Govt affirms commitment to investment projects

The Jakarta Post, Jakarta

The government has reiterated its commitment to attracting more foreign investment, affirming its guarantees for major infrastructure projects and longer-term land and property use titles for foreign investors.

The policy affirmation comes as the House of Representatives wraps up deliberation on a new investment bill, which is expected to become law by the end of the month.

"We will of course provide support for the main infrastructure development projects. One form this support will take will be providing guarantees for multi-year projects," Coordinating Minister for the Economy Boediono told Antara news agency last week.

Investors in projects such as toll roads, power plants, and mass transport systems have recently been seeking guarantees from the government to ensure returns on their investments.

The government on its part has said its seeking investors' assurance that projects will be done well and done on time.

The Finance Ministry has formed a unit to assess suitable guarantee schemes for the infrastructure projects.

The government, Boediono said, would also provide suitable support for public infrastructure projects -- mainly concerning land clearance -- privately financed outside of the government's budget.

"We already have regulations to settle problems such as the price of land (for infrastructure projects) turning out to be higher than its actual value," he said.

"This is some of the support we can give."

The president has already issued a regulation allowing for the compulsory acquisition of land for crucial public infrastructure projects, with compensation for the owners based on the taxable value of their land and property (NJOP).

The regulation was aimed at addressing complaints from many investors who were turned off by speculation over land necessary for their projects.

Speaking separately on the issue of land for investment, National Land Agency (BPN) deputy head for land and registration affairs Bambang Eko H.N. said the new investment bill would also allow longer fixed-term use titles for business (HGU) of up to 95 years, for buildings (HGB) up to 80 years, and for land (HP) up to 70 years.

A previous 1996 regulation on foreign property ownership only allowed foreigners to purchase fixed-term HGB titles for up to 25 years.

Bambang said the government may consider a longstanding proposal by the Indonesian Real Estate Developers' Association (REI) to allow foreigners to own land and building ownership titles, with the proviso that they made direct investments in Indonesia.