JAKARTA: A dispute over a foreign-backed water processing investment in the Mandalika special economic zone (SEZ) in West Nusa Tenggara risks undermining investor confidence, Minister of Finance Purbaya Yudhi Sadewa warns.
During a public hearing held by the government’s task force at the finance ministry on Tuesday, Purbaya criticised what he described as a potential conflict of interest involving tourism state-owned enterprise PT Pengembangan Pariwisata Indonesia, also known as In-Journey Tourism Development Corp (ITDC).
“You invited a foreign contractor to come here, then created a competitor through your own company. That creates a conflict of interest. Investors will inevitably lose or be sidelined. This is not sound business practice,” Purbaya said.
The case centres on PT Perusahaan Air Indonesia Amerika (Paia), a foreign investment joint venture backed by investors from United States, Singapore and Saudi Arabia, with state-owned contractor PT Adhi Karya.
The company operates a seawater desalination plant using reverse osmosis technology in the Mandalika SEZ, located on the southern coast of Lombok Island.
Paia halted operations after PT ITDC Nusantara Utilitas, a subsidiary of ITDC, stopped purchasing water from the company and instead partnered with local water utility PDAM Central Lombok, as its main supplier.
Acting ITDC president director Ahmad Fajar defended the move, saying the partnership with the regional water utility was necessary to ensure supply reliability, which requires at least two water providers. — The Jakarta Post/ANN
