Economic Policies

Trade and Industry

InvestmentGuide

Investment Procedure

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Iinfrastructure Facilities

Electricity
Telecommunication
Transpotation
Banking, Insurance and Leasing
Stock Markets

A. Electricity

The state-owned electricity enterprise, PT. Perusahaan Listrik Negara (Persero) is responsible for the generation, transmission and distribution of electricity all over Indonesia.

Up to year 2000, the total of PLN generating capacity is 20,762 Megawatts (MW) comprised of the following:

1. Hydropower plants 2. Steam 3. Combined cycle 4. Gas turbine 5. Geothermal 6. Diesel Power Plants

3,015 MW or 14.5% 6,770 MW or 32.6% 6,863 MW or 33% 1,203 MW or 5.8% 360 MW or 1.7% 2,550 MW or 12.28%

In addition to PLN, privately owned generating units, mostly for industrial use, is also contributing a generating capacity at approximately 8,420 megawatts (MW).

The tariff for electricity is divided into usage category of social services, home, business, industry, government office and public service, traction, bulk and multi-purpose. On April 2002, basic tariff for electricity for industry was set at Rp 25,384 per kVA/month for above 2200 VA up to 200 kVA.

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B. Telecommunication

PT. Telkom provides domestic telephone and telegraph services while PT. Indosat provides international telecommunications services. Both are state-owned enterprise. Telkom produc lines are ViewNet, MobileNet, ServiceNet, PhoneNet and InterNet. As of December 31, 2001, Telkom and the KSO (Joint Operation Scheme/JOS) units recorded 7,218,938 lines in service, consisting of 3,949.905 lines in service in Telkom Regions and 3,269,033 lines in service in KSO Regions, and along with the internet development, there are 24 Internet Service Providers.

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C. Transportation

1. Roads

Indonesia’s road network totaled 268,030 km including 103,430 km of roads in Sumatera, 54,301 km in Java and 5,653 km in Bali. Most cities in java Sumatera, Sulawesi and Bali are connected by highways or secondary roads.

Nearly 90% of passenger transport and 50% of cargo transport are made by road. Trunk roads are well developed and new toll highways are being developed b private sector investments.

2. Railways

Railways in Indonesia have a total track length 6,482 km in Java and Sumatera. Railways are used to freight transportation and long-distance passenger services. In the Jakarta-Bogor-Tangerang-Bekasi (Jabotabek) region railways are used for commuter services.

3. Seaports

Indonesia has 2,061 ports, among other which have container facility are: Lewan, Batam, Tanjung Priok, Tanjung Emas, Tanjung Perak and Makassar. Other strategic ports are Dumai, Lhokseumawe, Pekanbaru, panjang, Palembang, teluk Bayur, Pontianak, Jambi, Banjarmasin, Benoa, Tenau, Sampit, Balikpapan, Samarinda, Bitung, Ambon, and Sorong.

Tanjung Priok, the largest port, is servicing Jakarta area and handles 1,431,753 Twenty Feet Equivalent Units (TEU’s) container since 2000. Tanjung Perak Container Terminal accommodates 238,567 TEU’s in the year 2000.

4. Airport

Among the 150 airport operating in Indonesia, 18 are classified as international airports servicing in different locations/provinces:

Name of Airport	Provincial location
1. Soekarnot Hatta 2. Halim Perdanakusuma 3. Husein Sastranegara 4. Adisumarmo 5. Juanda 6. Ngurah Rai 7. Sultan Iskandarmuda 8. Polonia 9. Hang Nadim 10. Sultan Syarif Kasim II 11. Tabing 12. Kijang 13. Supadio 14. Sepinggan 15. Hasanuddin 16. Sam Ratulang 17. Frans Kaisiepo 18. Selaparang	Jakarta Jakarta Bandung Surakarta Surabaya Bali Bandar Aceh Medan Batam Pakanbaru Padang Tanjung Pinang Pontianak Balikpapan Makassar Manado Biak Mataram

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D. Banking, Insurance and Leasing

Bank Indonesia is the Central Bank and is responsible for the regulation and administration of the banking system and foreign exchange regulations. It carries the functions of the monetary authority. Relating to foreign investment, Bank Indonesia plays the following roles:

1. Issuing a letter of clearance for final draft loan agreement of Foreign Direct Investment (FDI) companies;
2. Monitoring the FDI accounts;
3. Ensuring that the capital for FDI projects originates mostly from offshore;
4. Registering all offshore loans receive by FDI companies.

There are four state commercial banks with 874 branches, 92 private commercial banks with 1217 branches 27 regional development banks with 298 branches, and 31 foreign joint venture banks and 10 foreign banks with 29 branches. Other financial institutions include 165 insurance companies, 199 leasing companies and a number of other institutions of lesser significance, such as pawnshops. The foreign banks operating in Indonesia are:

1. Citibank N.A.
2. Hong Kong and Shanghai Banking Corp.
3. ABN Amro Bank
4. Deutsche Bank AG
5. Standard Chartered Bank
6. The Bank of Tokyo-Mitsubishi Ltd.
7. American Express Bank
8. Chase Manhattan Bank N.A.
9. The Bangkok Bank Comp. Ltd.
10. Bank of America N.A.

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E. Stock Markets

In 1976, the Government established a Capital Market Supervisory Board (BAPEPAM) and a state owned company to operate stock transactions (TP. DANARESKA), to promote the development of security markets in Indonesia. However, only since 1986 when the government started to significantly deregulate this sector, the capital & stock market activities in Indonesia has experienced a dramatic rise. Instead of getting involved in the day-to-day operation of the capital & stock market, now BAPEPAM has only a regulatory and supervisory role. Its principal function is to ensure an efficient orderly and fair operation of the markets, now run by private agencies licensed by the Minister of Finance.

The Government has taken other reform measures since then, and will continue to do so deemed necessary in the future, to ensure a healthy climate for example, the establishment of number of new institution such as the Clearing and Settlement Agency run by a separate private firm, Custodian Agency, and a Share Registry. The reforms enable private firms to engage in mutual fund operations and improve disclosure requirements. The measures also set up new requirements for financial institutions to operate in the capital markets. Banks, insurance companies and financing firms, other than securities firms, can now deal in securities firms, and public offering procedures. All the measures so far introduced are aimed at strengthening the operational and supervisory frameworks of the capital stock markets and particularly at providing greater protection for the investor’s interests.

These measures resulted in a surge of company listings on the Jakarta Stock Exchange. As of mid- December 1999 there were 277 firms listed, with a market capitalization of Rp. 425.04 trillion, compared to only 139 listed companies with a capitalization of a mere Rp. 16,4 trillion in December 1991. The Surabaya Stock Exchange has also progressed considerably.

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