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RI faces major infrastructure project delays
The Public Works and Public Housing Ministry is struggling to prepare the tender process for a large number of infrastructure projects to be developed this year, following President Joko âJokowiâ Widodoâs instruction to start them as soon as possible
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The Public Works and Public Housing Ministry is struggling to prepare the tender process for a large number of infrastructure projects to be developed this year, following President Joko 'Jokowi' Widodo's instruction to start them as soon as possible.
Public Works and Public Housing Minister Basuki Hadimuljono said preparations were ongoing but it would be difficult to open the tender process by March, as previously scheduled, because of the large number of projects involved.
The minister estimated less than 50 percent of this year's infrastructure projects could be put to tender by the early March deadline.
According to the minister, from a Rp 118 trillion (US$9.03 billion) budget for the ministry, Rp 94.5 trillion is allocated to new infrastructure projects, while the rest ' Rp 12.8 trillion ' is for maintenance work, including road and irrigation repairs.
'From the Rp 94.5 trillion in new projects, only about Rp 40.2 trillion worth of projects can be tendered as of early March,' Basuki told reporters on the sidelines of a ministry working meeting on Friday.
'According to the presidential instruction, the tender process should be completed in March. We may be a little behind schedule, but I will monitor the process,' he said.
Basuki said the ministry faced problems immediately opening the tender because of the large number of new projects and the usual slow disbursement of the state budget to the ministry.
'With a significant increase in the number of projects, we need to prepare a lot of things, including the land acquisition and also the tender documents,' he said.
'Infrastructure projects are part of investment, therefore we are expected to begin the projects as soon as possible to contribute to the country's economic growth this year,' Basuki said.
Over the next five years, the ministry is tasked with building a total of 49 new dams, 1,000 kilometers of toll roads and 2,650 km of main roads across the country.
Ministry director general of water resources Mudjiadi said the ministry was set to construct 13 dams this year alone, including Raknamo in East Nusa Tenggara, Kariyan in Banten, Logung in Central Java and Lolak in North Sulawesi.
In the revised 2015 state budget, around Rp 290 trillion has been earmarked for capital expenditure (capex) spending, a fund allocation that includes ministerial investments and growth-generating infrastructure projects.
Capex spending in particular was in the spotlight as it has among the lowest budget realization rates of all spending types.
In 2014, the capex realization rate stood at 84 percent, lower than the overall budget realization rate of 94 percent, according to Finance Ministry data.
I Kadek Dian Sutrisna Artha, the director of the Institute for Economic and Social Research (LPEM) at the University of Indonesia, said the government was already on the right track by increasing capex and exempting the budget from the fuel subsidy.
'Based on the planning and budget allocation, theoretically the government may be able to achieve its economic growth target, but the main concern is whether the government has the ability to execute all these projects,' he told The Jakarta Post.
'The delayed tender process will lead to delayed projects and lower spending, which will have an impact on the government's economic growth target. If the government is unable to deliver the programs, the target of 5.8 percent economic growth this year will be hard to achieve,' he continued.
