The government’s efforts to provide various incentives and support for those doing business in the country have started to bear fruit, particularly in the infrastructure sector, an official has said.

Investment Coordinating Board (BKPM) investment promotion deputy chief Himawan Hariyoga said there had been a very significant increase in the total investment commitment to US$38.21 billion in 812 infrastructure projects as of September.

The size of the investment, a combination of both foreign direct investment and domestic investment, was six times higher than the figure for the same period last year.

Meanwhile, the country also saw $8.93 billion in combined investment realization in over 1,000 projects as of September, a slight increase in value from last year. The infrastructure projects were in the construction, electricity and transportation sectors. 

“The government has eased permits and also facilitated investors from the start,” he said on the sidelines of the recent Indonesia Infrastructure Week event.

Having adopted the One-Stop Integrated Services (PTSP) for business licensing earlier this year, the BKPM took over 134 permits from 22 ministries and institutions, including from the Food and Drug Monitoring Agency (BPOM). Among the permits were several that had been stumbling blocks for investment, such as land-use permits.

Himawan added that the government had also helped investors to solve perennial problems in infrastructure projects, such as land acquisition, and issued permits for 10 major projects with a combined value of $14 billion.

As of October, there were four projects whose problems had been resolved, including thermal power plant projects in South Sumatra, Bali and North Sumatra, as well as a geothermal power plan project in North Sumatra.

The assistance had resulted in a total combined investment of Rp 19.8 trillion, he said.

With other policy changes, such as quicker permits for prospective investors with a minimum investment of Rp 100 billion and/or a plan to employ more than 1,000 workers, as well as fiscal incentives for special economic zones, he expected even greater confidence among investors.

“We hope that private investors will not be in doubt anymore, as the demand for infrastructure projects will never cease from the business standpoint,” he said.

The government of President Joko “Jokowi” Widodo has focused on various infrastructure projects in the country in its bid to boost economic growth and reduce logistics costs, which are among the highest in the region.

It aims to build 1,000 kilometers of new toll roads, develop power plants generating an additional 35,000 megawatts as well as building 49 new dams, among other projects.

Jokowi has also pledged to improve connectivity throughout the archipelago through his maritime highway initiative, which involves the development of ports in more than 77 locations across Indonesia.

Senior officials attended the Indonesia Infrastructure Week event, including Vice President Jusuf Kalla as well as Coordinating Economic Minister Darmin Nasution, who reiterated the government’s commitment to infrastructure development.

Darmin highlighted the implementation of the projects that had been slow due to law-enforcement issues, a lack of funding or poor management.

He said the government had proven its commitment by issuing six economic policy packages that addressed various issues in investment by cutting red tape and providing incentives for investors

“I will ensure the availability of support needed to implement the key infrastructure projects,” Darmin said in his closing speech at the event on Friday, adding that the Rp 4.4 quadrillion ($321.2 billion) needed for development until 2019 would require participation by the private sector.

The annual event welcomed 12,000 visitors with 200 exhibitors related to the infrastructure sector. (fsu) - See more at: http://m.thejakartapost.com/news/2015/11/09/incentives-boost-infrastructure-investment.html#sthash.lT9hTHTE.dpuf

 

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