T

he House of Representatives has finally approved the government’s plan to inject public funds into four construction-related state firms after several delays created concerns over infrastructure projects.

However, the approval comes with terms and conditions that the funds will be set aside in a special bank escrow account to ensure they will be spent properly by builders Wijaya Karya (Wika) and Pembangunan Perumahan (PTPP), toll road operator Jasa Marga, and steel producer Krakatau Steel.

“Withdrawals are to be for projects agreed in the firms’ business plans only,” said State-Owned Ministry secretary Iman Aprianto Putro, adding that the temporary accounts will be managed by the executives of each state firm.

A working meeting with the government, hosted by the House’s Commission VI overseeing trade, industry and investment, on Wednesday gave a green light for the state firms to issue rights shares worth Rp 14 trillion (US$1 billion), the funds of which will be used to support their expansion plans and projects as part of President Joko “Jokowi” Widodo’s push to develop infrastructure.

About Rp 9 trillion worth of new shares will be bought by the government through the state capital injection (PMN) scheme, in which the government will fully exercise its rights in the new shares issuance, while the remaining Rp 5 trillion would be sold to the public.

Proceeds from the rights shares issuance will be used mostly by Wika for infrastructure development, by PP’s property arm PP Properti for low-cost apartments, by Krakatau Steel for new steel plants and power plants and by Jasa Marga for toll road infrastructure.

Lawmakers also required the utilization of the funds to be focused on infrastructure construction, energy and food self-sufficiency and the continuity of the government’s programs on micro credit (KUR) and micro, small and medium enterprises. The funds cannot be used to build the multi-billion-dollar, Chinese-backed high-speed railway that is to connect Jakarta and the West Java provincial capital of Bandung.

They also wanted close supervision over the PMN disbursement by asking the SOE Ministry to submit regular reports to Commission VI, which would carried out site visits to the projects.

The meeting was attended by Finance Minister Sri Mulyani Indrawati on behalf of SOE Minister Rini Soemarno, who has been banned by the House following a corruption case involving port operator PT Pelindo II, and executives of the four SOEs.

Lengthy debate between the government and lawmakers over the PMN delayed the disbursement of the funds, which had been budgeted since late last year to a total of Rp 50.98 trillion, as the House wanted the funds to be distributed for more pressing issues such as village infrastructure.

Jasa Marga president director Adityawarman said he expected the fresh funds to support his company’s toll road construction projects, including those in Java like the Semarang-Batang and Pandaan-Malang routes and the second part of the Jakarta-Cikampek section.

“We must get the PMN so the projects can go on,” he said after attending the meeting.