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Nearly 40 South Korean businessmen representing the country's
major companies are visiting Indonesia to take a closer look at a
number of infrastructure projects offered by the government.
The Korean contingent in the republic is part of the two countries'
economic partnership agreement.
The business executives together with senior officials from Indonesia's
ministry of construction and transportation, and the ministry of
planning and budget met their Indonesian counterparts here Monday to
discuss the projects, which include the development of railways, toll
road and sea ports.
"Many Korean companies expressed their interests in railway development
projects in the country during the meeting," the deputy minister for
infrastructure and regional development at the office of the
Coordinating Minister for the Economy Bambang Susantono said.
"They will discuss their proposals with related ministry officials."
The Korea Development Institute's (KDI) managing director Kim Jay-Hyung
said the Korean companies and the Indonesian government were currently
discussing projects including those on railway and seaport
construction, but he refused to elaborate further.
"Infrastructure development is an essential element for economic
growth," Kim said.
"Limited public budget, however, won't be able to fulfill the demand.
"Therefore, encouraging private sector capital investments in
infrastructure facilities is an alternative method to fulfill the
demand."
The Korea-Indonesia partnership program was initiated in December 2006
to foster a mutual economic relationship between the two countries.
In October this year, both governments signed a memorandum of
understanding (MoU) aimed at sharing knowledge and experiences,
attracting Korean companies to invest in Indonesia, and building
productive partnerships.
The deputy chief for infrastructure at the National Development
Planning Agency, Dedy S. Priatna, said the country's infrastructure
development required a total investment of US$65 billion for the
2005-2009 period, while the government was only able to provide S$25
billion.
To fill the gap, participation of the private sector was essential.
However, Dedy added, inviting foreign parties to take part in the
development of the projects faced some major problems, including those
related to land acquisition, laws and regulations that needed to be
adjusted to facilitate partnership program, a lack of domestic capital
market to finance partnership projects and the poor quality of project
preparations.
He said those issues needed to be fixed to accelerate the country's
slow pace of infrastructure development.
The government was currently finalizing a scheme to determine the
maximum cost of land acquisitions in major infrastructure projects, an
issue noted as one of the major causes of project delays.
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