Govt to form infrastructure fund soon

Antara News, Thursday, December 24, 2009 02:29 WIB

Jakarta (ANTARA News) - The government is soon to form an Infrastructure Fund tasked with collecting long-term funds from donor countries and other sources to speed up infrastructure development, a top public works official said.

"The Fund`s establishment has been awaited for a long time because we badly need long-term financing sources for infrastructure development," Deputy Public Works Minister Hermanto Dardak said here on Tuesday.

The contributions to the Fund could come from Indonesia itself, the World Bank, the ADB or other institutions prepared to make long-term investments in infrastructure development in Indonesia, he said.

In fact, pension or insurance funds could also put their money in the Infrastructure Fund which was now in a preparatory stage.

The fund`s formation would enable the government to be more involved in providing a number of "missing links" in existing infrastrcture projects such as the Trans-Java turnpike and other toll road systems, he said.

The Fund would in effect be something like a holding company among PT SMI, the World Bank and ADB and operate under its own management.

Hermanto said the Public Works Department had so far had access only to short-term financing sources to carry out road construction projects which actually need long-term financing.

As a result, the projects were often subject to interruptions or delays. "With the present government budgets, we can only tackle certain missing links in exissting toll roads such as the Solo-Kertosono turnpike. "We cannot undertake whole projects," he added.

The Trans-Java toll-road project actually needs a huge budget to clear 4,500 hectares of land but because of budget constraints the government had to implement the project piecemeal or according to a priority system, Hermanto said.

This was why, after more than five years of land-clearing efforts, only 27 percent of the land needed for the Trans-Java toll had now actually been cleared.