Sat, 04 Nov 2006
From: The Jakarta Post
By Benget Simbolon Tnb., The Jakarta Post, Jakarta
While he acknowledged that the government needs to enact further reforms to create a better business climate, Coordinating Minister for Economic Affairs Boediono said Thursday that Indonesia had gotten a positive response from foreign investors on developing infrastructure projects here.

"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 said on the second day of the three-day Indonesia Infrastructure Conference and Exhibition. The event has drawn about 1,200 businesspeople, mostly representing foreign companies.

"We haven't yet reached any deals with foreign investors," he added. "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 concluded, saying he believed this year's meeting would prove to be more productive than the previous one.

Last year, the government offered a total of 91 infrastructure projects. But so far, only 24 projects, valued at US$6 billion, have gotten commitments from investors.

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.

Vice President Jusuf Kalla said later in the day that the government would continue to do its best to create more attractive conditions for investors to do business in Indonesia.

As part of those efforts, the government has submitted a bill to the House of Representatives aimed at creating better conditions for investment in the country. The proposal is expected to pass before the end of this year.

Transportation Minister Hatta Rajasa said Wednesday that the House of Representatives was also considering four bills concerning land, sea, air and rail transportation. The bills would end the government's monopoly and allow private companies to fully own, build and operate transportation projects.

Boediono said the government was 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, the investors concerned will repay the government for the land.

Boediono also noted that the government's eagerness to attract foreign investors to develop infrastructure did not spring from an unwillingness to do so on its own part.

"This is because we're facing a shortage of funds from domestic sources," he said.

He added that the government would also very likely tap into the Islamic-based financial market to fund infrastructure development.



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