Land acquisition bill, coming together - CLSA

Our eyes and ears on ground Mita “the komodo” Valina met with parliament members to get an update on the long anticipated land acquisition bill (attached). Overall, progress up to date sounds encouraging.

The House of Representatives has set up a new special committee to deliberate land acquisition bill.

One interesting finding from the report is that the bill sets a specific time frame for the whole process (from socialization to the settlement of any disputes) to 148 days.

In our view, another interesting development is the appointment of a legislative commission member from opposition party PDIP as the chairman of this land bill special committee. In the past, PDIP has been the most prominent critic of land acquisition bill. This bodes well for the bill’s prospects, signaling a compromise may have been reached. The government aims to get the bill passed in 1H11.

Key points in report:
Draft bill differentiates between public intereset (mandatory surrender of land) and private interest (voluntary basis)
First right of refusal to the government through BPN
Limits the time to 148 days from the start of socialization of the project to settlement of any disputes
Independent parties to conduct valuation appraisals. Has to be licenced by the Finance Ministry and BPN
Compensation will be based on physical effects. Non-physical losses such as relocation cost or losing job will NOT be compensated

Main beneficiaries if bill is passed are toll road operators (JSMR IJ), cement producers (INTP IJ & SMCB IJ), construction companies and property companies (BSDE IJ & SMRA IJ).