berita     August 10, 2016

Priority projects expedited

The government reiterated on Tuesday its commitment to accelerate the completion of major infrastructure projects across the archipelago, among President Joko “Jokowi” Widodo’s priority programs, in the face of a number of hurdles to their progress.

In a seminar organized by The Jakarta Post, stakeholders expressed their optimism over the future of infrastructure development in Indonesia, where economic growth has been hindered by infrastructure bottlenecks.

Toll Road Regulatory Agency (BPJT) head Herry Trisaputra Zuna said the government would not go about business as usual regarding land procurement and tenders for the government’s toll road projects in an effort to beat the pressing deadlines.

The government, for example, has started to shorten the tender process for toll road projects from around 12 months to five months to ensure construction can start soon, Herry said. Land acquisition, meanwhile, is expected to be completed gradually as the construction stage goes on.

“Under normal conditions, the Serang-Panimbang toll road is expected to be completed by 2019. We need to acquire land to meet that deadline,” Herry said, referring to the 83.9-kilometer toll road in Banten, a national strategic project.

Earlier this year, President Jokowi issued two policies to expedite hundreds of projects listed as “national strategic projects”, alongside a large-scale electrification program. They comprise 225 projects in 13 sectors, such as railways and toll roads, and have received special backing and attention from the government, as stipulated by presidential regulations (Perpres) No. 3/2016 and No. 4/2016.

Despite the President’s move to cut fuel subsidies to fund infrastructure projects at the beginning of his administration, land issues and red tape have long hampered the country’s infrastructure projects. The issues have also hindered Indonesia from growing at its potential of beyond 7 percent annually. Indonesia’s economy grew at a stronger-than-expected rate of 5.18 percent year-on-year (yoy) in the second quarter.

The government-sanctioned Priority Infrastructure Development Acceleration Committee (KPPIP), tasked with expediting infrastructure projects, has also set an ambitious target of seeing the groundbreaking of its 30 priority infrastructure projects by 2018.

“The government will take care of the permit for the projects – we don’t need investors to hurry hither and thither,” KPPIP director for water resources Henry Toruan said.

The KPPIP cited projects that had begun after government intervention, including the construction of a 2 x 1,000 megawatt (MW) coal-fired power plant in Batang, Central Java.

The US$4.2 billion project, which will build Southeast Asia’s biggest power plant, had been delayed since 2011 as a result of land-acquisition issues. Although the project’s tender was originally won in 2011, land acquisition problems plagued the project up until March this year when the Supreme Court voted to reject a challenge to a Central Java gubernatorial decree that allowed a 125,146 square-meter site to be used for the power plant.

The project is part of the government’s ambitious plan to procure an additional 35,000 megawatts (MW) for the electricity grid by 2019.

State electricity firm PLN, meanwhile, stated it was still upbeat over the progress of the electrification project, despite only 195 MW having been added to the grid as of last month.

“People say we are running behind schedule, but building po-wer plants does take time,” PLN corporate secretary Bambang Dwiyanto said.

The local arm of US-based technology company General Electric (GE) meanwhile said the government was “on the right track” regarding infrastructure development.

“We have been involved in a number of PLN projects. We want to invest more in Indonesia,” GE Indonesia CEO Handry Satriago said.

Meanwhile, state infrastructure financing company Sarana Multi Infrastruktur (SMI) pledged to serve as a catalyst for investment in infrastructure projects.

“We want to get banks to be more aggressive in entering infrastructure [projects],” SMI project development and advisory director Darwin Trisna Djajawinata said.



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