RI needs Rp 613t in infrastructure investment

RI needs Rp 613t in infrastructure investment

Sandy Darmosumarto, The Jakarta Post, Jakarta

The Indonesian government will need much more assistance from
the private sector to help finance the development of the
country's sub-standard infrastructure, which is seen as crucial
to boosting economic growth.

The Committee on Policy for the Acceleration of Infrastructure
Development (KKPPI) predicted last week that Indonesia would
require tens of billions of dollars to build key facilities over
the next six years.

"Indonesia will need around Rp 613 trillion ($US72 billion) in
infrastructure investment between 2005 and 2009," said Bambang
Susantono, who chairs the KKPPI secretariat.

"The government will incur a $31.34 billion financing gap even
if macroeconomic conditions improve and debts are better
managed."

Bambang expressed the need for the government to raise
infrastructure management standards in order to better maintain
and improve existing facilities. Management reform and new
financing schemes are crucial in attracting the private sector
back a host of projects stalled since the late 1990s economic
crisis.

Christopher Findlay, a professor at Australia National
University's School of Public Policy, commented on the need for
more private sector participation to assist the government in the
management of the funds and technology that are required to boost
infrastructure development.

Besides improvement of the investment law, improvement of the
country's infrastructure sector are among the conditions demanded
by foreign investors to allow them to make fresh investment.

New investments are vital if the country wants to push
economic growth to the 7 percent per year range, which is seen as
the minimum needed to provide sufficient jobs for the millions of
unemployed, with around 2.5 million new workers entering the job
market yearly.