Regions told tender early, help growth

The Jakarta Post, Jakarta |  Tue, 11/04/2008 10:36 AM  

The government urged local administrations Monday to start by the end of this year the tender processes for procurement for projects allocated in the 2009 regional budgets, to help bolster national economic growth, despite the global financial crisis. 

"The government's spending is needed to keep growth at above the 6 percent level," said State Minister of National Development Planning Paskah Suzetta, Monday, during a meeting with leaders from provinces, including governors, spokespersons of local councils and regional treasurers. 

"Although the budget will be effective from January (next year), we can prepare all tender requirements from now on," he added. 

The global economic downturn, triggered by the sub-prime mortgage crisis in the United States, is drying up market liquidity and weakening the national economy. Early government expenditure (on projects) can be expected to help keep the economy running. 

However, director general of financial balance at the Finance Ministry, Mardiasmo reminded local authorities to complete all the requirements needed to get their annual budget support from the central government. 

"For example, this year's budget support will expire if regions don't submit their progress reports on local projects," he said. 

Only 53.94 percent of the Rp 21.20 trillion (US$1.9 billion) special allocation funds (DAK) for this year, a special budget allocated by central government to support regions in developing their infrastructure projects, had been distributed by October due to late reports on previous projects. 

Mardiasmo said that local governments failed to submit project progress reports because they had been late in opening the previous project tenders. 

For next year, central government has agreed to allocate Rp 24.8 trillion of DAK and Rp 186.4 trillion of general allocation funds (DAU), another annual budget allocated for regions. 

The Central Statistics Agency (BPS) chairman, Rusman Heriawan, another speaker in the meeting, agreed that local administrations had to spend their annual budgets more efficiently and effectively. 

"Local administrations tend to spend most of their budget near the end of the year. They should instead spend their budget continuously (during the year) like 10 percent every month," he said. (hwa)