New Cities Should Not be Funded by Foreigners

Inter-agency coordination is needed

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By Anugerah Perkasa

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JAKARTA - Development of new cities in Indonesia has continued to draw criticisms for its reliance on foreign funding and the weak coordination among concerned institutions, hence resulting in poor harmonisation of development.

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Urban planning researcher from Bandung Institute of Technology Jehansyah Siregar said that investment for the development of new towns is essentially a public infrastructure undertaking, so it is not appropriate if it is built using foreign funds. The national budget for it, he explained, is very adequate at about Rp 150 trillion. "The budget is already adequate at the national level, coupled with the local government budget (APBD) level I (province) and level II (regency/city).

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Another problem is the integration of development and coordination," said Jehansyah to Bisnis yesterday. He described that poor practices of public corporations, institutions of public asset management and operation in residential settlements and urban areas have also become one of the obstacles. According to Jehansyah, the matter of urban development does not, in fact, concern funding, which then requires foreign investment, but instead it concerns inter-agency harmonisation.

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Master Plan
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He said that foreign investment should only get its portion when a region has had its Master Plan prepared and the basic infrastructure facilities have been established. "We can learn from how Selangor, Malaysia, set up an area for foreign investment there. Everything is managed in an integrated manner by the Perbadanan Kemajuan Negeri Selangor (Selangor State Development Agency)," he said. One of the city development projects is the new city of Maja. State Minister of Public Housing (Menpera) Suharso Monoarfa previously stated that the funds needed to build the new city of Maja would be around US$ 15 billion. To meet the need of those funds, Indonesia is inviting private and foreign (investors). Suharso revealed that Indonesia is currently only able to meet about 10 percent of the total funding needs. The available funds for the development of Maja City are just about US$ 1.2 billion, so that to meet the shortage of funds his office will invite businessmen and investors, both from home and abroad, as well as using the mechanism of public private partnership.

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Furthermore, Menpera stated that Maja City will in due course become part of the Greater Jakarta programme. The city is also built to provide housing for low income people. The agreement on this new town has been signified by the signing of a memorandum of understanding between a consortium of companies led by Perum Perumnas, with the other companies comprising PT Wijaya Karya Tbk and PT Housing Development Tbk, and the MCC (a state-owned enterprise from China) as witnessed by Menpera in March. President Director of Perumnas Himawan Arief Sugoto said that his party has prepared the lands around Maja, Banten, West Java. According to him, the new town development of Maja will be more focused on the modem city. (anugerah.perkasa@bisnis.co.id)

http://www.indii.co.id/news_daily_detail.php?id=760
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