Indonesia pushes 2012 PPPs
The 15-year MP3EI plan announced last year, corresponds with a 2012 PPP book – a revised edition on last year’s book, outlining prospective PPP projects and future proposals surrounding the nation’s commitment to PPP.
Three projects in this year’s book were outlined as ‘priority’ status, focusing on infrastructure of the state’s roads, and wastewater plans.
Ignatius Hwang, lawyer at Squire Sanders, said Indonesia needed to implement a structured procedure for PPPs and noted Singapore’s system as a considerable influence.
"As a market, Indonesia holds great promise because they’re so far behind in terms of infrastructure – so there is a great demand due to the need for it," Hwang said. "Once the government cleans up its act, investment could potentially flow in and the country would become bankable."
According to Hwang, perceived notions of corruption still hampered the country’s ability to attract foreign investors. Hwang said there was no formal framework in place as yet and there was still a lot of ambiguity from regulatory bodies.
"Despite the seetbacks, the government is working hard to implement a new PPP scheme and because its market has a lot of pent up demand and liquidity, foreign investment is highly potential," Hwang said. "The local domestic consumption is amazing and Indonesia has a great two-speed economy."
The government’s commitment to PPP was further enhanced in February this year, when new laws were passed on land acquisition – designed to speed up the process in government acquiring land and accelerate the process for public infrastructure projects.