President Joko Widodo at the Limited Meeting on PSN in the State Palace - Photo by President Office

JAKARTA (TheInsiderStories) – The Indonesian Government decided to trim the number of projects in the list of its National Strategic Project (NSP) due to slow development progress.

Coordinating Minister for Economic Affairs (CMEA) Darmin Nasution said on Monday (16/04) that the government decided to drop 14 projects with worth of Rp264 trillion (US$19.27 trillion) from the NSP list, which makes this year’s priority projects to go down to 222 projects, plus three programs. That compared to 245 projects and two programs previously.

Based on the government’s data, the 14 projects among others are Jambi – Palembang railway, East Kalimantan Railway, Water Supply System in North Sumatra, Polesika Dam in Central Sulawesi and Special Economic Zones in Merauke, Papua.

Darmin spoke to reporters after attending a limited cabinet meeting at the State Palace, the 222 projects need a total investment of Rp4,100 trillion. This year, the government expects 10 projects to be completed.

The NSP was set based on the Presidential decree No. 3/2016, which initially listed 225 projects plus one development program. In that year, 20 projects was completed.

In the following year, government decided to add 55 projects plus one program and cut 15 projects from the previous 225 projects and one program. In 2017, the government decided to list 245 projects plus two programs.

Nasution said the government dropped the projects because it predicts there will be no physical development before third quarter (Q3) of 2019. This year, the government decided to make another review over the projects development. After a discussion with some related ministries, the President Joko Widodo decided he will set criteria of projects that may be scrapped.

This year, government decided to trim again 14 projects after finalizing 13 projects in 2017. In addition,  this year the country sets one university project and one program on economic equity.

At the end, this year government decided it is only prioritizing 222 projects and three programs.

Nasution explained as many as 48 projects are expected to see completion before the Q3 of 2019, while 94 projects are predicted start construction. There is also one program related to electricity development to be pushed.

In details, there are 86 projects and one airplane program to start construction this year and start operating in 2019. There are also 17 projects estimated to start to develop next year.

In details the government will develop 69 road projects, 51 dam projects, 29 special zones projects, 16 railway projects, 11 energy projects, 10 port projects, eight clean water and sanitation projects, six airports projects, six irrigation projects, six smelter projects, four technology projects, three housing projects, and agriculture, marine, education each one project also three programs consisting of aircraft, agrarian and forestry.

In his opening speech, Widodo reminded that the projects and programs in the NSP program that are planned to be kicked off in 2018, should see real progress developments.

He suggested, the financing of projects in the NSP list should not rely solely on the State budget, only but it also should seek for alternative and creative financing models to attract investors to co-finance the projects.

“In doing so, I also hope it will involve the private sector,” President Widodo told his ministers at the opening speech of limited cabinet meeting in his office.

New Rules for Non NSP

At the same time, Minister of Agrarian and Spatial Planning Sofyan Djalil said Widodo plans to issue a presidential decree related to the land acquisition for strategic projects that are not included in the NSP list. This rule is necessary for other projects that have impact for the community and be more easily to construct.

He said, one of the facilities is the ease of land acquisition by using the rules of law No. 2 of 2017 on Land Acquisition. In the future, He said, is open to expand to other relaxation such as compensation and other convenience.

Transportation Minister Budi Karya Sumadi adding, the new policy is expected will push other strategic projects could be completed as soon as possible. He gave an example a project could get the benefit from the new regulation like Kediri Airport in East Java.

The project is belong to private company but also useful for the people. The project like this, he said, will get incentives from the country like land reform or compensation.

US$1: Rp13,700

Email: linda.silaen@theinsiderstories.com

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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