Poor infrastructures hamper investments in eastern regions

Poor infrastructures hamper investments in eastern regions

JAKARTA (JP): Poor infrastructure in eastern provinces of the
country has hampered the growth of investments there, heads of
provincial offices of the Investment Coordinating Board (BKPM)
said here yesterday.

The chief of BKPM's West Nusa Tenggara office, Lalu G.
Wirasentana, told The Jakarta Post that most of the problems
faced by investors in his province are the poor conditions of
roads and lack supplies of electricity.

"Some areas of the province's regencies have not been reached
by electricity networks and most investors must therefore depend
on their own power generators for running their plants," he said.

Wirasentana was among 150 BKPM officials attending the three-
day annual meeting on investment coordination. The meeting,
opened by Coordinating Minister for Industry and Trade Hartarto
on Monday, is scheduled to be closed today by State Minister of
Investment Sanyoto Sastrowardoyo.

Wirasentana said that due to the poor infrastructure, the
realization of investment commitments in his province has reached
only some 60 percent over the last few years.

Americo Nunes, head of the supervisory board for investment
affairs of East Timor, told the Post that the poor conditions of
the province's airports are the main problem for investors.

"We have therefore asked the ministry of transportation to
expand the existing airport in Baukau," he added.

Promotion

"But more importantly, the lack of promotion of the province's
potentials in addition to the political situation in East Timor
have in fact caused the slow growth in investments," Nunes said,
adding that there are only two investment projects established in
the province so far.

The first domestic investor, which began operation in 1987 in
East Timor, is PT Samaflu Agung which constructed 600 houses with
an investment of Rp 1.24 billion, followed by travel agency PT
Multi Perona Maya in 1991 with an investment of Rp 1.06 billion,
Nunes said.

"There are 10 new investors applying for business rights in
East Timor this year, most of whom are interested in handicraft,
ceramic and forestry industries," he said, adding that no foreign
investment commitments are registered so far.

Abu Bakar Makarau, head of BKPM's Central Sulawesi office,
told the Post that his province is facing a serious problem with
telecommunications.

"Telephone services have not reached sub-districts of the
province," he pointed out.

"The lack of telecommunications has in fact discouraged
investors from entering Central Sulawesi," he added.

He noted that the realization of the province's overall
investments only reached Rp 175 billion from its original target
of Rp 1.2 trillion last year.

Frans Lapananda, head of BKPM's North Sulawesi office, said
that land appropriation is a serious problem faced by his office.

"The ownership of land is traditionally related to
inheritance, thereby consuming a longer time to make
transactions," he added.

He said a cement plant will be built in the province by PT
Sulenco Whibawa with an investment of Rp 432 billion to produce
750,000 tons of portland cement per year. PT Dharma Rigowa
Nusantara will also set up another cement plant with an
investment of Rp 600 billion and a capacity of one million tons a
year near Gorontalo.

Unequal growth

Sanyoto conceded that growth both in domestic and foreign
investments was still unequal in the country.

A BKPM study on the realization of investments showed that
West Java, Jakarta, East Java, Central Java and Riau ranked the
top places in attracting investments.

Out of the Rp 198.15 trillion (US$91.44 billion) domestic
investments during the last five years, around 32.18 percent was
committed for projects in West Java, 12.07 percent in Jakarta,
8.29 percent in East Java and 7.84 percent in Central Java.

Out of the foreign investments of $41.19 billion during the
last five years, 36.58 percent was committed in West Java, 23.62
percent in Jakarta, 10.6 percent in Riau and 9.85 percent in East
Java.

Sanyoto assured that the government is committed to initiating
concerted efforts to promote investments in eastern provinces.
(fhp)