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Jakarta Post

City to miss housing target due to budget cut

The Jakarta administration is unlikely to meet its target of providing 2,400 new low-cost rental apartments this year after it decided to postpone construction projects in 22 locations

Agnes Anya (The Jakarta Post)
Jakarta
Thu, August 25, 2016

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City to miss housing target due to budget cut

T

he Jakarta administration is unlikely to meet its target of providing 2,400 new low-cost rental apartments this year after it decided to postpone construction projects in 22 locations.

With the postponement, the administration will only build 2,359 new apartments across eight locations such in KS Tubun in Central Jakarta and West Cakung in East Jakarta. As of now, the administration has provided the city with 14,000 apartments in 23 locations.

The Jakarta Housing and Government Building Agency had to delay the construction plans after Governor Basuki “Ahok” Tjahaja Purnama instructed all agencies to reduce several programs in a bid to cut the city’s budget, said Arifin, the agency’s head, on Wednesday.

“All agencies were asked to reevaluate programs. The ones that cannot be finished this year are to be postponed,” Arifin said at City Hall, adding that the measure was taken due to delays in the disbursement of revenue sharing funds from the central government.

The administration has finalized its 2016 revised budget draft, which is now set at Rp 62.3 trillion (US$4.9 billion), as it has yet to receive revenue sharing funds from the government. It initially set the figure at Rp 67.3 trillion.

The agency will postpone construction of 22 apartment buildings, which together consist of 3,000 apartments, in several areas across the city such as Pluit reservoir in North Jakarta, West Cengkareng in West Jakarta and Pulo Gadung in East Jakarta.

These projects, estimated to cost Rp 2 trillion, have confronted a number of stumbling blocks, from a lack of access for heavy equipment to land disputes, Arifin said.

The West Cengkareng apartments, for example, had to be scrapped from this year’s program as the land is currently in the middle of a legal dispute, which erupted following the Supreme Audit Agency’s (BPK) report in June.

According to the report, the state lost Rp 648 billion because Arifin’s agency bought a 4.6 hectare plot of land in an area that already belonged to the city administration.

The agency purchased the land, owned by the administration since the 1960s, from resident Toeti Noezlar Soekarno last year at the recommendation of the Jakarta Financial and Asset Management Board (BPKAD).

Because of the case, the agency’s previous head, Ika Lestari Aji, was fired and replaced by Arifin, who was the deputy mayor for Central Jakarta at the time. “Aside from land disputes, there is also land that has yet to be acquired by the administration. Hence, we cannot build apartments on them,” Arifin said, adding that one of projects facing acquisition problems was in Pluit reservoir.

However, Arifin said the agency would be able to start building more apartments next year to provide more housing options for Jakarta residents.

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