Hans David Tampubolon, Jakarta – The Indonesian Chamber of Commerce and Industry (Kadin) says that businesses are disappointed over the fact that the government has failed to issue a presidential regulation on the Land Acquisition Law on schedule.
"We expected the regulation to be issued months ago. Due to the fact that the regulation has not been issued, there are a lot of infrastructure projects that have been delayed," Kadin chairman Suryo Bambang Sulisto said during a press conference at the Office of the Coordinating Economic Minister in Jakarta on Thursday.
Suryo added that the projects, mostly toll roads, were essential to resolving logistical issues caused by the current lack of transportation infrastructure.
"The longer it takes for the regulation to be issued, the more expensive the projects' cost will become because land prices continue to grow over time," he said. "Therefore, I believe it is very important and essential for the government to issue the regulation as soon as possible. Without it, the projects have no solid ground to begin on," he said.
In a highly anticipated move, the House of Representatives endorsed the long-awaited Land Acquisition Law for public development in December last year, which will ensure all legal proceedings pertinent to land acquisition for public infrastructure projects are finalized within 436 days at the latest. The government promises to implement the law within two months after the House's approval. But the regulation to implement the law has still not been issued.
The law basically stipulates all the requirements for land acquisitions conducted by the state within a shorter period of time than in the past for the sake of the development of public infrastructure.
Before the law was endorsed, public infrastructure projects in the past often faced numerous obstacles, particularly in land acquirement. There were often tensions between land owners and state officials over infrastructure projects because the government often needed at least two years to settle disputes.
The law stipulates that the process of information dissemination to the public in relation to planned land acquisitions in government-commissioned projects must take no more than 30 days and must later be followed by a 60-day public consultation period, which can be extended by a further 30 days.
If the public agrees with all the terms and conditions in the consultation, all business and legal procedures for the land acquisition will be completed within 260 days, while disputes take place, BPN had said that land acquisition process would take place within 436 days at the most or less than two years.
If the regulation is issued, then the country will have a clear standard on the technical details to properly conduct land acquisitions for infrastructure projects and will be able to lure more private investors to invest.
Luring private investors is essential for the country's infrastructure development because the state budget is not sufficient to fund major projects.
"The funding that is needed for infrastructure in Indonesia is huge, estimated at Rp 1,786 trillion, where Rp 681 trillion is required for power and energy infrastructure, Rp 339 trillion for roads, Rp 326 trillion for railway and Rp 242 trillion for information, communication and technology," Suryo said.
Land acquisitions for the sake of public infrastructure is crucial to the country's Master Plan for the Acceleration and Expansion of Economic Growth (MP3EI).
Previously, Coordinating Economic Minister Hatta Rajasa said that the regulation for the Land Acquisition Law would be issued in March. However, this has still not happened.
The Office of the Coordinating Economic Minister's infrastructure coordination and regional development deputy, Luky Eko Wiryanto, said that the government had not been able to issue the regulation because it contained a lot of complex issues that needed to be carefully addressed.
"We want to make sure that once the regulation is issued, it will be able to clearly regulate every single issue concerning land acquisitions for all stakeholders," he said.