How would you describe the current situation of Indonesia’s infrastructure?

Indonesia’s infrastructure is in its infancy, we do not have a luxurious infrastructure like Singapore or Malaysia so our ministerial mandate right now is to keep up the pace with the regional infrastructure development and improve our economic competitiveness. Our target is to improve our country’s infrastructure competitiveness ranking from 92 to 62.
Our main challenge now is to develop the infrastructure of Indonesia from the East to the West. Our program in the western part consists of maintenance and rehabilitation of existing infrastructure, which has been built in Sumatra and Java from colonial times, but when we look at the eastern side we have to build all infrastructure from scratch which is a big challenge.
Until 2014 we only managed 780km of toll roads. The current
administration has targeted a midterm development of 1200 km until 2019 with a final target of 1851 km and the projection looks good after adding the Trans Java Toll Road and the Trans Sumatra Toll Road. By connecting the archipelago from West to East, Java and outer Java islands, the goal of President Jokowi is to tackle disparity of income and bridge the gap between richer and poorer areas of Indonesia.

There is also the financing gap; what are your expectations from the private sector and what do you expect from international investment?

Infrastructure development is not only funded by the government budget. First we offer the opportunity to the private sector. If there is no interest in the project, we will work towards a Public Private Partnership (PPP), if a PPP does not work we will give the project as a special task to the SOE. The SOE can finance itself through securitization like Jasa Marga, which allows us to consider government finances as our last resort. We have opened avenues with Japanese investors and have organized an investor’s round table in Indonesia following my visit to Japan. We have interest from the Japanese in a few infrastructure projects like public waste management where we will apply innovative financing mechanisms so the government maybe supplies only 30% of the total funding.

“Our target is to improve our country’s infrastructure competitiveness ranking from 92 to 62.”

As the Minister of Public Works and Housing how do you see the ease of doing business in Indonesia?

The President recently issued a government regulation about the ease of doing business in order to speed up the process for permits. His wish is that investors will get their permits within hours from the moment of application. Latest by January 2018 there will be one single institution where interested parties can request permits for all the territories of Indonesia, which will be a major step towards simplifying the ease of doing business in Indonesia.

How about land acquisition? That is one of the biggest complaints when determining the ease of doing business in Indonesia.

Land acquisition used to be a problem in Indonesia indeed, but we have law no. 2 in our constitution on Land Procurement, which is very clear. The procedure has thereby been considerably simplified: There will be an assessment of the land by an independent surveyor on the cost of the land that needs to be paid by the investor. After the investor has acquitted the payment the reimbursement process to the investor will be done by the LMAN (Lembaga Management Aset Nasional) institution under the Ministry of Finance. This process is very fast.

How do you see the opportunities for international investors in the area of water resources?

For the water supply we are currently building the dams in western part of Jakarta, but we need to bring the water to Jakarta so that is an opportunity for the private sector to invest. We have regional water systems that we are proposing to the private investors like in Lampung, Semarang and Jatiluhur.

How do you think Indonesia should be seen internationally?

Now is the time for competition and Indonesia needs to be seen as a competitive market internationally. One point I want to bring to the attention of your international readership is that Indonesia has been upgraded to investment grade by S&P. This was not an easy task, we stripped down more than 3000 unnecessary regulations just to guarantee investment in Indonesia will become easier.
Now Indonesia would like to work together with the international community and we are ready to compete in order to bring prosperity for the Indonesian people. Nowadays the competition is not being fought between the big and the small but between the fast and the slow. Come to Indonesia and we guarantee to be cheaper, faster and better!