Governor puts this year's development projects on hold

JAKARTA (JP): Governor Sutiyoso acknowledged yesterday the city administration would hold off on any development projects in the capital for the remaining nine months of the current 1998/1999 fiscal year due to the limited budget available.

With about Rp 1.4 trillion (US$87.5 million) left in the budget, the administration might only be able to work on routine activities, the governor told reporters at the City Hall.

"All programs that I've launched such as the greenery project, Blue Sky environment campaign and Clean River campaign would be set aside for now.

"We'll mainly focus our work for the people, particularly those at the grass roots," he was quoted by Antara as saying.

He said his administration had decided to temporarily halt megaprojects scheduled earlier due to the crisis.

"All unnecessary spending should be annulled because we're economizing our budget in almost every sector," he said.

On Tuesday, Sutiyoso guaranteed that his administration would not withhold or cut salaries of its 70,000 employees.

In the other related development yesterday, councilors have called on the government to immediately revoke the presidential decree which obliges the city administration to give 20 percent of revenue collected through hotel and restaurant taxes to the Indonesian Tourism Promotion Board.

Amarullah Asbah, head of Commission C for financial affairs, said the rule was just a further burden to the financially troubled administration.

"We call on the central government to revoke 1993 Presidential Decree No. 6 immediately because it is a burden to the administration," he said, speaking on behalf of his colleagues at the commission.

Amarullah said the commission strongly believed that the administration must secure all the funding it possibly can to see it through this difficult year.

The city administration's budget for the 1998/1999 fiscal year has already been cut twice. From its initial level of Rp 3.2 trillion the budget was cut first to Rp 2.7 trillion and then to Rp 1.4 trillion as a result of the economic and political crises, he said.

The remaining funds are only sufficient to cover routine expenses, not to finance further development projects.

Rp 273 billion of the budget has been allocated to pay contractors for projects awarded last year, he said.

"Now you can calculate how much of the budget is left to cover routine expenses (for the current fiscal year which began in April)," he added.

According to a city official who requested anonymity, the administration has always opposed the controversial presidential decree.

"I should not tell you this, but the administration has never meet the obligation in full," he said.

"It's not that we don't want to promote our nation's tourism. We believe that we work very hard to raise that revenue.

The crisis means that now more than ever the city administration needs that money," he added.

He said that during the 1994/1995 fiscal year the administration transferred a mere Rp 3.5 billion, or 2.1 percent of the total Rp 163 billion in revenue raised through hotel and restaurant taxes into the state tourism board's coffers.

Were it to have followed the decree to the letter it would have given them Rp 32.6 billion in the same fiscal year.

In the following fiscal year the administration transferred 5 percent (Rp 9.8 billion) of the Rp 196 billion raised through the taxes to the board.

In the 1996/1997 fiscal year 4.3 percent (Rp 9.9 billion) of the Rp 230 billion raised was given to the board.

"We were harshly condemned by the government for retaining the larger part of our hotel and restaurant revenues," he said.

The official declined to say if the administration had met its obligation for the 1997/1998 fiscal year, in which Rp 198 billion had been raised through hotel and restaurant taxes by December last year.

The administration hopes to raise Rp 265 billion from hotel and restaurant taxes in this fiscal year, although by June 8 only Rp 47.2 billion had been collected. (cst/bsr)