Govt considering two infrastructure financing options

Jumat, 27 Januari 2012 | 08:59

The government discussed two options for the financing of infrastructure development at a limited cabinet meeting here on Wednesday.One option was setting up a new financing institution and the other strengthening an existing body, PT Sarana Multi Infrastructure (SMI), Bank Indonesia (BI) Governor Darmin Nasution said after the meeting.

The meeting of ministers dealing with economic affairs chaired by Presient Susilo Bambang Yudhoyono was also attended by Vice President Boediono.

Darmin said all proposals and ideas were discussed while the focus was not only on one option and therefore no decision had been made. He however added that a decision would be made soon.

"This is a very useful stage before concluding hopefully in the not too distant future whether we will strengthen the existing institution or set up a new one," he said.

Darmin said it was not impossible for the government to set up an institution like Bank Pembangunan Indonesia (Bapindo) that operated during the New Order government. He said countries generally had a special bank that was charged with collecting development funds to finance not only infrastructure but also other projects.

He said it was possible for a bank like that to be set up without necessarily repeating the mistakes made in the 1997/1998 crisis under present economic conditions which were marked by good growth and stability.

"Indeed an institution like that must be made really professional so that no moral hazard will come from its customers, management, supervision, owners or others," he said.

Darmin said the government had so far been considering to strengthen the existing institution because setting up a new one would take time, adding that PT SMI would soon issue bonds.

He believed the government could collect a large amount of funds from bonds as the country`s economic conditions were good with its investment rating also rising.

"Our funds sources will be more open than before and so it will be up to us to be ready to exploit them or not," he said.

Chief economic minister Hatta Radjasa meanwhile said he thought it would be better for the government to use the existing institution or set up a special desk in state-owned banks to specially deal with infrastructure development funding.(*)

bY Heru