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Ministry expects 90% budget disbursement

The Public Works and Public Housing Ministry expects its early bidding policy will expedite budget disbursement to at least 90 percent by the end of next year

The Jakarta Post
Jakarta
Fri, November 27, 2015

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Ministry expects 90% budget disbursement

T

he Public Works and Public Housing Ministry expects its early bidding policy will expedite budget disbursement to at least 90 percent by the end of next year.

Public Works and Public Housing Minister Basuki Hadimuljono said that the ministry would see budget disbursement start as early as January, compared to last year when budget spending really only kicked off in June.

'€œWe estimate the budget disbursement would hit around 6 percent to 10 percent [as of January],'€ Basuki said on Thursday. He hoped that by the end of 2016, only 10 percent of the budget would remain unspent.

The ministry was earmarked Rp 104 trillion (US$7.5 billion) in the 2016 state budget, the highest of all ministries so far, albeit lower than its budget allocation of Rp 118.5 trillion this year. Out of its total budget,
Rp 101.6 trillion was reserved for capital expenditure.

Basuki said that the money spent in January would be on ongoing projects signed this year, as well as on the down payment for contracts that came out of the early bidding.

The ministry has so far conducted early bidding for 1,975 project packages worth Rp 17.92 trillion, out of a total of 6,317 packages. The early bidding has been going on since September, with most packages having originated from the ministry'€™s directorate general of water resources and Bina Marga.

Basuki said that the policy would also be in stark contrast to this year'€™s spending, which was practically nonexistent in January, as the ministry was still dealing with the new administration'€™s nomenclature changes.

'€œIn effect, budget spending should also be more evenly spread over every month,'€ he said.

Basuki also said that the ministry would aim for more than 90 percent of the budget to be spent by the end of next year, even though they had not specified the figure yet. The ministry has set a target of 93 percent of the budget to be spent this year.

According to ministry data, 63.13 percent of the total 2015 budget has been spent to date and 71.78 percent of the contracted construction work has been completed.

'€œWe need to fix this in 2016,'€ he said.

This year, the House of Representatives only approved the revised 2015 state budget in April, which resulted in the low level of spending.

The spending, in accordance to the observed trend in the past few years in many ministries, then moved slowly and would have to rely on heightened spending in November and December to reach the target. For next year, the ministry has prioritized several projects on its list, including the development of eight new dams, 769 kilometers of new roads and 29 kilometers of toll roads.

The new barrages would include the Ciawi dam and Sukamahi dam in West Java, the Ladongi dam in North Sulawesi and the Rukoh dam in Aceh. The total worth of the eight dams is estimated to be Rp 8.4 trillion. The ministry will also build 11,642 housing units next year, as part of its '€œ1 million homes'€ program.

So far, the ministry has built about 498,000 residences as of October, Basuki said, maintaining his optimism over building 600,000 housing units for low-income people this year. (fsu)

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