Jokowi gets helping hand on infrastructure projects

The Jakarta Post, Jakarta | Business | Sat, August 23 2014

President-elect Joko “Jokowi” Widodo may get a boost in his bid to accelerate the pace of reforms for infrastructure development, following outgoing President Susilo Bambang Yudhoyono’s appointment of the incumbent government’s transition team.

The President has appointed the National Development Planning Board (Bappenas) and the Finance Ministry to jointly lead the transition team, which will assist Jokowi with his economic development programs, according to Dedy S. Priatna, deputy for infrastructure at Bappenas.

Some existing infrastructure project plans might be changed to accommodate Jokowi’s economic team’s development programs, to help him accelerate the pace of infrastructure reforms, Dedy said.

“If some alterations [to infrastructure projects] are needed, then I, as both a government representative and deputy minister overseeing infrastructure, will definitely make the necessary changes,” he said at his Jakarta office on Friday.

Jokowi’s economic team has frequently stated that some of the current government’s infrastructure projects might end up on the chopping block, including the extensive Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI).

Jokowi has promised that his economic vision for Indonesia would rely on maritime development, such as the improvement of infrastructure for sea-based transportation.

Yudhoyono, meanwhile, has been seen as pouring most investment into road infrastructure during his one-decade leadership.

Some of the projects under the current administration might also continue, Dedy said, including the controversial plan to build the 29-kilometer Sunda Strait Bridge connecting the islands of Java and Sumatra.

The Sunda Strait Bridge plan, valued at Rp 200 trillion (US$17 billion), has been seen as prioritizing land connectivity, thus contradicting Jokowi’s maritime vision.

The existing government will continue at least 15 out of 40 priority infrastructure projects this year, said the deputy minister. Some of the infrastructure projects could begin construction as early as October, such as toll roads serving Manado-Bitung in North Sulawesi and Balikpapan-Samarinda in East Kalimantan, as well as steam-power plants in Pangkalan Susu and Medan — both in North Sumatra — as well as in Takalar, South Sulawesi.

However, a lack of funding has been a major hurdle in infrastructure development in Indonesia, with state budget for infrastructure growing by only 8.5 percent from 2010 to 2014, noted state-run BNI Securities analyst Thendra Crisnanda.

“We believe the MP3EI has become one of the best platforms in order to develop domestic infrastructure,” he said. “However, a lack of infrastructure budget and execution have become a bottleneck [causing] this program to be perceived as a failure in the previous government.”

Jokowi’s mission to accelerate infrastructure development next year will also be helped by the full implementation of the 2012 law on land procurement, which will oblige people to sell their property for public infrastructure projects in return for “fair” compensation from the government.

“The clarity in this regulation will potentially be a strong catalyst for accelerating infrastructure development, especially for ongoing projects where implementation commenced prior to 2012,” said Thendra.

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