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Trade Ministry Seek to Increase Local Content Requirement in Cooperation Project with Japan

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The Indonesian Ministry of Transportation sought to increase the local content requirement (TKDN) in a transportation infrastructure project cooperation with Japan. Minister of Transportation, Budi Karya Sumadi in an online press conference amid his visit in Japan on Tuesday (7/9) said that over the last three years, Japan's investment in Indonesia has risen significantly. The Ministry also lobbied so that the local content requirement in the cooperation with Japan keeps increasing.

Minister Budi Karya further explained that in a Government-to-Government (G- to-G) meeting with the Japanese government, both countries shared a similar outlook to accelerate the Government-to-Business (G-to-B) and Business-to-Business (B-to-B) cooperation in some transportation infrastructure development projects in Indonesia.

Minister Budi added that the Japanese government supported the Patimban Seaport optimization, by inviting automotive companies and seaport operators from Japan to use the seaport by forming a consortium with Indonesia.

Regarding the MRT Jakarta development project, the Transportation Ministry asked the development to be done faster. Minister Budi Karya also pointed out that the government wants the MRT to be a monumental project that gives off a meaning for the people, and for the two countries' relations.

Then, Indonesia welcomed Japan's interest to participate in the Government-to-Business-Cooperation (KPBU) project in developing a Proving Ground in Bekasi, West Java. Currently, the project is under auction. Two companies from Japan join the auction.

Minister Budi Karya further remarked that his side explained some potentials in the seaport sector. They include Ambon Seaport development in eastern Indonesia that has the potential for fishery and cargo; the Palembang Seaport with cargo, oil, and gas potentials; Natuna Seaport that will be a fishery industry center; Gorontalo which will be collaborated with agricultural products; and a plan to integrate some seaports in Batam.

He affirmed that the Indonesian government is committed to accelerating the national transportation development infrastructure despite the Covid-19 pandemic.

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