Land acquisition regulation expected in first 100 days

Andi Haswidi and Mustaqim Adamrah , The Jakarta Post , Jakarta | Fri, 10/30/2009 11:35 AM | Headlines

The new presidential administration plans to issue a government regulation-in-lieu-of-law to ease bottlenecks in the development of infrastructure projects, a minister revealed at the first day of the National Summit on Thursday.
Industry Ministry Mohammad S. Hidayat said the regulation was being drafted and was expected to be issued in the first 100 days of President Susilo Bambang Yudhoyono's second term in office.
The regulation will temporarily replace a 1961 law on the revocation of land and building rights, the implementation of which has caused various problems due to unclear and overlapping land ownership.
“The regulation will serve as a legal umbrella for land acquisitions, at least for the time being, before the actual amendment of the law,” the newly appointed minister said.
Hidayat, who is still chairman of the Indonesian Chamber of Commerce and Industry, also announced the government would push for the establishment of a cement factory in the eastern part of the country to tackle a supply problem that had catapulted cement prices in the region.
“The plan is to establish a cement factory in Papua. The aim is not only to influence prices. If most of the government’s infrastructure projects move forward, the current output will not be sufficient,” he said.
Several companies have expressed their willingness to invest in the cement factory, “Freeport is one of them,” Hidayat said, referring to US mining firm Freeport McMoran, which operates the world’s largest gold and copper mine in Papua.
At the opening of the summit Yudhoyono said that Rp 2,100 trillion (US$219 billion) was needed to finance infrastructure projects in the country annually, of which the government can only provide 15 percent, and called for greater participation of the private sector – a sentiment echoed in his previous term.
To attract private participation in developing big infrastructure projects such as toll roads and electricity, the government, he said had introduced Public-Private Partnership (PPP) programs and promoted them through two infrastructure summits in 2005 and 2007.
However, the two summits failed to attract enough investment regardless of incentives provided by the government, such as the allocation of a revolving government fund for land acquisition assistance and even subsidies, albeit under special terms. As a result, over the past five years, the previous government only established 85 kilometers of new toll roads or 7.8 percent of the 1,095-kilometer target.
Currently Indonesia has 693 kilometers of toll roads, in comparison to other emerging markets such as Malaysia with 6,114 kilometers and China with 45,400 kilometers.
The summit will end today with discussions on public welfare, and political and security affairs.

Source : The Jakarta Post