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Indonesia injects 1.5 bln USD to fund land acquisition

Xinhua, April 4, 2017 Adjust font size:

Indonesia will inject 20 trillion rupees (1.5 billion U.S. dollars) into its country asset management to fund land acquisition for national strategic projects, a chief economic minister stated on Tuesday.

Coordinating Economic Minister Darmin Nasution said land acquisition is the biggest hurdle faced by the Indonesian authorities in infrastructure development, aside from planning, licensing and funding.

"In order to tackle this biggest problem, we change the scheme to fund land acquisition from capital expenditure to government investment funding through State Asset Management Agency (LMAN)," Nasution said during the launch of the new scheme in Jakarta.

The funds injection in 2017 is bigger than last year worth 16 trillion rupees (1.2 billion U.S. dollars).

The agency commenced operations in December last year as a public service agency under the Finance Ministry's Directorate General of State Assets.

LMAN should plan for funding and the utilization of land banks as well as pay compensation for land acquisition to support the government's infrastructure development programs.

Nasution explained of the total funds injection, toll road infrastructure projects received the largest allocation of 13.3 trillion rupees, followed by railway infrastructure projects 3.8 trillion rupees, dams construction projects 2.4 trillion rupees, and port infrastructure 500 billion rupees.

As part of the new scheme, two public bodies, the Toll Road Regulatory Agency (BPJT) and the Public Works and Public Housing Ministry, signed a memorandum of understanding (MoU) with 23 toll road companies (BUJTs).

The Joko Widodo's government has committed to reduce logistics cost from 23.5 percent of gross domestic product (GDP) to 19.2 percent by 2019, with the development of 2,650 km road, 3,259 km railways, 24 seaports, 15 airports, power plants with a capacity of 35,000 megawatts and 9 million hectares of agriculture land.

"The government hopes the national strategic projects that have been hampered by land acquisition can be completed on target," Darmin added. Endit