More Than Half Infrastructure Projects Start Construction

Photo by CMEA

JAKARTA (TheInsiderStories) – Land acquisition, which has stood as a major obstacle to infrastructure project development, has begun to be resolved, for a total of 145 projects, or 58.7 percent of the 245 national strategic projects entering a construction phase.

Arie Yuriwin, Director General of Land Procurement at the Ministry of Agrarian and Spatial Planning, reported that the government is pursuing land acquisition for the remaining projects, preparing planning documents for the new projects.

“By 2019 we hope all projects can be under construction,” Arie told The Insider Stories.

The land acquisition process is financed by the State Asset Management Agency (SAMA), an organ founded to deal with acquisition of land plots for ‘national strategic projects. Puspita Rahayu, President Director of SAMA, announced they are ready to repay back investors’ bridging funds used to finance land acquisition.

Until now, the agency has paid out Rp7.29 trillion (US$548 million) or 61 percent of the total bridging funds coming from investors – mainly toll road investors – amounting to Rp12.4 trillion last year. The remaining Rp5.1 trillion is still in the works and bridging funds are expected to be disbursed before the end of this year.

The payback is for land meant for toll-road projects, namely Rp 1.18 trillion (Trans Java toll – 3,625 kilometers), Rp 1.52 trillion (Trans Sumatra toll road – 2,981 kilometers), Rp 3.7 trillion (toll-road in Greater Jakarta region -1,529 kilometees) and Rp 880 billion (other toll roads – 1,263 kiometers).

Puspita said the government is committed to speeding up the process of disbursing the bridging fund by conducting a verification process in parallel. The key, she added, lies in the quality of planning documents: they should be complete and accurate from the start, so that the disbursement can take place in fewer than 30 working days.

Technically, the government will simplify the requirements and mechanisms to disburse the bill. The stakeholders, namely, SAMA, Development Finance Comptroller Agency, Toll Road Regulatory Agency, Ministry of Public Works and Public Housing, and Ministry of Agrarian and Spatial Planning, will oversee planning document quality as the requirement for bridging fund disbursement.

This year, SAMA received Rp 25.2  trillionfrom the government to acquire land for infrastructure projects while next year the agency is should receive additional funds for 70 other projects.

Those funds are considered critical because land acquisition has historically been constrained by funding problems. Arie revealed that the government has often faced complaints from landowners, including residents, for not paying land compensation promptly when a deal has been signed.

From the regulatory side, Law No. 2 of 2012 on Land Procurement for Public Interest sets a legal basis for land acquisition directed to infrastructure projects. The problem, according to Arie, lies in non-technical issues, such as actions by NGOs that complicate matters, even though the government has paid for land at a fair market price.

Rainier Haryanto, Program Director of the Committee for the Acceleration of Priority Infrastructure Delivery, also said that land acquisition continues to be the primary obstacle for infrastructure projects. He pointed out that the Batang power plant was hampered by NGO involvement in land acquisition.

“We helped Bhimasena Power Indonesia – the Batang power plant investor – prepare CSR (corporate social responsibility) documents that showed what they should do to resolve this matter. Once the CSR programs were unveiled, one problem could be resolved,” he said while pointing to similar cases in other regions, such as Yogyakarta.

Land acquisition is linked to a certificate of land ownership. In Indonesia, not all legal status of land has been confirmed by the Ministry of Agrarian and Spatial Planning. Rainer said the government is currently trying to certify land ownership across the nation, with land intended to serve national strategic projects as the main priority to be dealt with.

That problem is exemplified in the Medan-Binjai toll-road, as part of the Trans Sumatra toll-road. When the government goes to negotiate purchase of land, it often finds there is no legal certificate of land ownership. The government has already bestowed 40 percent of certificate documentation to residents, a process expected to be completed in September 2017.

In fact, the government has instructed the Attorney General’s Office (AGO) to mount guards around infrastructure projects, especially power plant projects, to avoid disruption. The AGO has established a special task force on every level to ensure projects can be completed on target.

1$ = Rp13.300,-

Writing by Rahmat Fiansyah, Email: