The Jakarta Post, Jakarta | Business | Sat, August 16 2014
Despite the urgent need to speed up infrastructure development, the government has reduced the budget allocation for the Public Works Ministry in the 2015 draft state budget.
In the proposed budget, the budget allocation for the ministry declined to Rp 74.2 trillion (US$6.35 billion) from Rp 74.5 trillion in this year’s revised state budget.
“We are aware that national infrastructure development is still far from perfect. We realize that it has often been a barrier to improving a range of economic and social activities in the country,” Susilo Bambang Yudhoyono said, during his presentation of the 2015 draft state budget at the House of Representatives on Friday.
The Public Work Ministry’s funding, however, remains the largest after the Education and Culture Ministry, which is receiving Rp 67.21 trillion and the Defense Ministry with Rp 95 trillion.
Responding to the budget allocation, Public Works Minister Djoko Kirmanto said that despite the reduced budget the ministry would follow the president’s instruction to improve the country’s connectivity in order to enhance the competitiveness of the national economy, improve the community’s quality of life and welfare and reduce inequalities among regions.
“We had previously proposed a budget allocation of around Rp 123 trillion for next year, after consulting with regional administrations across the country,” Djoko said. “With the proposed allocation, we will continue to concentrate on improving the nation’s connectivity, food security and the availability of drinking water,” he continued.
He said, however, the ministry might not be able to achieve all its targets with the limited budget.
“We will not delay the construction, but we will increase the length of time to complete the projects,” Djoko said. “For instance, projects that were previously slated to be completed in 2015 may be revised to 2016, just like when we had the budget cut a few months ago,” he said.
In May, the President instructed lawmakers to cut the ministry’s budget this year by Rp 22.7 trillion as part of the government’s cut backs in response to the increase in fuel-subsidy spending and lower-than-expected tax revenue.
Following a series of discussions, the ministry and lawmakers ultimately agreed to cut the ministry’s budget by only Rp 9.62 trillion. As a result, the ministry’s budget was downsized from Rp 84.14 trillion to Rp 74.5 trillion.
The budget cut has disrupted the government’s programs under its Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), including the construction of roads in regions outside Java.
As stated in the 2015 financial note, among the achievement indicators of infrastructure implementation are the completion of 240.94 kilometers of new roads, 11,716 meters of new bridges and 1,213 meters of overpasses and underpasses.
In his presentation Yudhoyono said that in addition to national connectivity, the Public Works Ministry was also tasked with the construction of dams and irrigation infrastructure in order to support food security and clean-water supply, as well as the construction of 22 kilometers of coastal protection.