic or face dismissal.

"In the coming three years, for those bureaucrats who cannot follow the patterns handed down by the president to the ministers and first echelon officials, we are going to carry out leadership reforms at the lower levels," he told a press conference.

He cited two recent presidential instructions aimed at trimming down red tape on electricity projects as an example. Under these regulations, Sugiharto said, the process of starting project tenders to signing a deal which used to take more than 800 days to complete has been reduced to 12 months. "No slippage can be tolerated, otherwise we will be experiencing power shortages in 2009," the minister said.

On Wednesday (1/11/06), President Susilo Bambang Yudhoyono also moved to assure investors that Jakarta could provide a stable environment for their funds. He said the nation needs some $22 billion per year to devote to infrastructure over the next few years.

Dimitri Pantazaras, a participant from a Bahrain-based private equity fund investor, said while there were limited projects ready to go, “I'm sure the government is committed to making these reforms happen," he said.

Coordinating Minister for Economic Affairs Boediono said Thursday that Indonesia had received a positive response from foreign investors on developing infrastructure projects.
"With this summit we regain the momentum to boost the development of our infrastructure. We now see that we're on the right track toward reaching our goal," Boediono was quoted as saying by The Jakarta Post on the second day of the three-day conference. The event drew about 1,200 businessmen, mostly representing foreign companies.

"We haven't yet reached any deals with foreign investors. But we've seen very strong interest from them during this summit. I'm optimistic that we'll win their commitments to develop the projects we're offering," he said, adding that he believes this year's meeting would prove to be more productive than the previous one.

This year, the government is highlighting 10 so-called "model projects" valued at $4.4 billion. A further 101 projects valued at approximately $14.7 billion are on offer.

The 10 model projects and the 101 potential projects include toll roads, drinking water, electricity, gas, transportation, and telecommunications infrastructure.

Boediono said the government is also designing regulations to keep land acquisition problems from hampering highway projects in the future.

The administration has established a revolving fund to be used to acquire land for infrastructure projects. Later, investors concerned will repay the government for the land.



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