Monday, 20 May 2013 | 06:17
Indonesia vies to return to its former glory in Southeast Asia's boxing arena, aiming
to nab two gold medals in the 27th SEA Games in Myanmar.
Monday, 20 May 2013 | 05:27
About a thousand Freeport Indonesia workers were still blockading the road to the
underground mine that collapsed last Tuesday.
Wednesday, 01 August, 2012 | 10:57 WIB
Debate over Providing State Guarantees to Private Parties over Bridge Project
TEMPO Interactive, Jakarta:Not all are on board as to who should take control over the two-year feasibility study linked to the Rp 142 trillion bridge project linking Java and Sumatra. Indonesia has put this megaproject in the Master Plan for Expediting and Expanding Indonesian Economic Development. The project is targeting the completion of the construction of a 29 kilometers-long bridge in 2021 – seven years when work begins in 2014 – with an initial investment of Rp100 trillion.
Much has been made out of Presidential Regulation Number 86 of 2011, which is linked to this gargantuan project. In Article 25, the government must pay compensation for preparation costs if the project fails to be carried out. Article 30 says that the government supports and guarantees the project. Support can take the form of fiscal and non-fiscal contributions, or financial compensation.
Bambang Brodjonegoro, Head of the Fiscal Policy Body at the Ministry of Finance, ever said that Presidential Regulation Number 86 of 2011 is confusing. It is mentioned there that the mechanism for guaranteeing the bridge project is based on Presidential Regulation Number 78 of 2010 regarding guaranteeing infrastructure. Whereas, Presidential Regulation Number 78 sets a condition that guarantees can only be given for projects which are public-private partnerships, in accordance with Presidential Regulation Number 67 of 2005. For this reason, Bambang suggests revising the Presidential Regulation.
This matter of project guarantees is also what drove Minister of Finance Agus Martowardojo to want to take over the project preparation stage. He suggests that this phase be done by the government. He sent a letter to Minister of Public Works Djoko Kirmanto on 8 June. In it, he asks Minister Djoko to take responsibility for the project and the conducting of the feasibility study.
Agus is ready to provide state budget funds for the costs of the feasibility study up to the bidding process. He also proposed separating bridge construction from area development.
Deputy Minister of Public Works Hermanto Dardak said that the use of state budget funds is very possible for the preparation stage of the project, which will cost about Rp2 trillion. A Tempo source said, Minister Armida Alisjahbana agrees with this.
In essence, according to this source, they do not want this stage to be funded by private or foreign interests. This is to reduce the risks associated with providing guarantees. It is also believed that funding it on their own will make the results of project preparation more objective in the eyes of prospective investors who will take part in the bidding. To read the story in full, please refer to this week’s TEMPO English magazine cover edition. Retno Sulistyowati, Rosalina