The Indonesian government will speed up construction of the 2,700 kilometers-long Trans-Sumatra toll road by revising Presidential Regulation No 100/2014 on Toll Road Construction in Sumatra and by accelerating the land acquisition process. The Trans-Sumatra toll road will become the main highway on Sumatra that connects Banda Aceh in the north to Bandar Lampung in the south through 24 sections stretching across ten provinces. President Joko Widodo said that construction of the highway is to start in April 2015.

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In the past ten years, Indonesia has seen its toll roads expand by about 300 kilometers only. In 2004, the total length of the country's toll road network was 611 kilometers. In 2014, it reached a length of 918 kilometers. This slow growth of toll road development is alarming as the lack of quality and quantity of infrastructure is one of the major bottlenecks for Indonesia's economic development. (as subsequent high logistics costs put off investors). The difficulty of land acquisition is possibly the most notorious stumbling-block for infrastructure development.

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According to the Deputy Minister of Transportation Bambang Susantono, the construction of the Trans-Java railroad is well on its way and might be fully operational from the first quarter of 2014. The Trans-Java railroad is a 727-kilometer double-track railroad that connects Jakarta and Surabaya, Indonesia's two largest cities. Most of the railroad, which costs the government IDR 9.8 trillion (USD $852.2 million), will be ready for use before New Year but there are still a few plots of land that the government needs to acquire.

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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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Fitch Ratings, the global rating agency, expects slower growth in Indonesia's property sector for the next 12 months. However, for the longer term, the institution still maintains a positive outlook as Indonesia is characterized by high urbanization, a rapidly expanding middle class and low mortgage rates. Since the revival in 2011, the average selling price of Indonesia's residential properties increased by about 30 percent year-on-year, particularly in the Greater Jakarta area.

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In the first quarter of 2013, sales figures of trucks and heavy equipment in Indonesia still show no significant upward movement yet due to low activity in the country's mining, plantation and construction sectors. The chairman of Indonesia's Heavy Equipment Manufacturer Association (HINABI), Pratjojo Dewo, said that production numbers of heavy equipment in January and February rose slightly compared to the same months last year.

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After the government of Indonesia threatened to revoke the export permit of Freeport Indonesia by the end of January on claims that the company fails to show its commitment to establish a new copper smelter in Southeast Asia’s largest economy, the local unit of US mining giant Freeport-McMoRan Copper & Gold (re)confirmed today that it is serious to build the smelter. Based on renegotiations between the government and Freeport Indonesia (agreed upon in July 2014), the company had been allowed to resume copper concentrate.

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The plantation sector of Indonesia is vulnerable to land disputes. Noor Marzuki, a Director at the National Land Agency (Badan Pertanahan Nasional, or BPN), a non-departmental government institution, said that currently only 30 percent of Indonesia's total plantation estate area has been registered at the BPN. This implies that 70 percent of Indonesian plantation estates are unregistered and thus susceptible to land conflicts. The total size of Indonesia's plantation estate area is 120 million hectares.

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In 2015, Indonesia's Ministry of Public Works will start with the land acquisition process for the construction of the Trans-Sumatra Highway. This highway is a 2,732.2 kilometers-long toll road connecting Banda Aceh in the north of Sumatra to Bandar Lampung in the south through 23 routes that connect ten provinces. The total land area that needs to be acquired is roughly 218,976 million m² and is expected to cost around IDR 15 trillion (USD $1.3 billion). By 2025, construction of the project should be finished.

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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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Indonesia's Chamber of Commerce and Industry (Kadin) said that it signals a lot of foreign interest in infrastructure projects in Indonesia. However, the country's unconducive investment climate blocks investors from initiating or participating in these projects. A number of matters that cause the unconducive investment climate are discrepancies in regulatory framework between central and regional governments, land acquisition, and a lack of human resources with adequate skills.

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