Infrastructure & Tourism Industry
The government has engaged World Bank for the development of basic and supporting infrastructure in three tourist destinations prioritized by Jokowi-Kalla administration: Toba Lake (North Sumatra), Borobudur Temple (Central Java), and Mandalika Resort (West Nusa Tenggara). The partnership starts with the provision of masterplan for the tourist destinations within 12 months time, including public roads, homestay, clean water, and sanitation system.
Growing Optimism for Connectivity (7)
Physical construction progress of Section III of Medan-Binjai toll road in North Sumatra province has reached 99.36% by June 2nd, 2017. Section II, meanwhile, has reached 96%. That means, these sections will soon be entering commercial operation, boosting connectivity in the most populous province in Sumatra Island.
Infrastructure Journal No.20/2017
Indonesian economy yet to grow faster. That’s true. Investment grade, improved corruption perception index, ease of doing business, and consistency in the development of infrastructure, however, promise future stronger growth. Better infrastructure will also support tourism industry.
A More Promising Manufacturing Industry
Unilever Indonesia (UNVR), market leader for home & personal care and food & refreshment, has laid out five-year investment plan worth US$500 million to the Government. Following commercial operation of oleochemical plant in Sei Mangkei, North Sumatra, the consumer goods giant plans to build downstream factories in the area, including shampoo and soap.
The Saturated Tower Market
Solusi Tunas Pratama (SUPR), an independent tower operator, booked net profit of Rp69 billion in the first quarter of 2017, an increase of 23.3% from the corresponding period of 2017. SUPR, where Carlyle is a strategic investor, however, reported only 2.8% growth in sales revenues, while operating profit inched up 1.7%.
Sinarmas Heats Up Cable TV & Internet Market
Telkom Group’s triple-play service IndiHome is not the only serious player threatening domination of Hary Tanoesoedibjo’s MNC Sky Vision in cable TV market. Massive investments in the past few years now placed Sinarmas Group a more significant player, bigger than Elang Mahkota Teknologi (EMTK) Group.
Tourism: The Economy’s Bright Spot
Indonesia recorded 1.14 million visits by foreign tourist in April 2017, jumped 26.75% year-on-year and improved 7.09% month-on-month. Accordingly, the country reported 4.2 million visits by foreign tourist in the first four months of 2017, an increase of 19.34% from the corresponding period of last year.
Freeport Wants to Build A Smelter, As Long As
PT Freeport Indonesia has said that they’re keen on finishing the development of their copper smelter in 5 years, with expected commercial operation start in 2022. But the Company has mentioned several conditions for this compliance concerning investment stability, fiscal regulation concerning tax, share divestment, and contract extension.
Confusion with the Minister of Energy and Mineral Resources Regulation No.34/2017
To this day there has not been any new progress on the development of smelters. The Ministry of Energy and Mineral Resources (ESDM) noted that as of 2016, only 30 percent of the mining companies required to construct a smelter have done so, despite the requirement being put in place since 2014 with the raw minerals export ban. In a bid to change the situation for the good, ESDM decided to publish the Minister of ESDM regulation (Permen No. 34/2017), which contains a clause promising extended operating license to those building their smelter.
Growing Optimism for Connectivity (6)
Ministry of public works and housing has earlier this week signed agreements with various parties for the development of infrastructure in 10 tourism destinations prioritized by central government. Under the agreements, central government will provide development support for residential areas, water infrastructure, and sanitation. Today, the ministry also kicked off tender for the development of Trans South-South Java Road Project with US$250 million of financing from Islamic Development Bank (IDB).