Jakarta rolls out $35b infrastructure projects

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Suramadu-BridgeThe government will offer up to 30 infrastructure projects totaling up to $35 billion to investors starting in 2014 under a public-private partnership (PPP) scheme. Coordinating Economic Minister Hatta Rajasa said on November 13 that the government would prioritise projects that brought “multiplier effects for the economy”. Among them are projects on dams, airports, railways, ports, toll roads and power generators, the Jakarta Post reported.

“The government will issue a new rule to prepare for the priority projects, notably under the PPP model, aiming to make them more transparent and accountable by adopting international best practice,” Hatta said on the sidelines of the Indonesia International Infrastructure Conference and Exhibition at the Jakarta Convention Center.

For each of the projects, preparations would include thorough feasibility studies carried out before the offering, he added. In addition, the government would provide necessary incentives, including financial leverage through a viability gap fund, on a case-by-case basis to attract investors, according to Hatta.

A viability gap fund allows the government to allocate state funds to cover up to 40 per cent of the total value of an infrastructure project using the PPP scheme. Infrastructure remains one of the major bottlenecks in Southeast Asia’s biggest economy.

With limited funds to improve infrastructure, the government has encouraged the private sector to be more involved in PPP projects. The projects the government has selected include the Medan-Binjai toll road in North Sumatra, the
Balikpapan-Samarinda toll road in East Kalimantan, the Makassar-Pare-Pare railway system in South Sulawesi and the Karama hydropower plant in West Sulawesi.

They are featured in Indonesia’s Masterplan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), which is aimed at boosting its GDP to around $4.5 trillion by 2025, enabling it to be one of the world’s top 10 economies.

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Reading Time: 1 minute

The government will offer up to 30 infrastructure projects totaling up to $35 billion to investors starting in 2014 under a public-private partnership (PPP) scheme. Coordinating Economic Minister Hatta Rajasa said on November 13 that the government would prioritise projects that brought “multiplier effects for the economy”. Among them are projects on dams, airports, railways, ports, toll roads and power generators, the Jakarta Post reported.

Reading Time: 1 minute

Suramadu-BridgeThe government will offer up to 30 infrastructure projects totaling up to $35 billion to investors starting in 2014 under a public-private partnership (PPP) scheme. Coordinating Economic Minister Hatta Rajasa said on November 13 that the government would prioritise projects that brought “multiplier effects for the economy”. Among them are projects on dams, airports, railways, ports, toll roads and power generators, the Jakarta Post reported.

“The government will issue a new rule to prepare for the priority projects, notably under the PPP model, aiming to make them more transparent and accountable by adopting international best practice,” Hatta said on the sidelines of the Indonesia International Infrastructure Conference and Exhibition at the Jakarta Convention Center.

For each of the projects, preparations would include thorough feasibility studies carried out before the offering, he added. In addition, the government would provide necessary incentives, including financial leverage through a viability gap fund, on a case-by-case basis to attract investors, according to Hatta.

A viability gap fund allows the government to allocate state funds to cover up to 40 per cent of the total value of an infrastructure project using the PPP scheme. Infrastructure remains one of the major bottlenecks in Southeast Asia’s biggest economy.

With limited funds to improve infrastructure, the government has encouraged the private sector to be more involved in PPP projects. The projects the government has selected include the Medan-Binjai toll road in North Sumatra, the
Balikpapan-Samarinda toll road in East Kalimantan, the Makassar-Pare-Pare railway system in South Sulawesi and the Karama hydropower plant in West Sulawesi.

They are featured in Indonesia’s Masterplan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), which is aimed at boosting its GDP to around $4.5 trillion by 2025, enabling it to be one of the world’s top 10 economies.

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