Government issues crucial decree on land acquisition

Government issues crucial decree on land acquisition

Muninggar Sri Saraswati and Rendi A. Witular, The Jakarta Post/Jakarta

The government has finally issued the much-awaited regulation on
land acquisition in an effort to speed up the construction of
massive infrastructure projects, sacrificing rights of property
owners opposed to the projects.

Presidential spokesman Andi Malarangeng said President Susilo
Bambang Yudhoyono had already signed Presidential Regulation No.
36/2005 on Land Provision for the Development of Public
Interests. The regulation was issued to resolve problems in land
acquisition for state infrastructure projects for the sake of the
public.

"The regulation is to speed up the planned massive
infrastructure construction. We understand that land acquisition
has become an obstacle for infrastructure construction," he told
reporters at the State Palace on Friday.

Andi reiterated that uncertainty caused by the problem had
quelled investors' interest in the infrastructure sector, at a
time when the country was in dire need of investment in the
sector to support higher economic growth and reduce unemployment.

The massive infrastructure projects are part of the
government's effort to prevent congestion in distribution, which
significantly increases the cost of doing business here.

However, numerous infrastructure projects in the country have
run aground due to problems related to land acquisition, with
investors facing widespread protests and rejection from land
owners.

Land owners' objections in the East Flood Canal construction
in the eastern part of Jakarta and in the construction of a few
sections of the Jakarta Outer Ring Road have halted those
projects.

Therefore, the government has included in the regulation an
authority to eliminate the land owners right to protect their
properties, unless an agreement is made on the compensation
payment given by the government for the land.

The right, however, can only be applied to a minority of land
owners who fail to agree on compensation payments offered by the
government for their land that will be used for public facilities
or infrastructure.

The regulation allows land disputes to be resolved in court,
while the construction of the project continues.

It also stipulates that the compensation to land owners be
based on the land's taxable value of property (NJOP) and its
current market price. The price assessment for the land will be
conducted by an independent property appraiser.

To prevent land speculation, the regulation also stipulates a
safeguard arrangement for land owners -- whose land will be used
for public facilities -- in selling their lands to other parties
aside from the government.

"People who want to buy a land allocated for public facilities
in the future, should seek a written approval from local
administrations before they seal the deal," said Andi.

In the approval, the buyer should agree that he or she will
not sell the land to other parties at a higher price than that
initially set by the government.

At present, the government and private investors have to spend
additional funds to buy land at higher prices due to the
emergence of land speculators.

Andi said the safeguarded locations should be allocated by
local administration's spatial agencies for public facilities.

In Greater Jakarta, for example, a land safeguard will be
applied for the toll road connecting Cikarang in Bekasi and
Tanjung Priok in North Jakarta; a road section from Depok to Jl.
Antasari in South Jakarta and the Cinere and Jagorawi route in
Bogor.

I-box
Presidential Regulation No. 36/2005 covers:
1. Public roads, toll roads, railways, water pipes and
sanitation
2. Dams, reservoirs, irrigation works
3. Public hospitals and public health centers
4. Seaports, airports, railway stations, bus terminals
5. Religious facilities
6. Schools
7. Markets
8. Public cemeteries
9. Public shelters
10. Post and telecommunication facilities
11. Sports venues
12. Television, radio stations and supporting facilities
13. Government offices, embassies, the United Nations or agencies
under the auspices of the UN
14. Military and police facilities and installations
15. Penitentiaries
16. Low-cost apartments
17. Garbage dumps
18. Natural and cultural conservation areas
19. Parks
20. Social institutions
21. Power plants, transmission and distribution facilities