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Lessons learned as govt expedites 2016 project tenders
In an attempt to expedite state budget disbursement next year, several ministries will launch early tender processes for 2016 projects as the governmentâs poor spending this year faced criticized as failing to help stoke growth in a time of need
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In an attempt to expedite state budget disbursement next year, several ministries will launch early tender processes for 2016 projects as the government's poor spending this year faced criticized as failing to help stoke growth in a time of need.
The Public Works and Public Housing Ministry on Friday launched an early tender process for 61 road projects across 15 provinces worth Rp 3.7 trillion (US$263.3 million) included in the 2016 state budget draft bill. The Transportation Ministry has also unveiled plans to conduct an early tender release for its 2016 projects.
'With the acceleration we hope that we can disburse at least 10 percent of the allocated budget, worth Rp 16.7 trillion, by January next year,' said Public Works and Public Housing Ministry's Bina Marga director general Hediyanto W. Husaini, who oversees the construction and maintenance of the national road network.
Tender processes for government projects normally begins in the first quarter of the year, after the state budget draft bill is discussed with the House of Representatives in the second semester of the previous year.
But the government's slow spending so far this year has weakened the nation's efforts in stoking growth, which has slowed to the lowest level since 2009 in the past few quarters, with economists urging a boost in government spending to create multiplier effects in Southeast Asia's largest economy.
The Public Works and Public Housing Ministry, which is seen as crucial to President Joko 'Jokowi' Widodo's infrastructure push, only spent 29 percent of its budget as of Thursday, according to secretary-general Taufik Widjojono, who is still upbeat that with only four months left, it can catch up and reach its 93 percent target in budget disbursement by year end.
Taufik said that the ministry had reported to the House of Representatives regarding the plan to expedite the tender process for next year's projects.
'The projects open for tender today are only projects whose designs and preparations are already completed and will no longer face changes in terms of budget,' Taufik said.
In the 2016 state budget draft bill, budget allocation for Bina Marga reached Rp 46.2 trillion, of which Rp 28.3 trillion would be used to finance new road projects and the remaining Rp 17.9 trillion allocated for road maintenance and office expenditure.
Separately, Transportation Ministry spokesperson Julius Andravida Barata said that the ministry would also open early tender processes for projects financed by the 2016 state budget.
'Within the next one or two months, we will also open tender processes for projects in 2016,' Julius said, adding that the ministry was still discussing the details of the projects that would be offered.
The government will maintain its focus on infrastructure development next year, with the 2016 state budget draft allocating Rp 313.5 trillion or 14.8 percent of total state spending for infrastructure.
The Public Works and Public Housing Ministry will get Rp 106.4 trillion, while the Transportation Ministry is targeted to receive Rp 50.16 trillion.
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