Infrastructures to support economy and food estate prioritised: Total budget of Transportation Ministry and PUPR reaches Rp195 T
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: Infrastruktur pendukung ekonomi dan food estate jadi prioritas: Total anggaran Kemenhub dan PUPR Rp 195 T
3 September 2020
By: Thresa Sandra Desfika and Muawwan Daelami
Jakarta – The Public Works and Public Housing (PUPR) Ministry is prioritising construction of food estates and supporting infrastructures in industrial estates in their 2021 budget. Meanwhile, the Transportation Ministry is focusing their next year’s budget to support the acceleration of national economic recovery and infrastructure construction.
“The government’s work plan in 2021 is to accelerate economic recovery and social reform. Hence, we will realise the tasks of the Transportation Ministry,” Transportation Minister Budi Karya Sumadi said during a work meeting among the Transportation Ministry, the PUPR Ministry, the Villages, Development of Underdeveloped Regions, and Transmigration Ministry, and Commission V of DPR (House of Representatives) in Jakarta on Wednesday (2/9).
Furthermore, PUPR Minister Basuki Hadimuljono said that the food estate construction in Central Kalimantan and North Sumatra and the supporting infrastructures in Batang and Subang industrial estates were prioritised in the PUPR Ministry’s budget in 2021, which reaches Rp149.8 trillion.
“We need Rp140 trillion, but we are allocated Rp149.8 trillion. It is not too much as we are also tasked with [constructing] food estates and supporting industrial estates that will be developed,” Basuki said.
Baski explained the 2021 budget allocation was arranged by following President Jokowi’s five visions and considering Covid-19 impacts, categorised in six priority programs. The first program is food sustainability, which includes the construction of food estates in Central Kalimantan to produce rice and cassava and in Humbang Hasundutan, North Sumatra to produce horticultural products.
The second program is to improve connectivity by continuing constructions and road preservations to support the efficiency of logistics and the national competitiveness. The third program is to improve the health of the environment and citizens by constructing decent, quality, and affordable housing as well as creating healthy and productive settlements.
The fourth program is to increase investment by providing supporting infrastructures in national strategic areas to develop industrial estates, especially estates related to investment relocation. This program also includes the development of five super priority national tourism strategic areas (KSPNs), following the development of five tourism destinations that started in 2020.
“This is one of the new tasks, 4,500 hectares in Batang and 1,600 hectares in Subang. This is a new concept as the lands are owned by the state. All of the basic infrastructures are prepared by the government, including roads, clean water, and employee housing. Investors can participate for free for 10 or 20 years, they only have to pay for the charge,” the PUPR Minister said.
The fifth program is to strengthen the national safety net to lower the unemployment rate and maintain purchasing power by implementing the cash for work program, purchasing local products, and financing guidance on local businesses.
“We will continue to purchase local products, including rubber. We will provide the financing for guidance on local businesses based on the work packing policy,” Basuki said.
The sixth program is to improve the country’s resilience against disasters and climate change to mitigate the risk of disasters, accelerate recoveries after disasters and emergency situations, and be able to rehabilitate through constructions.
Basuki explained that the budget ceiling of Rp149.8 trillion consisted of Rp5.87 trillion loans, Rp14.76 trillion sharia sovereign bonds (SBSN), and Rp129.18 trillion pure rupiah.
However, as there will still be further discussions on the budget of PUPR Ministry programs, Basuki mentioned that the proposed budget of several programs was currently around Rp5.8 trillion for food estates, Rp12 trillion to support industrial estates, Rp18 trillion for cash for work, Rp7 trillion for drinking water, Rp5.9 trillion for sanitation, Rp10 trillion for flood prevention, Rp7 trillion for irrigation, and Rp8 trillion for housing development.
Transportation Ministry programs
Meanwhile, the budget ceiling of the Transportation Ministry in 2021 will only reach Rp45.6 trillion, while the required budget is Rp75.74 trillion, so they lack Rp30.14 trillion. Hence, the Transportation Ministry is revising priorities by considering major projects in the 2020-2024 National Medium-Term Development Plan (RPJMN).
Furthermore, Transportation Minister Budi said that the budget of each national project was in line with the government’s work plan in 2020, which includes the first national priority; maintaining economic resilience for quality and balanced growth with a budget of Rp369.9 billion. The priority programs include the construction of Adi Sumarmo Airport Railway Access, Labuan Bajo Seaport, and facilities in Likupang Seaport.
The second national priority is to develop regions to lower disparity and guarantee balance with a budget of Rp253.4 billion. The priority programs are the reconstruction of Pantoloan, Donggala, and Wani ports, the development of Mutiara Sis Al-Jufri-Palu Airport, as well as the development of Domine Eduard Osok Sorong Airport.
The third national priority is to increase the quality and the competitiveness human resources with a budget of Rp1.3 trillion. The priority programs are vocational education and training for transportation education and provision of supporting facilities and infrastructure for transportation education and training.
