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Builders applaud early launch of tenders for 2016
The Indonesian Builders Association (Gapensi) has applauded the governmentâs move to conduct early bids for next yearâs projects that could speed up government spending in 2016
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The Indonesian Builders Association (Gapensi) has applauded the government's move to conduct early bids for next year's projects that could speed up government spending in 2016.
Gapensi secretary-general Andi Rukman said many contractors had anticipated the government's move to open bids early each month, as initiated by the Public Works and Public Housing Ministry since late August so that projects could start straight away when the year starts without waiting for a time-consuming bidding process.
'If we can start working in January, we will have plenty of time to work and reach the target and help government spending too. It's better than the current condition,' he explained.
Many observers and business players are banking on government projects to jump-start the ailing economy, which has seen growth weaken to a six-year low as domestic consumption and exports remain sluggish against the backdrop of a weak rupiah and global economic uncertainty.
The Public Works and Public Housing Ministry, which has spent less than 50 percent of its 2015 budget so far this year, has been allocated Rp 103.8 trillion from the draft 2016 state budget. It has promised to spend more than 90 percent by the end of this year and improve disbursement next year.
The ministry, which is seen as crucial in creating multiplier effects for the economy through employment and domestic consumption in projects, will also forbid big companies from bidding for small-scale projects to develop small and medium enterprises.
The new auction arrangement includes division of project based on its value, starting from below Rp 10 billion to above Rp 50 billion.
'So it can be more even. For example, for a project valued at below Rp 50 billion, big companies cannot participate in bidding. For local companies that cannot take a Rp 50 billion project, they will have a chance with a project with maximum value of Rp 10 billion,' said Public Works and Public Housing Minister Basuki Hadimuljono.
This has been especially welcomed by Gapensi, which has data showing that small to medium companies make up 92 percent and 7 percent of the total 131,000 construction companies, respectively. The policy will enable small and medium constructors to reap benefits from government projects, according to Andi.
In the first two months of its realization, the early auction mechanism has been applied by two directorate generals in the Public Works and Public Housing Ministry, namely those for Bina Marga and water resources.
Up to the end of September, the Bina Marga directorate general had opened bidding on 366 project packages valued at a total of Rp 13.03 trillion, according to the ministry's Bina Marga director general Hediyanto W. Husaini.
'It is almost 50 percent of all the projects to bid for 2016,' he told The Jakarta Post on Friday.
With the early bidding, Hediyanto said, companies would be better prepared and have enough time to bid and start the projects, unlike previous years when bids were held in the beginning of the year.
Meanwhile, the Water Resource directorate general plans to offer 2,103 project packages worth Rp 10.8 trillion for tender by December, having opened 355 projects for bidding as per late September worth Rp 1.78 trillion. (fsu)
