GOVT NEEDS $19.4 BILLION FOR INFRASTRUCTURE

Bappenas deputy chief for infrastructure Dedy S. Priatna (Photo: indonesiainfrastructurenews)

Jakarta, 4 Shafar 1436/27 November 2014 (MINA) – The government will need a total of Rp 236.6 trillion (US$19.4 billion) in investment for infrastructure development in 2015, yet so far, the government has only allocated Rp 150.9 trillion, according to the National Development Planning Agency (Bappenas).

Bappenas deputy chief for infrastructure Dedy S. Priatna said the state budget may only allocate Rp 150.9 trillion of the total needed.

Dedy said the agency was still waiting for directives from President Joko “Jokowi” Widodo on how to fill the Rp 85.7 trillion gap in funding, either by accelerating the public private partnership (PPP) scheme or designating state-owned enterprises, The jakartapost quoted by Mi’raj Islamic News Agency (MINA) as reporting on Thursday.

“In the revised 2015 state budget, however, there will be additional money from fuel-subsidy savings, as well as from an increase in tax ratios,” Dedy said recently. “We cannot provide the detail just yet, because the fiscal saving will also be used for social-protection programs following the increase in fuel prices,” he continued.

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Finance Minister Bambang Brodjonergoro has said that the government would allocate up to Rp 140 trillion from fuel-subsidy savings, mainly to develop agricultural infrastructure in order to accomplish self-sufficiency in key crops in the next three to four years.

In general, he said, infrastructure would receive the largest portion of the fiscal saving, including sea-based transportation infrastructure and the building of fishing boats to support the realization of the maritime axis scheme.

According to Bappenas data, the extra Rp 85.7 trillion needed could be used to build basic infrastructure projects including a total of nine dams, irrigation systems for 37,000 hectares of farmland and flood mitigation projects.

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Other infrastructure projects that could be built by the extra money include drinking water treatment systems (SPAM) for 284 villages, 5,000 housing units and 44 twin blocks of low-cost apartments, as well as transportation infrastructure such as 258.9 kilometers of roads, 101 kilometers of railways and the development of eight airports.

Transportation Minister Ignasius Jonan said that in an attempt to help attract investors to infrastructure projects, his ministry would ease the process of granting business licenses to improve the country’s business climate.

He also said that business permits that currently needed to be renewed every month would instead be renewable annually. “We are currently trying to make regulations that will attract the private sector to invest in infrastructure projects within the scope of the Transportation Ministry,” Jonan said recently.

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During Friday’s press conference, Bappenas revealed that the government would need Rp 5.5 quadrillion in investment for infrastructure projects between 2015 and 2019.

Dedy said that funding would come from the state budget (Rp 2.215 quadrillion or 40.14%), the regional budget (Rp 545.3 trillion or 9.88%), state-owned enterprises (Rp 1,066.2 trillion or 19.32%) and the private sector, which would be the source of Rp 1692.3 trillion (30.66%).(T/P009/R03)

Mi’raj Islamic News Agency (MINA)