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Bright Business Prospects in Indonesia's Infrastructure Sector

by Sebastianus Epifany Wednesday, June 7, 2017 - 09:47

JAKARTA - Indonesian Government targets the development of strategic infrastructure projects for the next five years with a budget of Rp 5.425 trillion. This makes Indonesia as the largest country in the ASEAN region in terms of infrastructure development and creates a bright prospect of business opportunities in the infrastructure sector.

The size of Indonesia's budget cannot be separated from the massive infrastructure projects being developed, ranging from roads, railways, airports, dams, bridges, irrigation to housing and settlement. On the other hand, from the total funding needs, the Government can only provide about Rp 2,215 trillion. This means that there are huge potentials opportunities from the infrastructure development sector that can be taken by the private sector.

According to the Deputy Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) of Construction and Infrastructure Division, Erwin Aksa, the funding imbalance is finally overcome by the government with various strategic steps by conducting various business schemes and cooperation between the government and especially with the private sector.

"Until now, the contribution of infrastructure development from the private sector is quite big reaching more than 30 percent or around Rp 1,692.3 trillion and this should be increased to enlarge the business portion that can be worked out from this sector. The government and regional governments will definitely increase cooperation and funding from private investors so the potential is very large," said Erwin Aksa as reported from rei.or.id (7/6/2017).

Erwin also hopes that the potential of this infrastructure project can be addressed by the government by issuing regulations and various strategic measures to issue a conducive policy for the investment climate. There are so many potential funding that can be maximised like foreign aid funds. In fact, Erwin also mentioned that the funding potential of the stock market, bonds, mutual funds, pension funds, insurance, and others in the country have not been maximised for infrastructure financing alternatives.

"So in addition to the great potential, it is also necessary needs alternative and opportunities that can be maximised to increase the acceleration of development, in addition to increasing strategic alliances between government and private. We are very enthusiastic to improve the collaboration and synergy between Kadin and the government to accelerate infrastructure development," he concluded.

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