Jakarta – The draft law on land acquisition soon to be submitted to the House of Representatives will ensure fair compensation to residents displaced by public infrastructure projects, a senior minister has said.

Coordinating Economic Minister Hatta Rajasa told reporters Thursday the proposed law would also give the authorities the right to "force" land owners to sell their land for public use.

"We need a simpler mechanism in the acquisition of land for public use in relation to both land pricing and financing," he said.

Hatta said he hoped the new law would be a breakthrough in dealing with difficulties in the current process. "We all know land acquisition is quite complicated in this country. The development of about 82 sections of toll roads have been hampered by problems," he said.

National Land Agency (BPN) chairman Joyo Winoto said the problems were partly caused by weaknesses in existing regulations.

"As we have seen before, any organization can operate as a land broker to provide land for certain projects. Such practices should be stopped because all activities related to land procurement should be handled by the BPN," he said, adding that the proposed legislation would correct such weaknesses.

Under the proposed law, he said, land acquisition could be completed in 246 days per project, far quicker than the current time period. "If possible, it can be sped up further."

Finance Minister Agus Martowardojo earlier said the government would support land development for public infrastructure by establishing PT Pusat Investasi Pemerintah (PIP). "We are ready to lend money for any public private partnership [PPP] projects that require the acquisition of land," he said.

"If an infrastructure project can't be carried out because landlords refuse to sell their properties, the proposed law will enable the government to press ahead with the land acquisition," Agus said.

PIP chairman Soritaon Siregar said land acquisition remained one of the biggest obstacles in the implementation of PPP projects since the company's establishment in 2005. "Investors... have no hesitation in investing here if it is clear they can get the land needed for their projects," he said.

PIP, he said, provided four kinds of support for PPP projects: land development for infrastructure, financing for the construction of infrastructure, financing through joint ventures with enterprises and financing for project preparatory.

"We are preparing a sufficient fund worth Rp 300 billion to finance PPP projects in 2010," he said.

The National Development Planning Agency said five PPP projects were ready to go – the Manggarai Soekarno-Hatta airport railway, a coal-fired power plant in Central Java, Tanah Ampo port in Bali, a waste energy project in Bandung and a coal railway in central Kalimantan. (ebf)