ACEC Successfully Pushes to Have Indonesian Regulation Cancelled
About three weeks after returning from a U.S. government-sponsored trade mission to southeast Asia, American Council of Engineering Companies officials who took part in the mission got some good news. ACEC says the U.S. embassy in Jakarta on Dec. 2 notified it that the government of Indonesia had revoked a regulation that ACEC viewed as a roadblock for firms seeking to enter or continue to work in that country.
During the Nov. 3-8 trade mission, led by Commerce Secretary Wilbur Ross, ACEC's current chair, Mitchel Simpler, and its 2018-2019 chair, Manish Kothari, pushed for a change in the Indonesian regulation.
During the trip, Simpler and Kothari brought up the Indonesian regulatory issue with Ross, who discussed it during a one-on-one meeting with Luhut Binsar Pandjaitan, Indonesia’s coordinating minister for maritime and investment affairs, according to Jeff Urbanchuk, an ACEC spokesman.
In a later meeting of the full delegation with the minister, whose department was responsible for the regulation, Ross repeated the U.S. concern about the rule, which required shareholders of foreign engineering services firms to have the same professional licenses as those held by the company in which they hold shares.
Thus, as Urbanchuk explains it, if a parent firm has an engineering license but one of its subsidiaries has a construction license, that would conflict with the rule, known as Regulation 9.
In that session, the minister committed to resolve the issue by the end of December. The revocation of Regulation 9 is “an industry-wide win,” Urbanchuk said via email.
ACEC was the only engineering or construction organization or company on the trade mission, which included stops in Thailand and Vietnam as well as Indonesia
In interviews with ENR in November, after the trade mission had wrapped up, Simpler and Kothari said that they also achieved a goal of letting the southeast Asian government leaders know that ACEC and its member firms are interested and able to help address the region’s massive infrastructure needs.
A 2017 Asian Development Bank report estimated infrastructure needs in Southeast Asia at $2.8 trillion, or $184 billion per year, over the 2016-2030 period. (Estimates are in 2015 costs.)
For the wider Indo-Pacific region, Kothari says infrastructure needs are estimated at $50 trillion between now and 2040. Kothari also is president of Sheladia Associates Inc., Rockville, Md.
Simpler, who also is managing partner of New York City-based Jaros, Baum & Bolles, says needs in Thailand, Vietnam and Indonesia span all industry sectors. “Their immediate needs are energy, transportation [and] deep ports for shipping,” he adds.
One major project-related announcement during the trip was the signing of a memorandum of understanding by electric utility company AES Corp. and Vietnam’s Ministry of Industry and Trade to, in the Commerce Dept.’s words, “solidify cooperation” on a $1.7-billion power plant. The Son My combined-cycle gas turbine power plant will have a capacity of 2.2 GW. Vietnam’s government had approved the project in September.
Earlier, the Vietnamese government approved a $1.3-billion AES liquefied natural gas import terminal, near the planned Son My power plant.