JAKARTA (TheInsiderStories) – Indonesia intensifies its effort to reduce pressures on the rupiah. After implementing the biodiesel policy to curb crude imports and announcing higher import tariffs on 1,147 tariffs, the government will soon announce a list of infrastructure projects put on hold.
Delaying infrastructure projects would help to reduce imports of capital goods which in turn help to stabilize the Rupiah. Coordinating Minister for Economic Affairs Darmin Nasution explained on Thursday (06/09), the government discourse of delays in the construction of National Strategic Projects (NSP).
The aim is to suppress imports, especially in the midst of the recent pressure on the Rupiah. The project criteria to be postponed are in the preparation stage, not part of the NSP’ project and not in the financial closing stage, said Nasution.
“Basically discussing the postponement of national strategic projects that need to be done by considering several things,” he said at his office.
Last April, the Government decided to trim the number of projects in the list of its NSP due to slow development progress. 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.
The minister said the 222 projects need a total investment of Rp4,100 trillion (US$96.55 billion). This year, the government expects 10 projects to be 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.
According to director of state-owned power producer PT Perusahaan Listrik Negara Syovie Felienty Roekman ensured the construction of electricity classified as Renewable Energy was not delayed. But two other projects, such as steam and diesel power plant have the potential to be postponed.
The NSP was set based on the Presidential decree No. 3/2016, which initially listed 225 projects plus one development program.