Indonesia needs $52b for infrastructure projects<\/p>\n
JAKARTA (JP): Indonesia needs US$52 billion in investments for
\nfour major infrastructure projects for electricity,
\ntelecommunications, roads and water supply within the next five
\nyears, a minister said.<\/p>\n
\"To give some idea of the enormous problems we face, consider
\nIndonesia's infrastructure requirements over the next five
\nyears,\" State Minister for National Development Planning
\nGinandjar Kartasasmita told an APEC expo and business meeting at
\nthe Jakarta Trade Center in Kemayoran yesterday.<\/p>\n
He said, for example Indonesia must increase the switching
\ncapacity of its telecommunications networks by 160 percent from
\nthree million to eight million lines, at a cost of $6 billion and
\nincrease electricity generation capacity by 60 percent from 22
\ngigawatts to 36 gigawatts at a cost of $25 billion.<\/p>\n
\"Over 10,000 kilometers of new roads must be constructed,
\nincluding 310 kilometers of toll roads, at costs of $13 billion,\"
\nhe said.<\/p>\n
Ginandjar, who is also chairman of the National Development
\nPlanning Board, said Indonesia also plans to expand the capacity
\nof its water supply distribution to cover another 22 million
\npeople, including the provision of small scale supplies to 22,000
\nvillages, at the cost of $7.8 billion.<\/p>\n
\"The amount of infrastructure investments needed in Indonesia
\nover the next five years will exceed $50 billion, absorbing close
\nto 20 percent of the country's total investment funds, both
\npublic and private, for all activities,\" Ginandjar said.<\/p>\n
He said raising that amount of funds will be an enormous
\nchallenge and the government, whose financial capability is
\nlimited, is inviting private sector companies to provide a major
\nportion of the funds.<\/p>\n
Bonds<\/p>\n
\"If funding is the only constraint, private sector capital can
\nbe raised by selling infrastructure bonds, such as those already
\nfloated by the state-owned toll road company PT Jasa Marga and
\nthe state electricity firm PLN,\" he said.<\/p>\n
The government announced last week that the state-owned
\ndomestic telecommunications operator PT Telkom, PLN and Jasa
\nMarga will float shares on domestic and overseas markets
\nfollowing the successful debut of PT Indosat's dual listing on
\nthe domestic market and the New York Stock Exchange. Indosat, the
\nprovider of international telecommunications services, raised
\n$800 million from the sales of its shares on the New York Stock
\nExchange and Rp 650 billion ($297 million) on the domestic
\nmarket.<\/p>\n
Ginandjar told reporters that privatization should be
\nclarified. Privatization has two directions which are: providing
\nthe opportunities for private firms to operate businesses which
\nwere previously state run firms and offering the assets of state
\nfirms to the private sector.<\/p>\n
\"We don't need to sell PLN, just offer some electricity
\nprojects to private firms,\" he said.<\/p>\n
Ginandjar said that in road construction projects, the
\ngovernment has decided state firms will not construct toll roads
\nanymore but will conduct feasibility studies, while the
\nconstructions will be offered to private companies.<\/p>\n
PLN's president, Zuhal, told reporters that his company,
\ncurrently serving around 15 million customers, will establish
\nsubsidiaries which will offer shares to the public. \"Preparation
\nfor this will likely be completed by next year or 1996,\" he said.
\n(icn)<\/p>",
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