Differences in Statement Between the Two Ministers and Its Impact On Investment
Monday, 14/09/2020
Differences in statements between the two Ministers sometimes occur in determining policies. One of the cases of disagreement occurred in Indonesia regarding the policy to postpone the increase in toll rates. The Coordinating Minister for Maritime Affairs and Investment is of the opinion that commitments with both domestic and foreign investors must be carried out, including commitments regarding toll tariff increases. On the other hand, the Minister of Public Works and Public Housing is of the opinion that the postponement of toll rate increases must still be done, especially in the conditions of the Covid-19 Pandemic.
Responding to this problem, the Director of CSID of the University of Indonesia, Mohammed Ali Berawi, through Kompas.com argued that ideal conditions such as compliance with agreements to investors should be implemented, but in conditions of force majeure where there is a decrease in economic activity in various sectors and an increasing burden on society, it is necessary to renegotiate between the parties involved in the agreement.
Ali Berawi argues that the government’s move to temporarily postpone the increase in toll rates is expected to be followed by a burden sharing mechanism, to reduce the burden on investors or toll road operators. Incentives or government participation funds for operations and maintenance as well as efforts to adjust the concession period can be a win-win solution for reaching a new agreement between the parties. Thus, the government’s commitment in carrying out this cooperation scheme can be maintained. On the one hand, the businessmen can meet the minimum service standards (SPM) for operations and simultaneously the community is also not burdened by a situation that was not previously predicted, namely the Covid-19 Pandemic.
Furthermore, the initial forecasting can be re-executed with the improvement of the existing situation to maintain investment commitments. In addition, the government can help provide operational funds or change the concession period. This can provide certainty, security and market confidence in toll road investment in Indonesia. Ali Berawi concluded that the delay in toll tariffs during the Covid-19 Pandemic or due to other force majeure would not be a precedent. Precedents only occur in normal conditions, and there is no warranty investment without fulfilling commitments.