Indonesia plans to allow foreigners to own up to 67 percent in air traffic navigation, ground handling and other transport supporting service companies, as the country seeks helps to improve its logistics system.
Under a revision of the negative investment list – a list of sectors restricted to foreign capital –foreigners would also be able to control airport management companies, maritime cargo handling, aircraft leasing, air logistic services and other airport services, said Transportation Minister Ignatius Jonan on Monday (2/1).
Logistics accounts for more than a fourth of production costs in Indonesia, whose notorious red tape and lack of infrastructure adds complications for companies in transporting their goods and services across the vast archipelago.
While local transport services companies have shown massive improvement in the past decades, they still lacks the know-how of foreign peers that operate on a global scale.
Still, the foreign ownership cap for airports would remain at 49 percent, Jonan said.
"This is a sovereignty issue, because the port would not only control the land, it will also be in charge of the air space above it. We just cannot give that away to foreigners," he said.
For a similar reason, foreign ownership in sea ports will also be limited to 49 percent he said.
The government is currently revising its the negative investment list. The first part of the revision rolls out in the next few days , said Coordinating Minister for Economic Affairs Darmin Nasution.