Coordinating Political, Legal and Security Affairs Minister Mahfud MD said on Monday that the 4G base transceiver station (BTS) construction project would continue so that further state losses could be avoided, as the government had already spent nearly one third of the total budget.

"It is a multi-year project that has been ongoing for [several] years. If the project is terminated, the state will suffer losses," Mahfud said at a press briefing at the Communications and Information Ministry building on Monday.

The completion of the infrastructure project, he added, would support the government's goal of achieving digital equality.

President Joko “Jokowi” Widodo summoned Mahfud to the State Palace earlier on Monday to solicit updates on the situation. He reportedly instructed the minister to press ahead with the construction of the BTS towers in remote regions.

Mahfud is serving as the interim communications minister until the President appoints a definitive replacement for Johnny G. Plate of the NasDem Party, who last week was named a graft suspect and arrested in a case related to the telephony project.

The BTS procurement project is headed by the Telecommunications and Information Accessibility Agency (BAKTI) under the communications ministry and has a total budget of Rp 28 trillion (US$1.8 billion).

By 2023, the ministry was supposed to have erected some 8,000 4G BTS towers in locations with poor connectivity, particularly in underdeveloped regions.

The project began in 2020, after Johnny was installed as minister in October 2019. In the first phase, which had a budget of Rp 10 trillion, 4,200 BTS towers were to be constructed by 2021. The deadline was later pushed back to March 2022, by which time only a fourth of the towers had been constructed, according to Mahfud.

The significant delays raised suspicions of graft, and the Attorney General’s Office (AGO) said last week the alleged corruption in the first phase of development had caused some Rp 8.1 trillion in state losses, far higher than its previous estimate of Rp 1 trillion.

It remains unclear how the government will make up for the missing funds.

Yuris Rezha Kurniawan of the Gadjah Mada University (UGM) Corruption Studies Center (PUKAT) said the project needed money that was simply not available.

“The government's vision to increase internet access [in underdeveloped regions] is good. But state losses can only be recovered after the court delivers a verdict and only if the process to recover the stolen assets goes well. So which [part of the] state budget will be used to continue this project?” he said.

Alvin Nicola of Transparency International Indonesia said the government should postpone the project until the graft case had been decided, adding that the program needed to be thoroughly audited before any decision was made.

Johnny was the sixth person to be named a suspect in the case, following BAKTI president director Anang Achmad Latif, PT Mora Telematika Indonesia president director Galumbang Menak Simanjuntak, University of Indonesia (UI) human development expert Yohan Suryanto, PT Huawei Investment integrated accounts director Mukti Ali and PT Solitech Media Sinergy commissioner Irwan Hermawan.

The first three suspects, Anang, Galumbang and Yohan, were arrested in January. Anang is accused of having created and manipulated rules to allow specific bidders to win the BTS procurement auction at marked-up prices. Galumbang is accused of aiding Anang in carrying out the scheme and Yohan of creating fake research to support Anang’s marked-up prices.

Huawei’s Mukti has been accused of colluding with Anang in the botched procurement scheme, along with Irwan.

Huawei Indonesia public relations representative Damar Harsanto said the company "currently has no statement regarding this issue" when contacted by The Jakarta Post for comment.

Johnny’s arrest has revived rumors of an imminent Cabinet reshuffle, as the rift between his NasDem party and the ruling coalition, led by the Indonesian Democratic Party of Struggle (PDI-P), grows ever wider. Some members of the coalition, such as the United Development Party (PPP) and the National Mandate Party (PAN), have called outright for NasDem ministers to quit or be removed from the Cabinet.

The tension in the relationship between NasDem and the ruling coalition stems from NasDem’s decision last year to support the 2024 presidential bid of opposition figure Anies Baswedan.

Mahfud said Johnny’s arrest had nothing to do with politics or the 2024 election.

— Nina A. Loasana contributed to this story.