Jokowi's Infrastructure Ambitions Face Court Test Over Land

  • Work on Java power plant stalled because of farmer disputes
  • Supreme Court to rule whether compulsory land purchase legal

Indonesia's Top Court to Rule on Jokowi's Law

Indonesia’s top court will rule whether the state can forcibly purchase land from farmers refusing to make way for a power plant, a test of President Joko Widodo’s efforts to get stalled infrastructure projects moving.

Construction of the $4 billion Batang coal-fired station on Java island was supposed to begin in 2012 but has been held up by villagers unwilling to sell their land, a common obstacle to projects in Indonesia. Widodo, better known as Jokowi, formally kicked off work at the site in August, yet three months later full-scale construction has not begun.

Delays on the plant have undermined Jokowi’s image as a can-do reformer, after he was elected last year promising to overhaul Indonesia’s power supply and transport network to help revitalize economic growth. The government announced in June it will apply a never before-used law that allows for compulsory land purchases for projects in the public interest, and villagers backed by Greenpeace are challenging that in the Supreme Court.

“By the end of the year the court case will be settled,” said Ganjar Pranowo, the governor of Central Java province, where the plant is located. He predicts the court will toss out the challenge. “And then we will start work. This is very important. It’s a model project.”

Not Leaving

If the court rules against the villagers they might file a judicial review against the verdict, a process that would require the submission of new evidence and represent their final legal avenue, said Desriko Malayu Putra, the lawyer assisting the villagers for Greenpeace, which opposes all coal-fired power.

A decision in favor of the government would be a boost to Jokowi, yet might not signal the end of the saga. Some farmers say they will refuse to leave their land under any circumstances. That would mean forced evictions, raising human rights concerns that could unnerve lenders and developers, which include Japan’s Electric Power Development Co. and Itochu Corp., and a unit of Indonesia’s PT Adaro Energy.

“We are not negotiating and we are not selling,” said Untung, one of 48 landowners insisting on remaining on their fields. “We are staying. We don’t want this project.”

Jokowi staked his reputation on delivering Batang, a public-private partnership, after telling businessmen in Tokyo in March that construction could start the following month. In August he flew to the site along with ministers to inaugurate the project, even though developers had yet to acquire around 10 percent of the land they need.

Difficult Decision

The project will produce 2,000 megawatts of electricity in a country where industries often cite unreliable power supply as a major obstacle to their operations. Regular blackouts are common across the sprawling archipelago of 250 million people.

The government aims to lift the country’s electrification ratio, or proportion of people with access to power, from 87 percent this year to 97 percent in 2019. That compares to 100 percent in regional neighbors Malaysia and Thailand, according to World Bank data.

Getting the project started would also send a signal to private investors the government is serious about partnering with them on infrastructure. It would be the first large-scale project to be carried out under a 2005 presidential regulation aimed at encouraging such ventures. The court case is the first use of a 2012 law on acquiring land, which sets timeframes for talks on prices and resolving disputes.

The government needs to spend $500 billion on infrastructure and can only fund 30 percent of that from the state budget, Sofyan Djalil, the country’s planning minister, told a conference of business people last week in Jakarta.

“At the end of the day the government has to make a difficult decision as to what is for the greater good,” said John Cheong-Holdaway, a Jakarta-based infrastructure economist. “Does it consider powering Java worth the livelihoods of a couple of hundred farmers?”

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