Mon, 20 Jul 2015
From: Reuters
"Delays: A general view of Jakarta’s mass rapid transit construction site on a busy street in Jakarta. Investors hoping for President Jokowi to speed up infrastructure works have been disappointed by delays. – EPA

JAKARTA: Investors hoping for President Joko Widodo to speed work on Indonesia’s infrastructure projects have been disappointed, with a plan for a US$2bil airport railway line in the capital spotlighting the delays and bureaucratic infighting involved.

Nearly half the 10 projects to which Widodo gave priority when he took office last year are languishing for lack of cooperation among ministries he has been unable to whip into line.

“Somebody has to coordinate the orchestra of stakeholders,” said Emma Sri Martini, head of government-owned infrastructure finance firm Sarana Multi Infrastruktur (SMI). “If decisions for infrastructure are slow, there won’t be activity in any sector.” Widodo is racing against time to create sufficient jobs for the 2 million Indonesians who enter the workforce annually, as he struggles to revive economic growth that has fallen to the weakest pace in around six years.

His promised splurge on roads, ports and power plants is critical as Indonesia’s traditional engines of growth, consumption and commodity exports, are faltering, while businesses are shedding jobs fast.

When governor of Jakarta, Widodo had managed to break an almost decade-long impasse over construction of a ring road around the Indonesian capital, and investors had hoped to see him, as president, repeat the feat on the national level.

Nine months into his tenure, the signs are not encouraging.

The airport railway line, designed to cut the travel time to one of the world’s busiest airports to 30 minutes from as much as three hours, has suffered a delay of at least two years in construction.

Officials have locked horns over its route and how to fund it, but in the absence of significant government support, it hardly offers private investors a worthwhile return.

“The project is indeed taking quite a long time because of the preparation for all the studies,” said transport ministry official Sugiadi Waluyo.

Just last month, for example, newspaper Bisnis Indonesia reported that Transport Minister Ignasius Jonan had sought a route change to take advantage of existing tracks.

But all the authorities involved must sign off on the change, leading to a delay, SMI’s Martini said. “A single decision might seem simple, but the consequence can be a delay multiplier.” The route must be hammered out before potential investors from countries such as China, Japan and South Korea will take even the first step, she added.

As the government weighs the merits of one-off or deferred funding for the railway project, it expects private bidders to get returns chiefly from future traffic volumes and fares.

“There’s potentially a lot of appetite for the airport train project, but the main question for investors and lenders is, ‘How do you make money out of it?’” said Mark Giblett, group head of Asia project finance for Sumitomo Mitsui Banking Corp.

Many companies preferred to be paid to build and operate railways for a fixed time, as that carries a lower revenue risk, he added, but such a structure meant the government would have to shoulder most of the costs.

Another question hangs over the financial feasibility of two railway lines to a single airport, as the state railway firm is set to complete a separate line next year, at a cost of 1.2 trillion rupiah (US$90mil).

Government officials say the lines target two different markets, airline passengers and commuters, but investors worry.

“Most airport rail links struggle to make money, more so if there are more than one line servicing the airport,” said Raj Kannan, managing director of Tusk Advisory, who advises potential investors in Indonesia’s infrastructure projects.

Widodo must act fast as Indonesia risks falling behind neighbours who are aggressively building infrastructure.

Indonesia’s cost of moving goods was as much as 27% of gross domestic product in 2013, outstripping Malaysia, Thailand and Vietnam, a study backed by the World Bank showed.

Investors are eager for Widodo to speed things up.

“The biggest thing that Jokowi thought he could do, and that he realised that he cannot do, is coordinate all his ministries,” said OCBC Bank economist Wellian Wiranto, referring to the president by his nickname.

“He has to step up, because at the end of the day, he’s the ultimate coordinator.”





News Search/Filter
Transaction Rates
23 Sep 18
Buy
Sell
AED1
3,920.15
3,920.15
AFN1
189.90
189.90
ALL1
133.87
133.87
AMD1
29.86
29.86
ANG1
7,809.11
7,809.11
AOA1
49.79
49.79
ARS1
387.30
387.30
AUD1
10,505.46
10,505.46
AWG1
7,997.07
7,997.07
AZN1
8,457.43
8,457.43
BAM1
8,664.82
8,664.82
BBD1
7,199.39
7,199.39
BDT1
171.92
171.92
BGN1
8,659.38
8,659.38
BHD1
38,254.15
38,254.15
BIF1
8.13
8.13
BMD1
14,398.78
14,398.78
BND1
9,530.21
9,530.21
BOB1
2,085.12
2,085.12
BRL1
3,554.55
3,554.55
BSD1
14,398.78
14,398.78
BTC1
96,683,693
96,683,693
BTN1
199.93
199.93
BWP1
1,354.30
1,354.30
BYN1
6,920.36
6,920.36
BZD1
7,168.35
7,168.35
CAD1
11,143.21
11,143.21
CDF1
8.77
8.77
CHF1
15,016.72
15,016.72
CLF1
615,859.24
615,859.24
CLP1
21.59
21.59
CNH1
2,102.22
2,102.22
CNY1
2,099.65
2,099.65
COP1
4.79
4.79
CRC1
24.89
24.89
CUC1
14,398.78
14,398.78
CUP1
564.65
564.65
CVE1
152.83
152.83
CZK1
660.85
660.85
DJF1
80.88
80.88
DKK1
2,268.22
2,268.22
DOP1
287.73
287.73
DZD1
122.46
122.46
EGP1
804.94
804.94
ERN1
960.09
960.09
ETB1
519.85
519.85
EUR1
16,929.79
16,929.79
FJD1
6,836.36
6,836.36
FKP1
18,823.54
18,823.54
GBP1
18,823.54
18,823.54
GEL1
5,884.28
5,884.28
GGP1
18,823.54
18,823.54
GHS1
3,035.72
3,035.72
GIP1
18,823.54
18,823.54
GMD1
295.05
295.05
GNF1
1.59
1.59
GTQ1
1,866.92
1,866.92
GYD1
68.94
68.94
HKD1
1,843.78
1,843.78
HNL1
599.54
599.54
HRK1
2,277.74
2,277.74
HTG1
207.25
207.25
HUF1
52.16
52.16
IDR1
1.00
1.00
ILS1
4,032.86
4,032.86
IMP1
18,823.54
18,823.54
INR1
199.32
199.32
IQD1
12.07
12.07
IRR1
0.33
0.33
ISK1
130.74
130.74
JEP1
18,823.54
18,823.54
JMD1
106.13
106.13
JOD1
20,265.51
20,265.51
JPY1
127.91
127.91
KES1
142.64
142.64
KGS1
211.31
211.31
KHR1
3.51
3.51
KMF1
34.39
34.39
KPW1
15.99
15.99
KRW1
12.91
12.91
KWD1
47,613.46
47,613.46
KYD1
17,288.80
17,288.80
KZT1
40.45
40.45
LAK1
1.69
1.69
LBP1
9.52
9.52
LKR1
85.36
85.36
LRD1
92.92
92.92
LSL1
1,001.69
1,001.69
LYD1
10,455.82
10,455.82
MAD1
1,540.60
1,540.60
MDL1
857.88
857.88
MGA1
4.22
4.22
MKD1
274.83
274.83
MMK1
8.85
8.85
MNT1
5.89
5.89
MOP1
1,790.86
1,790.86
MRO1
40.27
40.27
MRU1
402.20
402.20
MUR1
421.63
421.63
MVR1
934.37
934.37
MWK1
19.79
19.79
MXN1
764.71
764.71
MYR1
3,483.56
3,483.56
MZN1
236.82
236.82
NAD1
1,001.69
1,001.69
NGN1
39.72
39.72
NIO1
450.11
450.11
NOK1
1,766.51
1,766.51
NPR1
124.95
124.95
NZD1
9,625.58
9,625.58
OMR1
37,457.34
37,457.34
PAB1
14,398.78
14,398.78
PEN1
4,376.72
4,376.72
PGK1
4,334.17
4,334.17
PHP1
265.45
265.45
PKR1
116.92
116.92
PLN1
3,928.46
3,928.46
PYG1
2.46
2.46
QAR1
3,954.62
3,954.62
RON1
3,634.68
3,634.68
RSD1
143.35
143.35
RUB1
215.37
215.37
RWF1
16.34
16.34
SAR1
3,839.42
3,839.42
SBD1
1,825.14
1,825.14
SCR1
1,059.62
1,059.62
SDG1
797.52
797.52
SEK1
1,638.14
1,638.14
SGD1
10,557.07
10,557.07
SHP1
18,823.54
18,823.54
SLL1
1.71
1.71
SOS1
24.90
24.90
SRD1
1,930.65
1,930.65
SSP1
110.53
110.53
STD1
0.68
0.68
STN1
686.31
686.31
SVC1
1,646.59
1,646.59
SYP1
27.95
27.95
SZL1
1,001.69
1,001.69
THB1
444.81
444.81
TJS1
1,528.80
1,528.80
TMT1
4,113.95
4,113.95
TND1
5,193.21
5,193.21
TOP1
6,231.79
6,231.79
TRY1
2,287.87
2,287.87
TTD1
2,137.72
2,137.72
TWD1
469.91
469.91
TZS1
6.30
6.30
UAH1
513.65
513.65
UGX1
3.76
3.76
USD1
14,398.78
14,398.78
UYU1
437.62
437.62
UZS1
1.79
1.79
VEF1
0.05
0.05
VND1
0.62
0.62
VUV1
132.70
132.70
WST1
5,562.52
5,562.52
XAF1
25.80
25.80
XAG1
205,880.98
205,880.98
XAU1
17,271,154.84
17,271,154.84
XCD1
5,327.85
5,327.85
XDR1
20,217.70
20,217.70
XOF1
25.80
25.80
XPD1
15,142,593.26
15,142,593.26
XPF1
141.87
141.87
XPT1
11,914,891.62
11,914,891.62
YER1
57.51
57.51
ZAR1
1,005.74
1,005.74
ZMW1
1,238.04
1,238.04
ZWL1
44.66
44.66
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services