Sat, 22 Aug 2009
From: The Jakarta Globe
By Muhamad Al Azhari
With the country’s woefully inadequate roads, railways and ports becoming creakier by the day, the government says it wants to spend Rp 93.9 trillion ($9.36 billion) next year on an array of priority projects to address the yawning infrastructure deficit.

The projects include the building of seaports, airports, railways, roads, bridges, schools and irrigation works.

The plans, proposed in the draft 2010 budget, will cost significantly more than the Rp 70 trillion allocated for regular infrastructure spending under this year’s revised budget, even including the additional Rp 12.2 trillion that was allocated to infrastructure under the government’s fiscal stimulus package passed in February.

The 2010 draft budget still has to be approved by the House of Representatives.

Speaking to the House Budget Commission, Finance Minister Sri Mulyani Indrawati said the draft 2010 budget included further fiscal stimulus spending by ministries and government agencies.

But she added, “If it is felt that additional funds for work that can speed up the economic recovery are essential, we will discuss this thoroughly with the relevant [House] commissions.”

Separately, Herry Purnomo, the Finance Ministry’s director general of the treasury, on Friday said that as of Tuesday, only 12.61 percent of the this year’s additional Rp 12.2 trillion in approved stimulus money had been spent.

Olly Dondokambey, vice chairman of the House’s Commission XI, which oversees the financial sector, questioned whether it would be possible for the funds to be spent by the end of the year.

“There needs to be some relaxation of the rules for disbursement of the funds,” he said, adding that time was rapidly ticking away.

Some observers, including MS Hidayat, the chairman of Indonesian Chamber of Commerce and Industry, have slammed the sluggish government spending, saying it was depriving the economy of a much-needed jolt.

Herry said the delays were partly due to the fact that specific project proposals at the departmental level were only completed in June and July.

“Based on the latest information we have, they [ministries and government agencies] are in the process of finalizing contract documents,” Herry said. “After that, they will be able to draw down about 20 percent of the total budget allocations for their respective projects.”


Key Infrastructure Proposals:

Roads: Building and upgrading 131 kilometers of arterial highways, 50 kilometers of roads in border areas, 48 kilometers of roads along Java’s south coast and 23 kilometers of roads on remote islands.

Ports: Upgrades for the country’s main port, Tanjung Priok, as well as other important ports, such as Belawan in northeast Sumatra and Bojonegara in Banten.

Railways: Double-tracking the Kroya-Kutoarjo line (76.1 km) in Central Java, the Cirebon-Kroya line (158 km) and the Mangarai-Cikarang line (20 km) in Greater Jakarta, as well as sections of the Tegal-Pekalongan and Brebes-Losari lines in Central Java.

Aviation Projects: Building or upgrading airports at Muara Teweh, Seram, Pengganit, Muara Bungo, Sorong and Putusibau.

Others: Repairing and upgrading hundreds of schools, irrigation networks serving hundreds of thousands of hectares and more than 100 kilometers of bridges.



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