View on Infrastructure Projects in Indonesia - Photo by IIGF

JAKARTA (TheInsiderStories) – PT Penjamin Infrastruktur Indonesia also known Indonesia Infrastructure Guarantee Fund (IIGF) has offered four national strategic projects (NSP) worth Rp4.75 trillion (US$332.17 million). The projects would be run under the Public Private Partnership-Availability Payment funding scheme.

According to IIGF Director of Business Muhammad Wahid Sutopo, the four projects namely Trans Sulawesi railway project routing Makassar – Parepare worth of Rp1 trillion, construction of tower 2 Dharmais cancer hospital with costs Rp650 billion, non-toll road preservation of Riau and South Sumatra`s eastern cross roads for Rp3.1 trillion. Now the four projects has entered pre- qualification for bidding.

Meanwhile, the Director for management of government support and infrastructure funding for the Finance Ministry Freddy Saragih said Public Private Partnership funding scheme would become one of the government`s priority in the draft of 2019 state budget.

He added, in 2019, government will have 19 projects under the PPP funding scheme. Currently, the government is preparing the standard for PPP preparation, process, transaction and operation.

Meanwhile, the Director General of Railway at the Transportation Ministry Zulfikri noted that by 2030 the government has some railway construction project plan that might need a total investment of $67 billion. Of the total investment, the government only has the capability to fund some 30 percent of it, while the remaining 70 percent would need private investment.

Las April, Indonesian Government decided to trim the number of projects in the list of its NSP due to slow development progress. Coordinating Minister for Economic Affairs Darmin Nasution stated that the government decided to drop 14 projects with worth of Rp264 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.

Meanwhile, 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.

The 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.

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.

New Rules for Non NSP

At the same time, Minister of Agrarian and Spatial Planning Sofyan Djalil said Presiden 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: Rp14,300

Written by Staff Editor, Edited by Linda Silaen Email: theinsiderstories@gmail.com

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here