Govt red tape retards infrastructure investment<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Last month's much-hyped Infrastructure Summit has apparently not
\nbeen able to spur government bureaucrats into action,
\nparticularly on the issue of promised regulations to streamline
\nthe process for foreign investors.<\/p>\n
Prior to the summit -- in which 91 infrastructure projects
\nworth US$22.5 billion over the next five years were offered to
\ndomestic and international investors at the Jan. 17 and Jan. 18
\nevent -- the government has prepared 11 government regulations
\nand three presidential decrees as the legal basis for those
\nprojects, but those will take several months to implement.<\/p>\n
\"We (the government) can't issue the regulations any time soon
\nbecause our workload in the first three months has been too much.
\nIt has been very difficult to issue new regulations,\" State
\nMinister of National Development Planning Sri Mulyani Indrawati
\nsaid on Thursday.<\/p>\n
The main obstacle for the planned issuance of the regulations,
\nshe said, was that the many of the drafts could contain articles
\nthat are in conflict with other laws. That would mean even more
\ntime as the government would have to revise the laws to be
\nconsistent with the new regulations.<\/p>\n
\"We must maintain legal consistency between existing laws and
\nnew regulations. We must also take into account the impact of our
\nlong-term development programs. We must meticulously arrange the
\nregulations to avoid legal uncertainty in the future,\" Mulyani
\nexplained.<\/p>\n
Sri would not venture a guess as to when the reform-oriented
\nregulations would be issued.<\/p>\n
Legal uncertainty is one of the main concerns for foreign
\ninvestors, in addition to the out-of-control corruption here.
\nThey have expressed fear that legal uncertainty would result in
\nlegal disputes, either with local partners or with the
\ngovernment.<\/p>\n
Investors have also proposed the possibility of obtaining
\nlegal protection and guarantees directly from the central
\ngovernment in developing infrastructure projects.<\/p>\n
Meanwhile, a source at the Office of the Coordinating Minister
\nof the Economy said the government might \"take months\" before
\ncompleting the new regulations since it has to revise a number of
\nlaws with the House of Representatives before they are endorsed.<\/p>\n
\"It is such a mess. It will take months before the regulations
\non the incentives can be implemented,\" said the source.<\/p>\n
The government is in dire need of a whopping $150 billion in
\nnew investment for the development of roads, power plants and
\nother crucial infrastructure facilities over the next five years.<\/p>\n
Some 55 percent of the funds, or around $80 billion, is
\nexpected to come from outside Indonesia in the form of foreign
\ndirect investment or loans from donor countries and agencies,
\nwhile the rest will be from domestic resources.<\/p>\n
Among the regulations promised to investors is their ability
\nto negotiate toll rates and concession periods with the
\ngovernment in order to enable investors to calculate the cost
\nfeasibility of projects.<\/p>\n
Another promised regulation is on the government's assistance
\nto the investors in acquiring land for toll road projects,
\nincluding the avoidance of lengthy negotiation periods and
\ndisputes with local land owners over the compensation price.<\/p>\n
Another proposed regulation will require local administrations
\nto protect land allocated for toll roads by maintaining the land
\nprice in the areas, in order to prevent unscrupulous brokers from
\nincreasing prices.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-red-tape-retards-infrastructure-investment-1447893297",
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"sponsor": "Okusi Associates",
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