The House of Representatives has finally passed the Bill on Construction Services, which replaces the now obsolete Law No. 18 of 1999 on Construction Services. In its bid to redefine construction services, the new Bill sets out a number of provisions which address: (1) the scope of construction services, (2) the qualifications of construction services, (3) the development of construction services, (4) the distribution of authority and functions between central government and regional government, and so forth.

In a bid to expedite the realization of nationally strategic projects, the government has now allowed regional governments to directly appoint Regional-Government Owned Companies (BUMD) in order to undertake the planning, construction and/or supervision of such projects. In order to address this matter, the government has issued Government Regulation No. 54 of 2016 as the third amendment to Government Regulation No. 29 of 2000 on Construction Services. Additionally, this third amendment also revises provisions which relate to the direct appointment of other parties by BUMD for the undertaking of integrated construction work.

The Ministry of Energy and Natural Resources recently issued Regulation No. 35 of 2016 on the Implementation of Domestic Oil-Refinery Construction by Private Companies (?Regulation 35/2016?) in order to safeguard the country?s fuel supply, to increase national fuel production volumes, to reduce dependency upon fuel imports, and to hopefully eventually achieve energy security. In order to do so, Regulation 35/2016 sets out the legal framework for optimizing the participation of private companies during the construction of domestic oil refineries, including: (1) Eligibility and requirements for such private companies; (2) Support for any construction?s economic-feasibility enhancements; (3) Fulfillment of domestic need and fuel distribution; and (4) Oversight measures.

The Ministry of Finance has issued Regulation No. 130/PMK.08/2016 which sets out procedures for the granting of loan guarantees and business feasibility guarantees to PLN for the development of electrical infrastructure. The Ministry had previously issued Regulation No. 173/PMK.011/2014, which focused only upon the granting of business feasibility guarantees.

In order to expedite the construction of badly needed infrastructure through public-private partnership (?PPP?) schemes, the Ministry of Finance has issued Regulation No. 129/PMK.08/2016 (?Amendment?), which amends Regulation No. 265/PMK.08/2015 on Facilities for the Preparation and Implementation of Public-Private Partnership Transactions for the Construction of Infrastructure. The Amendment set outs new provisions which cover fiscal facilities made available by the Ministry for PPP projects, as well as cooperation with foreign parties relating to the construction of any such facilities.

Despite the longstanding slump in global oil prices, the government is continuing in its efforts to stimulate domestic oil production and refineries, as well as to fulfill national demand. With these goals in mind, the Minister of Energy and Mineral Resources recently issued Regulation No. 22 of 2016 on the Construction of Small-Scale Domestic Oil Refineries, which sets out a series of flexible requirements and procedures whereby businesses and PT Pertamina may engage in the construction of small-scale refineries.

The 2016 Regulation sets out a number of technical guidelines relating to the implementation of Ministerial Regulation No. 22/PRT/M/2014 on the Delegation of the Authority to Grant Business Licenses for the Fields of Public Works and Public Housing through the One-Stop-Integrated-Services Facility at the Indonesian Investment Coordinating Board (?BKPM?).

Regulation aims to set out updated, simplified and more efficient guidelines covering the securing of construction permits for buildings (Izin Mendirikan Bangunan ? ?IMB?) in order to improve Indonesia?s investment climate.

The 2016 Regulation sets out procedures to be followed by parties who are intending to challenge location designations made by governors or regents/mayors for the implementation of public-construction projects. With this purpose in mind, the 2016 Regulation establishes applicable procedures for the submission of lawsuits and for the hearing of such disputes at the State Administrative Court (?Court?).

The aim of the 2016 Regulation is to support economic growth by accelerating the development of electrical-power infrastructure (Pembangunan Infrastruktur Ketenagalistrikan ? ?PIK?) in order to produce some 35,000 MW of electricity.