According to the Minister of State-Owned Corporations (BUMN), Rini Soemarno, the entire planned infrastructure in Indonesia needed a total financing of around Rp5,000 trillion rupiah.
Jakarta (ANTARA News) - The Indonesian government acutely needs to cooperate with the private sector and avail of foreign loans to implement its infrastructure programs in 2016.

It is now preparing to finalize all phases of the 2016 infrastructure projects. Under the Ministry of Public Works and Public Housing, for example, there are some 1,600 infrastructure projects that need government-private partnership (KPS) and foreign loans.

National Development Planning Minister Sofyan Dajlil said the government will secure US$150 million in foreign loans to help finance preparations for infrastructure projects.

The government will need these loans to accomplish all the phases of the 2016 project preparations by the end of this year, he stated at a meeting of investors in Jakarta here on Monday (Dec.7).

The phases of project preparations include feasibility study, technical engineering design, land clearance, and project documentation.

"A loan commitment of US$150 million has been made to fund project preparations," he noted

According to the Minister of State-Owned Corporations (BUMN), Rini Soemarno, the entire planned infrastructure in Indonesia needed a total financing of around Rp5,000 trillion rupiah.

"It is impossible to source funding of such magnitude from within the country. It means that we need to attract foreign investors," Rini emphasized, after attending the Pertamina Energy Forum on Tuesday (Nov 24).

She also explained that infrastructure development was planned in the energy sector as well as transportation and welfare, and these should be integrated with each other.

She affirmed that all ministers have been tasked with the special responsibility of inviting investors from various countries, in their respective fields.

President Joko Widodo (Jokowi) has given a mandate to the National Development Planning Ministry/National Development Planning Agency (Bappenas) to supervise the preparations for infrastructure projects.

Bappenas has stated it would receive an additional budget allocation of Rp1 trillion to finance the project preparations. Minister Sofyan emphasized that the project preparations have currently become the governments priority.

As of this month, technical ministries are still working hard to finalize the project preparations, he added.

Minister Sofyan Djalil said preparations for KPS and foreign loan projects needed to be finalized so that by the time 2016 begins, the private sectors commitment to the government and the external loans could be realized. Thus, the development of infrastructure would start at the beginning of 2016.

Moreover, the finances needed for infrastructure projects of the KPS programs and external loans are relatively high. Based on the National Development Planning Board (Bappenas) data, the government has set a target of US$23.5 billion for the KPS infrastructure project.

As for external loans for infrastructure projects, the government has set a target of foreign loans amounting to US$3.8 billion or Rp51.6 trillion based on the Green Book 2015 data.

The government will secure US$150 million in foreign loans to help finance preparations for infrastructure projects, Sofyan Djalil stated.

With Japan, Indonesia will cooperate in the development of infrastructure such as seaports, airports, railway tracks and other projects. In a press statement early this week, the Ministry of Transportation said the two sides agreed to cooperate when Transportation Minister Ignasius Jonan visited Tokyo, and met with Japanese Minister for Defense, Infrastructure, Transportation and Tourism, Keiichi Isii.

"This cooperation is important for the two countries, particularly in the development of infrastructure in the transportation sector," the minister said.

Regarding sea transportation, Jonan made a push for the Indonesian governments program to become an advanced and self-reliant maritime country and emerge as the worlds maritime axis. A number of supporting programs will also be implemented, such as the sea toll project.

"Sea toll is in principle a fixed and regular transportation service using large ships with feeder vessels. The transportation service connects the western tip and the eastern part of Indonesia, thus ensuring economic benefits," the minister said.

Besides the possibility of cooperation in the sea transportation sector, Jonan also explained other programs such as the construction of the Trans Sumatra Railway project, Trans Kalimantan, Trans Sulawesi and Trans Papua.

Jonan said the Japanese government hailed the programs and said it was ready to support the plan for developing infrastructure in the transportation sector in Indonesia.

Besides, Japan has also provided Indonesia with a loan of 140.051 billion yen (US$1.14 billion) or Rp15.77 billion (at an exchange rate of Rp112,63 per yen) to finance infrastructure projects.

Japanese Ambassador to Indonesia Yasuaki Tanizaki said last moonth (November 27) that the loan was aimed at supporting three transportation infrastructure projects in Indonesia.

"The first project is the Mass Rapid Transit (MRT) for the East-West line. For this project implemented in Jakarta, we are giving loans worth 1,919 billion yen for the first phase," Tanizaki said.

The second project is the North-South MRT lines including the underground lines. The loan for this amounts to 75.218 billion yen.

"These two projects, it is believed, will improve Indonesias investment climate and boost economic growth," he added.

Meanwhile, the third project is the Java-Sumatra transmission to deliver electricity with loans worth 62.914 billion yen. The transmission is a power supply system for Java-Bali and Sumatra.

The project implemented in South Sumatra province will supply electrical energy which is derived from the coal power plant.

Besides Japan, China has also pledged support in financing infrastructure projects in Indonesia through the Asia Investment and Infrastructure Bank (AIIB) for the management and expansion of projects. The Chinese investment means that China will provide additional capital to Indonesia, Finance Minister Bambang Brodjonegoro said meanwhile.

Bambang asserted that China is ready to increase investment in infrastructure and manufacturing to support economic growth in Indonesia.

China will also cooperate with the Indonesian Chamber of Commerce and Industry (Kadin) in the construction of international standard seaports in Indonesias eastern regions.

"The Kadin is cooperating with the Development Committee of China in the development of international standard ports in Indonesia," Kadin deputy chairman for Maritime Affairs and Fisheries Yogi Prayanto said recently (Nov.17).

China has recently conducted a feasibility study for the construction of a fast train in Indonesia. In the Chinese proposal, the investment needed for the construction of the high speed train development was only US$5.5 billion.

President Joko Widodo during his recent Middle East tour said last September the project would cost a lot of money at around Rp70 trillion-Rp80 trillion forcing the government to opt for the business to business scheme.

The Indonesian fast train project is similar to Japans Shinkansen train network, with a cruising speed of 300 kilometers per hour, and will cover the Jakarta-Bandung route.(*)

Reporter: Andi Abdussalam
Editor: Heru Purwanto
Copyright © ANTARA 2015