Infrastructure in Jokowi's era: The finish line of strategic projects
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 - Infrastruktur era Jokowi: Garis finis proyek strategis
8 October 2024
By Surya D.A. Simanjuntak
Bisnis, Jakarta – As President Joko Widodo’s administration approaches its end, only 61% of national strategic projects (PSNs) funded by the State Asset Management Agency (LMAN) have been completed.
LMAN reported that only 78 out of 126 PSNs funded by public service agencies under the Finance Ministry have been completed.
LMAN clarified that its role is limited to managing the funding, not the construction, which is handled by the Public Works and Housing (PUPR) Ministry. LMAN Land Procurement and Funding Director, Rustanto, emphasised that PSN development is a shared responsibility.
“PSNs are projects that involve many parties within an ecosystem, with LMAN acting as the entity that manages the funds. Meanwhile, construction is generally handled by the PUPR [Ministry],” he said at a media briefing at the LMAN Office on Monday (7/10).
He explained that LMAN must coordinate with the PUPR Ministry when providing information regarding a PSN’s inauguration, as it relates to construction progress. Additionally, the Presidential Staff Office, the Coordinating Ministry for Maritime Affairs and Investment, and the Coordinating Ministry for Economic Affairs are also involved in the supervision of PSNs to ensure they are completed on time.
“We discuss the efforts and issues. We resolve them together,” he stated.
Furthermore, Rustanto mentioned that there are dozens of PSNs set to be inaugurated soon, including eight dams, three segments of the Trans-Sumatra Toll Road, and one segment of the southern highway. These PSNs are scheduled to be completed this year.
Meanwhile, LMAN President Director Basuki Purwadi stated that one of the three main tasks of the institution he leads is to fund PSNs. Since receiving the first project in 2017, LMAN has managed the funding of 126 PSNs.
“A total of 78 have been completed and are now operational,” Basuki revealed during the occasion.
He stated that LMAN completes an average of 8-9 PSNs annually. According to him, this achievement is something to be proud of.
Previously, President Jokowi expressed that he expected incomplete PSNs not to be abandoned.
From 2017 to 4 October 2024, LMAN has spent Rp134.45 trillion to fund land procurement for PSNs.
Rustanto explained that, in total, LMAN has managed the land acquisition for 126 PSNs. Most of the land acquisitions conducted by LMAN were for PSNs in the toll road sector.
“There are 53 PSNs in the toll road sector. Based on the realisation, the total funding for land acquisition until 4 October 2024 has reached Rp112.18 trillion,” he explained.
He revealed that, on average, land acquisition for toll road projects annually accounted for 83.89% of the total funding for PSNs. Meanwhile, other PSNs funded by LMAN include dams (40 PSNs), irrigation networks (5 PSNs), raw water facilities (1 PSN), railway tracks (10 PSNs), ports (1 PSN), national strategic tourism areas (1 PSN), and Nusantara Capital City (IKN) development (15 PSNs).
Rustanto claimed that the 126 PSNs are scattered throughout Indonesia. Specifically, there are 60 PSNs in Java, 29 in Sumatra, 19 in Kalimantan, 12 in Sulawesi, and 6 in Nusa-Bali. "We see that most are located in Java. We also see that most are toll roads," he stated.
Rustanto mentioned that the PSN in the toll road sector that costs the most is Ngawi-Kertosono-Kediri Toll Road (144 km), which costs Rp1.27 trillion. Meanwhile, for non-toll roads, the most expensive PSN is IKN Section 3A Karangjoang-KKT-Karingau, which costs Rp818.11 billion.
Based on the region, the largest funding has been provided for West Java (Rp2.63 trillion), Central Java (Rp1.69 trillion), East Kalimantan (Rp1.65 trillion), East Java (Rp1.39 trillion), and Trans-Sumatra Toll Road (Rp1.3 trillion).
Suboptimal
Amid the increase in new projects funded by LMAN, the agency has yet to successfully optimise the 184 state assets it manages as of October 2024. This means that hundreds of these state assets do not contribute to state revenue.
LMAN Development and Utilisation Director, Canda Giri Artanto, explained that his agency manages 310 state assets, but only 126 units have been optimised.
According to him, there are three issues preventing LMAN from optimising the 184 state assets it manages.
“Firstly, the assets are owned by irresponsible parties. Secondly, the structures are damaged. Thirdly, there are many arrears, such as unpaid water, electricity, telephone bills, property tax, and other liabilities,” Candra said.
For example, he mentioned the handover of apartment assets. These apartments have arrears for maintenance and other fees, necessitating further coordination with the Development Finance Comptroller and the Tax Directorate General. Moreover, if the asset has not been certified, it must first be certified on behalf of the Finance Ministry.
Additionally, if the asset is owned by an irresponsible party, LMAN must first acquire it.
“So, you can imagine that we must undertake these tasks for around 310 state assets,” Candra explained.
On the other hand, of the 126 optimised units, Candra revealed that LMAN has contributed a non-tax state revenue of Rp6.05 trillion since it was first established in late 2015.
Meanwhile, LMAN President Director Basuki Purwadi explained that from early January to 4 October 2024, LMAN has logged a non-tax state revenue of Rp3.2 trillion. He added that this amount is expected to increase by the end of the year.
“I am encouraging our colleagues at LMAN to increase non-tax state revenue by Rp1 trillion in the next three months until the end of 2024. This would bring the total to around Rp4.2 trillion by the end of the year,” he stated.
Furthermore, Basuki mentioned that of the 126 optimised assets, 54 were apartments and 72 were non-apartments.
Meanwhile, the 310 assets managed by LMAN include 1 Arun LNG Refinery, 1 Badak LNG Refinery, 151 apartment units, 112 shophouses/warehouses, 14 buildings, 22 plots of land, and 9 houses. Of these, 45 assets are ready to be marketed, consisting of 33 apartments and 12 non-apartments. Additionally, there are 42 ready-to-market assets and 3 units classified as "as is" assets.
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