Indonesia VP: IDR500 Trillion Infrastructure Operations Offered In Nov

JAKARTA -(Dow Jones)- The Indonesian government will offer domestic and foreign investors infrastructure investment projects valued at IDR500 trillion at a conference in November, Vice President Jusuf Kalla said Friday.

That figure includes IDR70 trillion in investments to upgrade the country's electrical power grid, IDR50 trillion for road construction and IDR50 trillion for housing construction, Kalla told reporters.

"These are partnership projects that will be developed by the government and investors," Kalla said.

A Ministry of National Development Planning document said the government would offer a total of 110 infrastructure projects for investment in November.

They will include 50 toll road projects, 27 water projects, 14 power projects, seven gas pipeline projects, four port projects, one railway project, one ferry terminal project and one telecommunications project, the document said.

But the government faces challenges overcoming the skepticism of potential investors about the viability of Indonesian infrastructure investment.

The planned Nov. 1-3 infrastructure forum is a follow-up to an international infrastructure summit in January 2005 that failed to attract the hoped-for investments due to the government's inability to address a myriad of governance, regulatory and legal obstacles.

Out of a total of 91 infrastructure projects unveiled in January, the only contracts awarded so far have been for three gas pipelines, one power plant and three toll roads, an Asian Development Bank Report said in a report earlier this month.

The government desperately needs infrastructure investment to help reach its 6.6% annual economic growth target from 2005 to 2009. The government expects the economy to grow 5.8% in 2006, compared with 5.6% last year.

The projects to be unveiled in November will be "ready-to-go-projects," Minister of National Development Planning Paskah Suzeta said Friday, without explaining.

The bulk of the projects will be under the auspices of the Ministry of Public Works, the Ministry of Energy and Mineral Resources, and the Ministry of the Ministry of Communications and Information, Suzeta said.

Suzeta said the government had earmarked IDR2 trillion in funds to clear land designated for infrastructure investment projects.

-By Farida Husna; Dow Jones Newswires; 62 21 3983 1277; phelim.kyne@ dowjones.comm

-Edited by Paul Baylis
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