US firms to engage in RI infrastructure development

The Jakarta Post, Jakarta | Thu, 09/16/2010 9:35 AM 

As many as 12 US companies are ready to sign a memorandum of understanding (MoU) on investments in infrastructure development projects with the government of Indonesia, a company delegate says.

The president director of heavy equipment company Caterpillar Asia, Kevin Thieneman, who represented the US-Asia Business Council, said Wednesday that the companies were expected to sign the MoU “in the very near future”.

“The investment will cover sectors like energy, roads, highways and broadband telecommunications,” he told reporters after meeting the Industry Minister, M.S. Hidayat, at the minister’s office in Jakarta.

The planned MoU, Thieneman said, aimed to help promote investments by US companies in infrastructure development projects in Indonesia and to accelerate the development of advanced technologies in the country to boost infrastructure investments.

Thieneman did not disclose the names of the companies that were committed to invest in Indonesia or the projected investment value.Industry Ministry director general for metal, machinery, textile and miscellaneous industries Ansari Bukhari said Caterpillar was among the companies interested to expand its heavy equipment and infrastructure development businesses in the country.

“[Thieneman] also came to affirm his company’s commitment to expand its business here,” he said. He added that Minister Hidayat had said that he fully supported the company’s commitment and pledged to consider giving several incentives to boost investments.Ansari said Caterpillar might receive several incentives since it had been conducting business in Indonesia since 1982.

He said the company might soon expand its business but declined to disclose the precise time.Poor infrastructure has long stalled foreign direct investments in Indonesia.

Many potential investors particularly in the manufacturing industry have backed down on plans to build factories in the country due to lack of energy supply and road access.

The government tried to promote infrastructure development projects by introducing public-private partnership (PPP) programs in 2005, but to date, the programs have not shown promise.

Coordinating Economic Minister Hatta Rajasa said earlier that infrastructure development in the country faced three hurdles: difficulties in land acquisition, the complexity of public-private partnership (PPP) project procedures and a lack of financing.

The Industry Ministry said it expected investments from the US companies would encourage more investors to work together with the government in developing the country’s infrastructure.

The Investment Coordinating Board (BKPM) estimates the government will need up to Rp 1,500 trillion for infrastructure development from 2010 to 2014.

The government will allocate Rp 500 trillion to Rp 600 trillion from its state budget for that period, with the rest of the money expected to come from PPP programs. (rdf)

As many as 12 US companies are ready to sign a memorandum of understanding (MoU) on investments in infrastructure development projects with the government of Indonesia, a company delegate says.

The president director of heavy equipment company Caterpillar Asia, Kevin Thieneman, who represented the US-Asia Business Council, said Wednesday that the companies were expected to sign the MoU “in the very near future”.

“The investment will cover sectors like energy, roads, highways and broadband telecommunications,” he told reporters after meeting the Industry Minister, M.S. Hidayat, at the minister’s office in Jakarta.

The planned MoU, Thieneman said, aimed to help promote investments by US companies in infrastructure development projects in Indonesia and to accelerate the development of advanced technologies in the country to boost infrastructure investments.

Thieneman did not disclose the names of the companies that were committed to invest in Indonesia or the projected investment value.

Industry Ministry director general for metal, machinery, textile and miscellaneous industries Ansari Bukhari said Caterpillar was among the companies interested to expand its heavy equipment and infrastructure development businesses in the country.

“[Thieneman] also came to affirm his company’s commitment to expand its business here,” he said. He added that Minister Hidayat had said that he fully supported the company’s commitment and pledged to consider giving several incentives to boost investments.

Ansari said Caterpillar might receive several incentives since it had been conducting business in Indonesia since 1982. He said the company might soon expand its business but declined to disclose the precise time.

Poor infrastructure has long stalled foreign direct investments in Indonesia. Many potential investors particularly in the manufacturing industry have backed down on plans to build factories in the country due to lack of energy supply and road access.

The government tried to promote infrastructure development projects by introducing public-private partnership (PPP) programs in 2005, but to date, the programs have not shown promise.

Coordinating Economic Minister Hatta Rajasa said earlier that infrastructure development in the country faced three hurdles: difficulties in land acquisition, the complexity of public-private partnership (PPP) project procedures and a lack of financing.

The Industry Ministry said it expected investments from the US companies would encourage more investors to work together with the government in developing the country’s infrastructure.

The Investment Coordinating Board (BKPM) estimates the government will need up to Rp 1,500 trillion for infrastructure development from 2010 to 2014. 

The government will allocate Rp 500 trillion to Rp 600 trillion from its state budget for that period, with the rest of the money expected to come from PPP programs. (rdf)