The government has set up a company to provide financial guarantees so that firms can access credit to finance infrastructure projects, requiring Rp 1,923.7 trillion (US$207.76 billion) in the next five years.
The company, named PT Penjaminan Infrastruktur Indonesia (PII), is to help private sector firms working on infrastructure projects backed by public private partnerships by giving guarantees to increase their creditworthiness, Arif Baharudin, a director at the Finance Ministry said in a statement.
The government has injected Rp 1 trillion from the 2009 budget to PII to provide initial capital, making the firm 100 percent state-owned.
“Additional capital is expected to be provided in the coming years,” Arif said.
He also said that the World Bank had pledged to disburse up to Rp 1.5 trillion in soft loans to support PII.
The government expects to be able in five years to spend Rp 768 trillion from state funds to finance upcoming infrastructure projects, while the rest is expected to come from private firms.
Projects that will begin this year include the construction of roads and bridges, for which the government has earmarked Rp 16.65 trillion from 2010 state budget.
Deputy Public Works Minister Hermanto Dardak said recently that the 2010 allocation would be used to construct 1,477 kilometers of new roads and repair 1,161 kilometers of existing roads across the country.
The ministry aims to build 19,500 kilometers of national roads by the end of 2014.
Most of this year’s Rp 1.34 trillion budget for roads and bridges, is to maintain roads on the northern coast of Java.
Hermanto said government was also focusing on roads and bridges in eastern Indonesia, especially in Papua and West Papua.
These provinces are to get Rp 1.159 trillion and Rp 560.2 trillion respectively from the 2010 budget for road construction and repairs, up by about 50 percent on 2009.
In Sumatra, the government will complete a 2,805 kilometer stretch of the eastern trans-Sumatra highway costing Rp 848.79 billion. The central trans-Sumatra highway stretching 2,540 kilometers will need Rp 543.06 billion while the 2,493 kilometer western trans-Sumatra highway will require Rp 418.68 billion.
The government aims to build 4,100 kilometers of new national roads in Sumatra while in Java, the total will be 2,100 kilometers.
Sulawesi will benefit from an additional 3,600 kilometers of new roads this year while 1,900 kilometers of new roads are also being planned for other islands across the archipelago. (bbs)
