Ideal Infrastructure Ratio Requires Rp 1.924 T Funding
Indonesia Finance Today - 09/07/2012
To achieve the ideal infrastructure finacing rate of five percent of Gross Domestic Product (GDP), the government needs funds of Rp 1.924 trillion (US$ 203.94 million) by 2014. Dedy Supriyadi Priyatna, Deputy of Infrastructure, Ministry of National Development Planning, said of the total needs, the government is only able to fulfill Rp 560 trillion.
Dedy said the rest of the infrastructure financing needs will be assisted by other funding sources, such as investments, state-owned enterprises (SOEs), private and regional funding through the Regional Budget and Expenditure (APBD). This assistance is estimated to amount to Rp 1.042 trillion. Thus, Rp 323.7 trillion is still needed.
If the ideal infrastructure financing target can be achieved, the economic growth could reach seven percent. The target is also expected to create sustainable economic growth in Indonesia and provide welfare to the entire community.
Data from the National Development Planning Board notes that the estimated requirement of Rp 1.924 trillion will be met from the State Budget and Expenditure (APBN) by Rp 559.5 trillion, APBD Rp 355.1 trillion, private and SOEs Rp 685.5 trillion. That still leaves Rp 323.7 trillion unfulfilled.
Meanwhile, to increase the role of infrastructure in 2013, the government will issue a definitive budget of Rp 114.65 trillion, with Rp 69.1 trillion in the Ministry of Public Works, Rp 31.2 trillion at the Ministry of Transportation, Rp 5.1 trillion at the Ministry of Housing People, and Rp 3.4 trillion at the Ministry of Communications and Information Technology.
"Of the total budget, Rp 35.5 trillion is allocated for road developments, an increase compared to the definitive budget in 2012 with Rp 30.9 trillion," he explained.
The priority activities of infrastructure in 2013 include developments of domestic connectivity infrastructures – consisting of improvements on roads, transportation facilities, empowerment of informatics tools, infrastructure development of residential housing, and infrastructure development of water resources to support food security.
Armida Salsiah Alisjahbana, Minister of National Development Planning, said in order to achieve the target ratio of ideal infrastructure, the government gradually increases financing from the APBN. Such improvements include increasing the infrastructure ratio to four percent in 2013 and to five percent in 2014.
The government will also encourage other institutions such as the local governments, SOEs and private sector to increase their investments, especially their capital spending for infrastructure.
To achieve these targets, the government plans to allocate Rp 755 trillion for infrastructure budget by 2014, consisting of Rp 544 trillion from the government, and the remaining Rp 211 trillion from the public private partnership.