Construction firms get another blow

Construction firms get another blow

JAKARTA (JP): Observers fear the government's plan to cut
development spending will prove a further blow to the country's
ailing construction sector.

Agus Kartasasmita of the Association of Indonesian Contractors
estimates that the money going into development projects such as
road construction will decline by between 60 percent and 70
percent.

"We understand because the government has no choices but
slash spending to help cover the widening budget deficit," he
said on Friday when discussing the possible impact of the
government's belt-tightening.

The government has said it will cut spending for development
projects to Rp 8 trillion from the originally budgeted Rp 21
trillion, as part of measures to control the budget deficit.

The association said the cut in development spending would do
further damage to construction companies, which remain largely
inactive due to the impact of the country's economic crisis.

Agus said he understood the government's decision, but he
appealed to the government not to cut the budget in other sectors
such as food procurement and educational activities.

He also urged the government not to slash the budget for road
repairs.

Separately, Minister of Settlement and Regional Infrastructure
Erna Witoelar said the cut in development spending would only
delay the completion of projects.

"It does not mean that the projects will be halted," she
said.(05)