South Korea eyeing Sunda Strait bridge project

Antara News, Otniel Tamindael, Thu, May 19 2011

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Jakarta (ANTARA News) - As the sixth largest investor in around 1,400 projects in Indonesia at present, South Korea also has an interest to invest in the construction of Sunda Strait bridge.

With cumulative investment of US$3.35 billion over the past 10 years exuding oil, gas, and banking sectors, the country is also eyeing other infrastructure projects in Indonesia.

"South Korea is interested in a number of infrastructure projects in Indonesia, including Sunda Strait bridge development," Coordinating Minister for Economy Hatta Rajasa said in Jakarta on Thursday.

Speaking after a coordination meeting to discuss ways to overcome traffic congestion problems in several Indonesian major cities, the economic minister said South Korean interest in infrastructure projects in Indonesia was discussed at his meeting with the country`s Economic Minister Choi Joong Kyung in Bali on Wednesday.

It was in Bali on Wednesday that the governments of Indonesia and South Korea signed nine memorandum of understandings (MoUs) on investment and economic cooperation between the two countries.

Signed by the two countries` senior government officials and business representatives, the MoUs covered cover partnership agreements in the fields of of among others technology, textiles, machinery, maritime, aerospace, defense and solar photovoltaic.

According to Hatta Rajasa, the business partnership agreements could make Indonesia as South Korea`s main overseas investment hub in the world.

He said the MoUs included hydroelectric power plan projects in Lampung province, shipyard collaboration between Daewoo Shipbuilding and Marnie Engineering and PT Dok & Perkapalan Kodja Bahari to build projects for vessels and offshore facilities.

In addition, Hatta said that the South Korean economic minister also expressed his country`s support to the implementation of the Indonesian Economic Development Acceleration Master Plan (MP3EI). Hatta said.

"At the meeting, South Korean economic minister expressed his country`s support to the implementation of the Indonesian Economic Development Acceleration Master Plan (MP3EI)," Hatta said.

According to him, Choi Joong Kyung was specifically sent by South Korean president to Indonesia to discuss what projects to be undertaken.

"Specifically the country conveyed its interest to participate in the development of Sunda Strait bridge, and the country wanted it to be considered," Hatta said.

He added that South Korea was probably interested not only to be the contractor of Sunda Strait bridge project but also the other ones.

"But we have yet to come to term, just the interest to participate in the projects," Hatta said, adding that the value of investment in the projects reached around US$20 billion.

Earlier in February this year, Hatta said that of the total $20 billion investment plans, $12 billion was already in the pipeline while the remaining $8 billion remained to be discussed.

Some South Korean companies that have expressed commitment to investing in Indonesia are among others Hankook Tires US$1.2 billion investment plans to build tire production plants, Lotte Groups US$5 billion petrochemical factory in Banten, East Java, or in Kalimantan, as well as electronics giants LG and Samsungs estimated US$500 million to US$1 billion investment to expand their businesses in Indonesia.

The South Korean investment plans are part of the Indonesian governments efforts to raise funds in the process of realizing the 2011-2025 economic master plan.

Indonesia is really South Korean main overseas investment hub and therefore many more companies from the country have made commitment to investing in various sectors in East Java, South Sulawesi.

Earlier this month six South Korean companies made commitment to investing a total of of US$52 million in East Java which was formalized in memorandum of understandings (MoUs) singed by their heads before before East Java Governor Soekarwo and Gyeongsangnam-Do Governor Kim Do Kwan.

The six companies from South Korea are Bo-Kyung, C02 Byo, PT Leader Music, PT Seong Dong Abadi, PT Agro Deka Industri, PT Mitra Lestari Hanjaya.

Bo-Kyung, a company engaged in the footwear industry, is to invest US$15 million in Bangil, Pasuruan district.

PT Leader Music would invest US$2 million in the music instrument industry in Mojosari, Mojokerto district.

Also in Mojosari, PT Seong Dong Abadi is to invest US$ 10 million in the chemical industry.

PT Agro Deka Industri with an investment value of US$2 million is to operate in an agricultural industry in Bangil, Pasuruan, while PT Mitra Lestari Hanjaya would invest around US$20 million.

Soekarwo said six more companies from South Korea would also invest in East Java later and the memorandums of understanding was signed when he visited Seoul last April 5-7, 2011.

While in Makassar, South Sulawesi, South Korea`s PEM Korea Co.Ltd also plans to build a polyethylene pipe plant on two hectares of land at Makassar industrial estate in June this year.

PEM Korea Co. Ltd. President Director Jin Hwan Ho signed a cooperation agreement for the construction of the plant with South Sulawesi Governor Syahrul Yasin Limpo at the gubernatorial residence in Makassar on Monday, May 16, 2011.

"In the first phase of the project, we will build two production lines to meet demand in South Sulawesi and neighboring provinces. Later we will develop them into four lines that we project will be able to meet demand in the eastern part of Indonesia," Jin said.

He said PEM Korea Co.Ltd. would team up with two local companies -- PT Hanwoo and Bahana Cipta -- to build the plant which would cost US$5 million to US$10 million.

Editor: Aditia Maruli