Seven projects bring investment record of $22b<\/p>\n
JAKARTA (JP): Plans to establish seven large projects will
\nbring foreign investments to a new record high of US$22 billion
\nthis year, State Minister for Investment Sanyoto Sastrowardoyo
\nsaid here yesterday.<\/p>\n
Sanyoto, also chairman of the Investment Coordinating Board
\n(BKPM), noted that this year his office has approved 301 foreign
\ninvestment projects with a total value of US$19.9 billion as of
\nSept. 24.<\/p>\n
\"It's a new record in foreign investment, one which may even
\nexceed $22 billion by the end of this year as the licenses of two
\nlarge projects are still pending our approval,\" Sanyoto told
\nnewsmen after meeting with President Soeharto at the Merdeka
\nPalace here.<\/p>\n
According to BKPM, the previous foreign investment record was
\nset in 1992, when the board approved foreign investment projects
\nworth $10.3 billion. Last year, foreign investment commitments
\ndeclined to $8.1 billion.<\/p>\n
Sanyoto explained that out of this year's foreign investments
\nof $19.9 billion, $7.5 billion will be used to finance the
\nestablishment of seven large projects, consisting of four oil
\nrefineries, two power plants and one steel mill.<\/p>\n
The two projects, whose licenses are still being processed,
\nare part of the seven large projects.<\/p>\n
BKPM's approval on the four private oil refineries in Aceh,
\nEast Java and South Sulawesi has drawn protests from a number of
\nlegislators in the House of Representatives (DPR), including Budi
\nHarjono of the Indonesia Democratic Party, Iskandar Mandji and
\nTadjudin Noer Said of the ruling Golkar faction.<\/p>\n
They claim that the approval of the four planned refineries
\nviolates Law No. 44\/1960 and Law No. 8\/1971, which require any
\ninvestor in the oil industry to cooperate with the state-owned
\noil company Pertamina.<\/p>\n
Export<\/p>\n
Sanyoto argued yesterday that the approval of the four planned
\nrefineries does not violate existing regulations because 100
\npercent of their raw materials will be imported from the Middle
\nEast. Three of the planned refineries will export all of their
\nproducts, while the other one will export only 65 percent of its
\nproducts.<\/p>\n
\"Because the latter refinery will sell its products
\ndomestically, it will surely have to cooperate with Pertamina or
\nsell its products to Pertamina, which will then resell them to
\nthe public,\" Sanyoto contended.<\/p>\n
Of the four refineries, two will be constructed in East Java
\nby PT Buana Ganda Perkasa with an investment of $3.5 billion and
\nPT Asia Pacific Petroleum with $1.1 billion. The other two will
\nbe built in Sabang, Aceh, by PT Sabang Oil Refinery with an
\ninvestment of $1.6 billion and in Pare-Pare, South Sulawesi, by
\nPT Indo Mudi Oil with $1.03 billion.<\/p>\n
Past records show that only 51 percent of foreign investment
\ncommitments were realized. As a result, Sanyoto said President
\nSoeharto had asked him to summon the license holders from the
\nfour planned refineries once every three months to report the
\ndevelopment of their projects.<\/p>\n
\"Investors actually have three years to implement their
\ninvestment commitments but if they do nothing within six months,
\nwe will revoke their licenses,\" Sanyoto warned.<\/p>\n
The Ministry of Mines and Energy will also monitor the
\nimplementation of the refinery projects every six months, he
\nsaid.<\/p>\n
The minister said he also reported to President Soeharto that
\nover 65 percent of foreign investment projects approved this year
\nwill be located in Java.<\/p>\n
Sanyoto said he therefore proposed that the government give
\nmore incentives to investors who are willing to set up projects
\nin the eastern provinces of the country.<\/p>\n
The proposed incentives could be in the form of tax holidays,
\nlower interest and longer grace periods on banking credits, the
\nreduction of private spending on infrastructure development and
\nfringe benefits to taxable incomes.<\/p>\n
Sanyoto said that as of Sept.24 this year his office also
\napproved 637 domestic investment projects worth Rp 44.71 trillion
\n($20.5 billion), as compared to 548 projects worth Rp 39.5
\ntrillion approved last year.(rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/seven-projects-bring-investment-record-of-22b-1447893297",
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