91 infrastructure projects on offers at summit

91 infrastructure projects on offers at summit

Urip Hudiono, The Jakarta Post, Singapore

The Indonesian government will offer a total of 91 infrastructure
projects worth up to US$22 billion to local and foreign investors
in next week's Infrastructure Summit.

Coordinating Minister for the Economy Aburizal Bakrie said the
government was also offering members of the Singaporean business
community to help manage the financing of the projects, which is
higher than the 37 previously stated by the government.

"We have also seriously considered (investors') suggestion of
providing them with tax incentives for investing in
infrastructure projects," he said on Wednesday after a two-day
meeting with major companies in Singapore.

Aburizal explained that the 91 projects would be the first
phase of the government's massive development of infrastructure
projects over the next five years.

"Details of the projects will be presented and offered to
investors through open bids during the summit," he said.
"Following the two- to three-year projects, the government will
then offer the next batch of projects in September or October."

The government has estimated it would need some $75 billion to
finance the infrastructure-related projects. But it could only
finance approximately 20 percent itself, mostly for "economically
viable" projects. The remaining 80 percent is expected to come
from local and foreign investors.

Head of the government's special team for infrastructure Raden
Pardede earlier this week said the projects were expected to give
investors a return of between 15 percent and 23 percent on
average.

"We also expect investors to help in the reconstruction of
tsunami-stricken Aceh by becoming the contractors or suppliers,"
Aburizal said.

He also explained that the government's plan to ask
Singaporean financial institutions to manage the projects, was
because foreign investors usually consulted with people in
Singapore before investing in Indonesia.

"Foreign investors usually ask Singaporean banks and analysts
about investments in Indonesia and whether the (Indonesian)
government is really serious about improving investment," he
said.

"Singapore can help us prepare the projects' prospectuses and
offer them to the market."

On the government's plan to give tax incentives, Aburizal said
the incentives would be needed as some projects -- despite being
commercially viable -- would still not be attractive enough for
investors.

"The projects could be more attractive if, for example,
interest income paid to investors were to be exempted from taxes
before the projects started generating revenue," he added.

Such policies have gained a warm welcome from the Singaporean
business community, 14 different groups promised to participate
in the summit.

"Many are interested in investing in the development of
seaport facilities to help Indonesia's agricultural sector gain
easier access to the market," said Lee Yi Shyan, chairman of the
International Enterprise Singapore, a group of the city-state's
prominent enterprises.

Singapore foreign minister George Yeo and Keppel marine group
director Lim Chee Onn, however, warned the government to keep the
projects transparent and free from corruption to ensure success.