Investment in Indonesia, which has been on the rise recently, is expected to further increase after the restructuring of the country's public-private partnership (PPP) program, said a minister.

Coordinating Economic Minister Hatta Rajasa said Monday that growth in new investment in the second quarter might reach 40 percent on a year-on-year basis, as compared to only 25 percent in the previous quarter.

He said gross investment capital, which is comprised of government, private and foreign direct investments, reached Rp 468.4 trillion (US$51.99 billion) in the first quarter.

He said that this year's investment target of Rp 1,894 trillion could be achieved with such progress.

"We are optimistic because we have already achieved more than Rp 400 trillion in the first quarter," he told journalists after a meeting at the ministry.

He said that the government would continuously improve the investment climate by restructuring the PPP program, among other initiatives.

The four working groups that currently supervise the PPP program would be reduced to two to reduce bureaucracy: the exports working group under the coordination of the Trade Ministry and the investment working group under the Investment Coordinating Board (BKPM).

"Investments will be fully managed under the BKPM and exports under the Trade Ministry," he said.

He said the PPP program will soon implement a new system involving a "back office" and a "front office".

All investment projects will initially be discussed at the National Development Planning Agency (Bappenas) and include related ministries and institutions before forwarded to the BKPM.

"Everything will be handled by the BKPM. Potential investors will no longer need to go to other government agencies," he said.

National Development Planning Minister and Bappenas head Armida S. Alisjahbana said that the existence of a "one-stop shop" at the BKPM would better promote potential projects.

"We will track potential projects that can be offered to both domestic and overseas investors. They may need to visit the BKPM to process investment licenses. It will accelerate our investment growth," she told journalists, adding that a memorandum of understanding (MoU) would be soon signed by her ministry and the BKPM.

BKPM head Gita Wirjawan said that the MoU was already drafted and would soon be discussed by a technical team. "I think it will be ready to be signed in a short time," he said.

He said that the BKPM would also prioritize PPP projects that might receive strong support from the government, which would be a shareholder and financier of the projects.

He said that the government would offer investment projects in a more simple and clear way on its new PPP Blue Book.

According to the Bappenas, there are at least four infrastructure projects under the PPP that are ready to be offered in 2010, including a garbage-based power plant (PLTS) in Gede Bage, Bandung; tap water plants in Klungkung, Bali, and Maros, South Sulawesi, and the renovation of Malioboro railway station in Yogyakarta.

Three other projects are ready to be offered in 2010: a cruise-ship harbor terminal worth $24 million in Tanah Ampo in Karangasem, Bali; the Palaci-Bangkuang coal railway worth $740 million in Central Kalimantan and a coal-powered steam power plant worth $2 billion in Pemalang, Central Java.

In the PPP Blue Book that was published by the government in March 2009, 87 projects worth $34.39 billion will be developed under the PPP scheme. Eight projects worth $4.5 are currently ready for offer. (ebf)