SOE not accorded priority in national strategic projects: Chief minister

"There is complaint that the government accords priority to SOEs in the implementation of national strategic project. This is not true at all," Darmin Nasution said.
Jakarta (ANTARA News) - Chief Economic Minister Darmin Nasution has refuted the allegation that the government is giving priority to state-owned enterprises (SOEs) in the implementation of national strategic projects (PSN).

"There is complaint that the government accords priority to SOEs in the implementation of national strategic project. This is not true at all," the coordinating minister for economic affairs Darmin Nasution said.

He was speaking to a dialog on "Special Economic Zones: Ink of Independence from the Border," here on Tuesday.

Nasution who is a former governor of Bank Indonesia (BI/the central bank), said that the largest portion of the national strategic projects are done by the private sector through the Public-Private Partnership/PPP scheme.

The chief economic minister also said that in order to attract private investors the feasibility study should be completed so that the average return rate (ARR) could be calculated.

"The private sector would not take part if the ARR is only about 9-10 percent. Therefore, the PPP is developed in combination with various other schemes such as governments guarantee," Nasution said.

In the meantime, for SOEs, the government usually granted them with assignment, and then the feasibility studies are planned.

"The government is actually giving priority to the private sector first because the government is aware that it is better to invite the private sector than financing the project through the state budget or SOEs,"he stressed.

National strategic projects are projects that are strategic for boosting growth and development equality in the framework of improving the welfare of the people and regional development.

Presidential Regulation (Perpres) No. 58 Year of 2017 on Amendment of Perpres No. 3 Year of 2016 on the Acceleration of the implementation of National Strategic Project recorded 245 national strategic projects plus two programs with an estimate of investment Rp4,197 trillion.

Based on data of the Committee on Priority Infrastructure Development Acceleration (KPPIP), the realization of the national strategic project in the second quarter of 2017 included Patimban Port, Kuala Tanjung International Hub Port, the Jabodetabek LRT, the international airport of Yogyakarta, the Bontang oil refinery plant and the Serang-Panimbang toll road. (*)

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