Govt keeps transportation tariff control

Govt keeps transportation tariff control

JAKARTA (JP): The government will maintain control over the
pricing of transportation-related services even though foreign
investors are allowed to take majority shares in these sectors,
Minister of Transportation Haryanto Dhanurtirto said.

"The public should not necessarily get worried about the
possibility of foreign investors taking majority stakes in
transportation-related businesses because pricing will remain in
the hands of the government," Haryanto said here over the
weekend.

In the domestic flight sector, for example, the government has
thus far been committed to preventing airlines -- which are now
open to foreign involvement -- determine fares on their regular
services, he said.

The government introduced a new deregulatory policy early this
month under Government Regulation No. 20/1994, which allows
foreign companies to own and manage seaports, civil aviation, sea
transportation, railways, telecommunications, power generation,
nuclear power, water supply, education and the mass media.

The new reform, which will be likely followed by another
deregulatory package this month, reduces the minimum equity
holding for the Indonesian partner in a joint venture from 20 to
five percent and lifts compulsory equity divestment for joint
ventures.

Haryanto also pledged Saturday that the government will
strictly supervise the operation of transportation facilities
which will be owned and run by foreign companies, considering
that there are only a small number of domestic companies which
have an access to these business.

"Domestic companies' involvement in infrastructure development
will likely reach only some five or 10 percent," the minister was
quoted by Antara news agency as saying over the weekend.

He also predicted that the involvement of foreign investors in
the transportation industries would only reach some 70 percent,
hoping that the remaining 30 percent will be controlled by
domestic companies. (fhp)