Home buying plan for workers in the offing

Home buying plan for workers in the offing

JAKARTA (JP): The government, working with a major local
cooperative, is currently working out a savings scheme which will
help private sector workers purchase their own homes.

Agus Sudono, the chairman of the Workers' Central Cooperative
(Inkopkar), said the home ownership plan would be along the same
lines as the successful scheme already introduced for civil
servants and members of the Armed Forces.

Inkopkar will set up an institute to manage the savings plan,
Agus told reporters after meeting with President Soeharto at the
Merdeka Palace.

The cooperative has been active in constructing low-cost
houses chiefly for its members and workers with low incomes.

Soeharto during the meeting supported the idea of establishing
the savings plan to help people buy their homes, Agus said,
adding that the government is currently making a draft of the
scheme.

The compulsory savings scheme for civil servants was launched
last year. Under the plan, members of the civil service who do
not own their own homes can borrow a certain sum of money for a
down payment on a house.

Difficulties in raising a down payment has been cited as the
main obstacle for people with low incomes to buy their own homes.

Agus emphasized the need as well as the potential benefits in
a similar scheme for private sector workers.

"There are some nine million workers in the private sector in
Indonesia," he pointed out. If each one chips in Rp 1,000 a
month, then we're talking about Rp 9 billion in funds raised
every month."

To date Inkopkar has already built 40,600 low-cost houses, he
said. Half of these were sold to members of the cooperatives and
the other half were made available to workers in the private and
public sectors.

The cooperative has been asked by the State Minister of
People's Housing to build between 60,000 and 100,000 low-cost
houses during the current Sixth Five Year Plan which began on
April 1, 1994.

Agus said Inkopkar faces difficulties in raising funds
especially to clear the land needed for such housing projects.

"I asked for assistance from the President," he said, adding:
"This is in addition to the assistance we have already received
from the banking community."

Soeharto during the meeting suggested that Inkopkar use
cheaper, second grade, mixed cement in building the houses in
order to keep costs low, Agus said.

Besides costing less, mixed cement does not use much water and
it dries quicker, Soeharto pointed out during the meeting.

Agus said the benefits of the cheaper cement has already been
proven during a test witnessed by officials of the Ministry of
People's Housing, the Indonesian Real Estate association,
Inkopkar and the Association of Indonesian Cement Producers.

He said however that the price of the mixed cement is still
too high at Rp 6,500 a sack.

He suggested that the price be brought down to Rp 5,500 or Rp
6,000 at the most in order to encourage people to use it instead
of insisting on the first grade type which now sells at Rp 7,400
a sack. (emb)