Water firms will issue bonds to finance projects

Water firms will issue bonds to finance projects

JAKARTA (JP): Two state-owned water companies, one in Bogor,
West Java, and the other in Surabaya, East Java, plan to offer
bonds to the public next year to raise funds for water
purification projects.

"All the requirements for the bond issuance are now under
preparation," Progo Nurdjaman, director for regional finance
management of the Ministry of Home Affairs, told reporters after
a seminar here on Saturday.

The seminar, organized by the ministries of home affairs and
finance, in cooperation with the United States Agency for
International Development (USAID), discussed the mobilization of
funds for the infrastructure projects of local administrations.

Progo said that the bond issuance is aimed at reducing the
dependence of local administrations on the state budget in
developing infrastructure.

He added that almost 80 percent of the development of the
local infrastructure facilities, such as water supply, market
places and bus terminals, depend on the state budget.

"We expect that the two water companies in Bogor and Surabaya
will pioneer efforts to raise funds from the public to finance
infrastructure facilities because they have shown good financial
management and performance," he pointed out.

Indonesia currently has more than 200 water companies managed
by local administrations.

Chairman of the Capital Market Supervisory Agency Bacelius
Ruru said that water companies should improve their management
before raising funds from the public because his agency will give
no special treatment to any firms entering the capital
market.

He said the main problem faced by state companies, including
water firms, is how to shift their orientation from purely public
service to profit making. (fhp)