Indonesia Investment Authority, Hutama Karya Sign Toll Road Investment Agreement

President Jokowi during the signing ceremony of cooperation agreement between Indonesia Investment Authority (INA) and Hutama Karya, at the Ministry of Finance, Jakarta, Thursday (04/14). (Photo by: BPMI of Presidential Secretariat)

Indonesia Investment Authority (INA), Thursday (04/14), signed a head of agreement on investment with state-owned construction firm PT Hutama Karya.

In his remarks during the signing ceremony, President Joko “Jokowi” Widodo said that the agreement, worth Rp39 trillion, is expected to build trust of both domestic and foreign investors on financial management and governance of the INA. It is also used to finance Trans-Sumatra and Trans-Java Toll Road projects.

The President underscored that infrastructure development is crucial to improve competitiveness of Indonesia’s products. To that end, the Government has been accelerating infrastructure development in form of toll road in Java, Sumatra, Kalimantan, and Sulawesi since 2014.

For the record, during the past seven years, the Government has built 1,900 kilometers of toll roads. It is such a drastic hike compared to toll roads built before 2014, which was only 780 kilometers in length during a 40-year period.

“The problem lies on funding; there is no alternative funding. We are heavily dependent on the State Budget and budgets of our state-owned enterprises. In case the work was trusted to the private sector, it did not end well. Therefore, the Government launched INA as a financial alternative scheme to be used for infrastructure development in Indonesia that will create multiplier effects for Indonesia’s economy,” he said.

The Head of State expressed hope that similar financing scheme will be further developed in order to gain trust from investors.

In the meantime, Minister of Finance Sri Mulyani Indrawati in her report said that signing of the agreement marked a new chapter in the role of INA to lure investment and put the investment in national strategic programs.

“The signing of head of agreement between the Indonesia Investment Authority (INA) and Hutama Karya, and the confirmation that transaction with toll road developer Waskita Toll Road is taking place, reflected a realization of an innovative financing scheme in order to speed up our infrastructure development, particularly toll roads, by involving investors, both domestic and foreign investors through the INA,” she added.

For the record, the head of agreement is made after a year of negotiation. In the future, the INA will have more investment cooperation agreement in various sectors, such as construction of seaports, geothermal and healthcare facilities.  (RF/UN) (RAS/MUR)