There are 30 projects that have been selected as priority infrastructure projects in Indonesia for the period 2016-2019. In total, all these projects together will require some IDR 5,519 trillion (approx. US $415 billion) worth of investment. However, the Indonesian government (including state-owned enterprises and regional governments) can only come up with IDR 1,400 trillion, or 26 percent of the required funds. The remainder therefore needs to be covered by the private sector. As such, the key for success is fruitful cooperation between the private and public sector (for example through public-private partnerships).

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The Indonesian government wants to enlarge the role of foreign participation in the country's infrastructure development. Through a proposed revision of Presidential Regulation No 36/2010 regarding the Negative Investment List (Daftar Negatif Investasi), foreign investors will have more room for investing in Indonesia's infrastructure sector within public-private partnership schemes (PPP projects). The Indonesian government needs more foreign participation as the current state of the country's infrastructure is inadequate.

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The Ministry of National Development Planning (Bappenas) estimates that between 2015 and 2020 the country needs IDR 7.200 trillion (USD $600 billion) for investments in infrastructure. However, the central government can only supply about 25 percent of the needed investments. These figures are the preliminary results of a study conducted by Bappenas. The study, which focuses on Indonesia's infrastructure development in the period 2015 to 2020, is expected to be completed by March 2014.

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The Indonesian government is in the process of revising the country's Negative Investment List (the list that states which sectors of the economy are closed to foreign investment). Head of the Indonesia Investment Coordinating Board (BKPM), Mahendra Siregar, said that a number of (sub) sectors, previously closed to foreign investment, will be opened up this year. These sectors include telecommunication, financial institutions, pharmaceuticals, tourism, airport and seaport transportation services and management, healthcare, and advertising.

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Two Indonesian government departments - the Ministry of National Development Planning and the Ministry of Economy - have selected 27 infrastructure projects that will be offered to the private sector in 2014. These 27 projects are considered top priority projects and will be offered during the International Indonesian Infrastructure Conference and Exhibition in the form of public-private partnerships (PPPs) with the Indonesian government. The total value of these projects combined is estimated at USD $47.5 billion.

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The realization of infrastructure projects through the Indonesian government's public-private partnership (PPP) scheme is yet to bear fruit. Up to this day, PPP infrastructure projects in Indonesia are still constrained by the difficulty of land acquisition, regulatory uncertainties and lack of funding. These investments projects are not among the most popular investment projects of private investors because they usually involve expensive (and risky) investments as well as patience while waiting for return of investment.

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Member countries of the Asia-Pacific Economic Cooperation (APEC) agreed to form a public-private partnership (PPP) center in order to enhance capacity of the APEC member countries to develop bankable PPP projects. It has been decided by the participating countries that Indonesia will become home to the pilot project. This decision was one of the results of the 2013 APEC Finance Ministers' Meeting (AFMM), which ended on 20 September 2013 in Nusa Dua on the island of Bali.

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The total value of investments in the Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) between 2011 - when the Masterplan was first introduced - and July 2013 amounted to IDR 647.46 trillion (USD $58.86 billion). Coordinating Economic Minister Hatta Rajasa said this to state-owned news agency Antara. State-owned enterprises invested a total of IDR 173.63 trillion, followed by the private sector with IDR 231.88 trillion, the government with IDR 99 trillion and public-private partnerships with IDR 143.12 trillion.

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The Public Private Partnership (PPP): Financing, Projects & Contracts workshop is back for 2020. With more sessions in different locations, Infocus International is delighted to bring one of their best events to professionals from all around the world.

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It is estimated that Indonesia will need some USD $450 billion in funds to finance the government's infrastructure development plans for the 2015-2019 period. However, through the state budgets the government can only deliver USD $230 billion, or roughly 50 percent of required funds. The remainder should originate from the private sector (30 percent of total funds) and state-controlled enterprises (20 percent). However, is it likely that the private sector (both foreign and domestic) is to come up with USD $141 billion for investment in infrastructure up to 2019?

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The government of Indonesia plans to add new fuel refineries soon after such development has been postponed for many years. Today, Indonesia's total of oil refineries have roughly the same combined production capacity as a decade ago, indicating that limited progress has been made. In fact, domestic oil output has experienced a steady downward trend for almost two decades due to a lack of exploration and investments amid weak government management, bureaucracy, an unclear regulatory framework and legal uncertainty.

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The regional government of Surabaya, Indonesia's second-largest city after the capital city of Jakarta, is planning to tender two separate infrastructure projects - open to both foreign and domestic investors - at the start of December 2013. The two projects involve the construction of the city's monorail, valued at IDR 6.42 trillion (USD $558.3 million), and the construction of a tramline, valued at IDR 2.41 trillion (USD $209.6 million). When finished, the two projects are expected to reduce traffic congestion in Surabaya, East Java's economic center.

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One of the major problems which is blocking Indonesia's economic growth is the country's infrastructure. The lack of quality and quantity of Indonesia's infrastructure causes logistics costs to rise steeply and thus makes investors (particularly the foreign ones) hesitant to invest as high logistics costs imply a weakening of the country's competitiveness. The problem of Indonesia's infrastructure is both 'hard' infrastructure (roads, airports and electricity supply) and 'soft' infrastructure (social welfare and health care).

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Cement consumption in Indonesia increased 8.6 percent to 18.11 million tons in the first four months of 2013. Demand was particularly supported by property and housing projects in the bigger cities of Indonesia. Another pillar of support was found in the development of various infrastructure projects (including those within the framework of the government's ambitious MP3EI plan). The Indonesian Cement Association expects this year's cement consumption in Indonesia to rise to 61 million tons in total.

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Indonesia's central government hopes that local governments team up with the private sector to develop the country's infrastructure. President Susilo Bambang Yudhoyono said that there are two ways through which local governments can stimulate its infrastructure development: cut expenses on other fields and use it on infrastructure development instead, or, invite the private sector to participate in public-private partnerships (PPPs).

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Both Indonesia's cement production and cement consumption have risen rapidly in recent years. As the country has been showing solid economic growth for a decade - and is forecast to continue this growth -, property and infrastructure projects have grown in number accordingly, thus increasing demand for building materials such as cement. Moreover, the government is committed to enhance the country's much-needed infrastructure development.

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