The minister expressed belief that the SWF will be able to drive infrastructure development in the country for which funding cannot entirely be borne by the state budget (APBN).
"We are optimistic of the SWF kicking off next month. This is cooperation among IDFC, JBIC, Australia, Abu Dhabi, and several other parties. This can boost infrastructure development," he remarked while opening a coordination meeting of the Toll Road Regulatory Body (BPJT) of the Public Works and Housing Ministry and the Indonesian Toll Road Association (ATI) in Labuan Bajo, East Nusa Tenggara, on Friday.
In a written statement released on Friday, Pandjaitan noted that the SWF can invest in the construction of toll roads. Hence, it is expected to encourage efficiency in infrastructure development.
SWF is a state-owned investment fund or entity generally established from the balance of payment surpluses, official foreign currency operations, proceeds of privatization, government transfer payments, and fiscal surpluses.
Unlike the SWF of developed nations, Indonesia will develop SWF by raising the required funds from private investors rather than from the country's reserve funds.
Pandjaitan further reiterated the significance of accurate study before the construction of toll roads is commenced, with the aspect of project efficiency being of similar importance.
"Study is very important, (especially) once the Sovereign Wealth Fund (SWF) enters Indonesia and invest in toll roads. They will look at efficiency. In our experience, land clearance is one of the issues worthy of serious observation. This is a trivial matter, but it can disrupt (the project) if it (land compensation) is not calculated accurately. Thus, you must conduct an accurate study. If at the onset, it is wrong, then, then it will be all mixed up," he added.
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