BKPM revokes 88 investment licenses
JAKARTA (JP): The Investment Coordinating Board (BKPM) revoked 88 investment licenses in the period between Jan. 1 and July 15, this year.
According to the investment board, 63 of the revoked licenses belonged to domestic investors and the other 25 to foreign investors.
The investment value originally planned for the 63 domestic investment projects reached Rp 900 billion (US$384 million), while that for the 25 foreign investments was $458 million.
The investment board did not disclose the reason of the revocations.
According to an existing regulation, investment licenses may be revoked if the investors fail to start constructing their projects within three years of being issued a license.
In a report distributed to journalists following the closing ceremony of the board's three-day national coordination meeting yesterday, the board said the number of revoked licenses was much higher than the 40 revoked in the same period of last year.
The licenses revoked in the Jan. 1 to July 15 period of last year composed of 32 for domestic investment projects with planned investments of Rp 32 billion, and eight licenses for foreign projects with planned investments of $29.3 million.
The board did not explain the profiles of the projects but they were most likely related to cement production and oil refinery.
Minister of Investment Sanyoto Sastrowardoyo said recently that most companies licensed by his office to build new cement factories and oil refineries had delayed the construction of their projects.
Sanyoto, who is also the chairman of the investment board, said the delays were mostly caused by the investors' difficulties in raising investment funds.
He said his office has since 1991 approved 46 investment projects related to the establishment of new cement factories but only six of them had so far been realized.
Sanyoto said only one of the 12 planned oil refineries approved by his office since 1994 had started construction.
Unlike those in the cement industry, most oil refinery investment projects were delayed due to uncertainty in the marketing of processed oil products on the domestic market.
Monopoly
According to the law, state-owned oil company Pertamina is the only party allowed to distribute and market oil products domestically.
The government has been working on the amendment of the law to end the monopoly given to Pertamina and to allow private companies to enter the refinery business. Despite having worked on the amendment for years, no significant progress has been made.
The board also said yesterday that domestic investment approvals rose by around 127 percent in value to Rp 70.6 trillion between Jan. 1 and July 15 from Rp 31 trillion in the same period of last year. Meanwhile, foreign investment approvals declined by 2.7 percent to $21 billion from $27.2 billion.
According to the board, Japan topped the list of 10 biggest foreign investors between Jan. 1 and July 15, with total cumulative investments of US$5.16 billion.
Britain was in the second slot with investments of $2.53 billion, followed by Singapore at third with $1.68 billion.
Kuwait was forth, with investments of $1.66 billion, Thailand fifth with $1.6 billion, Malaysia sixth with $1.15 billion and the Netherlands seventh with $1.21 billion.
Hong Kong, the United States and South Korea were eighth to 10th, with investments of $1.04 billion, $509 million and $458 million respectively. (hen)