$50b needed for infrastructure

JAKARTA (JP): President Soeharto yesterday called for private sector companies to finance most of the over US$50 billion investment needed for the construction of infrastructure facilities in the country in the coming five years.

"We must build cities, roads, harbors and airports that connect one place to another in our vast archipelago," he said at the opening of the five-day World Infrastructure Forum-Asia 1994.

He told the meeting, attended by about 700 participants from 13 countries, that the role of international financial institutions, like the World Bank, the Asian Development Bank (ADB) and the Organization for Economic Cooperation and Development (OECD) is still badly needed to finance infrastructure development in Indonesia.

He acknowledged that the government has allocated about 60 percent of the financial aid accrued from international financial institutions for the development of infrastructure facilities.

According to the Ministry of Finance, the government's borrowing from foreign donor countries and institutions stood at $59.46 billion as of June.

Soeharto said that private sector investments will concentrate on the development of modern facilities, such as toll roads, container ports, airports, power plants and transmission networks as well as housing infrastructures.

The government, under its deregulatory measures announced in June, has allowed foreign investors to get involved in the construction and operation of infrastructure facilities, including telecommunications, electricity, ports, airports and aviation.

Growth

The President stressed the importance of infrastructure to ensure economic growth, which Indonesia has projected to be around six percent annually in the coming five years.

"Our experience shows that without good infrastructure our economy will have difficulty growing and it will not be easy to have an equitable distribution," he told the forum, which will present Philippine President Fidel V. Ramos and Australian Deputy Prime Minister Brian Howe, who is also Australian Minister for Housing and Regional Development, as speakers today and tomorrow respectively.

Speakers at the forum also include Indonesian Coordinating Minister for Industry and Trade Hartarto, Singapore Minister of Finance Richard Hu, Vietnamese Minister of Construction Ngo Xuan Loc, Indian Minister of State for Industry Krishna Sahi and Chinese Vice Minister for State Planning Gui Shiyong.

Chairman of PA Consulting Group John Foden told the meeting that some US$2.5 trillion is projected to be spent on Asian infrastructure projects by the year 2000.

According to a statement issued by the steering committee, the forum is the vehicle to fulfill ADB's mandate to host an infrastructure financing symposium.

At a ministerial meeting of the Asia Pacific Economic Cooperation (APEC) forum in Hawaii of the United States last March, the ADB was accredited to host a top-level symposium to find ways of raising the $1 trillion or more required to finance infrastructure projects in Asia over the next six years.

Soeharto yesterday also toured stands at the exhibition on infrastructure and supporting services, carrying the theme "Creating Opportunity Through Innovation", which is participated in by 123 domestic and international companies.

Yesterday's opening ceremony was attended by foreign diplomats, Jakarta Governor Surjadi Soedirdja and a number of ministers, including Hartarto, Minister of Industry Tunky Ariwibowo, State Minister for Investment Sanyoto Sastrowardoyo and Minister of Transportation Haryanto Dhanutirto. (rid)

Investment -- Page 8