Transfer Funds Cut, West Sulawesi Provincial Government Applies for Rp200 Billion Loan
The Provincial Government of West Sulawesi (Pemprov Sulbar) has taken a strategic step by applying for a regional loan of Rp200 billion from PT Sarana Multi Infrastruktur (SMI). This move is intended to plug a budget deficit for infrastructure development after transfer funds from the central government were cut by up to Rp330 billion in the 2026 fiscal year.
The Regional Secretary of West Sulawesi Province, Junda Maulana, explained that the fiscal constraints faced by the region have heavily impacted priority projects. Therefore, this loan serves as an urgent solution to ensure development continues according to plan.
During a coordination meeting with the PT SMI team in Mamuju on Friday (5/6), Junda stressed that the application process actually began rolling in November 2025 and has received approval from the West Sulawesi Regional People’s Representative Council (DPRD). Currently, the main focus is on completing the technical documents requested by PT SMI following their field survey.
Several documents that must be swiftly finalised include the legality of road assets, the Environmental Impact Analysis Document (Amdal), and the status of forest areas at the project sites. Junda set a maximum deadline of one week for his staff to complete all these requirements.
‘Whatever can be answered, complete it immediately; whatever needs documents must be prepared straight away. I want this process not to drag on and to be finished within one week,’ Junda emphasised.
The West Sulawesi Provincial Government is targeting the loan funds to be disbursed by July 2026. Budget certainty is crucial because the tender process for infrastructure projects takes around 40 days, while physical work in the field requires three to four months.
Junda stressed that the provincial government will not launch a tender before there is budget certainty from PT SMI. This is done to avoid administrative and legal hurdles later on. Considering this financing uses the current year’s budget, all infrastructure projects funded by this loan must be completed before the end of 2026.
‘Development must be finished this year. If it passes the deadline, this loan will become less optimal because the execution window becomes narrower,’ he concluded.