Latest news with #Rosan
The Star
3 days ago
- Business
- The Star
Indonesia tightens screening of foreign investors to ensure long-term commitment
FILE PHOTO: A security guard uses a metal detector to scan a visitor's handbag at an entrance to the Sarinah shopping mall, next to a McDonald's Corp. restaurant, in Jakarta, Indonesia, on Friday, Jan. 15, 2016. Indonesia is conducting thorough assessments of investors' financial strength, technological capabilities and other relevant aspects. - Bloomberg JAKARTA: The Indonesian government has implemented a new policy to screen and select foreign investors planning to invest in the country to ensure the sustainability of future collaborations, Rosan Roeslani, minister of investment and downstreaming, said here on Thursday (Aug 7). Rosan, who also heads the Investment Coordinating Board (BKPM), said the policy has been in effect for several months. He explained that under this new approach, his office will conduct thorough assessments of investors' financial strength, technological capabilities and other relevant aspects. "In addition to inviting foreign investors, the BKPM is also analysing the strengths of those entering Indonesia," he was quoted as saying by local media. According to him, such analysis is essential because investment is a long-term commitment, and the government wants to avoid potential problems investors may encounter in the future. To carry out these evaluations, the BKPM has formed a dedicated team, he added. - Xinhua
The Diplomat
4 days ago
- Business
- The Diplomat
Indonesian State Investment Fund to Pursue Railway Debt Restructuring
Indonesia's new sovereign fund Danantara is working on a debt restructuring plan for the China-backed Jakarta-Bandung High-Speed Railway, which has left the country with a heavy debt burden. The $7.3 billion rail line, which links the capital Jakarta to the city of Bandung in West Java, began operations in October 2023. With a maximum speed of 350 kilometers per hour, the train, which is officially known as Whoosh, has cut travel time between the two cities from three hours to around 40 minutes. While the rail line recorded 2.9 million passengers in the first half of this year, a 10 percent increase on the same period in 2024, the project has created a considerable debt burden for the Indonesian government. Since its inception in 2015, the railway project has been spearheaded by PT Kereta Cepat Indonesia China (KCIC), a joint venture between a consortium of Chinese state-owned companies and a consortium of four Indonesian state-owned companies. Of the total estimated cost of $6 billion, 75 percent was contributed by a $4.5 billion loan from the China Development Bank, while the remaining 25 percent was contributed by Indonesian and Chinese shareholders in KCIC. However, the project experienced a series of delays and cost overruns due to the COVID-19 pandemic and complications in land acquisition. In February 2023, the Indonesian and Chinese governments agreed on a cost overrun of 18 trillion rupiah (around $1.2 billion). According to an article by ThinkChina, this officially made the Whoosh the most expensive infrastructure project undertaken under the aegis of China's Belt and Road Initiative, 'more so than the China-Laos Railway, the Addis Ababa-Djibouti Railway, and the Mombasa-Nairobi Railway, all built by China, at a price range of US$4-6 billion each.' While China set a 2 percent annual interest rate for the original portion of the loan, it has charged a higher 3.4 percent annual interest rate for the money borrowed to pay the cost overrun. According to a report in the Jakarta Globe, Danantara's head, Rosan Roeslani, told reporters on Tuesday evening that the agency was trying to find ways to change the terms to make the loans easier to pay back. 'We are evaluating [the project]. If we carry out a corporate action, we completely take care of it [the debt], and not just postpone it,' the paper quoted Rosan as saying. 'However, we will find ways on how we can restructure Whoosh's [debt].' Rosan did not disclose the specifics of how Danantara would seek to reduce the debt burden, either by a reduction in the interest rate or the extension of the loan term. The Jakarta-Bandung high-speed railway has the distinction of being Southeast Asia's first fully-fledged high-speed railway. (The Laos-China Railway, another Chinese-backed project that began operations in late 2021, runs at a slightly slower speed.) It therefore occupies an important place in China-Indonesia relations, something that probably ensures that Indonesia will be able to negotiate a debt restructuring of some kind, but also probably imposes limits on how hard it can afford to push. Meanwhile, President Prabowo Subianto is reportedly mulling plans to extend the line eastward to Surabaya, the capital of East Java. In late July, Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono announced that the government is preparing a new regulatory framework for the extension of the line. 'President Prabowo has given clear instructions to expand the Jakarta-Bandung high-speed train line to Surabaya,' he said, according to the state news agency Antara. He said that Prabowo wished to integrate further the island of Java, and that 'the key to this vision is to strengthen the Bandung-Surabaya corridor.'
The Star
7 days ago
- Business
- The Star
Danantara unveils sweeping reforms for SOE pay
FILE PHOTO: A sign for Indonesia's sovereign wealth fund Danantara is seen in front of its headquarters in Jakarta, Indonesia, February 28, 2025. REUTERS/Willy Kurniawan/File Photo JAKARTA: State asset fund Danantara has announced a major overhaul of bonus and compensation rules for state-owned enterprises (SOE) directors and commissioners, aligning rewards with global standards of corporate governance. Under the new rules, directors' incentives will be strictly tied to measurable operational outcomes and financial performance, based on audited statements that reflect actual business conditions. Meanwhile, commissioners will no longer be eligible for performance-based bonuses, in line with international best practices that advocate for fixed compensation to ensure their independent oversight role. 'This restructuring represents a comprehensive overhaul of the government's incentive system,' Danantara chief executive officer Rosan Roeslani said in a statement issued last Friday. 'We want to ensure that every reward, especially for the board of commissioners, is aligned with its contribution and actual impact on the governance of the SOE concerned,' Rosan said. The policy draws from global benchmarks, including the Organisation for Economic Co-operation and Development Guidelines on Corporate Governance of State-Owned Enterprises, which advocate for fixed remuneration for supervisory roles to ensure impartiality and accountability. The reform is seen as a bold move to reset the governance within Indonesia's SOEs and signals a broader shift in public sector compensation strategies. The policy, detailed in an official letter, will take effect this year and apply to all SOEs within Danantara's portfolio. The move is part of a broader structural reform agenda aimed at creating a more transparent, accountable and efficient SOE ecosystem that prioritises public interest over personal gain. Danantara said the reform does not amount to a reduction in remuneration, but 'a realignment'. Commissioners will continue to receive a fixed monthly income reflective of their roles and responsibilities. However, the elimination of variable, profit-based compensation is intended to reinforce their independence and supervisory integrity. 'This is not about cutting pay. It's about making it appropriate,' Rosan said. 'Commissioners will still be compensated fairly, but without the distortions of performance-based incentives that can compromise oversight.' The reform comes amid heightened scrutiny over SOE governance practices following a wave of controversial political appointments. With 30 of 56 deputy ministers now holding commissioner posts in major SOEs, critics argue that governance is increasingly driven by political patronage. These include recent appointments of Second Deputy Higher Education, Science and Technology Minister Stella Christie to Pertamina Hulu Energi and former athlete Taufik Hidayat to PLN Energi Primer Indonesia. Political observers and anti-corruption experts have flagged these dual roles as conflicts of interest. 'It shows weak commitment to anti corruption efforts,' Indonesia Corruption Watch's Yassar Aulia said on July 13. — The Jakarta Post/ANN
The Star
30-04-2025
- Business
- The Star
Foreign investment rises 12% in first quarter
Still growing: A major construction project in Jakarta's business district. Singapore was the source of the highest amount of FDI in Indonesia in the first quarter. — AFP JAKARTA: Indonesia has seen respectable growth in foreign direct investment (FDI) in the first quarter of this year as realised funding reached a quarter of the government's full-year target, while domestic investment grew even faster. Investment and Downstream Minister Rosan Roeslani revealed in a press briefing on Tuesday that the first-quarter FDI amounted to 230.4 trillion rupiah or about US$13.7bil, which marks a 12% year-on-year (y-o-y) increase. 'This was one of the very, very good indicators, very, very positive amid – what we all could see – the increasing geopolitical and geo-economic tensions. But, we see that the appetite of investors, be they foreign or domestic, to invest in Indonesia keeps increasing,' said Rosan. He pointed out that the composition between domestic and foreign investment in the first quarter was unusual in that the domestic investment of 234.8 trillion rupiah outstripped FDI. Rosan argued that this was not because FDI had slowed down, as in fact it had risen, but because the growth of domestic investment at 19.1% y-o-y outpaced the growth of FDI thanks to Indonesians pouring lots of funds into infrastructure projects and real estate. Total investment logged in the first quarter was 465 trillion rupiah, which marks a 15.9% increase from the first quarter of last year. That figure amounts to 24.4% of this year's investment target of 1.9 quadrillion rupiah, which Rosan said last week was on track with the target laid down by the National Development Planning Agency. The largest chunk of the investment went to the metals sector, followed by transportation, mining, other services and housing, in that order. With US$4.6bil coming in from Singapore in the first quarter, the city state was once again the main source of FDI, which Rosan attributed to its status as a financial hub, meaning the funds could have originated from any country but was routed through Singapore. China followed with US$4bil, then Malaysia with US$1bil and Japan with roughly the same amount. Malaysia has only recently become a top-ranking investor to Indonesia. This was owed largely to the establishment of joint ventures, Rosan explained, without elaborating. The minister also addressed South Korean LG Energy Solution's recent announcement on withdrawing from a major battery project in Indonesia but noted that the company remained invested in the archipelago through other projects. He explained that the company had backed down from three investment commitments but had realised a US$1.1bil investment plan in another battery-industry project and was looking to expand that business by pouring in an extra US$1.7bil. China's Zhejiang Huayou Cobalt is slated to replace LG Energy Solution as the lead investor in Project Titan, a proposed end-to-end production chain from nickel processing to battery-cell manufacturing meant to become the backbone of the country's battery ecosystem. Rosan said he had met and talked with Huayou and would hold follow-up meetings in May. The minister expressed confidence that Huayou's investment plan would be realised 'very swiftly', before explaining that the original goal remained the same but that the Chinese company might bring in more advanced technology. He also revealed that Apple had started land clearing to begin its investment in Batam, Riau Islands, and said the US-tech company might bring more foreign capital to Indonesian soil than planned. Rosan said he had talked with three Apple vendors, one of whom happened to be Huayou. — The Jakarta Post/ANN
Malaysia Sun
29-04-2025
- Business
- Malaysia Sun
Indonesia's foreign direct investment grows 12.7 pct in Q1 2025
JAKARTA, April 29 (Xinhua) -- Foreign direct investment (FDI) in Indonesia grew by 12.7 percent year-on-year to 230.4 trillion rupiahs (13.8 billion U.S. dollars) in the first quarter of 2025, Investment and Downstreaming Minister Rosan Roeslani announced on Tuesday. "Foreign direct investment continued to rise," the minister said during a press conference at his office, referring to the January-March period. Rosan noted that Singapore was the most significant contributor to FDI growth in the first quarter, with investments worth 4.6 billion U.S. dollars, followed by China's Hong Kong (2.2 billion U.S. dollars), China (1.8 billion U.S. dollars), Malaysia (1.0 billion U.S. dollars), and the United States (1.0 billion U.S. dollars). He attributed the FDI expansion to increased investments in key sectors, including the basic metal industry, metal goods, machinery and equipment, transportation, telecommunications, warehousing, mining, other services, housing, and industrial and office areas.
