GOVT TO OPEN TENDER FOR $2.5B INFRASTRUCTURE PROJECTS

Jakarta, 24 Dzulqa’dah 1435/19 September 2014 (MINA) – The government will by the end of this year open the tender process for several infrastructure projects, including power plants and seaports, with a total investment of Rp 30 trillion (US$2.49 billion), an official says.

National Development Planning Board (Bappenas) public private partnership director Bastary Pandji Indra said the projects included an Rp 8 trillion coal-fired power plant in Jambi; a Rp 7.5 trillion seaport in Makassar, South Sulawesi; and a Rp 2 trillion drinking water supply project in Pekanbaru, Riau.

Aside from these three projects, Bastary said, the government would also tender Rp 20 trillion worth of railway projects connecting Tanjung Enim in South Sumatra with Bagansiapiapi in Riau to transport coal, as well as a waste treatment system in Nambo, West Java, with an estimated value of Rp 350 billion, The Jakartapost quoted by Mi’raj Islamic News Agency (MINA) as reporting.

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“We will also tender a drinking water supply system in Pondok Gede [Jakarta],” Bastary said during the International Infrastructure Conference and Exhibition (IIICE) on Wednesday in Jakarta, as quoted by kontan.co.id.

“We are currently at the preparation stage, still completing all the documents needed for the tender process. The tender is set to begin between October and November this year, alongside the establishment of the new government,” he continued.

Separately, Wahyu Utomo, senior advisor for regional development to the Office of the Coordinating Economic Minister, said the government needed the private sector to participate in the financing process as the government had a limited budget.

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“The state budget is not enough, therefore we hope the private sector is also willing to take part in infrastructure development,” Wahyu said.

Bappenas has estimated that Indonesia needs to secure $550 billion worth of investment for infrastructure projects between 2015 and 2019. Infrastructure development is needed to boost the country’s economy.The agency said that out of the required $550 billion in investment, the state budget could only allocate around Rp 1,100 trillion ($97.3 billion).

Meanwhile, Indonesian Chamber of Commerce and Industry (Kadin) chairman Suryo Bambang Sulisto said the government should not just offer infrastructure projects to the private sector.

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According to him, the government should show its support and goodwill by setting up special banks for the financing of the infrastructure projects.

He said that specialized banking was essential to ensure the private sector would be able to get affordable long-term loans for infrastructure projects.Suryo said the private sector always had an interest in developing infrastructure in the country.

In reality, however, the sector’s interest was mostly hampered by difficulties accessing affordable long-term loans.“None of our banks offer such products. Kadin has already suggested that the government set this up but it hasn’t established it yet,” he said.(T/P009/R03)

Mi’raj Islamic News Agency (MINA)