SOEs seek partners in infrastructure projects: Minister

Zakki P. Hakim, The Jakarta Post, Jakarta

State-owned enterprises are ready to become investors' strategic partners and have already contributed one-fifth of the total funds needed for infrastructure projects in the country during the next five years, the SOE minister says.

"From US$150 billion in funds needed to build infrastructure nationwide in the next five years, projects by SOEs have contributed up to Rp 306 trillion ($32.43 billion)," State Minister of State Enterprises Sugiharto said on Tuesday.

Among these SOEs are state-owned electricity company PT PLN, tap water operator PAM, toll road operator PT Jasa Marga, seaport operator PT Pelabuhan Indonesia (Pelindo) and airport operator PT Angkasa Pura.

Most of 91 projects offered at the two-day Infrastructure Summit are SOE-driven. Since they do not have enough funds to finance the projects, the government has invited local and global investors to put their money into infrastructure development.

Sugiharto said the government wanted SOEs to lead the development of infrastructure in the country and several restructures and regulatory reforms had been made to encourage investors.

The debt-ridden PLN had been restructured and Sugiharto projected the company would book a profit for the first time in several years.

"I guarantee that PLN will deliver its contractual obligations to investors," he said, adding that PLN would have strong cash flow this year and would not default to independent power producer PT Paiton Energy or others.

International energy company Paiton has invested to produce a total of 1,200 megawatts of power in the country and is still owed money by the ailing PLN.

Nevertheless, Paiton is committed to expand another 800 Megawatts worth around $1 billion to meet the needs in Java, said Phillip Cox, CEO of UK-based International Power Plc., which partially owned Paiton.

In a future partnership, Paiton was looking for long term security, sanctity of contract and a strong payment record from partners, notably PLN.

"We will be making significant capital investment and just want to be sure we are going to get the return that we require."

Paiton wanted to see the government backed contracts, which it wanted it in U.S. dollar denominations because "that is principally the currency of the asset that we build and a lot of the finance that we grow."

Infrastructure development projects to be accomplished by SOEs and Regional Owned Enterprises (ROEs) from 2005 to 2009 (in Rp trillions):

Jasa Marga 85.24
PLN 78.96
Perum Perumnas 12.53
Kereta Api Indonesia 27.50
PGN 40.67
Angkasa Pura I 3.52
Angkasa Pura II 7.73
Pelindo I 1.86
Pelindo II 9.71
Pelindo III 2.28
Pelindo IV 3.63
PDAM* 25.94
Perum Jasa Tirta I 0.28
Perum Jasa Tirta II 6.06
Total 305.89

Source: Office of State Minister of State Enterprises