Optimising Infrastructure
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Kompas - Optimalkan Infrastruktur
25 January 2019
Jakarta, Kompas — Within the period of 2016 – 2018, as many as 62 national strategic projects worth Rp320 trillion have been completed. Their presence should be utilised optimally.
The Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) recorded that last year, 32 national strategic projects (PSN) were completed. The number added up the 20 PSN completed in 2016 and the 10 PSN completed in 2017.
Research Director of Core Indonesia Mohammad Faisal, in Jakarta, Thursday (24/1/2019), said after infrastructure construction is finished, follow-up measures are necessary to create more far-reaching impacts on the society. Trans-Java toll road connected from Merak to Pasuruan, for instance, shortens travel time, thus potentially spurring industrial estates and tourist destinations.
In addition to developing the rest area, toll roads are ideally connected to local economic potential, such as batik centre. “So, infrastructure must be connected to local economic centres or develop new growth centres. Therefore, both ministries and regional governments must sit together to match their perception on the potential to be developed,” said Faisal.
Even though infrastructure outside Java is not as reliable as it is in Java, said Faisal, new industrial centres are starting to be developed. Potential for natural resources or raw materials as well as competitive wages should be perceived as an opportunity to develop local industries.
Outside Java
In Kalimantan, for instance, local natural resources-based industries can be developed close to the already completed border post infrastructures. Proximity to neighbouring countries can be an opportunity to export local products. This is in line with the government’s program to improve downstream industries.
Separately, Vice Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) in the Economic Area Development Division, who is also the Chairman of the Industrial Estate Association of Indonesia, Sanny Iskandar said ideally, the development of industrial estates or special economic zones is supported by toll roads. Hence, the movements from and to the area will be more sterile and directly connected to other infrastructures, such as port.
The orientation of the development of industrial estates, said Sanny, will be the development outside Java. If several years ago 75 percent of industries were centred in Java, now the percentage has been reduced to around 65 percent, and 35% industries are now located outside Java, driven by the proximity to raw materials and the improved infrastructure. Moreover, the regulation requires industrial development outside Java.
Trans-Sumatra Toll Road Corridor can also drive the development of industrial estates. In Lampung, for instance, an industrial estate is now under development. “[We] expand to outside Java because there are abundant export-oriented resources and raw materials,” said Sanny.
