JAKARTA: The government through the Guarantee Fund (PT Penjaminan Infrastruktur Indonesia/PII) will provide infrastructure projects worth up to IDR350 trillion with guarantees for the next five years.
President Director of PII Sinthya Roesly estimated of IDR1,400 trillion needed to develop infrastructure in Indonesia during 2010-2014, the state budget could only provide IDR400 trillion, while the rest IDR1,000 trillion was expected to be provided by private parties.
"If 70% of the IDR1,000 trillion can be covered by public private partnership [PPP] scheme, it will be good. Of the IDR700 trillion fund, some we will try to get guarantee for," she informed last week.
She revealed PII had been running for a month since it was created on December 30, 2009. At the moment, together with the Ministry of Finance and PT Sarana Multi Infrastruktur (SMI), the company was seeking a synergy in term of project funding and guarantee.
So far, she continued, the management had identified which projects should get operational guarantee, namely power plant, port, railways track, and toll road projects.
"In addition, PPP, regional government, central government, ministry/institution, and state-owned enterprises (SOEs) infrastructure projects."
According to Sinthya, the guarantee had two goals.
First, to create direct guarantee exposure to the State Budget, leading to a more manageable fiscal risk since there would be no more sudden claims on guarantee given to infrastructure projects.
Second, to secure risk guarantee process, especially political risks in infrastructure projects.
"With the establishment of PII, commercial private practice can become a more transparent process handled by the Ministry of Finance."
PII was established with IDR1 trillion in equities from the state. As a state-owned enterprise (SOE), PII is 100% controlled by the government.
The fund is also supported by multilateral institutions, including the World Bank that prepares IDR1.5 trillion loan to help with capital and funding.
Bastary Pandji Indra, Director of PPP Development at the National Development Planning Agency (Bappenas) viewed the Fund would make the government have clearer commitment to guarantee PPP infrastructure projects in Indonesia. (Bisnis/dea)
http://www.bisnis.com/pls/bisnis/bisnis.cetak?inw_id=716414
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