ASEAN KEY DESTINATIONS
Early bids fail to speed up infrastructure progress
Indonesia: The government has had to hold its tongue as early tenders it held since August last year to resolve slow budget spending have been unable to rev up the country’s infrastructure development.
President Joko “Jokowi” Widodo’s most strategic ministry, the Public Works and Public Housing Ministry, had only booked 5.38 percent of its budget spending as of March 4, equal to Rp 5.5 trillion (US$422.9 million) of its Rp 104 trillion budget. The ministry had set an ambitious target of recording at least 6 percent by January this year.
Physical construction progress was even less, at a mere 3.89 percent.
Public Works and Public Housing Minister Basuki Hadimuljono attributed the lack of spending to poor performance from directorates general. The directorate general for housing provisions only posted 0.13 percent of its budget spending, while the Cipta Karya directorate general had posted 1.4 percent as of March. The ministry’s other directorates, including Bina Marga, achieved 8 percent budget disbursement as of March.
Last year, various issues such as changes in Cabinet nomenclature bogged down the disbursement of most state project funds.
With high expectations to resolve the issues, the ministry aimed to enhance budget spending by signing Rp 8.8 trillion worth of infrastructure project contracts in January from its early bidding program held in August last year.
Tender calls for government projects normally begin in the first quarter of the year after the state budget draft bill is discussed with the House of Representatives in the second half of the previous year.
By the end of last year, the ministry had tendered a total of 5,344 project packages worth Rp 42.74 trillion from a total of 10,752 packages worth Rp 73.41 trillion, expecting to spread out the projects evenly this year, compared to last year’s spending that only started around June.
“It’s all administrative problems. For instance, the Cipta Karya [directorate general] still has to make adjustments to new working units,” said ministry secretary-general Taufik Widjoyono.
Despite the lagging target, the ministry was upbeat it would be able to catch up, saying this year’s budget spending was still faster than last year. Last year, the ministry’s budget spending as of March only stood at 1.1 percent of the total.
“We will work harder and faster, with more strict controls. The problem is that the construction process is now parallel with rainy season,” Taufik said.
Minister Basuki promised to get his subsidiaries to work more on construction in the field.
“Well, the spending really depends on the progress in the field. But we’re still sure that we will wrap up all of our project bids by March,” he said.
Jokowi’s administration has named infrastructure development as a priority to boost the country’s economic growth, which grew by only 4.79 percent last year, lower than the 5.02 percent growth rate in 2014.
This year’s strategic projects include the development of eight new dams to provide irrigation for an estimated 38.4 hectares of rice fields.
The ministry recorded 94.4 percent budget disbursement last year, higher than its initial target of 93 percent.
Basuki also said that several infrastructure projects were ready to start operating this year.
The projects include the Bajul Mati and Gerak Sembayat dams in East Java, as well as the Surabaya-Mojokerto section of the trans-Java toll-road project.--The Jakarta Post
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