From Aceh to Papua: Jokowi’s Infrastructure Visions

Jakarta Globe, Yanto Soegiarto, Apr 19, 2015

Cyclists crossing the Kelok 9 flyover in Payakumbuh, West Sumatra on
 July 3, 2013. GlobeAsia Both local and international investors have turned
 their attention to President Joko Widodo’s ambitious plans. (JG Photo/Afriadi Hikmal)

The building of infrastructure in Indonesia is the key to understanding the extent of progress in the country.

During the World Economic Forum on East Asia, a question will be asked: Is Indonesia doing enough to show the public and investors they can trust that infrastructure development is moving ahead toward growth and becoming competitive in the region.

Indonesia, meanwhile, has been given the opportunity to showcase development and attract investment while playing host to the WEF event.

The administration of President Joko Widodo has set an infrastructure target, to be achieved by 2019, in which 24 seaports, 15 airports, power plants with a capacity of 35,000 megawatts and nine million hectares of agriculture land will be developed.

This was reiterated by WEF Indonesia committee member and Trade Minister Rachmat Gobel in a recent briefing to ambassadors and prominent business leaders.

The administration is confident in its programs to build dams, toll roads and railways to boost the local economy and raise the living standards of local communities.

Joko traveled to Aceh in March to inaugurate a number of projects in the area.

In North Aceh, he presided over the groundbreaking of the Keureuto dam — the largest to be built this year and expected to increase agricultural output in the region.

The construction of the dam will allow the irrigation of other regions which are in a deficit of rice production.

The dam is being built by state-owned construction companies Brantas Abipraya, Hutama Karya and Wijaya Karya.

It will hold 167 million cubic meters of water and irrigate 4,768 hectares of agricultural land. The reservoir will also prevent flooding in the downstream region.

Joko then moved on to Sabang, Indonesia’s most western tip, where he jump-started the construction of the Seunara reservoir, which has been stalled for more than nine years due to land clearance issues.

The issue was eventually solved as Joko negotiated with over 200 local residents who had been holding out for a larger compensation package.

“After talking to the residents, they have no problem. We have the budget, what’s important is the reservoir will be completed this year and function,” said Joko, who was accompanied by Aceh Governor Abdullah Zaini and Public Works and Housing Minister Basuki Hadimulyono.

The reservoir will provide water and help the local community boost income through the development of water tourism and aquaculture.

Veteran infrastructure expert Scott Younger says the president’s move to resolve the stalled Seunara project provides encouragement.

“He has quickly recognized the serious issue of lack of water storage across the country and acted on it. It is also positive that he has inaugurated the long-defined Keureuto project.

“With this early action it would seem that the president will certainly be trying to meet the target of 13 dam projects for this year,” Younger said.

But, he says, the longer-term concern is the lack of engineering and construction industry capacity to carry out all the work planned in the administration’s term, not just in water storage but across the infrastructure space as a whole.

Undaunted, the president pressed on to Lhokseumawe, the home of Kertas Kraft Aceh.

The company stopped production years ago, but the president has voiced he would like to see it running again as to contribute to the local economy.

“For more than 15 years I have wanted the company to be in operation again. There is adequate supply of raw materials from the forests which can be managed by the local people.

“We can plant fast-growing sub-tropical trees such as albizia or pine and we don’t have to wait 15, 20 or 30 years,” he said.

The president is no stranger to Aceh. He spent his early working years there and his first child was born in the province.

“Ibu Jokowi and I are very familiar with Aceh,” he said.

In Arun, just north of Lhokseumawe, the president launched the Arun regasification and storage terminal, marking a milestone in the country’s efforts to shift its energy consumption toward gas.

The plant sits on the now-depleted wells of Indonesia’s first natural gas resource, now run by Perta Arun Gas, a subsidiary of state-owned Pertamina Gas.

“The facility will regasify LNG sent from Kilang Tangguh in Papua,” Pertamina Gas president director Hendra Jaya explained, adding that the plant will provide the state electricity company with gas to power its generators in Belawan, Medan.

Joko’s initiative in Aceh marks a significant move in the nation’s infrastructure building, no president before him has had a similar strategy.

Dams and roads

This year, the administration is at work building at least 13 of the projected 49 dams it wants to construct over the next five years. The cost of the 13 dams will be at least Rp 12 trillion ($934 million), excluding land-clearance costs. The projects will be funded by the state budget.

Rising transportation and logistics costs have also won the attention of the government.

Many toll roads are to be constructed and work on the 2,700-kilometer Trans-Sumatra toll road, which will link Aceh and Lampung, is due to start this month.

The government has assigned Hutama Karya to undertake the project, as it is the only large state infrastructure firm not listed on the stock exchange.

Construction of the road has been estimated to cost Rp 300 trillion, with the government asking other state enterprises and local governments to cooperate without reservation.

The first stage of the project is to build 1,300 kilometers of road. Hutama Karya has been given an additional injection of funds by the government to get the job done.

Earlier Hutama Karya and other state enterprises, including banks, were ready to finance the project without relying on the state budget but the government deemed it would create too much of a burden.

During the previous administration of president Susilo Bambang Yudhoyono, the project was also to be managed by Hutama Kaya. The project proved difficult to get started due to financial concerns with investors reluctant to commit to such a long-term project.

The focus then turned to building the Medan-Binjai toll road, but that plan has also changed, with the focus now on the link between Bakaheuni in Lampung and Palembang, the capital of South Sumatra.

The April ground-breaking date was chosen at a limited cabinet session presided over by Joko, Vice President Jusuf Kalla, Public Works Minister Basuki Hadimulyono, State-owned Enterprises Minister Rini M. Soemarno and Finance Minister Bambang Brodjonegoro.

An important part of the decision was the revision of the previous presidential decree number 100/2014 which put an emphasis on land acquisition as a priority.

In a recent development, Rini revealed that four state enterprises — Hutama Karya, Jasa Marga, Waskita Karya and Wijaya Karya — will be tasked to jointly commission the project.

“The project will be done in sections. For instance Waskita Karya will do section 1, Wijaya Karya section 2 and so forth, Part of it will hopefully be completed in 2018,” she said, adding that some sections of the road will be commissioned by local governments involving the private sector.

Railway development

Following Joko’s pledge last year to develop railways in Papua, the Transportation Ministry will allocate at least Rp 105.6 trillion over the next five years to build railway networks beyond Java.

“We have evaluated the budget needs of the Directorate General of Railways at the ministry for the next five years and according to the new master plan pushed by the president, completion of the project is slated for 2019,” Director General for Railways Hermanto Dwiatmoko said.

In business terms, railway development beyond Java can be complex because of feasibility and financing, and as a result funding for railway development has to come either from the state budget or through public-private partnership, he said.

The plan may appear ambitious but Hermanto insisted that the project will begin in 2016.

It will contribute to what will become a total national railway network stretching 3,258 kilometers and be the longest railway project since the Dutch occupation of Indonesia.

Meanwhile, a feasibility study for the construction of the Trans Papua Railway has already begun. The new railway track will span 595 kilometers connecting Sorong and Jayapura.

Home Affairs Minister Tjahjo Kumolo said that development outside Java is one of the president’s priorities.

“There are many regions and border areas which are still untouched by infrastructure development.

“The president is committed to developing the eastern part of Indonesia where infrastructure is less developed.

“We at the Ministry of Home Affairs have reached a consensus with the Ministry of Public Works to support and develop infrastructure mainly in Papua, East Nusa Tenggara and the Kalimantan border areas,” he said.

House Commission V members who have visited Papua to see the prospective railway plan say they back the government’s initiative.

They have also encouraged the people of Papua to support it.

At the local level, regional officials have discussed the railway project with the central government but still have questions about the source of finance.

“We will have certainty on that in one or two months,” said regional secretary Ella Loupatty.

“We think that the project will begin from Sorong in West Papua and connect the Sarmi district in Papua province. If the project is realized, the distribution of goods will be easier and prices will go down in many areas.”

Hermanto added that he had asked regional officials to help in the process of land clearance, which poses one of the major hurdles to any infrastructure project.

He believes it is feasible to complete the Papua railway project within five years.

“We expect the project to be expedited although we note that any infrastructure development in Papua is not easy. But, we can’t delay it,” he said.

Higher commodity prices

Without the development of better infrastructure in the area, the price of cement could go as high as Rp 2 million for a 50 kilogram sack, while basic commodities such as sugar could cost between Rp 15,000 and Rp 50,000 a kilogram, many times over the price for such staples on Java.

Commenting on the rail plans, Younger, the infrastructure expert, says the target dates are highly optimistic.

“While railways must be part of the transportation infrastructure build-out, an emphasis for off-Java railway construction seems difficult to reconcile,” he says.

“There is still much to do in rail in Java and especially around the main urban centers, such as Jakarta and for fast rail links between the major cities. Railways make sense when there are many people and/or a large volume of commodities to transport.

“Java and off-Java highly-populated centers, such as Medan, fill the first criterion and off-Java in certain specific locations for the movement of commodities.”

And, he adds, the public-private partnership concept has been around for more than a decade, but a workable model is still to be found.

More needs to be done to encourage private investment.

Meanwhile, a number of countries in the East Asia region such as Singapore, Japan, and China have expressed interest to invest power plants projects in Indonesia, according to the Investment Coordination Board (BKPM).

The BKPM has received 12 new applications for investment permits from foreign investors to build power plants worth $8.9 billion, or around Rp 116 trillion.

It’s not just foreign investors looking towards Indonesian infrastructure — many domestic investors are interested as well.

BKPM chairman Franky Sibarani said that his office has also received applications for investment permits from 17 local investors.

GlobeAsia and the Jakarta Globe are media partners of the World Economic Forum on East Asia. Parts of this article originally appeared in the April issue of GlobeAsia.

GlobeAsia

We Are Waiting for You to Invest in Indonesia, Jokowi Tells APEC in Speech

Jakarta Globe, Nov 11, 2014

President Joko Widodo delivers a speech at the APEC CEO Summit as part of the
 Asia-Pacific Economic Cooperation Summit at the China National Convention
Center in Beijing on Nov. 10, 2014. (AFP Photo/Pool/Andy Wong)

Jakarta. Indonesian President Joko Widodo addressed business leaders at the Asia-Pacific Economic Cooperation CEO summit in Beijing on Monday, where he put out a call for greater investment in the archipelago and promised a friendlier climate for doing business in the country.

The following is his speech:

Excellencies, distinguished guests, ladies and gentlemen and CEOs.

First, on behalf of Indonesian government and the people of Indonesia I would like to thank you for coming to my presentation. Today I am very happy to be among with you because you know I was a businessman years ago. So this morning I am very happy because we can talk about business, about investment with all of you.

This picture shows you our map of Indonesia. We have a population of 240 million and the distance is like from London in the UK to Istanbul in Turkey. And imagine, we have 17,000 islands.

Our national budget in 2015 is $167 billion and the fuel subsidy [allocation] is $27 billion. It’s huge. So we want to channel our fuel subsidy from consumption to productive activities. We want to channel [the money] to farmers for seed, for fertilizers, and also for irrigation. And we want to build dams — 25 dams in five years from our fuel subsidy to maintain the water supply to farming areas.

Some subsidy [funds] we want to channel to fishermen, to give them boat engines [and] refrigerators. We want to increase the income of the fishermen. Some fuel subsidy [funds] we want to [give to] micro and small enterprises in the villages. We want to help them raise working capital. And some subsidy [funds] we want to channel to the health program [and] the education program. And the subsidy [funds] we [also] want to channel to infrastructure.

In five years we want to build 24 seaports and deep seaports. We have 17,000 islands, so we need seaports and deep seaports. And this is your opportunity: 24 seaports and deep seaports.

This picture shows our Jakarta port, Tanjung Priok Port. In 2009, the capacity was 3.6 million TEUs a year. And our plan in 2017 is around 15 million TEUs a year. This is the potential [for] ports in Indonesia. This is your opportunity. We want to build in Sumatra, Kalimantan, Java, Sulawesi, Maluku, also in Papua. And we plan to build our [railway network]. We already [have railway lines] in Java and we want to build in Sumatra, Kalimantan, Sulawesi and Papua. This is your opportunity.

Now we talk about mass transportation. We want to build mass transportation in six big cities in Indonesia. We started in Jakarta last year, and we want to build in Medan, Makassar, Semarang, Bandung [and] Surabaya. So, this is also your opportunity. Because you know our national budget is limited.

Now we [will] talk [about] our maritime agenda. We want to build [a] sea toll. What is [a] sea toll? [A] Sea toll is [a] maritime transportation system to make our transportation costs lower [and] more efficient. We want to build from the west to the east. We hope not only the vessels can enter our sea toll but also mother vessels can enter the sea toll. So the price, the cost of the transportation, [becomes] more efficient.

For example, the price of [...] one sack [of] cement in Java is $6 [...] But in Papua the price is $150 [...] Imagine, 25 times [as much]. So we hope with our sea toll the price in our islands [will be] the same.

Electricity. We need power plants. We need around 35,000 [megawatts] to build our industries, projects, industrial zones, [manufacturing] zones. So we need power plants. This is also your opportunity to invest in this project. Because we need our power plants for manufacturing, for industrial zones.

Many investors, a lot of investors, when they come to me most of them [...] always complain about land acquisition. I will push my ministers, my governors, my mayors to help clear this problem. I have experience with land acquisition when I was a governor. We [had the] Jakarta Outer Ring Road [project that] started 15 years ago but stopped eight years ago, because we had a problem. One point five kilometers [was] unfinished because there [were] 143 families [who did] not accept [...] the compensation price. So last year I invited them [...] to lunch and dinner. Four times. Ah, this is me. I invited them and then we talked about the problem. Four times. And the problem [was] cleared.

And now the toll road has been [in use since] seven months ago.

Now [let’s] talk business permits. We have a national one-stop service office that can help you, that will serve you, that will facilitate you, that will give you your business permit. For example, [a] principle business permit [will take] three days to process.

Finally, again on behalf of the Indonesian government and the people of Indonesia I would like to thank you for your listening my presentation. We are waiting for you to come to Indonesia. We are waiting for you to invest in Indonesia. Thank you.

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Indonesia to Offer PPP Projects Worth $52b

Jakarta to Start With Ambitious $34b Giant Sea Wall Project

Draft of the Master Plan for National Capital Integrated Coastal Development. 
(JG Screen Grab courtesy of the website of the Coordinating Ministry of
Economic Affairs)

Indonesia to Offer PPP Projects Worth $52b

Jakarta Globe, Eko Adityo Nugroho, Nov 06, 2014

Jakarta's government has set the capital's Decent Living Index at Rp 2.5 million
 ($206) for 2015, a strong signal to workers that minimum wages are unlikely
to increase substantially. (Reuters Photo/Beawiharta)

Jakarta. The Indonesian government plans to offer 43 infrastructure projects worth $52 billion to private investors next year, according to an official of the National Development Planning Ministry.

Bastari Panji Indra, a director at the ministry, said the projects will be offered under public-private partnership (PPP) schemes.

The projects offered include airports, monorail and, light rail transits, toll roads, coal transportation trains, ports, and water supply.

The government has published details regarding the projects in the Public Private Partnership Book 2015, which guides infrastructure development in the country.

Speaking on the sideline of Indonesia Infrastructure Week late on Wednesday, Bastari said of the 43 projects, eight are classified as “ready” to be offered, 11 are   “prospective” and 24 are marked as “potential.”

Bastari said the government will offer 10 major airport projects to private investors, including Juwata in North Kalimantan, Tjilik Riwut in Central Kalimantan and Fatmawati Soekarno in Bengkulu.

“Apart from airports, there are also a monorail project, coal transportation by train, water supply and six ports,” Bastari said.

Citing the Public Private Partnership Book 2015, he said the government plans to build an express train line connecting the Halim Perdanakusuma Airport in East Jakarta to the Soekarno-Hatta International Airport in Tangerang, Banten, in order to ease passenger commuting.

The director also announced a light rail transit system in Bandung, West Java, new train networks for South Sumatra, three water supply projects in Semarang, Central Java; Pekanbaru in Riau, and Pondok Gede in Bekasi.

Bastari also flagged a project for waste disposal processing in Bogor and Depok.

Deputy Minister Dedy Supriadi Priatna, who is charged with infrastructure affairs, said the government plans to revise the PPP scheme to attract investors, including with the introduction of a performance-based annuity scheme.

Under such a scheme, private investors contribute to development, financing and the operation of a project with a given concession time.

Once the project is open for commercial use, investors will receive regular payments for providing the service to the public, with a performance standard agreed to by both parties.

The new government under President Joko Widodo has a lot of research to do into the infrastructure sector.

Poor road and toll road conditions, over-crowded airports, over-capacity ports, and a lack of train networks have been cited as the main stumbling blocks to strong and sustained economic growth.

The previous administration under Susilo Bambang Yudhoyono repeatedly offered infrastructure projects to tender, but only a few have been completed.

Poor preparation of projects, complex bureaucracy and low return in investment for the private sector remain major factors that deter investor interest.

INDONESIA : Indonesia gets US$ 890 million World Bank loans

Tendersinfo News, June 1, 2011

Indonesia gets US$ 890 million World Bank loans to support infrastructure projects in the country. The first loan, worth US$ 640 million loan will be allocated for the construction of a pumped storage hydropower plant to support the increasing electricity needs of the nation. The Upper Cisokan Pumped Storage Hydropower project will be the first facility of its kind in Indonesia. The facility will be located near Bandung in west Java.

World Bank senior energy specialist Leiping Wang said, Pumped storage is the only form of technology that allows you to efficiently store large amounts of energy and quickly respond to peak electrical demand. The Upper Cisokan project will make Indonesia one of very few developing countries to have such a power plant. Pumped storage plants generate energy by transferring water from two reservoirs built at different heights - energy is generated by releasing water from the high reservoir to the low reservoir to drive turbines. The water is pumped back to the higher reservoir at off-peak times. US$ 800 million plant will be developed by Indonesia's state-owned electricity company PLN, with the support of World Bank and the proposed facility will have the capacity to generate more than 1000 MW of electricity.

The second loan worth, US$ 250 million, will go towards the development of roads along the Western Sumatra corridor of the nation. The Indonesian Ministry of Public Works will manage the project, which aims to enhance around 716 km of national roads along the Western Sumatra corridor. The project will cover laying new asphalt wearing courses, replacing 194 m of bridges, improving drainage as well as widening the roads where necessary.

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Govt Announces 17 Infrastructure Projects Worth Rp190 Trillion

Antara News, Fri, May 27 2011

Related News

• Chinese investors interested in infrastructure projects
• South Korea eyeing RI infrastructure projects
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• JP Morgan intends to fund Indonesia infrastructure projects
• Jakarta gears up for realization of infrastructure projects

Jakarta (ANTARA News) - The Indonesian government announced 17 new infrastructure projects worth Rp190 trillion as part of its 2011-2025 Indonesia Economic Development Expansion and Acceleration Master Plan.

"The number of projects officially started is 17 and they are part of all infrastructure projects to be carried out until 2014 worth Rp400 trillion," coordinating minister for economic affairs Hatta Rajasa said in his speech at the launching of MP3EI here on Friday.

Hatta said the projects were launched in four locations namely Sei Mangke in the province of North Sumatra, Cilegon in Banten, Lombok Timur, East Nusa Tenggara and Timika, Papua, with funds coming from state-owned companies, national private companies, foreign direct investment and national budget.

"The groundbreaking is a start for MP3EI other projects. In the months and years to come it will continue to be done and therefore a solid team is needed to conduct monitoring so that no obstacles are to be found by prioritizing transparency and accountability.," he said.

Hatta said the launching of MP3EI would be the start of "business not as usual" to accelerate economic development across the country sustainably and equally through synergy building involving all components in the central and regional governments.

"The master plan is expected to be able to eradicate various obstacles of development such as `bottleneck` that disrupt business climate and certainty," he said.

In Sei Mangke there will be three projects which are to be developed namely an oil palm area development project by PT Perkebunan Negara III with an estimated investment of Rp2.5 trillion.

The other ones are the Peusangan 1 and 2 (2x44MW) hydro-powered plants (PLTA) in the Aceh province worth Rp1.53 trillion and the Broadband Access and Through Broadband Access Plan by PT Telkom.

Five main projects in Cilegon in the West Java province of Banten meanwhile are the modern steel plant development project by PT Krakatau Steel and POSCO of South Korea worth Rp60 trillion and energy gasification project worth Rp59 trillion.

The third project is the extension of Samping, engine, casting and assembling plant for motor vehicles by PT Astra Daihatsu worth Rp2.4 trillion.

The fourth project meanwhile is the Tanjung Priok toll road worth Rp1.6 trillion by JBIC, the central government, the Jakarta administration, PT Angkasa Pura and PT Jasa Marga and the fifth is the aluminium grad chemical plant worth an investment of Rp4.3 trillion in Sanggau, West Kalimantan.

Four projects meanwhile will be carried out in East Lombok namely the Pandan Duri dam with an estimated investment of Rp728 billion, the Titab dike worth Rp481 billion, the Ngurah Rai airport expansion worth Rp1.94 trillion and the development of new Garuda Airlines routes o 13 cities in the Indonesian eastern regions.

Four projects to be carried out in Timika, Papua, meanwhile include the 135-kilometer long Timika-Enarotali highway with an investment of Rp600 billion and the 600-kilometer long Merauke-Waropko worth Rp1.2 trillion.

The others include a mining project and a cobalt and nickel processing plant worth Rp50 trillion and 150 KWp and 200 KWp solar power projects (PLTS).

Editor: Ella Syafputri

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

Govt plans new toll road to Bali airport before APEC Summit

The Jakarta Post, Jakarta | Tue, 01/11/2011

On Tuesday, the government announced plans to build a toll road in Bali connecting Nusa Dua airport with the rest of the island.

“We have agreed to build the Sarangan - Nusa Dua toll road, spanning 11.5 kilometers, in Bali," State-Owned Enterprises Minister Mustafa Abubakar said Tuesday after meeting Coordinating Economic Minister Hatta Rajasa.

“The toll road will not curve but cut from the airport to Benoa. It will also cut from the airport to Sarangan," he added.

Four state-owned enterprises, PT Jasa Marga, PT Pelindo III, PT Angkasa Pura, and the Bali Tourism Development Board, would form a consortium that would oversee the construction of the road.

“The four state-owned enterprises will work together to manage [the construction of] the toll road so it won't be necessary to use the state budget [APBN]. All funds, amounting to Rp 1.4 trillion to Rp 1.6 trillion, will come from the state-owned enterprises,” Mustafa said.

He added that the construction would begin in January, and has been targeted for completion by May 2013.

"We hope this road will be complete before the APEC Summit in Bali in 2013," he said.

$4.5b Toll Road Project to Untangle Traffic Snarls to Start in 2011: Fauzi Bowo

Jakarta Globe, Arientha Primanita | August 19, 2010

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Jakarta. The Jakarta administration’s ambitious Rp 40 trillion ($4.5 billion) project to build six new toll roads to ease the capital’s famed gridlock will not get underway until next year, Jakarta Governor Fauzi Bowo said on Thursday.

The Public Works Ministry has approved the new toll roads, which will connect the existing networks between Jakarta and Surabaya by 2014.

“The toll roads will add to Jakarta’s road ratio by up to 0.3 percent. The tender process will begin at the end of this year,” Fauzi said. The city’s road ratio currently sits at 6.2 percent.

The city administration had been waiting for central government approval for the project, which involves 75 kilometers of new roads and is part of the city’s attempts to upgrade its creaking transportation infrastructure.

“City Hall will be finalizing the administrative documentation, and the first phase of the construction will be completed by 2012,” Fauzi said.

He also said the city had prioritized certain areas for toll road construction to ensure the highways became a solution to the traffic jams and not an additional burden.

The governor added that companies that won a tender would also manage the operation of the toll road, and the city administration would allow city-owned developers Jakarta Propertindo and Pembangunan Jaya Group to team up and join the bid.

Sutopo, a director at Pembangunan Jaya, said that based on this year’s Presidential Decree on tenders, a city-owned enterprise was permitted to act as a project initiator and was also allowed to prepare a tender.

“The tender is for everyone and the city’s consortium will join the bid,” Sutopo said.

Fauzi said concern from the public had been registered over whether the construction of new roads would spark greater gridlock in a city known for hours-long traffic jams.

While adding road ratio to a city provides a short-term fix to congestion, studies indicate that when new roads are built, vehicle ownership rates increase to cover the new pavement.

But Jakarta’s planners hope that inner toll roads linking with other toll roads such as Jakarta’s outer ring road will still provide a buttress to the capital’s traffic woes.

Fauzi also said the city would manage the on and off ramps of the elevated toll roads to better control the usually voluminous flow of incoming traffic.

The proposed routes for the new toll roads in Jakarta are Kampung Melayu-Kemayoran; Pasar Minggu-Casablanca; Kampung Melayu-Duri Pulo; Pulogebang-Sunter; Ulujami-Tanah Abang; and Semanan-Sunter.

The construction schedule has the six toll roads slated to be built in four stages.

The first stage is the 17.88 kilometer long road from Semanan in West Jakarta to Sunter in North Jakarta, which will be followed by a road running from Pulogebang in East Jakarta to Sunter in North Jakarta.

The second stage is Duri Pulo in Central Jakarta to Kampung Melayu in East Jakarta, and Kampung Melayu to Kemayoran.

A Ulujami to Tanah Abang road makes up the third stage, and the last stage will be a toll road linking Pasar Minggu to Casablanca.

US ready to help Southern Trans-Java highway project

Antara News, Friday, May 7, 2010 15:45 WIB

Jakarta (ANTARA News) - The Millennium Challenge Corporation (MCC), a United States donor institution, is ready to give a soft loan of US$300 million for the construction of the southern trans Java highway.

"We are to conclude a formal agreement with the MCC to approve the soft loan of US$300 million," Public Works Ministry`s Bina Marga Director General Djoko Murjanto said here on Thursday.

He explained that MCC`s intention to assist to southern Java trans highway project was under discussion at the US Senate, and if being agreed, the design process would be made in 2011 and then continued with physical construction for three years.

Murjanto said the soft loan would be used for the construction of 300-km road of a total 1,567,195 km in the southern coastal area of Java island.

He said the US donor institution had an interest to help develop the southern trans Java road to have an access to the isolated areas.

Murjanto said the soft loan would also be allocated for the construction of a road linking Banten province and West Java province.

He said the proposal for the grant had been handed to the National Development Planning Board (Bappenas) to be discussed further.

Cost of Sunda Strait bridge may balloon to US$18.87 billion

Aditya Suharmoko, The Jakarta Post, Jakarta | Tue, 04/27/2010 10:24 AM

The construction of the Sunda Strait bridge, which, if completed, will be the longest suspension bridge in the world, may cost as much as Rp 170 trillion (US$18.87 billion), almost double the initial estimate of $11 billion, an official said.

Feasibility studies revealed the huge price tag, which, according to Syahrial Loetan, the main secretary of the National Development Planning Agency, is subject to change.

The Sunda Strait bridge will connect Java and Sumatra with an approximate length of 30 kilometers, according to the planning agency.

The bridge width will be 60 meters, with six lanes for traffic and double-track railways, based on the official website.

Gas and oil pipes, fiber-optic cables and electricity cables will be built into the length of the bridge.

The planning agency said the Sunda Strait bridge is needed as the only existing transportation, ferries, can no longer support economic development in both islands.

The construction of the bridge was initiated by PT Bangungraha Sejahtera Mulia, a subsidiary of the Artha Graha Group owned by tycoon Tomy Winata. A national team led by Coordinating Economic Minister Hatta Rajasa is now responsible for preliminary studies into the bridge’s construction.

The bridge is expected to take at least 10 years to build, said Banten Governor Ratu Atut Chosiyah.

The planning agency expects construction to start in 2012.

Because a large amount of funds is needed to construct the bridge, the agency has included it as part of the public-private partnership (PPP) projects in the 2010-2014 period worth $47.3 billion in total.

Hatta said he has offered construction of the bridge to Chinese investors, but as yet no decision has been announced.

Syahrial is optimistic foreign investors will want to invest in this ambitious project. “Our economic growth is high compared to other countries. With stable macroeconomic conditions Indonesia can be the right place for global investors,” he said.

President Susilo Bambang Yudhoyono said he expects private investors to participate in the bridge construction.

The government “has taken comprehensive moves to create a better investment climate,” he said, adding that Indonesia has improved infrastructure over the past five years.

Indonesia’s economy grew by 4.5 percent in 2009, according to the Central Statistics Agency. The government expects economic growth will hit 5.8 percent this year.

Government Offer 42 Infrastructure Projects

Tempo Interactive, Thursday, 15 April, 2010 | 17:00 WIB

TEMPO Interactive, Jakarta: Public Works Department said the government is offering 42 infrastructure projects to foreign investors. Thirty of the projects are toll road construction, 10 water projects, and two waste and sanitation projects.

Minister Djoko Kirmanto said today (15/4) on the sidelines of Infrastructure Asia in Jakarta that the government hoped that the fair would boost investments for the projects.

Total value of the projects he said was about Rp157 trillion but some of the project have no feasible financial plan, and Djoko said the government will guarantee the infeasible projects.

Thirty of the toll road projects are being categorized into “priority projects” and “potensial projects”.

Priority Projects include

1. Medan-Kuala Namu-Tebing Tebing (North Sumatra)/60 km/Rp4,755 trillion
2. Cileunyi-Sumedang-Dawuan (West Java)/58.5 km/Rp5,102 trillion
3. Palembang-Indralaya (South Sumatra/22 km/Rp1.052 trillion
4. Tegineneng-Babatan (Lampung Province)/50 km/Rp2.726 trillion
5. Sukabumi-Ciranjang (West Java)/28 km/Rp1.855 trillion
6. Pasirkoja-Soreang (West Java)/15 km/Rp1.021 triliun
7. Pandaan-Malang (East Java)/37.62 km/Rp2.572 trillion
8. Medan-Binjai/15.80 km/Rp1.293 trillion
9. Kemayoran-Kampung Melayu/9.65 km/Rp6.953 trillion
10. Sunter-Rawa Buaya-Batu Ceper/22.92 km/Rp9.760 trillion
11. Ulujami-Tanah Abang/8.27 km/Rp4.255 trillion
12. Pasar Minggu-Casablanca/9.56 km/Rp5.719 trillion
13. Sunter-Pulo Gebang-Tambelang/25.73 km/Rp7.377 trillion
14. Duri Pulo-Kampung Melayu/11.38 km/Rp5.960 trillion
15. Terusan Pasteur-Ujung Berung-Cileunyi-Gede Bage

Potential Projects include

1. Pekanbaru-Kandis-Dumai/135 km/Rp8.446 trillion
2. Manado-Bitung/46 km/Rp5.612 trillion
3. Kisaran-Tebing Tinggi/60 km/Rp5.280 trillion
4. Bukit Tinggi-Padang Panjang-Lubuk Alung-Padang/55 km/Rp10.230 trillion
5. Terbanggi Besar-Menggala-Pematang Panggang/100 km/Rp5.780 trillion
6. Bakauheni-Terbanggi Besar/100 km/Rp8.2 trillion
7. Cilegon-Bojonegara/15.69 km/Rp920 billion
8. Kamal-Teluk Naga-Batu Ceper/32 km/Rp3.590 trillion
9. Gede Bage-Majalaya/12.75 km/Rp900 billion
10. Semarang-Demak/23.99 km/Rp2.960 trillion
11. Yogyakarta-Bawen/104 km/Rp6.085 trillion
12. Yogyakarta-Solo (Central Java)/40.49 km/Rp2.330 trillion
13. Bandara Juanda-Tanjung Perak (East Java)/23 km/Rp5.03 trillion
14. Probolinggo-Banyuwangi (East Java)/170.36 km/Rp8 trillion
15. Batu Ampar-Muka Kuning-Bandara Hang Nadim (Batam- Riau Islands)/25 km/Rp2.2 trillion

KARTIKA CHANDRA

China lends Indonesia US$2b

The Strait Times, Apr 3, 2010

Indonesian Trade Minister Mari Pangestu (L) and China's Minister of Commerce Chen Deming (R) - (AFP)

YOGYAKARTA (Indonesia) - CHINA has agreed to lend at least US$1.8 billion (S$2.5 billion) in soft loans to Indonesia as part of its free trade agreement with the 10-member Association of Southeast Asian Nations (Asean), a minister said on Saturday.

The China-Asean Free Trade Agreement, which imposed zero tariffs on a range of goods, came into effect in January and has prompted fears among some Indonesian businesses that the domestic market would be flooded with cheap Chinese imports, leading to job losses in a country which already has high unemployment.

Indonesia's Trade Minister Mari Pangestu, who met China's Commerce Minister Chen Deming in Yogyakarta, Central Java, on Saturday, afterwards announced that China would provide US$1.8 billion in export buyers credits to finance the import of Chinese goods used for infrastructure projects such as toll roads, bridges and coal-fired power plants.

In addition, China will provide 1.8 billion yuan, also for infrastructure-related projects, while Chinese banks would help finance trade between the two countries.

Export-Import Bank of China will provide a US$100 million loan and Industrial and Commercial Bank of China may lend US$250 million to companies investing in both countries, according to a statement from the trade ministry.

Indonesia's largest lender PT Bank Mandiri Tbk will open a branch in China to further help trade between the two countries, according to the ministry. -- REUTERS