Kadin decries licensing red tape in infrastructure<\/p>\n
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry
\ncomplained yesterday that private investors in infrastructure
\ndevelopment face arduous licensing procedures which ultimately
\nraise the cost of doing business.<\/p>\n
\"Time consuming license procedures have unnecessarily been
\nadding greatly to the costs of infrastructure projects,\" the
\nchamber's vice chairman, Iman Taufik, said yesterday at a seminar
\non infrastructure development.<\/p>\n
Citing an example, Taufik referred to PT Paiton Energy, for
\nwhom it took about two years to get a license for its coal-fired
\npower station project near Probolingo, East Java.<\/p>\n
He also referred to the reports by the Japan External Trade
\nOrganization (Jetro), the World Bank and analysts at Columbia
\nUniversity in Hong Kong which attacked Indonesia's bureaucratic
\nprocedures as the worst in the ASEAN region.<\/p>\n
The reports also concluded that corruption and collusion
\npractices in Indonesia were the third most extensive in the
\nworld.<\/p>\n
Apart from the licensing procedures, Taufik cited such
\nobstacles as high land-acquisition costs, land prices and price
\nmark-ups by state-owned suppliers as hindering infrastructure
\ndevelopment.<\/p>\n
He said that the high costs of infrastructure projects
\nfinanced by private investors were also caused by the high
\ninterest rates set by bank lenders. The rates often reflect high
\ncountry risks and the unusually high margins set by investors who
\nget projects through direct appointment, and not through open
\ntenders.<\/p>\n
\"The requirement for foreign investors to bring in local
\nshareholders, who for the most part do not put up any equity,
\nalso adds to the costs,\" Taufik said.<\/p>\n
\"We should give more attention to the high cost problem
\nbecause infrastructure development is vital to the country's
\ncompetitiveness in the global market,\" he said.<\/p>\n
The high costs, according him, can be reduced by
\nstandardization of infrastructure projects and bids as well as by
\nmaking the bids for build-own-operate or build-operate-transfer
\ndeals fully open and transparent.<\/p>\n
The government, he said, will soon issue an anti-trust law to
\nprotect Indonesian businessmen from unfair competition in the
\nform of monopolies, oligopolies and cartels.<\/p>\n
The Chairman of the Indonesian Industrial Estates Association
\nHalim Shahab told the same seminar that the development of
\nindustrial estates also has been hindered by complex licensing
\nprocedures.<\/p>\n
He suggested that the government set up a National Authority
\nof Industrial Estates as a private entity in charge of processing
\nall the permits needed for industrial estates.<\/p>\n
\"Such an authority like the Batam Development Authority should
\nbe responsible directly to the President,\" Shahab said.<\/p>\n
But even the Batam Authority, according to Shahab, has not
\nfunctioned as a one-stop service center for licensing as the
\nShenzen Authority in China has done. (04)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kadin-decries-licensing-red-tape-in-infrastructure-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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