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Jakarta Post

Anies allocates more money to BUMDs after shake-up

After appointing his desired candidates to top positions at city-owned firms (BUMDs), Jakarta Governor Anies Baswedan has taken a bold move to allocate money to the companies to run infrastructure projects

Vela Andapita (The Jakarta Post)
Jakarta
Fri, August 31, 2018

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Anies allocates more money to BUMDs after shake-up

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fter appointing his desired candidates to top positions at city-owned firms (BUMDs), Jakarta Governor Anies Baswedan has taken a bold move to allocate money to the companies to run infrastructure projects.

Anies, who was reluctant to channel money to the firms during the 2017 budgeting process, decided to make fiscal room to allocate Rp 11 trillion for the projects to eight city-owned companies. The funding was made possible by canceling existing projects, including three low-cost apartment construction projects as well as an injection of Rp 6.1 trillion (US$415.5 million) in fresh funds, making the total city budget — if the requests for additional funds are approved — Rp 83.2 trillion.

Anies said the BUMDs needed capital for business and construction development.

The capital injection (PMD) for the BUMDs is aimed at funding projects related to construction needed by the companies to support their activities.

“They can’t use [the PMD] for commercial or business purposes. Instead, the capital is for development-oriented activities,” the governor said on Thursday.

Anies appointed four new executives at several BUMDs who are known to be close to him and outgoing deputy governor Sandiaga Uno.

Gubernatorial Decree No. 5/2018 on the procedure for appointing and dismissing BUMD directors issued in January granted Anies the authority to directly appoint individuals without any experience as civil servants to be executives of city-run firms.

The new decree replaced a regulation issued by former governor Basuki “Ahok” Tjahaja Purnama on the management of BUMDs, which stipulated that candidates for directorships at city-owned companies, who had no civil service background, should be recommended by independent experts.

Last week, Anies appointed Priyatno Bambang Hernowo as president director of city water company PD PAM Jaya, replacing Erlan Hidayat who had been in charge of the firm since 2015.

In July, the city appointed Dwi Wahyu Daryoto, a former director for asset management at state-owned energy holding company Pertamina, as president director of city-owned developer PT Jakarta Propertindo (Jakpro). Dwi is said to have ties with Sandiaga since his time as a professional auditor for companies owned by Sandiaga.

Anies also installed Hanief Arie Setianto and Yuliantina Wangsawiguna as two new directors. Hanief was a member of the Governor’s Team for Accelerated Development, while Yuliantina was the former director of PT Saratoga Investama Sedaya, an investment firm founded by Sandiaga.

In April, Anies also installed former deputy chairman of the Indonesian Chamber of Commerce and Industry Sarman Simanjorang, another acquaintance of Sandiaga, as president commissioner of city-owned brewery and beer distributor PT Delta Djakarta.

Jakpro and PAM Jaya are among the BUMDs that will receive funding for their projects.

Jakpro plans to use Rp 1.8 trillion for the construction of phase 2 of the light rapid transit (LRT) (from Velodrome Station in East Jakarta to Dukuh Atas Station in Central Jakarta) and the other Rp 531 billion for the zero-down payment housing project.

PDAM Jaya proposed Rp 1.2 trillion for constructing distribution pipes in the western and northern parts of the city.

Budget analyst Uchok Sky Khadafi from the Center for Budget Analysis criticized the PMD proposals, saying that they were prone to misuse.

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