City to use surplus funds for 'strategic activities'

JAKARTA (JP): The City Council is about to enact a bylaw on the use of the city's reserve funds to help finance "strategic activities" and "force majeure" situations in the capital, a councillor said on Monday.

Councillor Dani Anwar from the Justice Party said the bylaw would be likely passed on Thursday and would initially take effect with half of the Rp 400 billion (US$59.7 million) surplus collected from the previous city budget of the 1998/99 fiscal year.

Should it be approved, the bylaw would be the first ever which regulates the use of such money.

"It's the first time we have such a bylaw on the use of the reserve funds. Previously, such a surplus was often used for 'useless' projects to reach 'a balanced budget'," Dani, who is also a member of the council's commission B for economic affairs, told a reporter after a council meeting to discuss the bylaw.

The Rp 400 billion, he said, was taken from the city's surplus budget which amounted Rp 822 billion.

The remaining Rp 422 billion would later be added to the city's upcoming budget for the 2000/01 fiscal year, he said.

According to Dani, the city administration requires the council's approval, instead of a governor's decree alone, before using the money for strategic funds.

In a recent hearing between councillors and officials of the city administration, the term "strategic activities" included the earlier stages of the construction of a flood canal in East Jakarta, the city's rapid mass transport system, a reclamation project off North Jakarta and city-owned hospitals, Dani said.

On the other hand, the city administration -- in this case the governor -- is allowed to use the reserved funds without prior notification to the council to handle "force majeure" situations, such as floods and other natural disasters, he added.

"Disasters could be handled by the city's budget allocation, but the administration is not allowed to use the city savings."

According to Dani, the money should be kept as usual at the city-run Bank DKI or other state-run banks. The city administration is also strictly prohibited to use the funds for risky deals such as foreign exchange transactions.

Dani, however, did not explain the status of the interest accruing from the funds. (jun)