Govt to launch 84 projects worth Rp 536 trillion this year
Hans David Tampubolon. The Jakarta Post, Jakarta - 14/03/2012
The government will launch 84 infrastructure projects worth Rp 536.3 trillion (US$58.4 billion) this year as part of the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI), a senior official says.
Wahyu Utomo, the head of MP3EI program integration at the Office of the Coordinating Economic Minister, said in Jakarta on Tuesday that 15 projects worth Rp 66.2 trillion would be financed by the government, with another 20 projects worth Rp 90.3 billion to be backed by state-owned companies and 38 projects worth Rp 301.76 trillion funded by the private sector.
“The remaining 11 projects, worth Rp 78.2 trillion, will be developed under a public-private partnership (PPP) plan,” Wahyu said during a seminar on infrastructure development.
Since the MP3EI was introduced on May 27, 2011, the government has launched 94 infrastructure projects worth Rp 490.5 trillion, he said.
The MP3EI is an economic acceleration program aiming to develop 22 principle economic activities in six corridors — Sumatra, Java, Kalimantan, Sulawesi, Bali–Nusa Tenggara and Papua–Maluku
islands — throughout the archipelago. The development of the corridors is expected to garner at least
Rp 4,000 trillion in investment in various projects within a 15-year period, spanning from 2011 to 2025.
According to data provided by the Office of the Coordinating Economic Minister, the largest project in
the Sumatra corridor to be launched this year will be the revitalization of state-owned fertilizer producer PT Pupuk Sriwijaya (Pusri), which will absorb an investment of about Rp 18 trillion.
In the Java corridor, the development of the north–south mass rapid transit (MRT) system will become the largest project, with a total investment worth Rp 40 trillion.
The Muara Wahau coal mine will receive the largest chunk of the MP3EI funding in the Kalimantan corridor, with Rp 40 trillion being devoted to develop its integrated infrastructure for mining and industry.
In the Sulawesi corridor, the development of a cacao processing factory in Makassar, South Sulawesi, will receive the largest amount of funding at Rp 9 trillion.
The Bima Port in West Nusa Tenggara will need Rp 400 billion in 2012, making it the largest project for the MP3EI program in the Bali-Nusa Tenggara corridor this year.
The largest MP3EI project in 2012 is set to take place in the Papua-Maluku islands corridor with the underground mining project at PT Freeport Indonesia’s block A area with an investment of Rp 150 trillion.
Public Works Ministry’s head researcher Andreas Wibowo, who also spoke at the seminar, said that the government needed to further develop its PPP mechanisms to lure more investment from the public sector into the MP3EI program.
Andreas said that the government’s ability to attract private investors with better incentives and stronger assurances of a good investment climate would be crucial for the success of the MP3EI program because the state could only provide a small portion of the total funding.
“From 2010 to 2014, the funding needed for infrastructure development stands at around Rp 1,400 trillion, and the government can only fund around 30 percent of it at most,” Andreas said.
National Planning Agency (Bappenas) institutional regulation and information subdirectorate head Gunsairi said there were still many obstacles that hindered cooperation between the government and the private sector in funding projects.
“One of the main obstacles is that project proposals are often not well prepared because there is still a lack of understanding regarding the PPP structure,” Gunsairi said.