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Massive Monies for Immense Infrastructure

The government is rapidly going ahead with some priority projects. Some are self-funded. Others have been assigned to state-owned enterprises in order to reduce pressure on state finances. Private investors have been given commercial projects. All these projects translate to enormous costs.

Special Economic Zones

Since September 2015, the government has established 17 special economic zones (KEK). The government wants these zones to become centers of new economic growth. It is estimated that some of these zones can attract up to Rp720 trillion in investment. Four zones are due to be operational this year:

- Sei Mangkei KEK (2015)

- Tanjung Lesung KEK (2015)

- Palu KEK (2017)

- Mandalika KEK (2017)

A Million Houses Each Year

The government is targeting the provision of a million house units each year for five years. Some assistance has been given, such as interest subsidies for low-income individual (housing financing liquidity facility/FLPP).

2015: 699,700 units

2016: 805,169 units

2017: 344,532 units (as of October 2)

FLPP Budget:

2015: Rp5.1 trillion

2016: Rp12.4 trillion

2017: Rp15.6 trillion

Palapa Fiber Optic Ring

Total project value: Rp7.79 trillion

Financing arrangement: Government-Business Cooperation (KPBU).

Network length:

West Package: 2,275 kilometers (construction at 74%)

Central Package: 2,995 kilometers (construction at 40%)

East Package: 6,878 kilometers (construction at 20%)

35-Gigawatt Generator

This 20,000 megawatt project will be done by the private sector (independent power producer/IPP). State electricity company PLN will do the remaining work. Here are the developments as of October 2017.

Read the full article in this week's edition of Tempo English Magazine