Mon, 24 Jan 2011

TEMPO Interactive, Jakarta:President Susilo Bambang Yudhoyono’s visit to India on an economic cooperation mission next week is believed to facilitate India’s investment plan in Indonesia worth US$ 15 billion. Coordinating Economic Minister Hatta Rajasa said the 15 MoUs that will be signed with several Indian companies mostly cover infrastructure development projects.

One of the projects that will be discussed is a coal railway development project in South Sumatra valued at US$2 billion. Other major projects in the fertilizer and coal gasification sectors will also be discussed.

Investment Coordinating Board (BKPM) chief Gita Wirjawan, said the investment was to build ships, smelter and others. “The investment will not start this year. It is for the next three years,” he said yesterday.

Industry Minister M.S. Hidayat said the government was aiming to collaborate with the private Indian company Primex to give added value to Indonesia’s sand exports. With the collaboration, Indonesia is expected to extract valuable content from the sand.

The extraction is also targeted not only to produce ferruginous sand, but also titanium, the hardest metal, as well as radioactive material, uranium. If this goes ahead, the sand export pattern will change as Indonesia has previously only exported raw sand.

The raw sand would be extracted overseas and sent back to Indonesia, meaning that any added value during the process would occur overseas. As such, Hidayat welcomed collaboration on sand exports with India to boost the industry’s production capacity in the country.

BKPM’s data shows that India was ranked 18th on the list of investors for Indonesia in 2009. In that year, India ran 32 investment projects worth US$26.2 million, or 0.2 percent of total foreign investment (FDI).

In addition to FDI from India, Gita said that Kuwait was also eyeing Indonesia. The Kuwait Petroleum Company (KPC), he said, planned to build an oil refinery worth between US$6 and 8 billion this year.

Gita said the government had prepared tax relief for investments over US$500 million. Earlier, the government also released Government Regulation no.94/2010, regulating a tax-free time period.