INFRASTRUCTURE BUDGET ABSORPTION LOW

The Ministry of Public Works and Public Housing reported that national infrastructure that national infrastructure budget absorption totaled IDR 17.5 trillion, or 14.8% of the total budget of 2015 budget year amounted to IDR 118.5 trillion. Minister of Public Works and Public Housing, Basoeki Hadimoeljono, in Jakarta, Thursday (June 2), said that the 14.8% uptake is the financial realization of the first installment payment on a wide range of activities which began to be implemented. He said that for roads and bridges construction activities, there are some provinces whose uptake is above 20%. These provinces are Yogyakarta, Aceh, Jambi, Maluku, Bengkulu, West Sulawesi, Jakarta, and North Maluku.

Basuki admitted that realization of infrastructure budget absorption by the Ministry of Public Works and Public Housing has not reached the target, despite showing a significant increase in absorption by the Ministry of Public Works and Public Housing has not reached the target, despite showing a significant increase in absorption. Nevertheless, he said that so far the progress of tender process of contractual package has reached has reached 87%, or about IDR 73 trillion.

Basuki said that of the total budget of IDR 118 trillion, IDR 94.57 is allocated for project execution, and the rest (IDR 12.8 trillion) is used for self management, IDR 6.8 trillion for land procurement, and IDR 4.3 trillion for general administration. After deducted by multi-year project budget of IDR 9.1 trillion, total contractual budget of 2015 is IDR 85.47 trillion.

Although absorption is low, Ministry of Public Works and Public Housing is still proposing additional budget of IDR 9.1 trillion for land acquisition for road management in 2016. Director General of Highways of the Ministry of Public Works and Public Housing, Hediyanto W. Husaini, said that based on the indicative ceiling in 2016, the Directorate General of Highways received budget allocation of IDR 46.44 trillion, with allocation for land amounting to IDR 3.5 trillion. This figure is relatively farm from budget needs of the Directorate General of Highways to realize the target of strategic plan 2015-2019 for 2016, which amounted to IDR 79.22 trillion.

Hediyanto said that his party had proposed adjustment of indicative ceiling for the Directorate General of Highways in 2016 at IDR 9.1 trillion to become IDR 55.54 trillion. According to him, the additional budget proposed by the Directorate General of Highways is only for land acquisition. Hediyanto said that with a budget allocation of IDR 12.6 trillion, the total land acquired is estimated to reach 4,500 hectares.

According to him, with a limited budget, his party will inevitably have to prioritize certain sectors and delaying will inevitably have to prioritize certain sectors and delaying others. As for the sectors, which he said would be delayed, is the increased number of national roads, especially road expansion activities. Hediyanto said that land budget next year will be much bigger than this year, which is only IDR 7.5 trillion.

This year’s land budget, which is derived from the state budget (APBN), is IDR 3.8 trillion, land capping IDR 1 trillion, and the rest is derived from funds of Public Service Agency (BLU). According to him, the government allocated huge funds for land acquisition has been the source of delays in infrastructure development.

Meanwhile, the government is advised to discuss the acceleration of budget absorption, including with the Supreme audit Agency (BPK) and the Corruption Eradication Commission (KPK), addressing delays in the preparation of changes in the nomenclature of a number of ministries. Secretary of the National Economic Committee (KEN), Aviliani, said that the government needs to create out-of-the box policies in response to the current economic slowdown to boost growth this year.

He said that capital spending in APBN-P 2015 totaled IDR 290.3 trillion, so that by the end of June 2015 it only reached 9.4%. Reallocation of oil fuel (BBM) subsidies to the productive sectors, among others, in the form state capital participation (PMN) in state-owned enterprises (SOEs), according to Aviliani, is a policy that needs to be appreciated. (E)

Business News - July 8, 2015