The Jakarta Post – Jakarta. The Transportation Ministry means business with transportation-related infrastructure projects as it has set up a team to bring in investment for the projects.
The team — which is led by the transportation minister and the ministry’s secretary-general — is tasked with identifying potential projects to offer to investors, the amount of funds needed, feasible investment schemes and with finding solutions to other issues.
“We hope we can offer profitable business to the private sector,” Transportation Minister Budi Karya Sumadi said on Wednesday.
The team’s establishment is backed by a Transportation Ministerial decree No. 590/2016, which states that there is an urgency to look for alternative funding sources and to increase investment for the sake of infrastructure development.
The ministry has already proposed a total of 10 projects to the private sector, ranging from land, sea and air transportation projects.
The projects include the construction of a railway to the Adi Sumarmo International Airport in Solo, Central Java; a high-speed railway connecting Jakarta and Surabaya in East Java; and the Kuala Tanjung Port in Medan, North Sumatra.
The Transportation Ministry has not specified the total funding required for the 10 projects, although it has previously revealed that the high-speed railway will cost Rp 253.8 trillion (US$19.01 billion).
Private sector involvement in infrastructure projects is deemed to be important due to the limited amount of funding from the state budget.
While all transportation-related infrastructure works are projected to cost Rp 1.82 quadrillion until 2019, the government has stated that it can only cover less than 30 percent of the total costs.
The Transportation Ministry has felt the impact of the tight funding as its budget allocation for 2017 has been reduced to Rp 45.98 trillion from the original expectation of Rp 48.7 trillion.
The ministry itself is in charge of building 15 new airports, 3,258 kilometers of railway tracks, 103 ships to pioneer new routes and other projects until 2019.
Budi said that the private sector’s involvement would enable the ministry to focus working on infrastructure projects in remote areas using the state budget.
State port operator Pelindo I president director Bambang Eka Cahyana said that he welcomed the ministry’s move to invite strategic partners to develop the Kuala Tanjung port, which will support the Sei Mangke special economic zone.
The first construction phase of the Kuala Tanjung multipurpose terminal is projected to cost Rp 3.7 trillion.
Meanwhile, several state enterprises, including state airport operator Angkasa Pura (AP) I, state railway operator Kereta Api Indonesia (KAI) and state construction firm Adhi Karya, have agreed to jointly build the Adi Sumarmo airport railway.
The companies signed a memorandum of understanding (MoU) in October.
Indonesian Chamber of Commerce and Industry (Kadin) air transportation committee chairman Denon Prawiraatmadja acknowledged the commercial appeal of the infrastructure projects offered by the ministry, such as the airports in Buleleng in the northern Bali and in Karawang, West Java.
“The ministry will need long-term investors for airports, otherwise they wouldn’t be [commercially] feasible,” he said, adding that the Buleleng airport had the potential to be an alternative entry point for tourists to reduce traffic at the crowded Ngurah Rai International Airport in Denpasar.