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.
Bisnis Indonesia - Anggaran infrastruktur: Preservasi jalan masuk prioritas
8 May 2025
By Alifian Asmaaysi
Bisnis, Jakarta – The Ministry of Public Works has focused on allocating an additional budget of Rp23.28 trillion for 2025, funding six key infrastructure development initiatives, including road preservation.
Minister of Public Works, Dody Hanggodo, explained that this additional budget had been effectively disbursed by the Ministry of Finance on 25 March 2025. With this increase, the total budget for the Ministry of Public Works in 2025 has reached Rp73.76 trillion.
"This Rp73.76 trillion budget was only approved at the end of March, including the extra Rp23 trillion. We still have many tasks to complete. For this additional amount, we are currently preparing the necessary administrative processes," he stated during a working meeting with Commission V of the House of Representatives (DPR) in Jakarta on Wednesday (7/5).
According to the presentation, the additional budget will support six key programmes. These include the Quick Best Results Programme (PHTC) for madrasahs, road preservation for the second semester, and rehabilitation of critical bridges.
The funds will also contribute to supporting newly established regions in Papua, fulfilling parts of multi-year contracts (MYCs), and advancing infrastructure development for Nusantara Capital City (IKN).
Dody clarified that the Ministry has not yet received an official letter from the Ministry of Finance regarding the additional funds. Currently, coordination efforts with various ministries and institutions are ongoing to determine how the budget will be allocated for development projects.
Dody also stated that the Ministry will not continue the Presidential Instruction on Regional Roads, which was previously aimed at improving regional road connectivity. The instruction was initially issued during President Joko Widodo’s administration on 16 March 2023.
"The Presidential Instruction on Regional Roads will not continue. Instead, we will introduce a broader initiative under the Presidential Instruction on Regional Infrastructure," he explained.
The new instruction will cover both road construction and preservation. Additionally, it will serve as a legal framework for developing sanitation systems, water disposal facilities, and drinking water networks in various regions.
Roy Rizali Anwar, the Director General of Highways at the Ministry of Public Works, stated that this new instruction is still being formulated through discussions with multiple ministries and government institutions.
He also emphasised that the government has yet to determine the exact budget for implementing the Presidential Instruction on Regional Infrastructure.
"We have not discussed funding yet. Financial arrangements will be coordinated with the Ministry of Finance and other stakeholders. Regional development will be prioritised in accordance with the Asta Cita," Rizali explained.
Meanwhile, Commission V of the DPR has requested a review of Presidential Instruction No. 2 of 2025 on the Acceleration of Development, Rehabilitation, Operation, and Maintenance of Irrigation Networks to support food self-sufficiency.
The request follows concerns that the regulation allows direct appointment of construction state-owned enterprises (SOEs) for irrigation infrastructure projects. Commission V Chairman, Lasarus, expressed objections, citing unsatisfactory performance by construction SOEs in previous projects.
"If a private contractor fails in its work, the contract is terminated. However, construction SOEs continue to receive extensions despite poor performance. This is unacceptable," he asserted.
Lasarus urged that irrigation projects be awarded to local contractors to stimulate economic growth in regional areas. In line with this, he and other Commission V members requested a review of the direct appointment policy regarding construction SOEs’ involvement in irrigation projects.
Responding to concerns, Minister Dody clarified that the irrigation Presidential Instruction allows two options: direct assignment to construction SOEs or self-management.
However, he noted that further discussions are still underway with the National Development Planning Ministry/National Development Planning Agency (PPN/Bappenas).
"The instruction specifies two mechanisms: direct appointment to state-owned enterprises and self-managed projects. We are currently determining which areas will fall under each approach through consultations with Bappenas," he explained.
Presidential Instruction No. 2/2025, which took effect on 30 January 2025, directs nine ministries and government institutions to coordinate efforts within their jurisdictions to accelerate food self-sufficiency.
The instruction designates 14 provinces for accelerated irrigation network development, rehabilitation, operation, and maintenance. These provinces include Aceh, North Sumatra, Riau, Jambi, Bangka Belitung Islands, South Sumatra, Lampung, Central Kalimantan, West Kalimantan, East Kalimantan, North Kalimantan, South Kalimantan, South Sulawesi, and South Papua. Other provinces requiring irrigation network improvements may also be included.
According to the regulation, direct appointment of construction state-owned enterprises for these projects falls under the authority of the Minister of Public Works.
Green light
Lasarus announced that the DPR has approved the Ministry of Public Works’ budget increase to Rp73.76 trillion for the 2025 fiscal year. He stated that part of this additional funding would support regional road preservation.
"Our focus is on road preservation to ensure road quality remains high," he explained.
With this budget increase, Lasarus hopes the Ministry will expand road preservation efforts across various regions, from Talaud to Rote Island.
Separately, Maulidya Indah Junica, Head of the Task Force for Community School Development, stated that President Prabowo Subianto has directed the construction of 100 community schools per year.
In the initial phase, the government plans to renovate 65 schools and convert them into community schools in 2025.
"As per the President’s directive, the goal is to establish 100 community schools per year. We are still working with the Ministry of Social Affairs to determine locations for these schools," she explained.
The renovations for these 65 schools are scheduled to begin in the third week of May 2025. These existing schools, owned by the Ministry of Social Affairs, universities, local governments, state-owned enterprises, and private institutions, will be transformed into community schools.
Maulidya mentioned that funding for the community school programme is still under review, but estimates suggest it will be around Rp100 billion per school.
"The budget is still being assessed. But generally, it will be close to Rp100 billion per school, covering infrastructure, land allocation, and furniture needs," she stated.
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