Jamsostek offers funds for low cost houses

JAKARTA (JP): PT Jamsostek will inject Rp 1 trillion (US$281.69 million) into the cash strapped state-owned PT Bank Tabungan Negara (BTN) to help finance the construction of 80,000 low cost houses.

Minister of Manpower Abdul Latief said President Soeharto supported the decision which would help improve BTN's liquidity.

"With this fresh money, the state minister of public housing can help small and middle scale housing developers," Latief said after meeting with Soeharto at the Bina Graha presidential office yesterday.

State Minister of Public Housing Akbar Tandjung said last week that half of the 2,400 housing developers in Indonesia had stopped activities due to skyrocketing lending rates caused by the currency crisis.

The rupiah has dropped about 35 percent against the U.S. dollar since July.

Most small and middle scale developers depend heavily on bank loans, especially from BTN, which specializes in financing low cost housing.

Tandjung said the planned construction of 500,000 low cost houses, in the current Sixth Five-year National Development Plan which began in 1994, may not be achieved if the dire monetary situation persists.

"The situation is so severe that developers can not pay their contractors, and consequently contractors can not pay their workers," Tandjung said.

PT Jamsostek, established in 1977, manages a social security program in the fields of savings, occupational accidents, health care and pension funds, for more than 11 million workers in the country.

The amount of funds collected from workers since 1993 has reached Rp 6 trillion.

In a related development, PT Jamsostek signed yesterday a memorandum of understanding with Lend Lease Group, an Australian financial and property services company, to acquire assistance in the management of the social security program.

The memorandum of understanding was signed by PT Jamsostek's president Abdillah Nusi and general manager of Lend Lease Financial Services Asia Leigh Watson.

The signing ceremony was witnessed by Minister of Manpower Abdul Latief and Australian Ambassador to Indonesia John McCarthy.

Under the agreement, Lend Lease will provide business consultations to help PT Jamsostek address the challenges associated with its rapid growth and support the company in working toward better management practice.

"In the next 12 months, this will involve specific support in the areas of staff training and skills development, changes in culture and operational structure, information technology, program development and customer services," said Abdillah Nusi.

Separately Akbar Tandjung also signed an MOU with Minister for Public Works and Housing of the Government of Queensland, Australia, David Watson, on strategic development and management of Housing.

Tandjung said the joint cooperation would help closer cooperation between the two countries in human settlement and housing.

"We choose Queensland, because it had already progressed much in housing management," Tandjung said.

Watson also hopes the cooperation heighten relations.

"We have some expertise to share, and we hope that in sharing we will be able to help improve the process of housing in Indonesia," he said. (09/prb/rms)