President Jokowi Encourages Asset Securitization by Infrastructure Company

Jakarta (Antara Bali) - President Joko Widodo (Jokowi) encourages asset securitization to raise fund to finance infrastructure development now on the right track.

"We have to continue to follow securitization. One and a half years earlier infrastructure projects had to depend fully on state budget for financing as securitization did not run well," the president said addressing "Kompas 100 CEO Forum" here on Thursday.

He said development of infrastructure in the next five years would need around Rp4,900 trillion and the state budget is expected to be able to contribute around 30 percent to the total cost.

"The fund set aside in the state budget for infrastructure has been much higher but is still not enough. The fund from the state budget would be not more than 30 percent of the total requirement," he added.

He said no cut in the budget for infrastructure project. the budget slashing recently was only for non productive sectors such as budget for official travels.

The president hoped that asset securitization could help finance infrastructure projects in addition to fund from the state budget.

He said state owned road developer Jasa Marga is charged with the duty to built toll roads not only as an operator or asset owner.

"The company should not stop at building toll roads and becomes an operator. The toll road should be sold for profit upon completion and the money is used to build more toll roads to be sold again," he said.

If Jasa Marga acts only as an operator relying on toll fee for income it would wait for tens of years before it could build more toll roads, he said.

"We were the first to build toll road in this region. Other countries learned from us, but now they already have thousands of kilometers of toll roads. And we after 71 years independent have only 840 kilometers," he said.

The president, therefore, wanted Jasa Marga to sell toll roads it has built to raise fund to finance new toll road projects .

"State companies have to sell assets for profit and build new ones," he repeated. (WDY)