State Budget cannot Cover Indonesia's Infrastructure Need  

TEMPO.CO, Jakarta - Wiko Saputra, economic policy observer from the Initiatives Society (Perkumpulan Prakarsa), said that the state budget revenue and expenditure (APBN) will not be able to cover for Indonesia's infrastructure needs. "According to my research, if [the funding is purely sourced from] the state budget, Indonesia needs 100 years to complete its infrastructure [projects]," he told Tempo, Monday, April 7.

Wiko said that Indonesia's infrastructure needs—based on the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI)—reached Rp4,012 trillion. With an allocation of just four to five percent per year, said Wiko, it would take 100 years to complete construction projects.

"I wish that 60 percent of the infrastructure [funding] is sourced from government-private partnership (KPS) or public private partnership (PPP)," said Wiko.

The current main issue, he said, the legal umbrella of for these types of partnerships is unclear. As a result, privates are having trouble getting into private infrastructure projects in Indonesia. Wiko said that so far only state-owned enterprises (SOEs) are intensively entering these projects.

Wiko said that legal clarity is necessary especially when it comes to land acquisition and concession schemes. According to Wiko, Jakarta's monorail project blunder has made private investors afraid of investing.

Earlier, Transportation Minister Evert Mangindaan Erenst said that the budget allocation for his department this year is still lower than the actual need of Rp64 trillion.

In the 2014 State Budget, the Ministry of Transportation is allotted Rp31.5 trillion. To compensate for the remaining need, the Ministry will cooperate with private and state enterprises.

MARIA YUNIAR