Summit only produces 3 winners bidders so far

Summit only produces 3 winners bidders so far

Urip Hudiono, The Jakarta Post, Jakarta

With the country in dire need of fresh investment in the
infrastructure sector, the government has only managed to drum up
three winning bidders for turnpike projects out of the total of
91 projects on offer during the first Indonesian Infrastructure
Summit held nine months ago.

Of the remaining 88 projects, some 42 projects worth US$12.5
billion, are at the final stages of the tender process.

Coordinating Minister for the Economy Aburizal Bakrie said on
Tuesday at a preparatory seminar for the second Infrastructure
Summit that a number of Australian companies had expressed
interest in developing turnpike projects, while Japanese
companies such as Sumitomo and Mitsubishi had expressed interest
in power generation projects. Meanwhile, Chinese and U.S. firms
had bid for projects in the oil and gas sector.

The government had hoped to attract a total of $21 billion in
investment on the back of the first Infrastructure Summit, with
the projects expected to be completed within the next five years.

Aburizal reiterated the importance of infrastructural
development if sustainable economic growth was to be achieved,
unemployment reduced and poverty alleviated.

"The government has identified infrastructural development as
the primary means for achieving annual economic growth averaging
6.6 percent over the next five years," he said.

"Developing the country's infrastructure, however, will need
some $140 billion. While the government can finance up to 20
percent of this, the rest must come from the private sector," he
explained.

For this, the government had been working on improving the
country's business climate to attract more investors to the
infrastructure sector, including improving the legislative
frameworks in the power, highway and water sectors, as well as
land acquisition. The government is also preparing an
infrastructure funding scheme and a risk management unit for
investors.

As regards the role of local administrations, Aburizal
expressed the hope that they would support the second summit by
offering infrastructure project opportunities in their regions
and collaborate with the government in preparing the tenders for
these projects.

"The bidding must be conducted in a fair, transparent and
accountable manner," he said.

Aburizal also expressed the hope that the regions would be
willing to provide a return rate of between 20 percent and 25
percent for investors involved in local-currency projects and
repeal any regulations that could cause them concern.

State Minister for National Development Planning Sri Mulyani
Indrawati highlighted the importance of local administrations
working together with each other to effectively develop their
infrastructural needs.

"There is a tendency for regions to compete with each other in
building their own ports and airports," she said.

"Competition between regions in attracting investment should
not result in chasing after just prestigious projects, but
forgetting their duties to improve public welfare."

Mulyani also mentioned the importance of local administrations
in focusing on the future maintenance of infrastructure projects
in their regions.

The government plans to hold the second Infrastructure Summit
next February after postponing it from November due to
unfavorable economic conditions caused by rising oil prices.