No foreign majority stake for Indonesia airports

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bali_airportThe Indonesian government has scrapped its plan to allow foreign investors to become majority or controlling shareholders in airport management in the country, obviously bowing to pressure from nationalistic groups.

“In the airport industry, the discussion now is to have [a maximum ownership of] 51 per cent for local investors and 49 per cent for foreign investors,” Investment Coordinating Board (BKPM) chairman Mahendra Siregar told reporters in his Jakarta office on December 16, according to the Jakarta Post.

“We’ve discussed this issue with firms in the airport management industry, both locally and internationally, and I think such an ownership threshold is already [sufficient] to make our airport management industry more conducive and appealing,” he explained.

Foreign investors may still own majority ownership in seaport management, though, maximum ownership there could be set at 95 per cent, Mahendra said.

The government announced its plan in Novermber to relax the foreign ownership cap in infrastructure management industries, such as airport and seaport management, previously stating that foreigners would soon be able to own up to 99 per cent in the sectors, from a previous level of zero per cent.

But the plan was shelved after it triggered controversy in the local media, with critics describing such a plan as “un-nationalistic” as it prioritised foreign interests at the expense of local firms.

Currently, state-run firms such as PT Angkasa Pura and PT Pelindo have the exclusive rights to manage airports and seaports in the country, but their “monopoly” in the sectors and the lack of competition there have been blamed for poor service quality within the industries.

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Reading Time: 1 minute

The Indonesian government has scrapped its plan to allow foreign investors to become majority or controlling shareholders in airport management in the country, obviously bowing to pressure from nationalistic groups.

Reading Time: 1 minute

bali_airportThe Indonesian government has scrapped its plan to allow foreign investors to become majority or controlling shareholders in airport management in the country, obviously bowing to pressure from nationalistic groups.

“In the airport industry, the discussion now is to have [a maximum ownership of] 51 per cent for local investors and 49 per cent for foreign investors,” Investment Coordinating Board (BKPM) chairman Mahendra Siregar told reporters in his Jakarta office on December 16, according to the Jakarta Post.

“We’ve discussed this issue with firms in the airport management industry, both locally and internationally, and I think such an ownership threshold is already [sufficient] to make our airport management industry more conducive and appealing,” he explained.

Foreign investors may still own majority ownership in seaport management, though, maximum ownership there could be set at 95 per cent, Mahendra said.

The government announced its plan in Novermber to relax the foreign ownership cap in infrastructure management industries, such as airport and seaport management, previously stating that foreigners would soon be able to own up to 99 per cent in the sectors, from a previous level of zero per cent.

But the plan was shelved after it triggered controversy in the local media, with critics describing such a plan as “un-nationalistic” as it prioritised foreign interests at the expense of local firms.

Currently, state-run firms such as PT Angkasa Pura and PT Pelindo have the exclusive rights to manage airports and seaports in the country, but their “monopoly” in the sectors and the lack of competition there have been blamed for poor service quality within the industries.

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