Public Works Ministry opens private investment opportunities of Rp544.48 trillion
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Kementerian PU buka peluang investasi swasta Rp544,48 triliun
11 February 2025
By Heru Feberianto
The Public Works Ministry is optimising creative funding through public-private partnerships (PPPs) for infrastructure development, aiming for a target of up to Rp544.48 trillion over the next five years.
Last Thursday (6/2), the House of Representatives (DPR) Commission V agreed to reduce the budget ceiling of the Public Works Ministry for the fiscal year 2025 from Rp110.95 trillion to Rp29.57 trillion. This amount includes Rp16.31 trillion of non-pure rupiah and Rp13.26 trillion of pure rupiah.
The budget ceiling adjustment follows Presidential Instruction Number 1 of 2025 on Budget Efficiency in the Implementation of the State Budget and Regional Budget for Fiscal Year 2025.
Despite the budget efficiency measures amounting to Rp81.38 trillion, the Public Works Ministry remains committed to advancing national infrastructure development by optimising the PPP scheme.
The scheme is anticipated to be a strategic solution to address the limitations of the State Budget (APBN) and to attract investment opportunities from the private sector and overseas, thereby accelerating the development of quality infrastructure.
Public Works Minister Dody Hanggodo emphasised that infrastructure development cannot be halted due to budget constraints. He stated, "In line with the President’s directive, we are continuously boosting investment through the PPP scheme to ensure development progresses optimally. Collaboration with the private sector enables strategic infrastructure projects to be realised faster and more efficiently," Dody said in Jakarta on Monday (10/2/2025).
As part of its creative funding strategy, the Public Works Ministry has set an infrastructure development target of Rp554.48 trillion through the PPP scheme for the period from 2025 to 2029. This plan includes the construction of 11 water resources projects, 23 toll road and bridge projects, and 11 settlement projects.
He explained, "Involving the private sector is anticipated to optimise project realisation by enhancing both funding and efficiency."
Through the PPP scheme, the government is creating opportunities for the business sector to contribute to infrastructure development, while still prioritising the people. With a more flexible financing model, the government will continue to act as the regulator and supervisor to ensure the quality and sustainability of the projects undertaken.
One of the infrastructure sectors prioritised for investment includes the construction of dams, reservoirs, toll roads, and bridges. These infrastructures not only support water security and national connectivity but also significantly impact the economy. According to Dody, dams and reservoirs contribute to food and energy security, while toll roads accelerate logistics distribution and enhance economic competitiveness.
He affirmed, "PPP is not only about funding; it also boosts innovation and strengthens both the soft skills and hard skills of the national workforce. With strong synergy between the government and the business sector, we are optimistic that infrastructure development will improve in quality and enhance Indonesia’s global competitiveness."
With investment opportunities and increased funding efforts, Indonesia's infrastructure sector is expected to develop, supporting national economic growth and public welfare.
Not detrimental to quality
Previously, Public Works Minister Dody Hanggodo emphasised that a high budget is not the primary goal of his ministry. For the Public Works Ministry, there are two main objectives: to provide the best services for the people and to carry out assignments in line with the President's directives, regardless of the budget.
Dody stated, "I emphasise that, for the Public Works Ministry, the APBN is a responsibility. For us, carrying out an assignment demands trust and professionalism."
He explained that the budget allocation is a tool for executing the state's assignments, not a target to be pursued for specific interests. In recent months, the government has prioritised budget efficiency, impacting various infrastructure projects undertaken by the Public Works Ministry.
He assured that his ministry is always prepared to execute assignments within the available budget, without compromising on quality and benefits for the people. He emphasised, "No matter the budget, the Public Works Ministry is ready to work and fulfil its assignments. The most important thing is to benefit the people."
This commitment aligns with the government’s vision of providing quality, effective, and efficient infrastructure for the people.
The Public Works Minister's statement addresses concerns about budget reductions in various sectors, including the Nusantara Capital City (IKN). He explained that budget efficiency is not a hindrance but a challenge to work smarter and more innovatively to complete national strategic projects.
With this approach, the Public Works Ministry is committed to delivering infrastructure that is not only of high quality but also directly beneficial to the people, in line with the President’s directive to advance and enhance Indonesia's competitiveness.
PPP suboptimal
Meanwhile, Special Presidential Advisor for Economic Affairs, Bambang Brodjonegoro, mentioned that the Public-Private Partnership (PPP) scheme serves as an alternative for implementing government programmes, while also promoting budget efficiency within ministries and agencies.
"I believe we can reduce infrastructure spending by collaborating with the private sector. There are many areas where savings can be achieved," Bambang stated, as reported by Antara.
The former Finance Minister (2014-2016) and Head of the National Development Planning Agency (Bappenas) (2016-2019) noted that the government's policy to enhance budget efficiency presents an opportunity for the private sector, particularly those in the financial services industry.
However, he expressed disappointment that, in recent years, the cooperation scheme has not been implemented optimally, as many have opted to work on projects funded by the APBN.
"With the PPP scheme, budget use becomes more disciplined and less prone to misuse. The most important aspect is that a large budget is not necessary to undertake an infrastructure project. There are many schemes within PPP that can be utilised," he stated.
An infrastructure observer from Universitas Trisakti, Yayat Supriatna, stated that budget reduction is not the end. According to him, the budget was redirected to fulfil political promises. "It is fair. It is not the end of everything. This reflects the need to boost productivity through creative ideas without relying on the State Budget (APBN)," Yayat told Investor Daily.
He added that the infrastructure ministries are authorised to maximise national development.
"They are large agencies, such as the Public Works Ministry, the Transportation Ministry, and other infrastructure ministries. They have networks both overseas and in various regions. This presents a challenge to creatively secure funding without relying on the APBN," he added.
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