Observers: Vehicle Rental a Strategy for Fiscal Efficiency and Budget Flexibility
Political observer and Executive Director of the Centre for Indonesia Strategic Actions (CISA), Herry Mendrofa, considers the South Tangerang municipal government’s (Pemkot Tangsel) allocation of Rp19.95 billion to rent official vehicles in the 2026 fiscal year to be a pragmatic strategy of fiscal efficiency. Herry explained that by renting, the government avoids the maintenance costs of official vehicles as assets and can save on regional budget expenditure.
“In my view, this can be read as a fiscal efficiency strategy. By renting, the government avoids long-term burdens in the form of maintenance of assets that have passed their economic life, whilst maintaining budget flexibility so that spending is not locked into large capital expenditure,” said Herry in his statement on Monday (13/7/2026).
Herry sees this policy model as a form of fiscal risk mitigation: rental costs are easier to predict and do not add to the burden of fixed assets. Moreover, it allows vehicle needs to be adjusted according to the contract period.
Nevertheless, Herry believes that Pemkot Tangsel must assess its effectiveness and continue to rely on contract transparency and the accountability of providers.
“As well as regular evaluations to ensure it is genuinely cheaper than purchasing. This is what I think is important for everyone to understand,” he said.
Meanwhile, economist Tanggor Sihombing of Pelita Harapan University (UPH) said the option of renting official vehicles is more effective and efficient from the perspective of budget expenditure.
“Renting is very good from a cash flow perspective, as no large investment is needed upfront. It is also good from a risk management perspective, because risks fall to the service provider, including maintenance costs,” said Tanggor.
According to him, better accountability requires an open tender for the procurement.
“The use of open e-procurement will increase transparency,” he said.
Previously, South Tangerang’s official vehicle rental budget came under public scrutiny after its value reached Rp19.95 billion in the 2026 fiscal year. Based on data from the General Procurement Plan (RUP) of the South Tangerang City LPSE via the data.inaproc.id portal, the official vehicle rental budget at the Regional Secretariat in 2026 reached Rp19.95 billion. This figure represents an increase of around Rp2.07 billion, or 11.6 per cent, compared with the 2025 budget of Rp17.89 billion.
According to Yanuar, the old bureaucratic paradigm of taking pride in asset ownership must be shifted towards an orientation on asset utilisation.
The South Tangerang municipal government’s policy has drawn public attention because the budget increased by around Rp2.07 billion compared with the previous year’s allocation.