Govt announces details of project cutback program<\/p>\n
JAKARTA (JP): The government announced yesterday details of
\n156 government and state-related projects worth Rp 111.18
\ntrillion (about US$38 billion) which it will either postpone or
\nreview as part of the retrenchment measure to cope with the
\nrupiah's sharp depreciation.<\/p>\n
Minister\/State Secretary Moerdiono said 81 of the projects
\nwere placed on hold and another 75 were under review.<\/p>\n
However, the cutback does not affect the other 85 projects
\nworth Rp 67.60 trillion, including the N-250 domestic passenger
\nplane program and a liquefied natural gas (LNG) plant at Bontang
\nin East Kalimantan.<\/p>\n
The national car project, headed by President Soeharto's
\nyoungest son Hutomo Mandala Putra, is also not included in the
\ncutback lists.<\/p>\n
PT Timor Putra Nasional, the owner of the project, is set to
\nreceive $690 million in syndicated loans from a consortium of
\nstate and private banks to build its assembly plant in West Java.<\/p>\n
\"To safeguard economic continuity and the general progress of
\nthe national economy, it is deemed necessary to take steps to
\ndeal with the monetary fluctuation and the arising consequences,\"
\nMoerdiono said.<\/p>\n
Minister of Finance Mar'ie Muhammad said last week that the
\ngovernment would end up with a Rp 9.2 trillion deficit unless
\nspending was cut to offset the anticipated decline in government
\ntax revenues and an extra burden of oil fuel subsidies caused by
\nthe weaker rupiah.<\/p>\n
The rupiah and other Southeast Asian currencies have been
\nunder attack following the devaluation of the Thai baht on July
\n2. The rupiah has dropped by about 20 percent since then.<\/p>\n
The retrenchment list includes 81 projects worth Rp 49.57
\ntrillion which will be postponed. The transportation sector is
\nthe worst affected with 62 projects worth Rp 33.01 trillion and
\nthe mining and energy sector with 14 projects valued at Rp 14.68
\ntrillion.<\/p>\n
\"A special team has been established to evaluate the projects.
\nIt is possible for the government to carry out a postponed
\nproject when deemed urgent, but we will be very cautious,\"
\nMoerdiono said.<\/p>\n
The $285 million integrated Manggarai Terminal in Jakarta, a
\nnew airport in Medan, North Sumatra, and the operation of a
\nrailway service for Greater Jakarta are among the delayed
\nprojects.<\/p>\n
Seventy-five projects worth Rp 61.62 trillion are under
\nreview. The mining and energy sector leads the list with 11
\nprojects worth Rp 39.13 trillion, followed by the transportation
\nsector with 32 projects worth Rp 10.92 trillion.<\/p>\n
It also includes six cement plants, the installation of
\nsecurity equipment for 50 airports, the Tanjung Jati A power
\nplant and the $1.77 billion Tanjung Jati C power plant in Jepara,
\nCentral Java.<\/p>\n
The continued project list includes 85 projects worth Rp 67.60
\ntrillion. The mining and energy sector will go ahead with 22
\nprojects worth Rp 29.86 trillion, transportation sector with 30
\nprojects worth Rp 18.33 trillion, followed by the industrial
\nsector with 13 projects worth Rp 9.05 trillion.<\/p>\n
Other projects which are not affected by the cutback program
\ninclude Umbulan Spring Water in East Java and the Bekasi Timur-
\nCawang-Kampung Melayu toll road.<\/p>\n
\"We are closely monitoring the situation and will inform the
\npublic about any new government measures,\" Moerdiono said.<\/p>\n
The value of the projects was based on an exchange rate of Rp
\n2,900, he added. (prb)<\/p>\n
Tables -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-announces-details-of-project-cutback-program-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }