Infrastructure

Infrastructure is one of the main factors in supporting economic growth and distribution of development in Indonesia. The government’s strategy to involve the private sector in the provision of infrastructure was, in fact, welcomed. It was demonstrated by the signing of several cooperation contracts with the state and local owned enterprise (BUMN/BUMD infrastructure provider.

A demand for infrastructure service continues to increase duo to the increasing population and urbanization. With respect to quality, the force of globalization and public demand for better infrastructure service are becoming stronger.

To address the above problems, attempt at accelerating infrastructure provision are deemed necessary by minimizing the constraints hindering the development of infrastructure.

In order to better integrate these efforts and maximize synergy, the government established under Presidential Regulation (PP No.42/2005), hence, the Committee is responsible to the President.

The scope of infrastructure in Indonesia among others are Transportation Infrastructure; Road Infrastructure Technology ; Water Infrastructure; Water supply and Sanitation Infrastructure; Information Technology Infrastructure; Electricity Infrastructure; Oil and Gas Distribution Infrastructure.

Under the initiative of the President of Indonesia, H.E. Mr. Susilo Bambang Yudhoyono The first Indonesia Infrastructure Summit 2005 was held in Jakarta in 17-18 January 2005 at Shangri-la Hotel. The objective of the summit is to socialize the Government of Indonesia’s new strategy and plans for infrastructure development as well as to invite public and private sectors (domestic and international) to participate in the infrastructure projects in Indonesia.

The Second Indonesia Infrastructure Summit was held in November 2006 and provided better opportunities for the government as well as related institution in completing the above issue as well as preparing other strategic issues.

In the aspect of Infrastructure Investment, the Government will provide guarantees or protection to infrastructure investors in Indonesia as the Government experts the projects will boost Indonesia economic growth. According to a decree by Finance Minister released on June 2nd, 2006, the protection, ranging from an extension of concession years to monetary compensation, will be provided on a case-by-case basis. The decree pointed out that the government may grant an extension of concession of years if there is any delay, a cancellation in tariff adjustment, or if initial tariff set are lower than what has been agreed.