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Sat, 15 Jan 2005

JP/Chinese investors commit $1.5b in infrastructure, manufacturing

Chinese investors commit $1.5b in infrastructure, manufacturing

Zakki P. Hakim The Jakarta Post/Jakarta

A number of investors from China have committed US$1.5 billion in various industry sectors ahead of next week's Infrastructure Summit, intended to lure massive fresh investment to the country.

At least 10 major Chinese firms, including members of the China National Machinery Import Export Cooperation (CMIC) and the China Coal Industry Cooperation (CCIC), are ready to invest in the power, coal, oil and gas exploration, telecommunications, forestry, transportation and maritime and fisheries sectors.

According to the Indonesia-China Cooperative Investment (ICCI), the investors were interested in infrastructure and manufacturing projects.

ICCI executive director Jusuf Rizal said one investor had committed to a $500 million pilot project to build a mini power plant with PT Power Jawa Barat in Serang, Banten.

Jusuf said other investors were interested in building mini power plants valued at $100 million each in regencies.

"In order to promote the (power plant) project, the ICCI will be working with the Regency Administrations' Association," he said.

At the two-day summit, set for Jan. 17 and Jan. 18 at the Shangri-La Hotel Jakarta, the government is to offer 91 infrastructure projects across the country with a total value of $22 billion to local and foreign investors.

The government estimates that it would need some $75 billion to finance the projects, but could only provide about 20 percent.

Coordinating Minister for the Economy Aburizal Bakrie said the majority of highly profitable projects, mostly located on Java, would be offered to the private sector.

The projects were expected to give an average return on investment of 15 percent to 23 percent.

Meanwhile, the government would handle projects on the islands of Kalimantan, Papua, Sulawesi and Sumatra, which were less profitable in the short-term.

Participation at the summit, hosted by the office of Coordinating Minister for the Economy and the National Development Planning Board (Bappenas), is by invitation only.