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Govt to nix China loans that can't be drawn quickly
Basuki Hadimuljono - JP/Jerry AdigunaPublic Works and Public Housing Minister Basuki Hadimuljono warned all stakeholders on Tuesday that infrastructure loans from China would risk cancellation unless the process of their withdrawal could be cut to three months from the current 28 months
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Basuki Hadimuljono - JP/Jerry Adiguna
Public Works and Public Housing Minister Basuki Hadimuljono warned all stakeholders on Tuesday that infrastructure loans from China would risk cancellation unless the process of their withdrawal could be cut to three months from the current 28 months.
Before a number of Chinese officials and executives of state companies, Basuki said that he would push the Finance Ministry, the National Development Planning Board (Bappenas) and Beijing for the swift withdrawal.
'It is illogical to spend around two years just to process the loans and another two years to complete a project,' said Basuki.
'If that happens again, I will cancel the [committed] loans.'
Basuki acknowledged that of the 28 months needed to process the Chinese loans, 23 months were required by the Indonesian side while the remaining five months were used by their Chinese counterparts.
'Still, I suggest the Chinese Embassy and MCC [Metallurgical Corporation of China] help speed up the process to just three months. We should work hard. I can send my people down to Beijing to help accelerate the process,' he said.
Following President Joko 'Jokowi' Widodo's visits to Beijing in November 2014 and in March, China had pledged to provide much-needed loans for Indonesia to expand its roads, ports, power plants and dams.
Jokowi has said that Indonesia's infrastructure development will largely hinge on the help of China as the state budget had limited capacity to finance the required swath of projects.
Basuki witnessed on Tuesday the signing of a construction agreement for a 10-kilometer toll road that will link Cileunyi, Sumedang and Dawuan in West Java.
China will provide loan Rp 3.48 trillion (US$241 million) for the construction that is to be handled by the MCC and state-run construction companies PT Wijaya Karya, PT Nindya Karya and PT Waskita Karya.
China is also set to provide other loans worth trillions of rupiah for the construction of toll roads linking Balikpapan with Samarinda in East Kalimantan and Manado with Bitung in North Sulawesi, according to Basuki.
'The Balikpapan to Samarinda toll road is of great importance as it will serve many plantations operating along the road,' the Public Works and Public Housing Ministry's director general for highways, Hediyanto W. Husaini, said.
While banking on Chinese funds, the government has also remained cautious over the requirements entailed in the loans that could position Indonesia on the losing side.
Earlier this month, Jokowi did the unexpected by refusing $5.5 billion in Chinese loans for the construction of Indonesia's first high-speed rail line that would have spanned some 149 kilometers linking Jakarta with the country's third-largest city, Bandung.
The President also refused a less-attractive Japanese proposal for a similar project, and opted to build a slower train that would cost about 40 percent less.
A potential burden to the state budget is cited as among the reasons behind the rejections. (fsu/ren)
