Govt says projects on offer are 'trouble free'

Zakki P. Hakim, The Jakarta Post, Jakarta

The government has guaranteed that the projects being offered at the Infrastructure Summit here are free from any kind of legal disputes.

"The government would never offer projects that still have (legal) problems," Minister of Transportation Hatta Radjasa told The Jakarta Post during the last day of the two-day summit on Tuesday.

The summit is being held to lure funds to finance the development of crucial infrastructure facilities in the country. The government, which has said it will need about US$150 billion to develop its infrastructure over the next five years, offered some 91 infrastructure projects valued at $22.5 billion to investors during the summit.

But there has been concern among some investors that at least two of the projects could face potential legal problems in the future.

Some investors questioned the status of the East Ancol Seaport Development project in Jakarta, which is located near the Jakarta New Port project being carried out by the Jakarta administration.

Hatta emphasized that the East Ancol Seaport project was not part of the Jakarta New Port project, and that the East Ancol project would be located on land belonging to state-owned port operator PT Pelindo II, not land owned by the Jakarta government.

"The government will invite the Jakarta administration and Pelindo to sit at the same table to discuss any possible future disputes ... the two parties should talk on a business to business basis. The government has no interest other than maintaining a favorable investment climate," he said.

The other project about which questions were asked is the Kali Lamong Surabaya Seaport in East Java. There have been reports the East Java provincial administration and the Madura regency administration have locked horns over the location of the project.

Hatta is hopeful all questions surrounding the infrastructure projects will be answered before the bidding on the projects starts in February.

Investors at the summit have called on the government to establish mechanisms to resolve any disputes that may arise during the development and running of the projects, particularly considering that empowered regional administrations have in the past issued regulations that go against central government rulings, harming the interests of investors.

Former World Bank country director for Indonesia Mark Baird said that among the main concerns expressed by investors during the summit was the poor implementation of regional autonomy.

Setting up a credible dispute solution mechanism is crucial to help ensure the smooth development of capital-intensive infrastructure projects, said Baird, who is now heading a study on infrastructure in the Asia-Pacific region, sponsored by the Asian Development Bank, the World Bank and the Japan Bank for International Cooperation.

"However, it takes time to establish an independent regulatory body and we have to be realistic about that," he said.

Baird said it was necessary to invest the time to develop the competency and capacity of agencies dealing with infrastructure projects.

"The government has made a commitment. I think over time this commitment can be fulfilled," he said.

91 projects offered by the government

Energy projects:
Gas Transmission Pipeline
Duri-Dumai-Medan phase I
Duri-Dumai-Medan phase II
East Kalimantan-Central Java
East Java-West Java
Kepodang-Tambak Lorok
Sengkang-Makassar

Electricity:
PLTU Tanjung Jati A
Sumatra-Java interconnection
PLTU Parit Baru
PLTU Mulut Tambang South Kalimantan
PLTU Serang
PLTU Tanjung Jati C
PLTGU Pasuruan
PLTU Cilegon
PLTU Paiton 3-4
PLTU Sibolga (North Sumatra)
PLTU Amurang (North Sulawesi)
West Java LNG receiving terminal

Telecommunication Project:
Palapa O2 Ring (Backbone Network Development)

Transportation Facilities Projects Railway: Manggarai-SoekarnoHatta rail network development

Seaport: Bojonegoro Seaport development
East Ancol Seaport development
KaliLamong Surabaya Seaport development
Balikpapan Seaport development

Airport: Kualanamu-Medan new airport development
Soekarno-Hatta International Airport Terminal (extension)
Soekarno-Hatta cargo facilities & integrated industry development
Hassanuddin-Makassar Airport development (ext)
Lombok new airport development

Water Projects: Duri water supply (Bengkalis regency)
Dumai water supply
Tanjung Pinang water supply
Ciledug water supply (Tangerang City)
Benda district-Cengkareng water supply (Tangerang City)
Ciparens Tangerang water supply
Sepatan water supply (Tangerang regency)
Pondok Gede water supply (Bekasi)
Cikarang water supply (Bekasi regency)
Jatinangor water supply (Sumedang regency)
Cirebon bulk and water supply
Uprating WTP Kaligarang Semarang
Semarang raw water supply
East Semarang new water supply
Bulk treated water supply to Semarang City and Regency
Tegal water supply
Surakarta-Sukoharjo bulk treated water supply
Yogyakarta surrounding bulk water supply
Meganti water supply (Gresik regency)
Karang Pilang IV bulk treated water supply
Umbulan bulk treated water supply
Banjarmasin bulk treated water supply

Toll Road Projects:
Ciranjang - Padalarang
Bekasi - Cawang - Kp. Melayu
Waru (Aloha) - Wonokromo - Tj. Perak
SS Waru - Tj. Perak Phase I
Gempol - Pandaan
JORR (Jakarta Outer Ring Road) W1
Ciawi - Sukabumi
Cikampek - Cirebon
Surabaya - Mojokerto
Kanci - Pejagan
Pejagan - Pemalang
Pemalang - Batang
Semarang - Batang
Kertosono - Mojokerto
Pasuruan - Probolinggo
Pandaan - Malang
Gempol - Pasuruan
Semarang - Solo
Bogor Ringroad
Medan - Binjai
Depok - Antasari
Cinere - Jagorawi
Cikarang - Tj. Priok
Cisumdawu
Makassar Seksi IV
Cilegon - Bojanegara
Pasir Koja - Soreang
Sukabumi - Ciranjang
Semarang - Demak
Yogyakarta - Solo
Solo - Mantingan
Mantingan - Ngawi
Ngawi - Kertosono
Palembang - Indralaya
Waru - Tj. Perak Phase II
Probolinggo - Banyuwangi
JORR 2
JORR W2 North