W Sumatra Investment Growth in Q2 is Going Down: BI

Padang, (Antara Sumbar) - Bank Indonesia (BI) noted that investment growth in West Sumatra in Quarter 2 (Q2) of 2017 slowed due to the lack of private investment and limited government capital expenditure.

"In the first quarter of 2017 foreign investment reached 3.5 million US dollars (US), the second quarter felt to 0.4 million US dollars, while domestic investment in the first quarter Rp570.7 billion and the second quarter felt to Rp237.7 billion," Chief Representative of West Sumatra BI, Endy Dwi Tjahjono stated in Padang, Tuesday (Sept 26).

He said that in the Regional Economic and Financial Review of West Sumatra in the second quarter of 2017.

According to him, the lack of optimal development of downstream industrialization and geographical position that are less strategic is often the main reason for potential investors to delay investment realization in West Sumatra.

"In addition, classic issues such as the length of land acquisition and utilization process and the absence of mapping of investment location also become the obstacle to investment development," he said.

On the other hand, investment performance is slowing because there are many investors who have obtained PMA and PMDN permits in West Sumatra, but they have not realized their investment as scheduled.

While from the government side, it happens because of limited realization of capital expenditure in second quarter of 2017 which only 13,8 percent from APBD target.

There are several procurement projects that have been completed as scheduled but it dows not paid by the government yet because the vendors have not made the collection yet, he explained.

In addition, he sees the restructuring of Local Government Work Units which came into effect since January 2017, causing local government to revise the budget in advance since initial budget still takes into account of SKPD prior to be restructuring.

Besides, the lack of national strategic projects in the province due to location on the west coast road is suspected to be the cause of investment deceleration in West Sumatra, he said.

Earlier, Head of Investment Coordinating Board and Integrated Licensing Service (BKPM PPT) of West Sumatra, Maswar Dedi said the target of investment to West Sumatra in 2017 amounted to Rp6.5 trillion from domestic and foreign investors.

Until July only 20 percent of the target which can be reached from Rp6.5 trillion. In fact it could reach 40 percent but there are some obstacles that need to be resolved, he said.

Nevertheless, he said the realization of an investment of Supreme Energy is Rp 1.8 trillion, if included in quarter III, the target achievement increases to 70 percent.

If observed, he added, for the largest investment in West Sumatra currently comes from development of earth thermal energy in South Solok. (cha)

Editor: Vicha Faradika