UJUNG NEGORO (Java) • Indonesia's President Joko Widodo declared with great fanfare yesterday that construction of a mega power plant is set to start after years of delay, proof that the government is resolving its infrastructure failings.
A group of students led a hearty rendition of the national anthem at the groundbreaking ceremony in Java, and President Joko thumped a button that set a siren wailing to mark the beginning of the project.
But obstacles still stand in the way of South-east Asia's largest coal-fired power plant, with dozens of landowners refusing to give up their paddy fields. Indeed, no ground was actually broken at the ceremony and instead officials showed a video of two bulldozers rumbling through a barren field.
Mr Joko has stepped up efforts to convince investors that the region's largest economy is on a rebound after notching up its weakest growth for six years in the second quarter.
"I don't want any more projects that have to stop, that have to be delayed, that cannot be completed because of licences or land clearance issues," he said. "This is proof that the government can resolve the problems. Let there be no more doubt on the part of investors."
The US$4 billion (S$5.6 billion) plant is among a handful of new infrastructure projects that the administration hopes to finally get off the ground. Mr Joko is expected to announce as early as Monday whether Japan or China has won a hotly contested contract to build the first high-speed railway in Indonesia.
"The kick-off of this Batang project will send a positive signal to investors to put their money in projects with the public-private partnership scheme," said Mr Sofyan Basir, head of state power firm Perusahaan Listrik Negara.
Bhimasena Power Indonesia, a joint venture by Indonesian coal miner Adaro Energy and Japan's Itochu Corp and Electric Power Development, will operate and build the 2,000 -megawatt plant.
News of the groundbreaking helped send Adaro shares up as much as 10 per cent yesterday, far outpacing a 1 per cent rise in the broader market. But when exactly construction will begin remains unclear as the government has not convinced all landowners to sell up.
"There are 67 landowners who are still controlling 20.7ha," said Greenpeace campaign coordinator Arif Fiyanto, who represents landowners in the area.
On June 30, the Central Java government issued a notice assigning the state electricity company the right to use a 2012 land law to acquire 12.5ha yet to be obtained. The law, formulated to speed up bottlenecked infrastructure projects, allows for compulsory purchase of land within set timeframes.
Police and military officers were stationed in villages and on roads leading to the proposed project, preventing those opposed to the plant from attending yesterday's ceremony, said another Greenpeace spokesman.
REUTERS, BLOOMBERG
