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Ministry seeks to optimize assets to accelerate projects
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Several workers repair the Kalipah Bridge in Tegal, Central Java, on March 30. (Antara/Oky Lukmansyah)
T
he Public Works and Public Housing Ministry is looking to optimally use state assets under its management to help accelerate various projects in the country in a time of limited funding.
The ministry currently holds various assets, including dams, worth more than a total of Rp 5 quadrillion (US$382.91 billion).
Public Works and Public Housing Minister Basuki Hadimuljono said it had already calculated the potential amount of electricity the dams could generate to support the government’s flagship program to produce an additional 35,000 megawatts (MW) of electrical power.
It built five dams in 2015 that it expected would be able to generate at least 111.84 MW altogether. The Jati Gede Dam in West Java has the largest capacity, with a potential to generate 110 MW of electricity. The other dams are minihydro or microhydro projects, meaning they generate less than 10 MW each.
Overall, the ministry plans to build 65 new dams by 2019 to generate a total of 408.69 MW, according to data from the ministry.
It also issued Ministerial Regulation No. 9/2016 on the procedures for the utilization of water resource infrastructure through cooperation between the government and the private sector.
However, Basuki claimed that optimizing the dams had not been easy. “I am frustrated over how to utilize them. We have proposed to the Finance Ministry that these dams be used to generate electricity as well, but no progress has been made for the past two years,” he said on Wednesday.
His comments came a day after President Joko “Jokowi” Widodo expressed his annoyance over a setback in the 35,000 MW program caused by the sluggish issuance of business feasibility guarantees by the Finance Ministry.
The Finance Ministry, which manages the state assets, also has Finance Minister Regulation No. 6/2014 on state asset utilization procedures.
The regulation stipulates that utilization can occur through several possible schemes, including renting, borrowing and using, utilization cooperation, build-operate-transfers and cooperation over infrastructure procurement.
It also stipulates that private sector partners involved in state asset utilization must be chosen through a bidding process, or through direct assignment if the assets are particularly complex, such as dams.
Basuki said there had been no decision regarding the most appropriate scheme for the dams, based on the Public Works and Public Housing Ministry’s discussions with the Finance Ministry and the National Development Planning Agency (Bappenas).
Agrarian and Spatial Planning Minister Sofyan Djalil backed Basuki’s claim and called for faster and more flexible mechanisms to allow the utilization of state assets. “Imagine if, for example, we charge Rp 50 per kilowatt hour generated from each dam. We will generate extra funding for the state,” he said.
Vincentius Sonny Loho, the Finance Ministry’s director general for state assets, said it would simplify current regulations and adjust them to prevailing laws. However, he argued that the Public Works and Public Housing Ministry must also provide clear information on the number of dams to be used as hydroelectric plants.
Center for Reform in Economics (CORE) research director Mohammad Faisal said that to repurpose existing dams to produce electricity would have a tremendous impact on the economy.
