Limited power supply hampering investment in RI

Surabaya, E. Java (ANTARA News) - Limited power supply has become a hindrance for investment in Indonesia`s industrial sector so that development of the country`s power generation capacity must be one of the government`s priorities, an investment official said.

"Limited power supply by state electricity company PLN during the past few years has become a problem. But PLN has done its best to meet domestic demand for electricity," Darmawan Djajusman, the Capital Investment Coordination Board (BKPM)`s deputy head for promotions, told the press on the sidelines of an investment expo here Wednesday.

National companies from 33 provinces are participating in the expo which is the second BKPM has organized after its first which it staged in Batam last September.

"Power supply is crucial for development of the industrial sector," he added.

But despite the power supply problem, BKPM had been able to attract foreign investment by simplifying bureaucratic procedures to obtain licenses and providing tax holidays to investors in certain industries.

"We hope the regulatons on the tax incentives can be put into force soon," Darmawan said.

During the January-October period in 2007, BKPM had approved domestic investment proposals worth Rp175.56 trillion and foreign investment proposals worth US$36.75 billion.

Some Rp32.98 trillion of the domestic investment and US$9.08 billion of the foreign investment proposals had been realized.

Meanwhile, BKPM Chief Muhammad Lutfi said recently the government would accelerate development of supporting infrastructure such as power generating plants, roads, ports, and clean water supply facilities to stimulate investment.

By 2009, the government would need US$123 billion or some Rp1,132 trillion in funds for development of infrastructure.

"Of the total amount of needed funds, the government will be able to provide only Rp220 trillion while the rest is expected to come from the private sector," he said.

Among the top priority infratructure projects the government had offered to the private sector were plants to produce a total of 13,500 MW of electricity, the building of 1,000 km of toll roads, port development and clean water supply facilities.