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Strategic ministry posts poor results approaching year-end
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A man walks on the Cikopo-Palimanan (Cipali) toll road in West Java in a June 2015 file photo. The longest toll road in Indonesia, 116 kilometers in length, will be open to the public on Monday. (Antara)
T
he Public Works and Public Housing Ministry, the backbone of President Joko “Jokowi” Widodo’s infrastructure projects, is struggling to meet its budget disbursement target with less than two months left before the end of this year.
The ministry revealed that as of Friday, it had only disbursed 61.07 percent of its budget: an amount of Rp 59.3 trillion (US$4.44 billion). Its total budget for 2016 has been set at Rp 97.1 trillion.
The result mirrored its disbursement posted in the same period in 2015, when it had only channeled 58 percent of its budget as of mid-November.
The ministry, however, remains optimistic that it will be able to disburse 93 percent of its budget for the full year, similar to the 94.4 percent rate reported in 2015.
“We stand by our target. In infrastructure development, many contracts end in early December and some contractors usually ask for funds to be disbursed by the end of their work,” Public Works and Public Housing Ministry secretarygeneral Anita Firmanti said over the phone.
Infrastructure development is expected to help spur economic growth, which slowed to 5.02 percent year-on-year (yoy) in the third quarter on the back of reduced government spending and weak global trade.
The ministry is currently in charge of many strategic projects, such as the construction of 1,000 kilometers of new toll roads and of 49 new dams until 2019.
The slow progress is also reflected in the slow progress of operational toll roads, which are expected to reach 70 km this year, a downward revision from the initial target of 136 km.
The ministry’s Toll Road Regulatory Agency (BPJT) has so far only added 44 km of new toll roads. “It seems that many of the toll road projects will miss the targeted operational date because of land procurement and weather issues,” BPJT head Herry Trisaputra Zuna said.
However, Anita claims that everything is under control and that many issues that previously hampered progress had been solved, including those related to land procurement through the establishment of a special public service agency for National Asset Management (LMAN).
The LMAN reimburses the funds spent by toll road operators for land procurement, specifically for government-backed projects.
The ministry is planning to ask contractors to bring in more reinforcements — in the form of additional construction equipment — and simplify budget disbursement administration in an attempt to expedite the projects.
Earlier in August, it attributed the slow budget disbursement to uncertainties regarding a number of projects after the government-proposed budget cuts as state revenue sources contracted. The Public Works and Public Housing Ministry eventually suffered from a Rp 15.3 trillion cut this year.
Meanwhile, Center of Reform on Economics (CORE) Indonesia research director Mohammad Faisal stated that even though the ministry’s budget disbursement was lower than other ministries with an average of 64 percent, it was still acceptable, considering the difficulty of its projects.
“The ministry has different characteristics compared to other ministries. It’s still not that worrying. It has carried out bids [for projects] early this year, which is good,” he said.
In 2016, it has put 1,556 projects, worth Rp 8.16 trillion, on auction.
