The Corruption Eradication Commission (KPK) of Indonesia has named Indonesian Minister of Religious Affairs Suryadharma Ali (who is also Chairman of the Islamic political party PPP) a suspect in a graft case. Reportedly, Ali engaged in self-enrichment by deliberately mishandling state funds that were allocated for the hajj pilgrimage covering financial year 2012-2013. Funds allocated to the hajj pilgrimage to Mecca totaled over IDR 1 trillion (USD $87 million) in that year. KPK spokesman Johan Budi confirmed the case.

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After Joko 'Jokowi' Widodo and Jusuf Kalla announced earlier today (19/05) to form a pair in the upcoming Indonesian presidential election (scheduled for 9 July 2014), supported by a coalition consisting of the PDI-P, NasDem, PKB and Hanura, the other pair also presented itself. Prabowo Subianto officially announced that Hatta Rajasa will be his running mate in the election. This pair is backed by Gerindra, PAN, PPP, PKS and Golkar. At the last moment Golkar, second-largest party in the April legislative election, decided to join this coalition.

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The Indonesian presidential election, scheduled for 9 July 2014, is most likely to become a battle between Joko "Jokowi" Widodo and Prabowo Subianto. Although this had already been expected as both men can rely on popular support (according to various surveys) and have the political backing of important political parties, a number of developments on Tuesday (13/05) seem to confirm this expectation. Moreover, there is more clarity about the vice-presidential candidates that will join the July election.

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In Indonesian media it was reported today (13/05) that Hatta Rajasa, the current Coordinating Minister for Economic Affairs, will meet President Susilo Bambang Yudhoyono this afternoon. It is speculated that in this meeting Rajasa wil ask permission to resign from his post in order to be able to run as Prabowo Subianto's running mate in the presidential election (9 July 2014). A 2008 law stipulates that ministers need to resign when participating in the election (as presidential or vice-presidential candidate) to avert a possible conflict of interest.

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After the Indonesian Democratic Party of Struggle (PDI-P), winner of the 2014 legislative election of Indonesia, was reported to have formed an alliance with the NasDem party in order to nominate a presidential candidate for the presidential election that is scheduled for 9 July 2014, both the National Awakening Party (PKB) and the United Development Party (PPP) have also been approaching the PDI-P. Reportedly, the PKB has mentioned two candidates to the PDI-P to become Joko Widodo’s running mate in the election.

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The government of Indonesia will tender a crude oil refinery construction project in mid April 2014. The oil refinery will be located in Bontang (East Kalimantan) and the project is based on the public-private partnership (PPP) scheme. Susilo Siswoutomo, Indonesia's Deputy Minister of Energy and Mineral Resources, said that the government is currently engaged in formulating procedures for submission of the tender bid. The Finance Ministry and Indonesia Investment Coordinating Board (BKPM) are also involved in formulating the terms of reference.

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The Indonesian government wants to enlarge the role of foreign participation in the country's infrastructure development. Through a proposed revision of Presidential Regulation No 36/2010 regarding the Negative Investment List (Daftar Negatif Investasi), foreign investors will have more room for investing in Indonesia's infrastructure sector within public-private partnership schemes (PPP projects). The Indonesian government needs more foreign participation as the current state of the country's infrastructure is inadequate.

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Two Indonesian government departments - the Ministry of National Development Planning and the Ministry of Economy - have selected 27 infrastructure projects that will be offered to the private sector in 2014. These 27 projects are considered top priority projects and will be offered during the International Indonesian Infrastructure Conference and Exhibition in the form of public-private partnerships (PPPs) with the Indonesian government. The total value of these projects combined is estimated at USD $47.5 billion.

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The realization of infrastructure projects through the Indonesian government's public-private partnership (PPP) scheme is yet to bear fruit. Up to this day, PPP infrastructure projects in Indonesia are still constrained by the difficulty of land acquisition, regulatory uncertainties and lack of funding. These investments projects are not among the most popular investment projects of private investors because they usually involve expensive (and risky) investments as well as patience while waiting for return of investment.

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Member countries of the Asia-Pacific Economic Cooperation (APEC) agreed to form a public-private partnership (PPP) center in order to enhance capacity of the APEC member countries to develop bankable PPP projects. It has been decided by the participating countries that Indonesia will become home to the pilot project. This decision was one of the results of the 2013 APEC Finance Ministers' Meeting (AFMM), which ended on 20 September 2013 in Nusa Dua on the island of Bali.

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It is estimated that Indonesia will need some USD $450 billion in funds to finance the government's infrastructure development plans for the 2015-2019 period. However, through the state budgets the government can only deliver USD $230 billion, or roughly 50 percent of required funds. The remainder should originate from the private sector (30 percent of total funds) and state-controlled enterprises (20 percent). However, is it likely that the private sector (both foreign and domestic) is to come up with USD $141 billion for investment in infrastructure up to 2019?

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The government of Indonesia plans to add new fuel refineries soon after such development has been postponed for many years. Today, Indonesia's total of oil refineries have roughly the same combined production capacity as a decade ago, indicating that limited progress has been made. In fact, domestic oil output has experienced a steady downward trend for almost two decades due to a lack of exploration and investments amid weak government management, bureaucracy, an unclear regulatory framework and legal uncertainty.

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The prequalification tender for the construction of the Soekarno-Hatta International Airport Railway project has been postponed until late October 2014 (from August) as agreements with several stakeholders still need to be finalized. For example, the government is yet to underwrite part of the required investment. Indonesia’s Ministry of Transportation proposes to underwrite IDR 13.5 trillion (USD $2.3 billion) - approximately 49 percent of total required investment for this railway project.

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The Indonesian Transportation Ministry will tender the Soekarno-Hatta International Airport train project in August 2014. The project, which will connect one of the world’s busiest airports to the capital city of Jakarta, is offered in the shape of a public-private partnership (PPP) with the Indonesian government. The total of investment required to develop the railway, which will be built partly underground, is estimated at IDR 26 trillion (USD $2.2 billion). The project aims to improve connectivity to the airport.

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Total realized investments in the context of the government's Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) will reach IDR 628.9 trillion (USD $51.6 billion) in 2014. The MP3EI was unveiled by the Indonesian government in May 2011 to accelerate its ambitious goal of becoming one of the world's largest economies by 2025. This masterplan particularly focuses on (much-needed) infrastructure development by cooperating with the private sector (for example through public-private partnerships).

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The government of Indonesia - through its Ministry of National Development Planning (known as Bappenas) - designed three funding scenarios for Indonesia's infrastructure development in the National Medium-Term Development Plan (RPJMN 2015-2019). The lack of appropriate infrastructure is one of the bottlenecks to Indonesia's development. The scenarios involve the amount of funds and other requirements for infrastructure investment. The three scenarios are divided into a 'full scenario', a 'partial scenario' and a 'baseline scenario'.

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The regional government of Surabaya, Indonesia's second-largest city after the capital city of Jakarta, is planning to tender two separate infrastructure projects - open to both foreign and domestic investors - at the start of December 2013. The two projects involve the construction of the city's monorail, valued at IDR 6.42 trillion (USD $558.3 million), and the construction of a tramline, valued at IDR 2.41 trillion (USD $209.6 million). When finished, the two projects are expected to reduce traffic congestion in Surabaya, East Java's economic center.

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One of the major problems which is blocking Indonesia's economic growth is the country's infrastructure. The lack of quality and quantity of Indonesia's infrastructure causes logistics costs to rise steeply and thus makes investors (particularly the foreign ones) hesitant to invest as high logistics costs imply a weakening of the country's competitiveness. The problem of Indonesia's infrastructure is both 'hard' infrastructure (roads, airports and electricity supply) and 'soft' infrastructure (social welfare and health care).

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