T

he Jakarta administration will likely see its revised budget cut by Rp 4.6 trillion (US$353 million) due to a delayed transfer of central government funds.

Jakarta Development Planning Board (Bappeda) head Tuty Kusumawati said that after its initial revision, the administration had come up with a proposed revised budget at Rp 67.3 trillion.

However, it eventually had to change that proposal and settled on a budget of Rp 62.7 trillion, as it had not yet received expected revenue-sharing funds from the government.

“We should have received the funds as they are this year’s allocation. However, the government is unable to transfer the funds until next year,” Tuty told The Jakarta Post on Monday. “Hence, we have to cut the revised budget and put the revenue-sharing funds into next year’s budget.”

Tuty added that the government was currently only able to disburse Rp 5.3 trillion, which were actually the revenue-sharing funds for 2015. Hence, the central government was still obliged to disburse Rp 5.1 trillion worth of 2016 funds, which were now planned to be transferred in April 2017.

Tuty said the administration had decided on the latest budget revision after discussing the issue with the City Council last Friday.

Earlier, the councilors had refused to discuss the revised budget draft after complaining about not having been involved when the city administration increased the existing budget from Rp 67.16 trillion to Rp 67.3
trillion in the proposed revision.

The administration said the additional funds were a grant from the central government through the Special Allocation Fund scheme.

The issue was resolved after Friday’s meeting. Tuty admitted that, following the cut, the administration had to slash allocations for several projects, including the construction of subsidized apartments in the capital.

“We have to cut several projects, like the construction of schools and apartments. We have also postponed our plan to acquire some lands in the city,” Tuty added.

Previously, Jakarta’s Financial and Asset Management Board head Heru Budi Hartono said the delay disturbed the administration’s cash flow management.

He said the administration had to therefore revise several planned allocations, by considering the priority of programs belonging to different working units in the administration.

The cuts, he added, also affected capital injections through the Government Investment Participation (PMP) scheme for city-owned companies, including PT Jakarta Propertindo (Jakpro).

“Probably, the PMP for Jakpro, planned at Rp 2.9 trillion in the existing budget, will be cut to between Rp 1.6 trillion and Rp 2 trillion in the revised budget,” Heru added.

He ensured that despite the cut, Jakpro’s projects would continue normally, because Jakpro still had Rp 650 billion in funds initially earmarked to fund the acquisition of private water operator PT PAM Lyonnaise Jaya (Palyja).